1. State development bank of Poland
Open days Workshop “Public Financial Institutions in Europe”
(Conf code 11A23)
Karina Kostrzewa
Brussels, 11th October 2011

2. Introduction - Profile
State development bank of Poland since 1924
Legally organized as a state bank (as opposed to a joint-stock company or cooperative)
Supervised by Ministry of Finance
Subject to oversight by financial supervision authority (KNF)
Not subject to bankruptcy law (implicit state guarantee)
BGK’s activities are governed by the following acts:
Act on Bank Gospodarstwa Krajowego (8 February 2011)
Decree establishing the statute of BGK (11 May 2010)
Banking Law (29 August 1997)
Ownership: 100% state-owned
Rating (Fitch): A- Stable (IDR)
Assets (2010): c. 9bln EUR (c. 36bln PLN);
8th biggest bank in Poland
Headquarters: Warsaw
Branches: 18 branches across Poland
Employee #: c.1,300 2

3. Introduction - Mission
Supporting government economic and social programs at national and regional level
Agent of the Ministry of Finance (foreign debt servicing)
Managing government loan and transfer funds
Handling government loan and subsidy programmes
Core Business
Banking and Advisory services for the Public Sector
Central Government Entities
Government programmes and tasks
based on capital guaranteed by the State Treasury
Public Mandate
Financing of Local Government 3

4. Introduction - Lending (2010)4

5. Supporting key sectors:
BGK activities
Supporting key sectors:
Exports
Infrastructure
Start-ups, entrepreneurship (SMEs)
Innovation and development
Financing municipalities
Social housing

6. Intermediary Financial Institutions
BGK Business Model
Intermediary Financial Institutions
Clients
Local government entities
SMEs
Strategic enterprises
Sources of Funding
Equity
International Financial Institutions
EU Funds
Debt markets
Deposits
Government funds
BGK’s Branches
State Liability
Special „State Bank” status
Act on BGK
Public Mandate
Management of Government Funds
Management of Government Programs 6

7. BGK business model - instruments
Government programs and tasks based on capital guaranteed by the State Treasury
Servicing of Public Sector
(Central Government Entities)
Financing of Local Government
& General Public Mandate
Guarantee programs
Servicing of appropriated funds
Complete servicing of municipalities, healthcare:
financing, PPP, transactional banking,
liquidity management
Support of EU investments
Agent of State Treasury [ST]
(public debt management)
Support of strategic sectors
(R&D, education, energy)
and project finance
Export finance support
EU funds transfer from ST accounts
( EU financial perspective)
Financing the gap in social housing
Export pre-financing, support for exporters,
including liquidity
and risk managementi
Infrastructure financing (transport,
municipal, social infrastructure)
Servicing of central budget accounts
(currently Central Bank of Poland [NBP])
Filling in gaps in credit-equity
financing in the financial markets
(e.g. VC, entrepreneurship)
Realization of other tasks as part of
assigned government programs
Banking services for ministries,
central agencies, NFZ, etc...
BGK Group
Venture Capital
Innovative SMEs
Guarantees
Guarantee System in Poland
Public-Private Partnership (PPP)
Advisory and structured financing
Export Finance
Business support

8. Financing instruments for regions/municipalities
BGK offers the possibility of financing local government investments through:
Capital markets: organizing bond issues (underwriting/advisory)
Lending:
Loans from the bank’s own resources
Loans from international financial institutions (eg. EIB)
Loans from state budget under the Rural Development Programme (PROW)
Loans under the Municipal Investment Development Fund (FRIK)
JESSICA – financing urban revitalization (Wielkopolska province);
Environmental Lending Subsidies (PO IS)
Environmental Protection Fund resources (in the repayable and non-refundable form);
Grants from the Treasury
Investments possible by financing municipal companies without recourse to local government guarantees or financing
Public-private partnerships (PPP) 8

9. Leading position in local government financing
Leading bank in local governments financing
2489 local municipalities in Poland
Municipal loan market share ~ 15,5%
Assets over 1,3 bln EUR
BGK takes part in almost ½ of all loan tenders announced by local governments (by volume) with nearly 50% effectiveness
Ranked second in underwriting municipal bond issues
Municipal bond market share ~ 13,14%
Bond issuance volume over 325mln EUR
Full service related to bond issue placement: organizing agent, depositary, transfer agent, dealer, underwriter. 9

10. Leading position in local government financing
BGK is the leader in local governments financing with total assets of 1,27 bln $
Municipal loan market market share ~ 15,5%
BGK takes part in almost ½ of all loan tenders announced by local governments (by volume) with nearly 50% effectiveness
Municipal bonds market share ~ 11,3%
2009
2010
tenders
2340
2577
BGK participation (number)
484
783
BGK participation (volume)
41%
47%
efficiency*
40%
*percentage of tenders won by BGK out of all tenders with BGK offer (by volume)

11. Value added
Municipalies:
Close ties and network with municipalities developed over the years
Advisory servises for municipalities (analysis, PPP, liquidity, financing, EU funds)
SMEs:
Equity for innovation start-ups
Technology grants for innovation SMEs
Counter ciclical:
providing financing for municipalities/SMEs during the crisis at low cost (loans, guarantees)
providing liquidity for interbank market

12. Summary
100% state own financial institutions with clear public mandate and implicit guarantee
Support to the development of the country at the central and municipal level
Guarantor of effective use of EU revolving instruments in Poland especially in MFF