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Current reports 1999

Kraków, September 30, 1999

Current Report 40/1999

Fortis Bank Acquired a Majority Ownership Position of Polish PPABank

On 29 September 1999 Fortis Bank has acquired 4,479,922 common shares in Pierwszy Polsko-Amerykański Bank S.A., from Polish-American Enterprise Fund (PAEF) and Enterprise Credit Corporation (ECC) at a price of 42.10 PLN per share under an off-market transaction carried out pursuant to a permit of the Polish Securities & Exchange Commission dated 24 September 1999.

Polish-American Enterprise Fund sold 2,644,547 shares and Enterprise Credit Corporation sold 1,835,375 shares. The total value of transferred shares is PLN 188.6 million (USD 46.0 million). Fortis Bank also undertook that the price per share, at the public tender for all outstanding shares of PPABank to be announced by Fortis Bank in accordance with Article 154 of the Polish Law on Public Trading in Securities, will be lower than the price paid to PAEF and ECC by not more than PLN 2.

This follows the announcement made by Fortis Bank (then Generale Bank) on 23rd February 1999 that it had agreed to acquire 4,479,922 shares amounting to 58.8 % of PPABank's issued share capital from the Polish-American Enterprise Fund and the Enterprise Credit Corporation, and to launch a tender offer for the remaining shares conditional upon required regulatory approvals. This transaction takes Fortis Bank stake in PPABank to 68.5%.

PPABank is a medium-sized commercial bank founded in 1990 and has been listed on the Warsaw Stock Exchange since 1994. PAEF and ECC became majority shareholders in PPABank in 1991 and were instrumental in growing the bank from one branch institution into national wide universal bank offering quality service mainly to the fast developing small and medium sized enterprises sector. PPABank has invested considerable resources in the development of its computer system which is among the most advanced ones in Polish banks. After the transaction PAEF, in a one year perspective, will support the program for development of small and medium-sized businesses, by providing financing of loans for this purpose granted by the Bank from a USD 30 million ECC funding.

PPABank total assets at the end of June 1999 were PLN 1,483 million (USD 362 million), and its loan portfolio increased very significantly in 1999, reaching PLN 1,085 million (USD 265 million). Its 1998 net profit amounted to PL.N 18.6 million (USD 4.5 million) and for the first half of this year already reached PLN 11 million. It currently employs approximately 600 persons.

Since June 1999, Fortis Bank forms a new integrated banking group, comprising Generale Bank, which has been Belgium's leading private financial institution for more than 175 years, and ASLK-CGER in Belgium, MeesPierson, VSB Bank and Generale Bank Nederland in the Netherlands. Present in 60 countries, Fortis Bank has a staff of 40,000 worldwide, 3,000 offices and 7 million customers in the Benelux. In this home market, the new bank wishes to strengthen its position as leading bank still further with regard to all customer segments. This strong market position provides Fortis Bank with a sound basis for further growth in Europe, where it ranks among Europe's top 15 financial institutions. Fortis Bank operates worldwide in private banking, asset management and financial markets. The bank also provides certain specialist services worldwide to large enterprises, institutional customers, banks and financial intermediaries. At June 30, 1999, Fortis Bank had assets of EUR 301 billion.

Polish-American Enterprise Fund was established by US Congress in 1989 to support the development of small and medium size businesses in Poland through direct equity investment in private companies and targeted loan programs. From PAEF's inception total equity investment and loans made by PAEF and sister funds stand at USD 655 million. Polish-American Enterprise Fund established the Enterprise Credit Corporation in 1990 to provide loans to small and medium businesses. Since 1995 the ECC Small Business Loan Program was serviced by PPABank. Both institutions were successful in providing loans of total USD 272 million to over 7 thousand private businesses.

Fortis Bank was advised by Rothschild and Baker & McKenzie. PAEF was advised by Weil, Gotshal & Manges.

For further information:

Fortis Bank, Kathleen Steel tel (00-32) (2) 565 2266; fax 565-27-97
Fortis Bank, Luc Delvaux tel (00-32) (2) 565 3500; fax 565-49-09
PAEF/ECC, Dariusz Prończuk tel (0-22) 653 4500; fax: 653 4555
PPABank, Marek Kulczycki tel (0-12) 618 3311; fax: 618 3344

Bank BGŻ BNP Paribas Spółka Akcyjna z siedzibą w Warszawie przy ul. Kasprzaka 10/16, 01-211 Warszawa, zarejestrowany w rejestrze przedsiębiorców Krajowego Rejestru Sądowego przez Sąd Rejonowy dla m. st. Warszawy w Warszawie, XII Wydział Gospodarczy Krajowego Rejestru Sądowego pod nr KRS 0000011571, posiadający NIP 526-10-08-546 oraz kapitał zakładowy w wysokości 84 238 318 zł w całości wpłacony.