Bank Austria Creditanstalt (BA-CA) is the unquestionable leader on the banking market in Austria. Eighty percent of large-sized and 70 percent of medium-sized companies in Austria are customers of BA-CA. The bank's assets are worth 150 billion euros.

As a member of the HVB Group-one of Europe's leading bank groups-the Austrian bank corporation is in charge of Central and Eastern Europe. Over the many years of its activities in the region, BA-CA has become a leader on the fastest growing European market. No other bank has been so firmly and consistently involved in the transforming economies of Central and Eastern European countries.

The bank entered the Polish market gradually, carefully testing the ground and earning growing credibility. In October 1997, BA-CA purchased 13 percent of the stocks in the PBK bank as its strategic investor. By gradually extending its participation in the bank from Warsaw, BA-CA acquired 57 percent of the shares. Without losing its Polish character, PBK became an international bank upon its integration with BA-CA Poland. It introduced a complete set of products

addressed to the private banking sector and expanded its selection of services in the treasury sector, foreign currency operations in particular. The merger of BA-CA with the HVB Group resulted in a merger of two Polish banks in which both the above institutions had a strategic amount of shares-BPH and PBK. Today, BA-CA is the main stockholder in the BPH PBK bank.

Like the entire HVB Group, BA-CA is convinced that in the next few years, the economies in Poland and other Central and Eastern European countries will develop faster than those in the European Union. In line with HVB's strategy, BA-CA is planning to increase its capital and issue of stock. The Board has announced that 25 percent of BA-CA's stock will be available on the over-the-counter market. Capital obtained from sales of stock will be spent on the expansion of the bank in Central and Eastern Europe.

BPH PBK is developing its operations across the country. It has a network of around 500 branch offices providing services to over 2.7 million customers. It is a universal and market-oriented bank. It reacts flexibly to the changing needs of its customers, adjusting the range and quality of its products to customers' expectations and promoting comprehensive services. The bank renders its services to individual and institutional clients-both private enterprises and companies from the public sector. It is also an active and innovative institution on international markets and in treasury operations. The bank offers modern products and credit, deposits and settlement services. Customer service is available at the bank's offices and through extensively developed alternative channels of distribution. As one of the first banks in Poland, BPH PBK introduced services in electronic banking (Sez@am Internet account) and a Call Center, being a leader in this sector.

The strategy of BPH PBK is to become a leading, modern and innovative universal bank which renders comprehensive financial services, and to gain a high credibility and satisfaction level with its customers and stockholders. The main points of the strategy are retail banking-focused primarily on the middle class-and corporate banking, especially in the sector of small- and medium-sized enterprises and the largest corporations, including international ones.

An important element of the bank's strategy is the market of real estate financing, where the bank utilizes the vast experience of its strategic investor and the best solutions worked out by each of the banks constituting the HVB Group.