Zagrebacka banka d.d.

ZABA

HRZABARA0009

Banks

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Apr. 26	Zagrebacka banka d.d. Reports Earnings Results for the First Quarter Ended March 31, 2024	CI
Feb. 26	Zagrebacka banka d.d. Reports Earnings Results for the Fourth Quarter Ended December 31, 2023	CI

Zagrebacka banka d d : Zagrebačka banka Group unaudited financial results Q3 2023

October 25, 2023 at 03:11 am EDT

Unaudited financial statements of

Zagrebačka banka Group

for the period from 1 January to 30 September 2023

Content:

Management report for the period from 1 January to 30 September 2023

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

III. Financial statements (TFI-KI statements)

General data as at 30 September 2023
Balance sheet as at 30 September 2023
Income statement for the period from 1 January to 30 September 2023
Cash flow statement for the period from 1 January to 30 September 2023
Statement of changes in equity for the period from 31 December 2022 to 30 September 2023
Notes to the financial statements

Management report for the period from 1 January to 30 September 2023

Zagrebačka banka Group realised profit after tax of EUR 404 million in the first nine months of 2023. This is EUR 162 million (+66.9%) higher than in the same period in 2022.

Our operating income increased, cost management is disciplined. Capital and liquidity positions are strong, assets are covered with prudent loan provisions.

Zagrebačka banka Group is resilient and reliable. We are strongly connected with our community, providing support to the economy and the society in which we operate. We are doing this by financing most loans in the market, by investing in optimal user experiences as well as in the security of our solutions, by maintaining the robust payment infrastructure and offering the wide scale of services to companies and citizens.

We are transforming our culture, working on simplification and digitalization of our organization and processes, to assure sustainability and guide capital reallocation towards economic activities which generate a positive overall impact, considering also the Environmental, Social and Governance (ESG) aspects.

We are striving to be the best employer possible, by supporting our employees through work-life balance and wellbeing initiatives.

Major contributors to Group result are Zagrebačka banka dd, UniCredit Bank dd Mostar and UniCredit Leasing Croatia doo.

Key performance indicators:

Operating income: EUR 710 million
Operating expenses: EUR 244 million
Profit before impairment and other provisions: EUR 460 million
Impairment and other provisions: EUR 24 million
Loans and advances to customers: EUR 12,412 million
Deposits from customers: EUR 20,129 million

Management report for the period from 1 January to 30 September 2023 (continued)

Operating income amounted to EUR 710 million, increased by EUR 190 million (+36.5%) Y/Y:

Net interest income amounted to EUR 503 million, increased by EUR 214 million (+74.0%) Y/Y.
Net fee and commission income amounted to EUR 162 million, remained at the same level.
Net trading and other income and expenses amounted to EUR 45 million, decreased by EUR 25 million (-35.7%)Y/Y mainly due to lower trading result.

Operating expenses - at EUR 244 million, higher by EUR 15 million (+6.6%). Cost to income ratio equals to 34.37%.

Profit before impairment and other provisions amounted to EUR 460 million, higher by EUR 180 million (+64.3%) Y/Y, as a result of the previously described movements in Operating income and Operating expenses.

Impairment and other provisions write-back amounted to EUR 24 million, increased by EUR 19 million.

Total assets of the Group amounted to EUR 24,725 million, higher by EUR 1,065 million (+4.5%) BoY.

Net loans and advances to customers amounted to EUR 12,412 million, increased by EUR 611 million (+5.2%) due to increase in corporate and retail lending.
Deposits from customers represent primary source of funding. They amounted to EUR 20,129 million, higher by EUR 1,071 million (+5.6%) BoY mainly in corporate and retail deposits.
Deposits from credit institutions at EUR 755 million, lower by EUR 182 million (- 19.4%) BoY.

