PKO BP INITIAL PUBLIC OFFERING
CONFIDENTIAL | 18 NOVEMBER 2004
PRELIMINARY | SUBJECT TO FURTHER REVIEW AND EVALUATION
THESE MATERIALS MAY NOT BE USED OR RELIED UPON FOR ANY PURPOSE OTHER THAN AS SPECIFICALLY CONTEMPLATED BY A WRITTEN AGREEMENT WITH CREDIT SUISSE FIRST BOSTON.
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /1
The Largest Ever CEE Equity Offering
The largest ever equity offering in Central & Eastern Europe – $2.3bn
The second largest European IPO to date in 2004
Largest Financial Institutions IPO in 2004
First / only Polish bank privatised without a strategic investor,
presenting a national champion to a global investor base
CSFB’s 3rd Central & Eastern European IPO in 2004
CSFB is #1 in CEE Equity issuance in the last 3 years with c. 50%
market share
The IPO of PKO BP is a landmark transaction in CEE
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Transaction Highlights
 The transaction was heavily oversubscribed
 Polish retail offering oversubscribed by more than 10x
 International offering more than 10x covered
 Offer size increased by more than 25% the day before pricing
 IPO priced at the top of the price range
 Broad global investor participation
 Attractive valuation achieved by The State Treasury of Poland, who retain a 52%
stake
 IPO priced at a 5% discount to the four largest CEE listed banks
 The IPO represents nearly 90% of the Polish privatization budget for 2004
2
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /3
Transaction Structure
Offering Structure
Issuer
PKO Bank Polski
Seller
The State Treasury of Poland, retain 52%
Pricing Date
3 November 2004
First Trading Date
10 November 2004
Shares Offered
377 million shares, all secondary
Reverse Greenshoe
Reverse Greenshoe option covering 6.5% of Offering (all
secondary)
Price Range
PLN 17.5-20.5 per share
Offer Price
PLN 20.5 per share
Offer Size
PLN 7.6 billion (US$ 2.3 billion)
Initial Public Offering
Pre Offer
Shareholders
Tranche Sizes
Listing
Polish Treasury
PLN 7.6 billion
$2.3 billion
Post Offer
100.0%
52%
Employees
0.0
10%
Free Float
0.0
38%
Polish retail:
42%
Polish institutions:
35%
International institutions:
23%
Sole Global Coordinator
November 3, 2004
Warsaw Stock Exchange (No GDRs)
On 3 November 2004, CSFB, acting as Sole Global Coordinator, completed the $2.3 billion
Privatisation of PKO BP, the largest bank in Poland
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /4
Investment Highlights - Poland
Population (millions)
GDP ($billions)
EU
381
Poland
38.2
EU
10,523
Poland
210
Czech Republic
10.3
Czech Republic
85
Hungary
10.1
Hungary
83
Slovakia
Slovakia
5.4
Source: EIU
33
Source: EIU
Bank Assets / GDP (%)
246
(1)
EU
Czech Republic
117
Slovakia
93
Hungary
Poland
Loans / GDP (%)
86
60
Source: EIU, European Central Bank, National Banks as at 31 December 2003
Note: 1) 2002 figures for bank assets
114
(1)
EU
Hungary
60
Czech Republic
43
Poland
37
Slovakia
37
Source: EIU, European Central Bank, National Banks as at 31 December 2003
Note: 1) 2002 figures for loans
Poland is the largest new EU member and has the least penetrated banking market
among the major markets
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /5
Investment Highlights - PKO BP
Largest Bank in
Poland
Leading market
position
 Assets of PLN 86.1billion (US$23.0bn)
 No. 1 in loans and deposits
 No. 1 in cash payment cards issued
 1,222 branches, 3,140 agencies, 1,785 ATMs
Nationwide
distribution network  Over 5.3 million retail and over 400,000 corporate
– largest in Poland
accounts
Financial strength
and proven risk
management
Profitable track
record
 Diversified loan portfolio
 Strongly capitalised and improving asset quality
 Half of entire banking sector’s earnings in 2003
 20.7% Return on Equity
PKO BP: Poised for profitable growth
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /6
Equity Capital Market Context
 Challenging European IPO market
 Investors highly price sensitive and selective in their investment
decisions
 Mixed aftermarket performance of recently priced IPOs
 Macro-environmental uncertainties
