CONTENTS Using money – methods of paying and purchasing, Michał Stalmach Inflation Michał Rogowski Private banking Jakub Jaworski Savings – saving facilities in Poland Karol Dąbrowski

METHODS OF PAYING AND PURCHASING USING MONEY METHODS OF PAYING AND PURCHASING

PAYING METHODS Cash Cheque named cheque cheque to bearer blank cheque dud cheque overdue cheque honour on presentation Traveler`s cheque

PAYING METHODS Credit card Debit card Bank card (cash card) Smart card Transfer

METHODS OF PURCHASING Hire purchase Buy on instalments Buy at auction Buy at fair But at sales bargain sales clearance sales seasonal sales

DICTIONARY Agreed - uzgodniony Bank card (cash card) – karta bankowa Bargain - okazja Blank cheque – czek bez wpisanej kwoty Buy on instalments – kupować na raty Cash – realizować (czek) Cash dispenser - bankomat Cheque to bearer – czek na okaziciela Clearance sale – wyprzedaż likwidacyjna Cover - zabezpieczenie Credit card – karta kredytowa Debit card – karta debetowa Draw – wystawić Drawer – wystawca weksla Dud cheque – czek bez pokrycia

DICTIONARY Fair - targi Hire purchase – sprzedaż ratalna Honour – honorować (czek) Liquid - płynny Named cheque – czek z imieniem odbiorcy On presentation – za okazaniem Overdue – przeterminowany Payee – beneficjent, odbiorca weksla Sale - wyprzedaż Smart card – karta magnetyczna Transfer - przelew Traveller`s cheque – czek podróżny

INFLATION A rise in the general level of prices as measured against some baseline of purchasing power

Types of inflation Demand – Pull Inflation – when there is too much money in the circulation Monetary Inflation – producers are not able to change the structure of production Cost – Push Inflation – rise of production costs

Causes of Inflation Unbalanced national budget Defective structure of economy To many investments in the country Rise of the basic energetic raw materials prices

Consequences of Inflation Personal Negative Positive General

Personal consequences Negative Have people who keeps their money in „pocket” or on savings account People who works (get increase and pay higher taxes) Banks that gives long - term loans

Personal consequences Positive Takes people who buys earlier cheaper goods and sells them as much more expensive Incurs mortgage credit during the inflation

General consequences Aversion of businessmen to take investments in the country Devaluation of national currency Impairment of national credibility to the creditors

DICTIONARY Money in circulation – pieniądze w obiegu Restock – uzupełniać Limitations – ograniczenia to induce – wywoływać Rate – stawka to incur – zaciągać( np. kredyt) Impairment – osłabienie Credibility – wiarygodność

PRIVATE BANKING WEALTH MANAGEMENT

PRIVATE BANKING Services which are offered to the wealthiest clients of a bank, it is a individual and comprehensive financial system of service of wealthy individual client by bank

CATEGORIES OF CLIENTS HNWI – high-net-wealth individuals – financial assets over 1 mln USD, Extremely wealthy - financial assets over 5 mln USD, U-HNWI – ultra high-net-wealth individuals – super rich - financial assets over 30 mln USD,

HISTORY OF PRIVATE BANKING England in XVII century Aristocracy Landowners, Merchants, Entrepreneurs, Geneva Julius Baer, Picted, Lombard Odier,

10 WORLDS BIGGEST BANKS OFFERING PRIVATE BANKING Union Bank of Switzerland 422 bln USD CSPB 288 bln USD JP Morgan Chase 230 bln USD Deutsche 180 bln USD Citibank 140 bln USD Merrill Lynch 137 bln USD ABN Amro 133 bln USD Bank of America 128 bln USD HSBC 121 bln USD BNP Paribas 100 bln USD

ORGANIZATIONAL SOLUTIONS IN MODERN PRIVATE BANKING Separate department of big retail bank, Separate department of investment bank Modern private banking in old traditional private bank

TRADITIONAL PRIVATE BANKING Keeping wealth’s value, Low volume of turnovers, Low market share, Elitist, Specialist advisory, High unit profit,

PRODUCTS OFFERED IN PRIVATE BANKING Investment products, Risk management, Traditional bank service, Financial, estate planning and advisory,

INVESTMENT PRODUCTS Equity, Fixed income, Hedge funds, Structured products, Options,

RISK MANAGEMENT Portfolio diversification strategies, Stock option strategies,

TRADITIONAL BANK SERVICE Loans, Mortgages, Checking/saving accounts, Business accounts,

FINANCIAL, ESTATE PLANNING AND ADVISORY Tax planning, Estate planning, Trust administration, Estate administration, Insurance,

