Addiko Bank : Group Half-Year Financial Report 1H23

There is no moving forward without looking back.

Half-year financial report 2023

Business development

Key financial data

EARNINGS
NET PROFIT	€19.5m
OPERATING RESULT	€49.6m
EPS	€1.0
NIM	3.7%
ASSET QUALITY
COST OF RISK	-0.2%
NPE RATIO	2.4%
NPE VOLUME	€158.5m
CAPITAL
CET1 RATIO	19.9%

Outlook 2023 upgraded

• NET PROFIT up 55% to €19.5m
• OPERATING RESULT up 54% YoY to
  €49.6m reflecting continued positive momentum on top-line
• DOUBLE-DIGITYOY GROWTH in Con-
  sumer and SME continued - on track to achieve 2023 Outlook
• NEW LOAN BUSINESS PRICING remains
  at premium, well above 100bp YoY in focus areas - prudent underwriting as anchor
• DIVIDEND of €23.6m (€1.21 DPS) paid on 4 May 2023
• ESG Strategy & Action Plan on track
• UPGRADED OUTLOOK 2023 on the
  back of a strong first half of the year

GROSS PERFORMING LOANS	ca €3.5b with >10% growth in focus
NET BANKING INCOME	up by ca. 15% (prev. ca. 10%)
OPERATING EXPENSES	below €179m
TCR	>18.6% (fully loaded)
SUM OTHER RESULT &	<1.5% (prev. ca. 1.2%) on average net loans to
CREDIT LOSS EXPENSES	customers

Condensed Group Management Report

Key data

			EUR m
Selected items of the profit or loss statement	1H23	1H22	(%)
Net banking income	140.7	120.7	16.6%
Net interest income	108.1	84.6	27.8%
Net fee and commission income	32.5	36.1	-9.7%
Net result on financial instruments	0.7	0.2	>100%
Other operating result	-4.9	-5.9	-16.4%
Operating expenses	-86.9	-82.8	4.9%
Operating result before impairments and provisions	49.6	32.3	53.7%
Other result	-16.5	-8.6	92.5%
Credit loss expenses on financial assets	-9.2	-8.8	4.3%
Taxes on income	-4.5	-2.3	92.9%
Result after tax	19.5	12.6	54.7%
Performance ratios	1H23	1H22	(pts)
Net interest income/total average assets	3.7%	3.0%	0.7
Return on average tangible equity	5.4%	3.4%	2.0
Cost/income ratio	61.7%	68.6%	-6.8
Cost of risk ratio	-0.2%	-0.2%	0.0
Cost of risk ratio (net loans)	-0.3%	-0.3%	0.0
Earnings per share (in EUR)	1.00	0.65	35.5
Selected items of the statement of financial position	Jun23	Dec22	(%)
Loans and advances to customers	3,423.3	3,292.7	4.0%
o/w gross performing loans	3,435.6	3,303.8	4.0%
Deposits and borrowings of customers	4,848.5	4,959.6	-2.2%
Equity	756.4	746.3	1.4%
Total assets	5,875.5	5,996.4	-2.0%
Risk-weighted assets 1)	3,559.2	3,481.0	2.2%
Balance sheet ratios	Jun23	Dec22	(pts)
Loan to deposit ratio	70.6%	66.4%	4.2
NPE ratio	2.4%	2.4%	0.0
NPE Ratio (on balance loans)	3.3%	3.3%	0.0
NPE coverage ratio	78.0%	75.4%	2.6
Liquidity coverage ratio	335.8%	307.4%	28.4
Common equity tier 1 ratio 1)	19.9%	20.0%	-0.1
Total capital ratio 1)	19.9%	20.0%	-0.1

1. As of 1 January 2023, there is no difference between the transitional and the fully loaded regulatory capital base due to the expiry of the IFRS 9 and Article 468 CRR (EU 2020/873) transitional capital rules. Comparative figures on a fully loaded basis.

Half-year financial report 2023 3

Condensed Group Management Report

Letter from the CEO

Based on the progress in our Acceleration Program, we accomplished a successful first half of 2023. Building on the achievements of our Transformation Program, which was launched almost two years ago, the improvements in our results are clearly visible in our business volumes, in our financial results and in the services offered to our customers.

