The Foundations and Drivers of BANKS ASSOCIATION the Innovative - PowerPoint PPT Presentation

THE POLISH The Foundations and Drivers of BANKS ASSOCIATION the Innovative Banking Sector in Poland Mieczysław Groszek Executive Vice President The Polish Banks Association 30 September 2014, Boston ul. Kruczkowskiego 8 00-380 Warsaw tel. +48 22 48 68 180 www.zbp.pl

Achievements of the Polish Transition 1989-2014 Poland Then and Now THE POLISH BANKS Democracy & Market ASSOCIATION Free GDP per capita 22,201 We, the (Intl. dollars, PPP) market! People! 6,154 * 1989 1994 1999 2004 2009 2014 Source: IMF. 586 52 Inflation (annual, %) Tertiary education enrolment rate (%) 1.5 13 * 1989 1994 1999 2004 2009 2014 Source: IMF. * 1989 2014 * Forecasts. Source: Central Statistical Office. ul. Kruczkowskiego 8 00-380 Warsaw tel. +48 22 48 68 180 www.zbp.pl

Foundations and Drivers (1) Annual GDP growth 1989-2014 (%) 10 THE POLISH BANKS  Stable 5 ASSOCIATION economic 0 1989 1994 1999 2004 2009 2014* growth -5 -10 Source: IMF. * Forecast. Cumulative GDP growth 2007-12 (%)  Resistance on economic crisis ul. Kruczkowskiego 8 00-380 Warsaw Source: IMF. tel. +48 22 48 68 180 www.zbp.pl

Foundations and Drivers (2) No. of commercial banks THE POLISH BANKS ASSOCIATION  Prudent and competent banking 87 supervision (but not blocking 39 innovations): 9 1. Consolidation of banks based on 1989 1993 2014 takeovers or mergers approved by FSA. No. of cooperative banks 2. Recovery and resolution under the 1663 1653 supervision of FSA. 3. Sound structure of the banking system 566 as a result. 1989 1993 2014 Source: Narodowy Bank Polski ul. Kruczkowskiego 8 00-380 Warsaw (national bank of Poland) tel. +48 22 48 68 180 www.zbp.pl

Foundations and Drivers (3) 1989 THE POLISH BANKS  Mixed structure of foreign and domestic ASSOCIATION capital in banks: 100% 1. Inflow of know-how. 2. Fast modernization of the obsolete banks 2008 inherited from the communist era. 28% 3. Good mixture between the established 72% corporate culture of the western banks and Domestic the dynamism of the Polish employees. Foreign 2014  POLISH SPECIFICITY: INNOVATIONS DRIVEN BY 38% LARGE INSTITUTONS BOTH DOMESTIC AND 62% FOREIGN. ul. Kruczkowskiego 8 00-380 Warsaw tel. +48 22 48 68 180 Source: The Polish Financial Supervision Authority. www.zbp.pl

Polish Banks Sound and Resilient (1) ROE by Country 2008 2010 2012 THE POLISH BANKS Austria 2.3 6.6 4.5 ASSOCIATION Belgium -62.3 10.8 2.6  Stable: CAR = 15.8%. Cyprus 13.4 6.2 -178.6 Germany -11.4 2.3 1.3  Efficient: ROE = 11.7%. France 2.2 8.3 3.4 UK -12.2 4.8 1.9 The Netherlands -12.5 7.2 5.9  Resistant: no single Poland 17.0 12.5 11.7 Italy 4.9 3.8 -1.2 bank got a bailout in the CAR in the Polish banking sector (%) crisis. 15,8 13,8 13,3 13,1 13,1 12,1 11,2 2007 2008 2009 2010 2011 2012 2013 Sources: The European Central Bank and the Polish Financial Supervision Authority. ul. Kruczkowskiego 8 00-380 Warsaw tel. +48 22 48 68 180 www.zbp.pl

Polish Banks Sound and Resilient (2) THE POLISH Innovations in payments: BANKS ASSOCIATION  More than 50% of bank accounts can be accessed online.  12% of mobile phone users are active using mobile banking.  5% of mobile phone users pay mobile.  60% of payment cards are contactless (NFC). Source: TNS and own sources. ul. Kruczkowskiego 8 00-380 Warsaw tel. +48 22 48 68 180 www.zbp.pl

THE POLISH BANKS ASSOCIATION Thank you for attention! Mieczysław Groszek Executive Vice President The Polish Banks Association 30 September 2014, Boston ul. Kruczkowskiego 8 00-380 Warsaw tel. +48 22 48 68 180 www.zbp.pl

Polish Payment System – modern but secure and compliant Adam Tochmański Director of the Payment Systems Department Narodowy Bank Polski Sibos 2014 Boston

Polish Payment System – modern but secure and compliant Polish payment system evolution Large value payment systems TARGET2-NBP EURO SORBNET-EURO (LVPS) SORBNET2 Traditional interbank SORBNET PLN settlements in SORB NBP branches 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Retail payment systems SYBIR ELIXIR PLN (RPS) BlueCash Express ELIXIR EURO Euro ELIXIR

