MONETA Money Bank : Interim report for 1Q 2024, consolidated

MONETA Money Bank, a.s. Consolidated interim financial report

as at and for the three months ended 31 March 2024 (All amounts in CZK millions unless otherwise stated)

Contents

1. Basic Information about MONETA Money Bank, a.s.
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2. Consolidated Interim Financial Statements for the

1. Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income for the Three- month Period Ended 31 March 2024 (Unaudited)
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2. Consolidated Interim Statement of Financial

7.4 Consolidated Interim Statement of Cash Flows for the Three-month Period Ended 31 March 2024

8.7.1 Analysis of deferred costs and fees directly attributable to origination of new loan products that are integral part of the effective interest rate and fair value adjustment resulting from the revaluation of acquired

1. Loans and receivables to banks and customers according to their categorisation . 32
2. Walk of allowances to Loans and

8.19.4 Break-down of allowances according to

8.19.5 Coverage of non-performing loans and

1. Five-yearguidance published on 2nd February 2024.
2. Internal forecast derived from macroeconomic forecast from CNB published in November 2023 https://www.cnb.cz/en/monetary- policy/forecast/cnb-forecast-archive/CNB-forecast-Autumn-2023/.

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MONETA Money Bank, a.s. Consolidated interim financial report

as at and for the three months ended 31 March 2024 (All amounts in CZK millions unless otherwise stated)

2 Letter from the CEO

Dear Shareholders,

Our results for the first quarter of 2024 indicate improved performances across all business categories, and I am pleased to report that our net profit was CZK 1.3 billion. This gives us optimism that our full-year minimum target of CZK 5.2 billion can be delivered. Nonetheless, the operating environment is challenging, especially the competition for deposits, where the market has yet to see a decrease in interest rates on savings deposits and term deposits. In particular, smaller competitors have maintained, or even introduced, very attractive introductory rates around 6 per cent in order to compete for market share amid a general decrease in short-term rates as introduced by the Czech National Bank (CNB). This phenomenon has meant a slower than expected adjustment to the interest rates on our existing deposit portfolio, which could result in lower net interest income for the year. Indeed, our performance going forward will largely depend upon our ability to reprice those deposit products.

Our ability to generate higher lending volumes has so far been excellent. During the first quarter, we provided overall lending volumes in the amount of CZK 12.9 billion, a 23.8 per cent increase against the comparable period last year. If we examine the retail franchise, the volume of newly disbursed loans was CZK 8.3 billion, representing year-on-year growth of 35.5 per cent. Concerning small business loans, our performance in new lending volumes came in at CZK 1.3 billion for the period, up 60 per cent against last year. Our new volumes of investment loans dropped by 8.5 per cent to CZK 2.4 billion. Overall, the first quarter's lending volumes exceeded our budgetary targets.

Alongside the challenges of deposit repricing and the welcome renewal in credit demand, we had a satisfactory first quarter with regard to fee and commission income growth. Our fee income was supported by CZK 6.1 billion of net new investments into the range of collective investment funds that MONETA offers through its open product architecture. The high demand for these products contributes to the conversion of high yield deposits into collective investments. Our portfolio of administered funds grew by 16.2 per cent compared to year end to CZK 44.7 billion. We also continued to generate sales of pension

and life insurance products and, so far, have exceeded our overall budgetary targets.

In the next few weeks, we expect to receive regulatory approval to distribute additional wealth management products. This should lead to an ability to earn commissions as well as management fees.

On 21 March 2024, MONETA published its invitation to the annual shareholder meeting. In summary, we proposed the approval of our 2023 financial results, the distribution of a dividend of CZK 9 per share, and the approval of our external auditor. Furthermore, we submitted to MONETA shareholders our remuneration policy, as required by regulation, and presented our management remuneration report. And lastly, we proposed an enlargement of the Management Board from five to six members with the aim to improve strategic leadership and diversity. The meeting took place on 23 April 2024, and I am pleased to report that all proposals by the Management Board were approved by our shareholders.

