Zagrebacka banka d d : Zagrebačka banka unaudited financial results 3Q 2022

Unaudited financial statements of

Zagrebačka banka dd

for the period from 1 January to 30 September 2022

Content:

1. Management report for the period from 1 January to 30 September 2022

1. Statement of the persons responsible for the preparation of the financial statements

III. Financial statements (TFI-KI statements)

1. General data as at 30 September 2022
2. Balance sheet as at 30 September 2022
3. Income statement for the period from 1 January to 30 September 2022
4. Cash flow statement for the period from 1 January to 30 September 2022
5. Statement of changes in equity for the period from 31 December 2021 to 30 September 2022
6. Notes to the financial statements

1. Management report for the period from 1 January to 30 September 2022

Zagrebačka banka dd realised profit after tax of HRK 1,555 million in the first nine months of 2022. This is HRK 488 million (+45.7%) higher than in the same period in 2021.

The Bank's exposures were not significantly directly impacted by the situation in the Ukraine. Our operations remain affected indirectly, by the overall negative consequences and economy trends.

Still, our operating income increased. Our capital and liquidity positions remained strong, with assets covered with prudent loan provisions.

Well-being of our employees and clients remains our priority as well as the support to the society and the environment in which we operate.

We empower our communities to progress even in the disruption periods. We are striving to provide best solutions for our clients, approaching them individually to tailor the offering.

We are introducing new ways to provide services - by identifying opportunities in technology trends, embedding digital and data, putting clients at the centre of everything we do.

We aim to integrate sustainability into our strategies and guide capital reallocation towards economic activities which generate a positive overall impact.

We are striving to be the best employer possible, by supporting our employees through work-life balance, health, family support and other important initiatives.

We invest in our talents, grow our corporate culture based on Integrity, Ownership and Caring.

Key performance indicators:

• Operating income: HRK 3,052 million
• Operating expenses: HRK 1,235 million
• Profit before impairment and other provisions: HRK 1,772 million
• Impairment and other provisions: HRK 98 million
• Loans and advances to customers: HRK 72,451 million
• Deposits from customers: HRK 114,625 million

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1. Management report for the period from 1 January to 30 September 2022 (continued)

Operating income amounted to HRK 3,052 million, increased by HRK 276 million (+9.9%) Y/Y:

• Net interest income amounted to HRK 1,672 million, slightly increased by HRK 21 million (+1.3%) Y/Y.
• Net fee and commission income amounted to HRK 952 million, increased by HRK 153 million (+19.1%).
• Net trading and other income and expenses amounted to HRK 428 million, increased by HRK 102 million (+31.3%) Y/Y, mainly due to higher trading result.

Operating expenses - at HRK 1,235 million, at the same level. Cost to income ratio equals to 40.47%.

Profit before impairment and other provisions amounted to HRK 1,772 million, higher by HRK 242 million (+15.8%) Y/Y, as a result of the previously described movements in Operating income and Operating expenses.

Impairment and other provisions - at HRK 98 million, changed by HRK 351 million.

Total assets of the Bank amounted to HRK 142,701 million, up by HRK 10.3 billion (+7.7%) BoY.

• Net loans and advances to customers amounted to HRK 72,451 million, increased by HRK 5.1 billion (+7.6%) due to increase in corporate and retail lending.
• Deposits from customers represent primary source of funding. They amounted to HRK 114,625 million, higher by HRK 7.4 billion (+6.9%) BoY, in retail and corporate deposits.
• Deposits from credit institutions at HRK 4,323 million, up by HRK 1.7 billion (+66.1%) BoY.

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1. Management report for the period from 1 January to 30 September 2022 (continued)
   Financial results for the period from 1 January to 30 September 2022

Zagrebačka banka dd					3Q 2022 vs 3Q 2021
Income statement (HRKm)	3Q 2022		3Q 2021		HRKm		%
	1		2		3 (1-2)		4 (3/2)
Interest income	1,885		1,847		38		2.1 %
Interest expense	(213)		(196)		(17)		8.7 %
Net interest income	1,672		1,651		21		1.3 %
Fee and commission income	1,165		969		196		20.2 %
Fee and commission expense	(213)		(170)		(43)		25.3 %
Net fee and commission income	952		799		153		19.1 %
Net trading and other income and	428		326		102		31.3 %
expenses
Operating income	3,052		2,776		276		9.9 %
Operating expenses	(1,235)		(1,173)		(62)		5.3 %
Cash contributions to resolution funds	(45)		(73)		28		(38.4 %)
and deposit guarantee schemes
Profit before impairment and other	1,772		1,530		242		15.8 %
provisions
Impairment and other provisions	98		(253)		351		(138.7 %)
Profit before tax	1,869		1,277		592		46.4 %
Income tax	(315)		(210)		(105)		50.0 %
Net profit	1,555		1,067		488		45.7 %

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1. Management report for the period from 1 January to 30 Septmeber 2022 (continued)

Financial results for the period from 1 January to 30 September 2022 (continued)

	Zagrebačka banka dd							2022 vs. 2021
	Balance sheet (HRKm)	30 Sep 2022			31 Dec 2021			HRKm	%
		1			2			3 (1-2)	4 (3/2)
Cash, cash balances at central	31,450			35,636		(4,186)	(11.7 %)
banks and other demand deposits
Obligatory reserve with the CNB	3,622			6,121		(2,499)	(40.8 %)
Financial assets held for trading	2,970			1,088		1,882	173.0 %
Non-trading financial assets
mandatorily at fair value through	288			284		4	1.4 %
profit or loss
Financial assets at fair value
through other comprehensive	5,887			9,824		(3,937)	(40.1 %)
income
Financial assets at amortised cost:	94,591			75,922		18,669	24.6 %
	Debt securities	7,778			3,498		4,280	122.4 %
	Loans and advances to credit	14,362			5,103		9,259	181.4 %
	institutions
	Loans and advances to	72,451			67,321		5,130	7.6 %
	customers
Tangible and intangible assets	1,376			1,360		16	1.2 %
Investments in subsidiaries, joint	1,523			1,513		10	0.7 %
ventures and associates
Other assets	994			697		297	42.6 %
Total assets	142,701			132,445		10,256	7.7 %
Financial liabilities held for trading	2,860			867		1,993	229.9 %
Financial liabilities measured at	119,469			110,270		9,199	8.3 %
amortised cost:
	Deposits from credit institutions	4,323			2,603		1,720	66.1 %
	Deposits from customers	114,625			107,225		7,400	6.9 %
	Other financial liabilities	521			442		79	17.9 %
Provisions for risks and charges	1,358			1,347		11	0.8 %
Other liabilities	1,322			935		387	41.4 %
Total liabilities	125,009			113,419		11,590	10.2 %
Equity	17,692			19,026		(1,334)	(7.0 %)
Total equity and liabilities	142,701			132,445		10,256	7.7 %
	Rating							30 September 2022
Fitch Ratings Ltd.	Long Term Issuer Default Rating		BBB
		Short Term Rating				F2
		Viability				bb+
		Support				WD
		Shareholder Support				bbb
		Outlook				Stable

Zagreb, 24 October 2022

Chairman of the Management Board

Ivan Vlaho

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