Addiko Group posted a net profit of EUR 19.5 million for the first six months of this year, up 55% from 2022. Our operating result also improved significantly with a 54% increase to EUR 49.6 million, an achievement that was supported by double- digit year-on-year growth in our focus areas Consumers and SME.

Our performance on cost management in times of elevated inflation is also evident and can be seen in an improved Cost/income ratio of 61.7% (1H22: 68.6%). These developments are a continuation of the solid results in 2022 which allowed us to distribute a dividend of EUR 23.6 million or EUR 1.21 per share to our shareholders in May 2023.

In response to changing customer needs, our Acceleration Program continues to prioritise business growth in the focus areas of Consumers and SME, operational excellence and the enhancement of our digital capabilities. At the same time, we want to become the best-in-class bank in risk management driven by data analytics and automation.

Our ambition allowed us to deliver a market premiere in Croatia by giving customers the possibility to get their loan documentation wherever and whenever suits them by courier service. In Slovenia, our bank improved the cash loan origination process by lowering the time to decision to a maximum of 15 minutes, with time to cash in under one hour. The process is now fully automated.

In Serbia, our customer centric approach has further improved, with lending at the point of sale (PoS) now available at over 300 partners including retail stores selling electronics, household appliances and other consumer goods. The simple and fast process enables customers to get a loan within 15 minutes, using only their ID.

Addiko's brand character Oskar was present across all media channels throughout more than 30 marketing campaigns to promote our offerings.

Despite falling energy prices, inflation in the region remains elevated, impacting household incomes and consumer spending. The war in the Ukraine also contributes to higher geopolitical risks, increasing economic uncertainties for the second half. Slovenia has been severely impacted by the recent floods. While Addiko Slovenia and its branches are so far only experiencing limited impacts, we are supporting affected employees and customers with targeted relief measures. Croatia on the other hand is expected to further benefit from its 2023 accession to the euro and the Schengen area.

Despite these uncertainties, we are confident that we still have significant headroom for growth in fast lending to Consumers and SMEs complemented by other simple banking products.

For the remainder of 2023, we have raised our outlook to reflect the continued strong business development, the favourable interest rate environment and our prudency on risk & legal costs.

I'm very satisfied with these results, which show how far we have come as a team and how fast we have moved as a business towards becoming the leading specialist bank for consumers & SME customers in the CSEE region. I would like to thank all our employees for their professional behavior and all their energy with which they serve our customers.

Herbert Juranek

CEO

Half-year financial report 2023 4

Condensed Group Management Report

Half-Year Financial Report 2023

Condensed Group Management Report	6
1.	Macroeconomic environment	6
2.	Business updates	7
3.	Financial development of the Group	10
4.	Capital and liquidity	15
5.	Segment information	17
6.	Risk management	26
7.	Outlook & Risk factors	26
8.	Sustainability	28
9.	Related parties	30
10.	Corporate Governance	30
Condensed Consolidated Interim Financial Statements	31
I. Consolidated statement of comprehensive income	33
II. Consolidated statement of financial position	35
III. Consolidated statement of changes in equity	36
IV. Condensed consolidated statement of cash flows	37
V. Condensed notes	38
Group accounting policies	38
Notes to the profit or loss statement	42
Notes to the consolidated statement of financial position	47
Segment Reporting	57
Risk Report	65
Supplementary information required by IFRS	86
Statement of all Legal Representatives	99
Glossary	100
Imprint	104

Disclaimer:

Certain statements contained in this report may be statements of future expectations and other forward-looking statements that are based on manage- ment's current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

Actual results may differ materially from the results predicted and information on past performances do not permit reliable conclusions to be drawn as to the future performances. Forward-looking statements based on the management's current view and assumptions might involve risks and uncertainties that could cause a material deviation from the statement contained herein. Neither Addiko Bank AG nor any of its affiliates or representatives shall be liable for whatever reason for any kind of damage, loss, cost or expenses of any kind arising directly and/or indirectly out of or on connection from any use of this report or its contents or otherwise arising in connection with this document. This report does not constitute a recommendation or an invitation or offer to invest or any investment or other advice or any solicitation to participate in any business and no one shall rely on these materials regarding any contractual or other commitment, investment, etc.

The tables in this report may contain rounding differences. Any data is presented on the Addiko Group level (referred to as Addiko Bank or the Group throughout the document) unless stated otherwise.

The English version of the report is a translation. Only the German is the authentic language version.

Half-year financial report 2023 5