 US elections on the day before pricing
 Unsettled political environment in Poland
 Limited knowledge of Poland among non-GEM & EMEA global investor
base
 Structural expensiveness of Polish market
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /7
Investor Education
 CSFB’s research team presented the investment case of PKO to over 125 investors
in 17 cities (8 in Europe and 9 in the US) in one-on-one meetings, group meetings
and conference calls
 Thorough sales force preparation prior to launch and continuous updates to drive
momentum
 Broadest possible investor base addressed
 Dedicated CEE & GEM Investors
 Global Investors
 Pan-European Investors
 Financial Specialists
US Investor Education
European Investor Education
Stockholm
Denver
Amsterdam
Seattle
Boston
Frankfurt
San Francisco
Vienna
Dublin
New York
London
San Diego
Wilmington
Paris
Texas
Miami
Zurich
Milan
Please note: The CSFB Research Department does not form part of the marketing team on any potential transaction. If the CSFB
Research Department should issue a research report the only role of the research analyst is to provide information to the market on the
issuer and the issuer’s sector
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /8
Key Investor Themes During Investor Education
 Key Fundamental Themes
 Recognition of PKO BP’s leading franchise  Costs and ability to control / cut them
 Retail exposure
 Market share erosion
 Growth potential of revenues
 Management credibility / Government
 Favourable economic backdrop
 High ROE
 Acknowledgement that PKO BP is a
“must own” stock locally
control
 Incentivisation of senior management
 Excess capitalisation
 Sustainability of margins
 Lack of GDR
 Breadth of opinion on choice of other appropriate benchmarks
 Concern that Polish banking sector is structurally expensive
Valuation sensitivity was apparent among both domestic and international institutions
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /9
Addressing Investor Concerns
Structure of IPO
Cost Control
Concerns
Mitigant
 Potential for clawback
 Managed investor expectations
 Lack of GDR
 Early education and particular assistance
 Reverse Greenshoe
with access to Polish market
 Over $500m placed internationally
 High staffing levels
 Focus on revenue story
 High cost/ income ratio
 Achievements to date clearly communicated
 Lack of incentives for senior
 Potential for further operational efficiencies
management
Government
Relationship
 Majority ownership/influence
 Government representation on roadshow
 Possibility of management changes
 Government openly supportive of
with Government changes
Valuation
communicated
 Targets emphasised by management
 Highly energised professional Board - a
number under 40
management team and their targets
 Marketing strategy promoted management's
clear credibility and operational autonomy
 Structural premium in Polish market
 Marshalling investor focus on unique
 Tight discount to CEE peers
characteristics of Poland
 Focus on huge growth opportunity in underpenetrated market
 Focused investors on Pekao SA as principal
benchmark
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /10
International Roadshow Schedule
 Comprehensive roadshow
with management presenting
to nearly 200 investors
 240 orders in the book with
high-quality international
investors taking up significant
stakes
 Over 90% hit ratio
West Coast
Standard Pacific Capital
Boston
London
London
London
Batterymarch FM
Boston Company AM
Boston Overseas
Emerging Markets Investors
Evergreen IM
Fidelity
MFS IM
Oechsle Int Advisors
Pioneer IM
Putnam Investments
State Street Global
Wellington
Aberdeen AM
Aeneas Capital
AIG Global Investment
Alliance Capital
Atlantic CM
Barclays Private Clients
Baring AM
BDT
Black Ant Group
Cantillon CM
Capital International (2)
Charlemagne Capital
Citigroup AM
Clariden Bank
Conseq
Credit Suisse AM
Deephaven CM
Deutsche AM
Elliott Advisors
Everest Capital
F&C AM
Fidelity Investment
Fleming Family & Partners
Fortis Investments
Fortune FM
Gartmore IM
Genesis IM
GLG Partners LP
Global AM
Goldman Sachs AM
Govt of Singapore Inv.
