The Role of Primary Dealers in the Financing of the Budget in the First Half of 2004 1

Ranking of primary dealers in H1 2004 MAIN TOPICS: Financing in 2004 Achievements of primary dealers in H1 2004 presented by: dr. László András Borbély General Deputy CEO Ranking of primary dealers in H1 2004 presented by: Mr. Zsolt Bangó Head of the Treasury Department Prizes 2

FINANCING OF THE BUDGET SPEAKER: DR. LÁSZLÓ ANDRÁS BORBÉLY FINANCING OF THE BUDGET IN 2004 2

DEBT MANAGEMENT ACTIVITY IN H1 2004 Less redemptions Net issuance is HUF 95 billion higher than planned HUF 29 billion loan take over 2

Less liquidity discount TB redemptions GROSS REDEMPTIONS IN H1 2004 2 615 2 531 Less liquidity discount TB redemptions -84 2

Less liquidity discount TB and more FX GROSS ISSUANCE IN H1 2004 3 579 3 568 Less liquidity discount TB and more FX 12 2

Total net issuance is as planned FINANCING PLAN – PLANS AND REALISATION IN H1 2004 Total net issuance is as planned 2

NON RESIDENTS’ HOLDINGS OF HUNGARIAN GOVERNMENT SECURITIES IN H1 2004 An increase of HUF 66bn (EUR 261 mn) 282 Annual increase in 2003: HUF 429bn, In 2002: HUF 719bn 178 66 2

The same ratio of non-resident investors Increased role of households INVESTOR BREAKDOWN IN NET ISSUANCE 1 018 759 48% 44% The same ratio of non-resident investors 14% -10% Increased role of households 2

Total net issuance will FINANCING PLAN IN Y2004 Total net issuance will increase moderately 2

Gross and net issuance expected to decrease slightly in H2 GROSS AND NET ISSUANCE IN H2 2004 3 548 3 073 Gross and net issuance expected to decrease slightly in H2 Out of the H2 HUF 346 bn (ca. EUR 1.3 bn) FX issuance EUR 1 bn is bond issuance, the rest are loans from int’l financing institutions 2

ACHIEVEMENTS OF THE PRIMARY DEALER SYSTEM SPEAKER: DR. LÁSZLÓ ANDRÁS BORBÉLY ACHIEVEMENTS OF THE PRIMARY DEALER SYSTEM 2

GROSS ISSUANCE IN THE DOMESTIC MARKET * projection Slight decrease in 2004 2

BREAKDOWN OF GROSS DOMESTIC MARKET ISSUANCE IN H1 2004 Total gross issuance: HUF 3,001 billion Gross issuance of primary dealers: HUF 2,645 billion 2

Q2 2004: a turnover of HUF 6,009 billion SECONDARY MARKET TURNOVER OF GOVERNMENT SECURITIES Dynamic growth Q2 2004: a turnover of HUF 6,009 billion 2

RANKING OF PRIMARY DEALERS SPEAKER: Mr ZSOLT BANGÓ 2

11 primary dealers in total PRIMARY DEALERS IN H1 2004 CIB Bank Rt. Citibank Rt. Deutsche Bank Rt. Dresdner Bank (Hungaria) Rt. Erste Bank Befektetési (Magyarország) Rt. HVB Bank Hungary Rt. ING Bank (Magyarország) Rt. Kereskedelmi és Hitelbank Rt. Magyar Külkereskedelmi Bank Rt. Magyar Takarékszövetkezeti Bank Rt. OTP Bank Rt. Csak 1 bróker, többi bank. Változás: CA-IB beolvadás HVB-be, Postabank ERSTE merge, Raiffeisen megszüntette a tagságot. 11 primary dealers in total 2

REQUIREMENTS OF PRIMARY DEALER MEMBERSHIP Following May 1, 2004, the EU-accession: Changes in the requirements of primary dealer membership: investment company registered in any EU member state, compulsory branch office in Hungary, official language of communication is Hungarian, only one dealer from one company group, price quotation, auctions using the MMTS module of the Budapest Stock Exchange. Egy cégcsoport: kereszttulajdonlásnál ne tudják ugyanazt a fiókot megjelölni. Fiók: kisbefektetők kiszolgálása, leányvállalat révén is teljesíthető. 2

HOW IS THE RANKING CALCULATED? Determined by the volume of auctioned Hungarian Government Bonds and Discount Treasury Bills weighted by the tenor of the security. The ranking demonstrates the primary dealers’ participation at auctions and their accomplishment of selling government securities. Likviditási DKJ is beletartozik! 2

2. Dresdner Bank (Hungaria) Rt. RANKING – H1 2004 GOVERNMENT BONDS: 1. ING Bank Rt. 2. Dresdner Bank (Hungaria) Rt. 3. ERSTE Bank Befektetési Rt. 4. Deutsche Bank Rt. 5. Kereskedelmi és Hitelbank Rt. Az első 5 cég részesedése: 60,92% (tavaly 61,33) ING tavaly is első volt. Két új az első 5-ben: Dresdner, Deutsche. 2

DISCOUNT TREASURY BILLS RANKING – H1 2004 DISCOUNT TREASURY BILLS 1. OTP Bank Rt. 2. ING Bank Rt. 3. ERSTE Bank Befektetési Rt. 4. HVB Bank Hungary Rt. 5. CIB Bank Rt. Az első 5 cég részesedése: 61,59% (tavaly 58,55) Első kettő tavalyhoz képest helyet cserélt. Két új: HVB, CIB. 2

PRIZES 2004 2

Prizes are awarded in two categories: THE PRIZES Prizes are awarded in two categories: I. To the primary dealer, which obtained the highest share at the auctions of government securities between July 2003 and June 2004, II. To the primary dealer, whose market share between July 2003 and June 2004 increased the most dynamically, compared to its share a year before. 2

Dresdner Bank (Hungaria) Rt. ERSTE Bank Befektetési Rt. 1st CATEGORY The primary dealer with the highest market share in 2003-2004: ING Bank Rt. Dresdner Bank (Hungaria) Rt. ERSTE Bank Befektetési Rt. Tavaly ING volt a legdinamikusabb 2

Deutsche Bank Rt. 2nd CATEGORY The primary dealer whose market share increased the most dynamically in 2003-2004: Deutsche Bank Rt. 1,4-szeres növekedés 2

Thank you for your attention! Congratulations to the awardees! 2

ING Bank Rt. Deutsche Bank Rt. AWARDEES IN 2004 Primary dealer with the highest market share: Primary dealer who increased its market share the most dynamically: ING Bank Rt. Deutsche Bank Rt. Tavaly az ING volt a legdinamikusabb 2