The Acquisition of BGZ

In 2009, the Group finalized the acquisition of Fortis Bank, Belgium and its subsidiaries in Luxembourg and in Poland. Subsequently the Group decided to merge Dominet Bank and Fortis Bank Polska (FBP) operating on the Polish market, in order to be better placed to deal with any liquidity issues that might arise and pursuing its ambition to build a strong sizeable universal bank on the Polish market.

An initial restructuring process, which took place between 2009 and 2012, included merger of the two polish banks, an acquisition of the organized part of the bank enter- prise from BNP Paribas SA Branch in Poland, including the selected group of 350 Branch customers and purchase of a leasing company by FBP aiming at integration of the Group s local leasing.

The new bank, rebranded and renamed to BNP Paribas Bank Polska in 2011, continued its transformation from a bank servicing mainly corporate customers and affluent indi- viduals to a universal bank.

However, the newly merged entity, which held a rather small market share, of the order of 1.5%, facing adverse market conditions on the very competitive banking market was not able to reach a critical size.

Back in Paris, BNP Paribas CEO Jean-Laurent Bonnafé studied the Polish situation and concluded, in line with Group strategy, that BNP Paribas needed to acquire a bank in Poland so as to attain a market share of around 5%, the threshold level at which the ven- ture could be profitable and achieve further growth. This strategic decision was taken at a moment when the banking system in Poland was undergoing change. Following a wave of privatisations during the 1990s and 2000s, there was a large number of medium-sized banks in existence, a situation which was likely to lead to a movement towards consoli- dation in the sector. Moreover, several international banks were showing interest in the Polish market, notably Santander and UniCredit. In 2010, Polish Bank Zachodni WBK (BZ WBK) came up for sale. BNP Paribas was among the suitors but in the end the prize fell to Santander. This was a setback for BNP Paribas, but it in no way called into question the strategic thrust determined the previous year. The Bank examined a number of other possible targets, but they were all too small.

It was then that BGZ came up for sale at a most unexpected moment. Rabobank had held a stake in BGZ since 2004, becoming the majority shareholder in 2010 and then

SIEDZIBA BANKU BGŻ PRZY ULICY KASPRZAKA 10/16 W WARSZAWIE

HEAD OFFICE OF BGZ, 10/16 KASPRZAKA, WARSAW

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