Polish Payment System – modern but secure and compliant Payment systems in Poland – 2014 Large value payments Retail Interbank payments from payments Customer payments Interbank payments securities market net ELIXIR gross Express gross ELIXIR SORBNET2 gross RPW RTGS gross / net net EuroELIXIR kdpw_stream gross gross BlueCash TARGET2-NBP gross RTGS Payment cards & innovative payment Securities depository (CSD) intruments & securities settlement Large value payment PLN systems (SSS) Retail payment systems (RPS) systems (LVPS) EUR

Polish Payment System – modern but secure and compliant Polish COMPLIANT MODERN payment system   Modern IT solutions Different systems for large value and retail payments  Short settlement time  Three SIPS designated  Two immediate payment under SFD (SORBNET2, systems TARGET2-NBP and  High usage of innovative ELIXIR) payment instruments  SECURE All payment systems (contactless cards, overseen by NBP mobile payments)  Ongoing assesment vs  Flexibile approach  Reliable and secure IT international standards towards the needs of platforms different users  International standards applied  Ongoing monitoring  Low share of card frauds

Polish Payment System – modern but secure and compliant The role of NBP in the payment system  Payment System Operator Council and its subgroups  Polish Banks Association and NBP working groups Regulator Catalyst  Alliance for non-cash payments and micropayments  Education – Overseer conferences & seminars

Adam Tochmański Director of the Payment Systems Department Narodowy Bank Polski +48 (22) 185 27 28 adam.tochmanski@nbp.pl

KDPW Group State-of-the-art post-trade infrastructure Ph.D. Iwona Sroka – President & CEO of KDPW and KDPW_CCP Boston, 30 September 2014

join the celebrations of the 25th anniversary of economic freedom in Poland ___________________________________ was established in 1991 was separated in 1994, as an independent, join stock company was created in 2011 17

Polish Capital Market vs. Europe Equity market Futures market Market Operator 2012 2013 London Stock Exchange Group 21,37% 20,56% NYSE Euronext 15,36% 15,21% Deutsche Börse 12,42% 12,29% BME (Spanish Exchanges) 8,31% 7,48% SIX Swiss Exchange 5,69% 6,28% NASDAQ OMX Nordic 5,71% 5,72% Oslo Børs 1,42% 1,11% Warsaw Stock Exchange 0,57% 0,64% CEESEG - Vienna 0,23% 0,23% Athens Exchange 0,15% 0,18% Boerse Stuttgart 0,14% 0,18% Irish Stock Exchange 0,09% 0,13% CEESEG - Budapest 0,11% 0,09% CEESEG - Prague 0,13% 0,08% Bucharest Stock Exchange 0,01% 0,01% Bulgarian Stock Exchange 0,00% 0,01% CEESEG - Ljubljana 0,00% 0,00% Luxembourg Stock Exchange 0,00% 0,00% Malta Stock Exchange 0,00% 0,00% Bratislava Stock Exchange 0,00% 0,00% Cyprus Stock Exchange 0,00% 0,00% 18

Capital Market in CEE Region Share of Capitalisation of Exchanges in Share of Stocks Turnover in the CEE Region the CEE Region 1% 1% 1% 2% 2% 2% 2% 6% 9% 9% 7% 9% 7% 9% 39% 44% 48% 58% 65% 48% 45% 42% 47% 53% 73% 71% 56% 58% 59% 54% 49% 46% 47% 50% 44% 40% 42% 35% 32% 34% 26% 26% 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Share of Numbers of Index Future Contracts in the CEE Region 8% 11% 14% 20% 25% 23% 30% 92% Warsaw Stock Exchange 88% 86% 80% 75% 77% 70% CEESEG: Austria, Czech Republic, Hungary, Slovenia Bucharest SE, Bulgarian SE, Bratislava SE 2 007 2008 2 009 2010 2 011 2012 2 013 19

At-a-Glance Statistics: August 2014  KDPW participants – 65  KDPW_CCP participants – 38  Issuers – 1152 (of which 77 are foreign)  Deposited equities issues – 1099  Deposited bond issues – 1099  Capitalisation of shares in KDPW – EUR 138 billion (USD 178 billion)  Capitalisation of bonds in KDPW – EUR 139 billion (USD 179 billion)  Number of cleared transactions – cash market: 6.14 M  Value of cleared transactions – cash market: 22 EUR billion (USD 28 billion)  Number of cleared transactions – derivatives market: 1.95 M  Value of cleared transactions – derivatives market: 33 EUR billion (USD 41 billion) 20

KDPW and KDPW_CCP 33% 33% • Stable and credible shareholders WSE NBP • Main objective: safety and stability of financial system • Treasury Low risk profile - not-for-profit infrastructure institution • Supervision by Polish FSA (KNF) and ESMA, oversight by Polish Central Bank (NBP) KDPW_LEI 33% *** • EU registration of KDPW Trade Repository – one of 4 first TRs registered in Europe • LEI assigning (KDPW_LEI) • Services for energy market (KDPW_GIR) • Planned CSDR authorisation of KDPW 100 % *** • EMIR authorisation of KDPW_CCP (3rd in Europe) • KDPW_CCP own capital: EUR 54 M (USD 70 M) • Central counterparty functionality through novation • Reporting to KDPW_TR (non mandatory) 21