CONTENTS
Investment recommendation 4
I— Overview of the banks 6
II— Valuation 7
􀁑 Gordon growth model 7
􀁑 Peer comparison 8
􀁑 Share price performance 9
III— Macroeconomic environment in Poland 10
IV— The Polish banking sector 13
􀁑 Low penetration boosting asset growth in recent years 13
􀁑 Market concentration is still not too high 15
􀁑 Double-digit loan growth a thing of the past 16
􀁑 Profitability, capitalization and asset quality 19
V— Comparison of the four banks 21
􀁑 Loan growth and loan split 21
􀁑 Profitability and capitalization 24
􀁑 Asset quality and FX option exposure 27
VI— Company profiles 29
􀁑 BRE Bank – Stretched leverage and risk of dilution 30
􀁑 BZ WBK – Just too exposed to real estate 34
􀁑 Pekao SA – Well positioned, but too expensive 38
􀁑 PKO BP – That's the one to have! 42