Griffin CM
Holte Capital
Investicni Kapitalova S.
John A Levin & Co
JP Morgan Fleming
Jupiter AM
Lansdowne Partners
Lazard AM
Legg Mason Investments
London & Mercantile
London & Pacific
Marble Bar AM
Meditor CM
Merrill Lynch IM
Metropole Gestion
Mondrian
Moore Europe CM
MT Thaler IM
Neptune IM
Newton IM
Nomura AM
Odey AM
Och-Ziff
Oxburgh
Pictet AM
Partner Fund Management
Pioneer Alternative IM
Plutus Capital
Polygon Inv. Partners
Principal Global Investors
Putnam Investments
Schroder IM
Seneca
Sigma CM
Sloane Robinson IM
Standard Life Investments
Swiss Re
Sydbank
Thames River Capital
Theorema AM
Toscafund
T Rowe Price
UBS
West Asset Management
ZBI Europe
New York
AIG Global Invesment
American Century IM
Artha Capital
Blue Ridge Capital
Citadel IM
Clay Finlay
Deutsche AM
Duquesne
DuPont CM
Emerging Sovereign Group
Federated Global IM
Gilder Gagnon Howe & Co
GLS Capital
HBK Investments
Julius Baer IM
Kingdon Capital Mmgmt
Lazard AM
Lord Abbett & Co
Morgan Stanley IM
Oaktree CM
Pequot Capital Partners
Rohatyn Group
Satellite AM
Shoreline/Victoire Finance
Sierra Global Mgmt
Sigma Capital
Sunova Capital
Third Point Mgmt
Tiedemann
United States Trust
Viking Global Investors
Wasatch Advisors
Amsterdam
ABN Amro AM
Delta Lloyd Verzekeringen
ING
Lombard Odier Inst. AM
Stichting Shell Pensioenfonds
Frankfurt
Zurich
Anova
Bank Leu
Clariden Bank
Fortune Management
Julius Baer
MC Trustco
Swiss Re
Vontobel AM
UBS Global AM
Zurcher Kantonalbank
Activest Investment
Allianz Dresdner AM
AXA Investment Managers
Deka Investment
DWS Investment
Union Investment
10
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /11
Demand Dynamics
 Huge media interest and speculation… more than 500,000 retail investors
queuing for shares
 The retail offering comprised 2 tranches
– An offering to bank customers
– An offer open to all retail investors
 Retail investors entitled to a price discount as well as bonus shares in a year’s
time
 Polish institutional demand fuelled by pension fund growth
 Pension funds structurally required to invest in PKO BP
 PKO BP represents the highest market capitalisation stock in the WIG
 Broad global investor participation
 Education of investors coupled with relentless marketing resulted in successful
cross-selling
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /12
Unique Marketing Strategy Maximized Demand
Banks Specialist
Sales
Europe
US
Financial Institution
Specialists
CEE & GEM
Specialist Sales
Europe
US
GEM + EMEA
Funds
Global Salesforces
Europe
European
Funds
US
Global
Funds
US Funds
Sector Other Sector Other Sector Other
Investor Education: Banks Research Team & EMEA Research Team
CSFB’s unique distribution platform resulted in superior execution and ultimately the
best pricing for the government
12
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /13
International Demand Analysis
 Offering generated significant excitement
Largest 15 Orders
amongst investors and stimulated demand from
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
a broad range of investor constituencies
 Polish specialists (EMEA Funds)
 CEE market specialists
(GEM + EMEA Funds)
 Financial Specialists
Name
Country
Global Long Fund
Global Long Fund
Global Long Fund
EMEA Long Fund
EMEA Long Fund
GEM Long Fund
Hedge Fund
Value Long Fund
Global Long Fund
Financial Specialist
EMEA Long Fund
Global Long Fund
Global Long Fund
EMEA Long Fund
EMEA Long Fund
UK
UK
UK
Germany
UK
USA
UK
UK
Italy
UK
UK
UK
UK
UK
Germany
Demand $ m
212
201
131
115
110
100
100
100
100
100
97
94
92
88
86
Total