WHY PEOPLE USE PRIVATE BANKING? Individual service and advisory, Snobbery, Elitist, ”Made-to-measure” offers

WORLDS MARKET SHARES OF WEALTH MANAGEMENT

PRIVATE BANKING OFFERS IN POLAND Name of the program/ name of the basic account Criterion of qualifications personal account or location account, Payment for packet Interest rate of basic account Available prestigious cards Yes - negotiable Yes – negotiable, Standard payment for ELITA account 15 PLN monthly Depends on balance and type of account Diners Club, Visa Gold KB/Warta credit card, Visa Platinum, Master Card Platinum credit card, Additional elements of offer Receipts in account – 10.000 PLN Assets of 200.000 PLN Assets of 250.000 Conditionally for clients with assets over 100.000 PLN - Receipts in account – 10.000 PLN -Negotiable exchange rate, -Automatic overnight deposit, -Deposit policy – attractive form of saving’s invest, -Service in separate establishments, -Foreign assets management, -Service Raiffeisen Concierge for owners MC Platinum -Quality certificate EN ISO 9001:2000 for service Private Banking, -Free Assistance insurance packet, -Bank assurance offer -Warta Vip client’s card

PRIVATE BANKING OFFERS IN POLAND - Private Banking Program, - Private Banking Account, - Private Banking & Investment Program, - Private Banking Account Receipts in account – 20.000 PLN or Assets of 300.000 PLN Name of the program/ name of the basic account Criterion of qualifications Payment for packet Interest rate of basic account Available prestigious cards Additional elements of offer Assets of 500.000 PLN Yes – negotiable, Standard - 60 PLN monthly 2.2% - 3.7% Depends on balance account Classified balance account, 10000 PLN debit balance without payments, Negotiable exchange rate, Bank assurance offer

PRIVATE BANKING OFFERS IN POLAND Name of the program/ name of the basic account Criterion of qualifications Payment for packet Interest rate of basic account Available prestigious cards Additional elements of offer - PLATINIUM Private Banking Program, - PLATINIUM Private Banking Account, Receipts in account – 10.000 PLN or Assets of 500.000 PLN Assets of 400.000 PLN Yes – negotiable, - Private Banking, - VIP Account, Free of charge – in case of balance account under 100.000 PLN /payment 30 PLN monthly Bank - Visa Electron or MasterCard with chosen by user picture – My Card ING - Visa Gold credit card, 0% But it is possibility to invest surplus in automatic OKO deposit with interest rate from 3.5% to 3.75% 5.000 PLN debit balance, Financial Advisory, Free renewable credit to 10.000 PLN, PLATINIUM Cash Credit, ”Program of Privileges” partnership program, -Free assurance, -Classified balance account, -Renewable credit line, -Assurance Investment Deposit,

PRIVATE BANKING OFFERS IN POLAND Name of the program/ name of the basic account Criterion of qualifications Payment for packet Interest rate of basic account Available prestigious cards Additional elements of offer Bank Assets of 500.000 PLN Receipts in account – 12.000 PLN or Assets of 100.000 PLN -Private Banking, -Prestige Euro account, Yes – negotiable, Min. 30 PLN monthly Free of charge – in case of balance account under 100.000 PLN /payment 70 PLN monthly -A’vista Account or GOLD Account, -Millennium Prestige, Prestige Personal Account, 0.10% negotiable 1.00% -Prestige IKM, Visa Platinum, -MasterCard Platinum, -MasterCard World Signia -Visa Platinum BRE Private Banking, -American Express Centurion Card, Negotiable exchange rate, Loan in Euro Account, ”Helpful Packet” insurance packet, Private Club or Private Consulting partnership program for users of World Signia or Visa Platinum credit card, Assets management products, ”Made-to-measure” products, -Renewable credit line, -Bank assurance offer, -PRESTIGE Investment program, -PRESTIGE Guarantee policy,

PRIVATE BANKING OFFERS IN POLAND Name of the program/ name of the basic account Criterion of qualifications Payment for packet Interest rate of basic account Available prestigious cards Additional elements of offer Bank -Platinum Packet, -Platinum Account, -CITI Gold wealth management, -CitiGold Personal Account, Assets of 500.000 PLN, Assets of 200.000 PLN, Free of charge – in case of balance account under 200.000 PLN /monthly payment 95 PLN, – in case of balance account under 500.000 PLN /quarterly payment 250 PLN, 0% - 0.25% Depends on balance account 0,50% -Maestro gold payment card, -Citibank Platinum credit card, -Automatic overnight deposit, -Foreign investment funds, -Service in international centres of Fortis Private Banking, -CITIBANK credit line, -Guarantee policy, -Bank assurance offer, -Access to Citi Gold Investment Centre for the wealthiest clients (over 500.000 USD), Negotiable exchange rate, ”Gold Land for Friends” Program,