Management report for the period from 1 January to 30 September 2023 (continued)
Financial results for the period from 1 January to 30 September 2023

Zagrebačka banka Group					Δ 3Q 2023 vs 3Q 2022
Income statement (EURm)	3Q 2023		3Q 2022		EURm		%
	1		2		3 (1-2)		4 (3/2)
Interest income	584		326		258		79.1 %
Interest expense	(81)		(37)		(44)		118.9 %
Net interest income	503		289		214		74.0 %
Fee and commission income	194		191		3		1.6 %
Fee and commission expense	(32)		(30)		(2)		6.7 %
Net fee and commission income	162		161		1		0.6 %
Net trading and other income and expenses	45		70		(25)		(35.7 %)
Operating income	710		520		190		36.5 %
Operating expenses	(244)		(229)		(15)		6.6 %
Cash contributions to resolution funds and	(6)		(11)		5		(45.5 %)
deposit guarantee schemes

Profit before impairment and other provisions	460		280		180		64.3 %
Impairment and other provisions	24		5		19		380.0 %
Profit from operations	484		285		199		69.8 %
Share of profit from associates	3		3		-		0.0 %
Profit from discontinued operations	-	3		(3)		(100.0 %)
Profit before tax	487		291		196		67.4 %
Income tax	(83)		(49)		(34)		69.4 %
Net profit	404		242		162		66.9 %
Attributable to equity holders of the Bank	404		242		162		66.9 %
Attributable to non-controlling interests	-	-	-		0.0 %
Net profit	404		242		162		66.9 %

Management report for the period from 1 January to 30 September 2023 (continued)

Financial results for the period from 1 January to 30 September 2023 (continued)

Zagrebačka banka Group					Δ 2023 vs. 2022
Balance sheet (EURm)	30 Sep 2023		31 Dec 2022		EURm		%
	1		2		3 (1-2)		4 (3/2)
Cash, cash balances at central banks and other	6,978		7,152		(174)		(2.4 %)
demand deposits

Financial assets held for trading	239		265		(26)		(9.8 %)
Non-trading financial assets mandatorily at fair	8	16		(8)		(50.0 %)
value through profit or loss

Financial assets at fair value through other	988		996		(8)		(0.8 %)
comprehensive income

Financial assets at amortised cost:	15,980		14,692		1,288		8.8 %
Debt securities	1,538		1,194		344		28.8 %
Loans and advances to credit institutions	2,030		1,697		333		19.6 %
Loans and advances to customers	12,412		11,801		611		5.2 %
Tangible and intangible assets	365		346		19		5.5 %
Investments in subsidiaries. joint ventures and	19		11		8	72.7 %
associates

Other assets	148		182		(34)		(18.7 %)
Total assets	24,725		23,660		1,065		4.5 %
Financial liabilities held for trading	226		259		(33)		(12.7 %)
Financial liabilities measured at amortised cost:	21,433		20,220		1,213		6.0 %
Debt securities issued	151		151		-		0.0 %
Deposits from credit institutions	755		937		(182)		(19.4 %)
Deposits from customers	20,129		19,058		1,071		5.6 %
Other financial liabilities	398		74		324		437.8 %
Provisions for risks and charges	241		238		3	1.3 %
Other liabilities	273		258		15		5.8 %
Total liabilities	22,173		20,975		1,198		5.7 %
Equity	2,552		2,685		(133)		(5.0 %)
Total equity and liabilities	24,725		23,660		1,065		4.5 %

Zagreb, 25 October 2023

Management report for the period from 1 January to 30 September 2023 (continued)

Significant events and transactions

Russia-Ukraine and Middle East conflict and Market uncertainties

At the end of September 2023, the Group's assets were not significantly directly impacted by the conflicts. Our operations remain indirectly affected, as the overall macro-economic scenario evolves.

The market environment continues to be uncertain, in the short and in the medium-term.

The impacts of uncertainties continue to evolve as of the date of this report. As such, it is fluctuant as to the full magnitude that they will have on the macro-economic scenario and consequentially on the Group's future financial condition and results of operations.

The Group continues to support our clients, while it adequately assesses their creditworthiness, carefully considering the risk classification as well as the related impact on financial reporting.

While having a strong capital and liquidity position, as well as the assets covered by prudent loan provisions, the Group is actively monitoring the situation and assessing its impact on operations, financial performance, capital position and cash-flows.

Ivan Vlaho

Chief Executive Officer,

Chairman of the Management Board

Jasna Mandac