Addiko Bank : Group Results Presentation 1H23

1H23 Results Presentation

Herbert Juranek (CEO)

Edgar Flaggl (CFO)

Tadej Krašovec (CRO)

Ganesh Krishnamoorthi (CMO & CIO)

Constantin Gussich (Investor Relations)

17 August 2023

Executive Summary & Business Update

Financials & Risk Update

Outlook & Wrap-Up

Additional Materials

Key Highlights 1H23

Earnings

&

Asset Quality

Business

Development

Funding,

Liquidity

& Capital

Other

News

• 1H23 net profit up 55% YoY to €19.5m (1H22: €12.6m), 1H23 EPS at €1.00
• • Second quarter result 2023 after tax at €9.8m (€9.7m in 1Q23)
  • Cost of Risk remained benign at -27bps(€-9.2m)
• Return on average Tangible Equity at 5.4% YTD (1H22: 3.4%)
• Operating result up by >50% YoY to €49.6m illustrates continued positive momentum on top-line despite increasing funding costs and inflation impacts on operating expenses
• NPE volume down to €159m (YE22: €163m) with NPE ratio (on-balance loans) at 3.3% (YE22:
  3.3%), while NPE coverage increased to 78.0% (YE22: 75.4%)
• Outlook 2023 upgraded on the back of strong first 1H23
• Double-digitYoY growth in focus areas continued - on track to achieve 2023 guidance
• Net interest income up by 28% YoY driven by Consumer and SME as well as income related to liquidity management and treasury
• New loan business pricing remains at premium, up >100bp YoY in focus areas
• Funding situation remained solid: €4.85b customer deposits, LDR 71% and LCR above 330%
• TCR ratio stood at a strong 19.9% fully-loaded - all in CET1 (YE22: 20.0%)
• The Supervisory Board extended the mandates of the Management Team
• ECB stress test completed, showing higher resilience in theoretical adverse scenario despite more severe assumptions compared to 2021's Comprehensive Assessment Stress Test

ADDIKO BANK AG

17 AUGUST 2023 | 3

Economic Environment

GDP forecasts1 (%, real growth)

Forecasts

						2022		2023E	2023E			2024E	2024E			2025E	2026E
							Base	Pessimistic				Base	Pessimistic			Base	Base
	Slovenia				5.4%	1.4%		(1.0%)				2.5%	(1.3%)				2.7%	2.7%
	Croatia				6.2%	2.5%		(0.6%)				2.9%	(1.8%)				3.1%	3.1%
	Serbia				2.3%	1.5%		(7.7%)				2.6%	(5.2%)				3.0%	3.0%
	Bosnia &				3.9%	1.7%		(5.9%)				1.9%	(4.4%)				2.5%	2.5%
	Herzegovina
	Montenegro	6.1%	3.5%		(5.7%)				3.2%	(5.0%)				3.0%	3.0%
	Euro Area				3.5%	0.5%		(1.4%)				1.8%	(1.2%)				1.7%	1.7%
New business continued during the first half of 2023
€m				60 62			56 61														1H23YTD: 328
						58 59	60	57
			51 48	54	50	49	49
38 38							50							38
Consumer
		Jan.	Feb.	Mar.	Apr.	May	Jun.			Jul.	Aug. Sep.	Oct.	Nov.	Dec.
																									1H23YTD: 430
						90	76 72	78	81
						75
			56 63	61		68			54		53	58	57	62
44 45									46
SME
		Jan.	Feb.	Mar. Apr.	May	Jun.			Jul.	Aug.	Sep.	Oct.	Nov.	Dec.
												2023
											2022

1 Source: The Vienna Institute for International Economic Studies (wiiw).

• 2023's economic growth in EU member states slowed, however,
  Southeast Europe motors on
• Despite a challenging growth backdrop in Europe, Southeast
  Europe is showing impressive resilience, and Austria's close integration with such countries as Slovenia, Croatia and Romania will provide some welcome support for economic activity this year
• Global economy still impacted by Russia's war in Ukraine which continues to be a major cause for uncertainty
• The GDP forecast for Slovenia does not consider the effects of the recent floods
• Addiko will continue to proactively apply and fine- tune its prudent risk approach for sustainable business growth going forward

ADDIKO BANK AG

17 AUGUST 2023 | 4

Update on Key Developments in Acceleration Program

Key developments

1	Business
Growth in
	Focus Areas

• Focus book with double digit growth YoY - on track to achieve guidance for full year on the back of
  1H23's growth of 7%
• Continued extension of partnership universe to c. 470 partners
• Launch of BNPL with FinTech partner in Romania
• Initial assessment for feasibility of digital market expansion into Romania concluded - further analysis ongoing until YE23/1Q24 for final expansion decision

2

Operational

Excellence &

Digital

• Operational Excellence stream established leveraging Kaizen methodology for further enhancements of key processes
• New digital innovations implemented for Point of Sale with partners & FinTechs, enhanced online lending, card capabilities, customer onboarding and mobile banking applications

3

Best-in-Class

Risk

Management

• Continued fine-tuning of underwriting criteria and decision engine based on sub-segmentanalytics
• Established new infrastructure for risk metrics analysis and reporting
• NPEs further reduced since YE22

ADDIKO BANK AG

17 AUGUST 2023 | 5