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MONETA Money Bank, a.s. Consolidated interim financial report

as at and for the three months ended 31 March 2024 (All amounts in CZK millions unless otherwise stated)

CURRENT ECONOMIC ENVIRONMENT

Thankfully, we are witnessing a rapid decrease in inflation and, notably, the year-on-year movement in prices is meeting the CNB's target of circa 2 per cent for the first time since 2018. A key reason for the subdued inflation appears to be centred around food prices. On the other hand, we have seen increases in imputed costs of housing as well as fuel prices, which have had a pro-inflationary effect. There has also been an elevation in costs related to certain services such as recreation, eating out and hotel accommodation. With respect to these and other movements across the Consumer Price Index (CPI) basket, key uncertainties concern the volatility of food prices. It could happen that inflation will grow in the coming months. On a positive note, the Czech Republic has the potential to record the lowest inflation in our region. And on this basis, even though there are continuing reasons to expect some level of CPI volatility, in our view, one can reasonably expect that the CNB will continue with rate cuts. This expectation is evidenced by short, medium- and long-term rate outlooks that are built into the money markets and their derivative instruments.

Last year, the current government managed to pass the so-called consolidation package. This set of measures aims at consolidating public expenditure and lowering the overall budget deficit. Hence, for the current year the state budget targets an overall deficit of CZK 252 billion. This contrasts with the 2023 overspend of CZK 289 billion. In parallel, during the current year, the government will seek to reform social security spending and finally address imminent issues regarding the "greying effect" on the population and the unsustainable "pay as you go" system of pension benefits. From the banking sector's point of view, there is the ever-present threat of additional taxation. This has become a standard government tool in a number of European countries and could reappear should the public deficit prove difficult to manage. The Czech Republic's next parliamentary election is due by the fall of 2025 and the topic of taxation reform has so far resonated throughout each cycle.

As expected, the Czech economy's performance in 2023 was largely flat as GDP shrank by 0.2 per cent. In the fourth quarter of 2023, on the other hand, the first signs of recovery occurred, with GDP increasing by

1. per cent quarter-on-quarter. Despite that uptick, the Czech economy should remain subdued in 2024, with the outlook suggesting growth between 0.6 and

1. per cent. Despite this near stagnant state, economic

confidence is improving as inflation returns to the CNB target, and the market widely expects further progressive cuts in interest rates, which recently dropped to 5.75 per cent. This growing optimism is supported by a still relatively tight labour market, with unemployment at 2.7 per cent in February 2024, the lowest in the European Union.

I will now provide more detail around our financial and business performance.

FINANCIAL PERFORMANCE

Our financial results for the first quarter of this year are good. Net profit came in at CZK 1.3 billion, which is an increase of 5.8 per cent on the same period last year. Our operating income reached CZK 3.1 billion, up

9.6 per cent year-on-year, thanks in particular to strong net fee and commission income, which outperformed our business plan. We saw increased demand for our investment funds as clients sought yields that are higher than those offered by savings accounts, whose market rates are declining. This demand resulted in doubled investment fund fee income, for a total of CZK 145 million. Similarly, sales of insurance products were good, with related fee income of CZK 322 million, which is a 14.2 per cent increase on the first quarter of last year.

Our net interest income for the period was slightly better than last year at CZK 2.1 billion. However, our cost of funds is still high due to the fact that MONETA, in order to stay competitive, had to keep interest rates payable on savings accounts high. Our excess liquidity remains placed with the CNB, albeit at a lower rate.

MONETA's total net fee and commission income increased by 20.1 per cent year-on-year to CZK 740 million. As noted, this was mainly thanks to the very successful distribution of insurance products and the increased demand for our investment funds.

I am pleased to report that the operating costs were

1. per cent lower than in the same period last year, at CZK 1.5 billion. Regulatory charges were lower by

1. per cent compared to the first quarter of 2023 due to lower contributions to the Resolution Fund. Additionally, the continued cost discipline, with administrative expenses down by 9.6 per cent, also contributed to this result. And as we reported in 2023, MONETA has sub-leased 25 per cent of its Prague headquarters office space to a third-party during the first quarter of 2024.

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MONETA Money Bank, a.s. Consolidated interim financial report

as at and for the three months ended 31 March 2024 (All amounts in CZK millions unless otherwise stated)

MONETA's operating profit for the first three months of this year was CZK 1.6 billion, an increase by 25.6 per cent on the same period in 2023, driven by higher net fee and commission income and lower operating expenses.

Cost of risk is, as expected, slightly higher than in the previous year. During the first quarter MONETA recorded a loss provision in the amount of CZK 135 million, or 20 bps of the average net loan portfolio on an annualised basis. This result is in line with our provided guidance.

MONETA faced an effective tax rate of 14 per cent in the first quarter, largely thanks to the fact that income generated from government bonds is tax exempt.

