SEGUNDA. ENTRADA EN VIGOR DE LA NORMA

As part of the investment segment activities, the Bank performs operations on the money and the capital market, manages financial risk, and trades on the interbank interest rate and foreign exchange market. Transactions concluded with retail and corporate customers, including transactions associated with financing large investment projects and transaction banking services, constitute an important part of the activities of this segment.

Cooperation with customers of financial institutions, such as investment fund companies, pension and insurance companies, is a growing part of this segment. Ownership supervision of the PKO Bank Polski SA Group entities is a part of the activities of the investment segment which supplement the basic offer of financial services provided by the Bank.

The investment segment also performs activities aimed at diversifying the sources of financing of the Bank's operations. Such activities include obtaining funds on the Polish market and on international markets i.a. through bond issues and obtaining funds from monetary and non-monetary financial institutions (see section 5.7 for details).

Interbank market

The Bank is the Treasury Securities Dealer and the Money Market Dealer, and it acts as the market maker on the domestic interest rate and foreign exchange markets. As a result of its activity on the interbank market, the Bank was ranked second in the Treasury Securities Dealer of the Year 2013 competition and also second in the Money Market Dealer of the Year 2013 ranking.

The Bank actively managed financial risks (liquidity risk, interest rate risk and currency risk). Surplus funds in PLN, which were not used by the Bank for the purposes of its lending activity, were mainly invested on the Treasury securities market and in NBP money market bills.

The Bank continued the programme of issuing its own bonds on the domestic market. In 2012, as well as in the previous year, the bonds were mainly purchased by financial institutions, and the total issue value was PLN 5.8 billion (the total debt as at 31 December 2012 in respect of bonds issued under the programme amounts to PLN 500 million).

Activities of the Brokerage House of PKO Bank Polski SA

The Brokerage House of PKO Bank Polski SA is one of the leading brokerage houses and it provides its customers with wide access to capital market products and services. The year 2012 brought an improvement of the Brokerage House’s market position, which was reflected in a 9.1% increase of its share in trading on the secondary stock market. Total turnover of the Brokerage House on the stock market was close to PLN 38 billion and it was 32% higher than in 2011. In this period, the market recorded a 27% decrease in turnover.

The Brokerage House was one of the top brokerage houses in terms of the number of companies for which it acted as the market maker on the NewConnect market (53 companies as at the end of 2012), and the generated value the turnover exceeded PLN 135 million, which gives the Brokerage House the 7th place on the market and almost 5% share in turnover. At the same time, the Brokerage House managed 54 agreements for acting as a market maker (3rd place in the market) and 24 agreements for acting as the issuer's market maker (5th place in the market). The Brokerage House remains an important player on the primary market. The value of IPO (Initial Public Offering) market transactions in which the Brokerage House acted as an intermediary in 2012 amounted to PLN 0.7 billion, which accounted for 20% of the market. The value of transactions concluded by the Brokerage House on the SPO (Secondary Public Offering) market exceeded PLN 1.2 billion.

In 2012, the Brokerage House acted as an issue agent for a Treasury bonds issue and offered its customers retail bonds with both fixed and floating interest rate.

As part of its operations, the Brokerage House maintained 175.9 thousand of securities and cash accounts and 150 thousand of active

registration accounts which gives the Brokerage House high 4th place among 46 participants of National Depositary of Securities in terms of the number of securities accounts maintained.

Treasury products and structural financing

The investment segment actively participates in providing services to corporate customers. It takes part in transactions in the structural financing area and in providing services in respect of Treasury products, also for retail clients.

The PKO Bank Polski SA network of Treasury products distribution is diversified and tailored to the individual needs of the customers. Treasury transactions can be concluded through a network of consultants working in branches, dedicated specialists and dealers, as well as via an online channel (SPOT transactions).

In 2012, the highest sales growth rate was achieved in the area of foreign exchange SPOT transactions, where the number of operations increased by ca. 7% and the value of turnover – by 21%. As far as the sales of Treasury products are concerned, a significant increase in the online sales channel utilisation should be noted. The number of transactions concluded was more than 2.5 times bigger in 2012 than in the previous year. The offer of Treasury products was extended by adding Asian currency options, which complemented the existing offer of currency products, and commodities – at present, the Bank offers hedging against risk for 16 types of commodities. Moreover, the Bank works intensively on adding interest rate options to its offer.

The PKO Bank Polski SA offer addressed to corporate customers is tailored to their individual needs. Products associated with the financing of large investment projects in the form of loans or issues of non-Treasury debt securities are a standard element of this offer. The financing is provided partly by consortia of banks. The Bank is the market leader in organising municipal bond issues - the share of the Bank's portfolio in the total portfolio of the market as at the end of November was close to 29%. The Bank also had a strong position in respect of municipal bond issues – the share of its portfolio exceeded 13%.

In 2012, PKO Bank Polski SA signed six loan agreements in the form of bank consortium and one annex to a previously concluded syndicated loan agreement. The total value of the agreements concluded was PLN 2.7 billion, of which the Bank's share amounted to PLN 1.7 billion.

Moreover, in 2012 the Bank signed 113 municipal bond issue agreements in the total amount of PLN 898.8 million, 13 corporate bond issue agreements (including 3 in the form of bank consortium), and 1 annex to an agreement previously signed in the form of bank consortium. The total value of issue agreements and annexes signed amounted to PLN 14.5 billion, of which the Bank's share amounted to PLN 8.0 billion.

Fiduciary services

The Bank maintains securities accounts and handles transactions on the domestic and the foreign markets. It also provides fiduciary services and acts as a depositary for pension and investment funds. It is a direct participant in the National Depository for Securities and the Securities Register (NBP), a member of the Council of Depositary Banks and the Non-Treasury Debt Securities Council of the Polish Banks Association.