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 unaudited financial results Q3 2023

October 25, 2023 at 03:09 am EDT

Unaudited financial statements of

Zagrebačka banka dd

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 dd realised profit after tax of EUR 346 million in the first nine months of 2023. This is EUR 139 million (67.1%) 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 dd 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.

Key performance indicators:

Operating income: EUR 568 million
Operating expenses: EUR 173 million
Profit before impairment and other provisions: EUR 395 million
Impairment and other provisions: EUR 25 million
Loans and advances to customers: EUR 10,079 million
Deposits from customers: EUR 16,990 million

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

Operating income amounted to EUR 568 million, increased by EUR 162 million (+39.9%) Y/Y:

Net interest income amounted to EUR 418 million, increased by EUR 196 million (+88.3%) Y/Y.
Net fee and commission income amounted to EUR 124 million, decreased by EUR 3 million (-2.4%) Y/Y.
Net trading and other income and expenses amounted to EUR 26 million, decreased by EUR 31 million (-54.4%)Y/Y mainly due to lower dividend income and trading result.

Operating expenses at EUR 173 million, higher by EUR 9 million (+5.5%). Cost to income ratio equals to 30.46%.

Profit before impairment and other provisions amounted to EUR 395 million, higher by EUR 159 million (+67.4%) 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 25 million, increased by EUR 12 million.

Total assets of the Bank amounted to EUR 20,622 million, higher by EUR 655 million (+3.3%) BoY.

Net loans and advances to customers amounted to EUR 10,079 million, increased by EUR 451 million (+4.7%) due to increase in corporate and retail lending.
Deposits from customers represent primary source of funding. They amounted to EUR 16,990 million, higher by EUR 754 million (+4.6%) BoY mainly in corporate and retail deposits.
Deposits from credit institutions at EUR 286 million, lower by EUR 198 million (- 40.9%) 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 dd					Δ 3Q 2023 vs 3Q 2022
Income statement (EURm)	3Q 2023		3Q 2022		EUR m		%
	1		2		3 (1-2)		4 (3/2)
Interest income	487		250		237		94.8 %
Interest expense	(69)		(28)		(41)		146.4 %
Net interest income	418		222		196		88.3 %

Fee and commission income	154		155		(1)		(0.6 %)
Fee and commission expense	(30)		(28)		(2)		7.1 %
Net fee and commission income	124		127		(3)		(2.4 %)
Net trading and other income and expenses	26		57		(31)		(54.4 %)

Operating income	568		406		162		39.9 %
Operating expenses	(173)		(164)		(9)		5.5 %
Cash contributions to resolution funds and	-	(6)		6		(100.0 %)
deposit guarantee schemes

Profit before impairment and other	395		236		159		67.4 %
provisions

Impairment and other provisions	25		13		12		92.3 %
Profit before tax	420		249		171		68.7 %
Income tax	(74)		(42)		(32)		76.2 %
Net profit	346		207		139		67.1 %

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 dd					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	6,137		6,662		(525)		(7.9 %)
and other demand deposits

Financial assets held for trading	232		259		(27)		(10.4 %)
Non-trading financial assets
mandatorily at fair value through	8		16		(8)		(50.6 %)
profit or loss
Financial assets at fair value through	719		648		71		11.0 %
other comprehensive income

Financial assets at amortised cost:	13,040		11,882		1,158		9.7 %
	Debt securities	1,398		1,163		235		20.2 %
	Loans and advances to credit	1,563		1,091		472		43.3 %
	institutions

	Loans and advances to	10,079		9,628		451		4.7 %
	customers

Tangible and intangible assets	175		179		(4)		(2.0 %)
Investments in subsidiaries, joint	197		196		1		0.4 %
ventures and associates

Other assets	114		125		(11)		(9.0 %)

Total assets	20,622		19,967		655		3.3 %

Financial liabilities held for trading	225		259		(34)		(13.2 %)

Financial liabilities measured at	17,814		16,930		884		5.2 %
amortised cost:

	Debt securities issued	151		151		0		0.0 %
	Deposits from credit institutions	286		484		(198)		(40.9 %)
	Deposits from customers	16,990		16,236		754		4.6 %
	Other financial liabilities	387		59		328		556.7 %
Provisions for risks and charges	217		213		4		1.7 %

Other liabilities	178		178		(0)		(0.2 %)
Total liabilities	18,434		17,581		853		4.9 %

Equity	2,188		2,386		(198)		(8.3 %)

Total equity and liabilities	20,622		19,967		655		3.3 %


	Rating					30 September 2023
Fitch Ratings Ltd.	Long Term Issuer Default Rating	BBB
		Short Term Rating			F2
		Viability			bb+
		Shareholder Support			bbb
		Outlook			Stable

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 conflicts and Market uncertainties

At the end of September 2023, the Bank'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 continues 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 Bank's future financial condition and results of operations.

The Bank 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 Bank 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