1,726
 Pan-European Funds
Evolution of Demand
 Global Funds
1,000m
demand including both dedicated EMEA and
general funds in Europe and the US
 Gross demand of 890 million shares / $5.4 bn
Cumulative Demand (shares)
 Extremely high quality international book of
890
Tranche size
900m
800m
700m
553
600m
500m
400m
331
300m
242
200m
100m
72
86
104
115
22 Oct
25 Oct
26 Oct
27 Oct
148
0m
28 Oct
29 Oct
1 Nov
2 Nov
3 Nov
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /14
Breakdown of International Demand
Allocation by Region
RoE
21%
Breakdown by Tier
2,500m
RoW
2%
2,179
2,059
US
25%
2,000m
Cumulative Demand ($ million)
UK
52%
1,500m
Breakdown by Investor Orientation
Other
Sector Funds 5%
10%
839
CEE Funds
30%
Global Funds
15%
Pan-European
Funds
20%
1,000m
500m
307
GEM Funds
20%
0m
Tier 1
Tier 2
Tier 3
Tier 4
Note: Tier 1 represent the highest quality institutions
14
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /15
Pricing and Allocation
 The decision to price the transaction at the top of the range was based on:
 Significant oversubscription levels
 The removal of price limits from most investors by the end of the roadshow
 Given oversubscription levels, it was imperative to distinguish between
aggregate and allocable demand
 This was particularly challenging given the high quality of international order
book
 Allocation strategy designed to create an investor base comprising long term
holders with appetite to buy more in the after market
 CSFB successfully managed international investors expectations so that
under allocation was widely expected
 Retail allocation needed to take account of the leverage provided by many
brokers
 The demand tension created by our allocation strategy stimulated significant
secondary market flow from international investors
15
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /16
Price Performance
 Stock closed at PLN24.50 on the first day trading,
Price Performance
+19.5% above the issue price
PLN25.0
 Offering priced at a 12.2x ‘05E P/E, 2.69x P/BV
 Currently trading at 14.6x ‘05E P/E, 3.21x P/BV
35
PLN24.5
30
 Trading activity in PKO BP shares set a new record on
PLN24.0
the Warsaw Stock Exchange
25
PLN23.0
20
PLN22.5
15
PLN22.0
Volume in Millions
Share Price
PLN23.5
 Highest turnover for a single stock
 Highest session turnover for all companies
Pricing Premium / (Discount)
Premium / (Discount) based on ‘05E P/E
35.2%
Offer Price
35%
PLN21.5
10
22.3%
25%
PLN21.0
13.8%
15%
5
PLN20.5
0
Offer Price
10-Nov-04
12-Nov-04
12.2%
5.2%
5%
-5%
PLN20.0
Today
-15%
15-Nov-04
(5.0%)
(8.1%)
(12.0%)
-25%
Volume
PKO BP
Note: Volume adjusted for double counting in the Warsaw Stock Exchange
Market data as at 15 November, Bloomberg
Note: CEE Average includes: Pekao, OTP, Bank BPH and Komercni Banka
Market data as at 15 November, IBES estimates
Right pricing strategy secured strong aftermarket performance
16
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /17
Implications for Further CEE Equity Issuance
 Significant investor appetite for CEE Equities
 Continued belief in the economic fundamentals of the region
 EU convergence platform provides defensive CEE market exposure
 Continued theme of non-specialist investors focusing on CEE as they
continue to chase outperformance
17
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /18
CSFB – First Class IPO Execution Platform
 Bookrunner of 10 IPOs in 2004 YTD, re-opening the IPO
# of IPOs Executed in 2004 YTD
market in a number of countries and sectors
10
10
 Consistent delivery to vendors by pricing every single
