GENERAL MEETING DRAFT - Bankier.pl

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>> Report on Operations
Corporate & Investment Banking (CIB)
� optimization of portfolios with negative EVA contribution: In 2009 the Group continued the initiative to
improve the return on EVA-negative portfolios, and further increased the awareness of sales
networks of the need to apply pricing indicative of the customer's risk profile;
� continued sustainability of relationships: A project was launched in Italy for the selection of deserving
customers experiencing temporary difficulties in order to provide them an opportunity to get through
the critical period and eliminate the sources of tension with the aim of reducing the probability of
default with a resulting benefit for RWAs. The tools available, which must be modified based on the
type of customer analyzed, are the following:
o reduction of financial charges, especially on medium and long-term loans (e.g., through the
temporary restructuring of installments or deferred payments);
o mitigation of risk by shifting credit facilities to loan categories with greater collateral, and reducing
exposure where possible;
o assessment of a possible re-pricing of facilities if conditions are not in line with the changed level
of risk, or if the customer is EVA-negative;
o assurance of compliance with any repayment plans.
Finally, the Leasing Product Line launched a number of initiatives aimed at reducing the impact of the
deteriorating economic situation on its results. In particular, a special program was launched to prevent
and reduce the deterioration of irregular loans through soft collection activities and payment
"restructuring," and the resale of assets owned by the company on the market. In order to perform these
and other credit recovery activities, Leasing set up dedicated task forces, and in 2009 the initial positive
results continued for an activity that the Group believes will continue to have an impact in 2010.
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Despite continued, widespread uncertainty over the actual extent of the recovery, recent changes in the
macroeconomic and industrial situation seem to indicate a gradual, but modest, stabilization process,
driven primarily by the rebuilding of inventories in the manufacturing sector and a renewed vitality in
exports. 2010 is seen as a transition year characterized by moderate growth in the main indicators, in an
environment that continues to experience substantial market difficulties and reduced competition among
companies, and in which there is still a substantial focus on loan quality. Current levels of underutilization
of manufacturing capacity indicate there will be a slow recovery of investments. The actual sustainability
of the economic recovery will depend, to a great extent, on the performance of international trade, and
especially on the dynamics of domestic demand, which to date has been bolstered by temporary tax
incentives.
The growth of loans to companies is expected to reflect the overall performance of the economy with
positive signs projected for the second half of 2010 due in part to the return of funding costs to levels
seen prior to the crisis. Market rates are expected to remain at low levels due to abundant cash levels
provided that rates realign with reference rates.
In the area of financial markets, in 2009, and especially during the first nine months of that year, operators
benefited from the substantial amount of liquidity injected in the system by central banks, high levels of
volatility and a renewed propensity for risk. These factors were accompanied by the recovery of stock
prices and indexes in the financial sector. These positive signs slowed down at year-end due to fears of
market operators over pressures on sovereign debt in Greece and the debt of a major financial operator
in Dubai. The outlook for the current year is based on the normalization of market conditions and the
presence of concealed risk factors that make it unlikely that the performance observed in 2009 will be
repeated.