PRIVATE BANKING OFFERS IN POLAND Name of the program/ name of the basic account Criterion of qualifications Payment for packet Interest rate of basic account Available prestigious cards Additional elements of offer Bank Receipts in account – 20.000 PLN or Assets of 500.000 PLN Yes – negotiable, 0.75%- 5.55% Depends on balance account -Free investment recommendations - investment portfolios, -Foreign investment funds, -Hedging funds, -Assurance products, -Status packet, -DB Fokus Account

DICTIONARY account - konto financial assets – aktywa finansowe, separate departments – wydzielone departamenty retail bank – bank detaliczny investment bank – bank inwestycyjny turnover – obrót volume – wolumen value – wartość market share – udział w rynku specialist advisory – specjalistyczne doradztwo unit profit – zysk jednostkowy

DICTIONARY portfolio diversification strategies – produkty związane ze strategią dywersyfikacji portfolio, stock option strategies – strategie opcji giełdowych, loan – pożyczka, mortgage – hipoteka, checking / savings account – rachunek rozliczeniowo – oszczędnościowy, business account – rachunek biznesowy estate administration – administrowanie nieruchomościami, trust administration – administrowanie funduszami powierniczymi, estate planning – doradztwo w zakresie nieruchomości,

DICTIONARY assets of… - aktywa o wysokości …. depends on balance – w zależności od salda exchange rate – kurs waluty Separate establishment – wydzielona placówka, basic account – rachunek / konto podstawowy personal account – rachunek / konto osobiste (A' vista) interest rate – oprocentowanie classified balance account – utajnione saldo rachunku, debit balance – saldo debetowe, free renewable credit – kredyt odnawialny credit line – linia kredytowa policy – polisa

DICTIONARY guarantee policy – polisa gwarancyjna foreign investment fund – zagraniczny fundusz inwestycyjny, assurance – ubezpieczenie, głównie na życie, recommendation – rekomendacja to open an account – założyć konto, to close an account – zamknąć / zlikwidować konto, interest (on) – odsetki (od) bull market – hossa bear market - bessa bond – obligacja securities – papiery wartościowe,

DICTIONARY investment product – produkt inwestycyjny, equity – akcje fixed income – papiery o stałym dochodzie, hedge fund – fundusz hedgingowy, structured product – produkt strukturyzowany, option – opcja, risk management – zarządzanie ryzykiem liquidity – płynność derivatives – instrumenty pochodne to audit – rewidować clearing - rozrachunkowy

DICTIONARY tax planning – doradztwo podatkowe, insurance – ubezpieczenie, asekuracja ”made-to-measure” offer – oferta „szyta na miarę” czyli dostosowana indywidualnie do potrzeb klienta, client - klient , np. banku, adwokata lub innej instytucji, elitist – elitarny, snobbery – snobizm receipt in account – wpływ na rachunek negotiable – do negocjacji, payment – płatność

Structure of savings in Poland Bank deposits Cash Direct investments (shares, bonds, T-bills) Investment funds Insurance capital funds Open Pension Funds

Level of savings in Poland Savings – 50% GDP CAGR exceeded 10% CAGR 2005 – 16%

Level of savings in Poland Dec ’99 Dec ’00 Dec ’01 Dec ’02 Dec ’03 Dec ’04 Dec ’05 INVESTMENTS

Level of savings in Poland Dec ’99 Dec ’00 Dec ’01 Dec ’02 Dec ’03 Dec ’04 Dec ’05 Open Pension Funds Insurance capital funds Investment funds Direct investments Cash Bank deposits INVESTMENTS

Structure of savings in 2005

Level of savings in Poland SUMMARY Stable level of banking deposits Restraining growth of direct investment Share drop of bank deposits to less than 50%

Level of savings in Poland SUMMARY Fast growth of Investment fund signification Growing matter of Pension fund

Level of savings in Poland SUMMARY People are able to accept higher risk level - reasons Bull market Huge privatizations Rising importance of common investment institutions

DICTIONARY Bank deposits - depozyty bankowe Cash - gotówka Direct investments (shares, bonds, T-bills (tresury-bills)) - inwestycje bezpośrednie (akcje, udziały, obligacje, bony skarbowe) Insurance capital funds - ubezpieczeniowe fundusze kapitałowe Open Pension Funds - otwarte fundusze emerytalne common investment institutions - instytucje wspólnego inwestowania CAGR - compound annual growth rate - średnioroczna stopa wzrostu