8
8
6
IPO within the initially set price range
 Priced more IPOs than any other bank (in absolute and
percentage terms) at or above the mid-point of the price
range
CSFB
 Better aftermarket than any other lead manager
MS
GS
ML
UBS
# IPOs Priced at or Above Range Midpoint
# of IPOs
Europe and globally than any other bank
CSFB led IPOs in 2004
US$2,300m
IPO
Sole Global
Co-ordinator &
Bookrunner
November 2004
US$194m
IPO
CHF180m
€1,451m
7
6
5
4
3
2
1
0
IPO
IPO
IPO
Bookrunner
Joint Global
Co-ordinator &
Bookrunner
Joint Global
Co-ordinator &
Bookrunner
October 2004
September 2004
June 2004
April 2004
CHF206m
US$127m
US$103m
US$167m
IPO
IPO
IPO
IPO
IPO
Global Co-ordinator
& Bookrunner
Joint Global
Co-ordinator &
Bookrunner
Joint Global
Co-ordinator &
Bookrunner
Bookrunner
Bookrunner
March 2004
March 2004
March 2004
March 2004
February 2004
7
33.3% 33.3%
12.5%
4
3
ML
MS
2
UBS
0.0%
0.0%
CITI
DB
1
GS
70%
60%
50%
40%
30%
20%
10%
0%
# of IPOs Priced At or Above Mid Point of Price Range
% of IPOs Priced At or Above Mid Point of Price Range
Premium/Discount to Midpoint of Range
1.6%
€217m
50.0%
CSFB
€456m
Global Co-ordinator
& Bookrunner
70.0%
% of IPOs
 CSFB over the last 5 years has led more IPOs in
CSFB
-2.8%
-4.5%
-6.0%
-6.6%
-7.0%
-9.3%
MS
ML
UBS
DB
Citi
GS
Source: Bondware and Datastream
CSFB is #1 in European IPO issuance in 2004 and has consistently met vendor expectations
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /19
CSFB – No 1 CEE Equity Franchise
CEE Equity Issuance Last 3 Years
US$2,300m
IPO
November ‘04
US$194m
IPO
October ‘04
Rank Manager
Amt (US$ m) # Deals
%Share
1 Credit Suisse First Boston
4,000
9
47.1
2 Morgan Stanley
1,187
2
14.0
3 UBS
793
4
9.3
4 ING
727
6
8.6
5 Citigroup
495
2
5.8
Other
1,295
6
15.2
Total
8,497
29
100.0
US$147m
ABB
February ‘02
US$201m
ABB
April ‘03
Source: Bondware; tables include CEE equity offerings >$50m; since November 2001
US$107m
ABB
April ‘04
US$127m
IPO
March ‘04
US$825m
ABB
December ‘03
US$407m
ABB
November ‘03
US$267m
Block
June ‘03
CSFB has executed more equity offerings than any other bank in CEE over the last 3
years
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C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /20
CSFB – Led the way in CEE Equity Offerings in 2003
2003
Best Central &
Eastern European
Equity Bookrunner
CEE 2003 Equity Issuance
Rank
1
2
3
4
5
6
7
8
9
10
Bookrunner
Credit Suisse First Boston
UBS
Morgan Stanley
ING
Citigroup
HVB Group
Merrill Lynch & Co
Deutsche Bank
ConCorde Securities Ltd
PKO Bank Polski SA
Other
Total
Source: Bondware
Euroweek
Am't (US$m)
1,286.99
625.51
412.28
265.65
158.55
78.85
53.77
50.94
48.39
12.15
6.64
2,999.73
# of Issues % Mkt. Share
4
42.90
2
20.85
1
13.74
5
8.86
2
5.29
3
2.63
1
1.79
1
1.70
1
1.61
1
0.41
2
0.22
22
100.00
2003
Central & Eastern
European Equity Deal
of the Year
Cesky Telecom
Euroweek
CSFB was named the best Central and East European Equity Bookrunner by Euroweek and led
the Deal of the Year (Cesky Telecom) in 2003
20
C:\Program Files\PowerPitch\PowerPitch.pot - Jul 19 2002 - 09:13 /21
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engagement and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with
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performance (including estimates of potential cost savings and synergies) prepared by or reviewed or discussed with the managements of
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benefit investor clients.
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