Net profit of CZK 1.3 billion translates to a Return on Tangible Equity of 17.1 per cent for the quarter under review.

We closed the quarter with a balance sheet of CZK 468 billion. Capital adequacy ratio remains strong, at

19.6 per cent, which is comfortably above our current target of 15.55 per cent (including decreased countercyclical buffer to 1.75 per cent effective from 1 April 2024). Our liquidity position also remains solid, with a liquidity coverage ratio standing at 359 per cent.

MONETA's client base remained stable at 1.6 million compared to the 2023 year-end.

BUSINESS PERFORMANCE

Both retail and commercial portfolios were stable during the first quarter and stood at CZK 267.4 billion. This is in line with our expectations and the guidance that we provided. Our new lending volumes in 2024 are higher than this time last year. Demand for new loans has increased since the CNB's rate cuts, with new mortgage volumes up by 34.7 per cent and new consumer loan volumes up by 38.6 per cent, year-on- year.

Deposit balances were stable in both segments, reaching a total of CZK 405.7 billion (up by 1.6 per cent compared to 31 December 2023). Retail deposits remained stable and accounted for CZK 314.8 billion, and commercial deposits were CZK 90.9 billion (up by 5.6 per cent compared to year-end).

Retail business performance

MONETA's gross performing mortgage receivables were stable at CZK 128 billion, while new mortgage volumes were CZK 3.1 billion, up 34.7 per cent year-on-

year. This result was driven by our competitive offer of a below-market rate. Our consumer lending business also performed very well, with new volumes up by

38.6 per cent. Our gross performing consumer lending receivables remained stable at CZK 47.4 billion. Credit card and overdraft volumes declined by 4 per cent to CZK 2.3 billion. Auto loans remained stable, at CZK 2.5 billion.

We saw a large increase in our investment funds portfolio to CZK 44.7 billion, with record new volume growth of 115.9 per cent against the same period last year. Our investment fund fee income was CZK 145 million in the quarter, up 101.4 per cent year-on-year. MONETA currently offers 44 investment funds in both CZK and EUR.

Commercial business performance

Gross performing commercial loans were largely stable, with new volume growth across several business lines. Investment loans were stable at CZK 45.3 billion. Working capital lending grew to CZK 17.7 billion, or by 15 per cent compared to year-end. Small business lending portfolio increased by 4.2 per cent during the first quarter to CZK 14.4 billion, with new volumes up by 60 per cent year-on-year. MONETA Auto loans were stable at CZK 7.8 billion. Overall, our commercial loan balances were up by 3.3 per cent on the end of the previous year. The new volumes reflect the revival of demand for loans, especially in the small business segment, as market interest rates decline.

DIGITAL STRATEGY PROGRESS

The number of our digital users continues to grow, with the number of customers who use our digital platform reaching 1.4 million. More broadly, the share of digital new volume remained buoyant throughout the quarter, accounting for 37 per cent of new mortgage originations, 49 per cent of new consumer loans, and 44 per cent of new small business loans. The digital platform is also very successful in the distribution of deposit products, originating 70 per cent of new retail term deposits and 49 per cent of savings accounts.

CAPITAL POSITION

MONETA's capital position remains strong. As at the end of the quarter, the regulatory capital stood at CZK 33.3 billion with a capital adequacy ratio of

1. per cent. This is well above the CNB's requirement of 14.55 per cent and our management target of

1. per cent (including the management buffer and

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MONETA Money Bank, a.s. Consolidated interim financial report

as at and for the three months ended 31 March 2024 (All amounts in CZK millions unless otherwise stated)

4 Macroeconomic Environment

1. Source: Czech Statistical Office, Quarterly Sector Accounts - 4th quarter of 2023.
2. Source: Czech Statistical Office, Retail trade - February 2024.
3. Source: Czech Statistical Office, Industry - February 2024.
4. Source: Czech Statistical Office, Construction - February 2024.
5. Source: Czech Statistical Office, Consumer price indices - inflation - March 2024.
6. Source: Czech National Bank, CNB Board Decision 8 February 2024 and 20 March 2024.
7. Source: Czech Statistical Office, Rates of employment, unemployment and economic activity - February 2024.
8. Source: Czech Statistical Office, Average wages - 4th quarter of 2023.
9. Source: Czech National Bank, CNB forecast - Winter 2024, published on 8 February 2024.
10. Source: Czech National Bank, ARAD quarterly mandatory disclosures, total banking sector.

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