13.03.2024.: INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 WITH INDEPENDENT AUDITORS' REPORT THEREON

Translation from Bulgarian

To:

Financial Supervision Commission

Investment Activity Supervision Department

16 Budapest Str.

Sofia

Cc:

Bulgarian Stock Exchange - Sofia AD

6 Tri Ushi Str.

Sofia

13 March 2024

Re: Annual individual (audited) financial statements of First Investment Bank AD as at 31 Dec 2023

Dear Sirs,

In compliance with the requirements of the Public Offering of Securities Act (POSA) and the regulations for its implementation, in our capacity as public company and issuer of bonds admitted for trading at a regulated market, we hereby submit the audited individual financial statements of First Investment Bank AD as at 31 December 2023, containing

• Audited individual financial statements as at 31.12.2023 and notes thereto, accompanied by the auditors' report as per Art. 100m, para. 4(1) of POSA;
• 2023 Annual Report of First Investment Bank pursuant to Art. 100m, Para. 4(2) of POSA;
• Declaration under Art. 100о, para. 4(4) of POSA;
• Information on First Investment Bank under Annex 11 to Ordinance №2 of the Financial Supervision Commission on the prospects of public offering and admittance for trade on a regulated market of securities and for the disclosure of information.

We are also sending you the Disclosure Policy of First Investment Bank and the Score Card for assessment of corporate governance in Bulgaria.

	Sincerely,
(signed)	(signed)
Svetozar Popov	Chavdar Zlatev
Executive Director	Executive Director
Member of the MB	Member of the MB

FIRST INVESTMENT BANK AD

INDIVIDUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

WITH INDEPENDENT AUDITORS' REPORT THEREON

Individual statement of profit or loss and of other comprehensive income for the year ended 31 December 2023

in thousands of BGN	Note	2023	2022
Interest income		404,711	310,785
Interest expense		(34,809)	(40,045)
Net interest income	6	369,902	270,740
Fee and commission income		192,605	172,990
Fee and commission expense		(41,056)	(33,475)
Net fee and commission income	7	151,549	139,515
Net trading income	8	23,295	19,717
Other net operating income	9	(27,192)	14,195
TOTAL INCOME FROM BANKING OPERATIONS		517,554	444,167
Administrative expenses	10	(210,667)	(205,113)
Other income/(expenses), net	12	(18,902)	(12,960)
Profit before impairment		287,985	226,094
Allowance for impairment	11	(137,168)	(135,349)
PROFIT BEFORE TAX		150,817	90,745
Income tax expense	13	(15,776)	(9,540)
NET PROFIT		135,041	81,205
Other comprehensive income for the period
Items which should or may be reclassified as profit or loss
Revaluation reserve of investments in securities		9,676	(21,860)
Total other comprehensive income		9,676	(21,860)
TOTAL COMPREHENSIVE INCOME		144,717	59,345

The statement of profit or loss and of comprehensive income is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 5 to 75.

The financial statements were approved by the Management Board on 12 March 2024 and signed on its behalf by:

Nikola Bakalov	Chavdar Zlatev	Svetozar Popov
Chief Executive Officer	Executive Director	Executive Director

Ralitsa Bogoeva		Ianko Karakolev
Executive Director		Chief Financial Officer
Audited as per the auditors' report dated 08/03/2024:
Athanasios Petropoulos		Iva Slavkova
Mazars OOD	Registered auditor
Procurator		responsible for the audit
George Trenchev, Manager	ECOVIS AUDIT BULGARIA
Registered auditor responsible for the	OOD
audit

1

Individual statement of financial position as at 31 December 2023

in BGN '000	Note	2023	2022
ASSETS
Cash and balances with Central Banks	14	2,325,807	1,911,371
Investments in securities	15	2,583,949	2,598,137
Loans and advances to banks and other financial institutions	16	259,718	264,984
Loans and advances to customers	17	7,158,309	6,384,541
Property and equipment	18	99,517	98,240
Intangible assets	19	23,007	14,925
Derivatives held for risk management		1,765	1,609
Repossessed assets	21	403,523	412,996
Investment Property	22	756,767	750,324
Investments in subsidiaries	23	34,579	38,526
Rights of use assets	24	121,410	124,159
Other assets	25	120,177	114,246
TOTAL ASSETS		13,888,528	12,714,058
LIABILITIES AND CAPITAL
Due to banks	26	54,326	45,703
Due to other customers	27	11,494,164	10,798,450
Liabilities evidenced by paper	28	439,634	116,487
Financial liabilities at fair value through profit and loss		3,165	8,488
Hybrid debt	29	257,871	256,861
Deferred tax liabilities	20	27,604	27,823
Current tax liabilities		2,028	398
Lease liabilities	24	121,503	124,240
Other liabilities	30	15,307	7,399
TOTAL LIABILITIES		12,415,602	11,385,849
Issued share capital	31	149,085	149,085
Share premium	31	250,017	250,017
Statutory reserve	31	39,861	39,861
Revaluation reserve of investments in securities		(5,639)	(15,315)
Revaluation reserve on property		4,500	4,500
Other reserves and retained earnings	31	1,035,102	900,061
TOTAL SHAREHOLDERS' EQUITY		1,472,926	1,328,209
TOTAL LIABILITIES AND GROUP EQUITY		13,888,528	12,714,058

The statement of the financial position is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 5 to 75.

The financial statements were approved by the Management Board on 12 March 2024 and signed on its behalf by:

Nikola Bakalov	Chavdar Zlatev	Svetozar Popov
Chief Executive Officer	Executive Director	Executive Director
Ralitsa Bogoeva		Ianko Karakolev
Executive Director		Chief Financial Officer
Audited as per the auditors' report dated 08/03/2024:
Athanasios Petropoulos	Mazars OOD	Iva Slavkova
Procurator		Registered auditor
George Trenchev, Manager		responsible for the audit
Registered auditor responsible for the audit	ECOVIS AUDIT BULGARIA OOD

2

Individual statement of cash flows for the year ended 31 December 2023

in BGN '000	2023	2022
Net cash flow from operating activities
Net profit	135,041	81,205
Adjustment for non-cash items
Allowance for impairment	137,168	135,349
Net interest income	(369,902)	(270,740)
Depreciation and amortization	12,969	12,060
Tax expense	15,776	9,540
(Profit)/loss from sale and write-off of tangible and intangible fixed assets, net	33	(5)
(Profit) from sale of other assets, net	(6,668)	1,134
(Positive) revaluation of investment property	-	(14,769)
Change in operating assets	(75,583)	(46,226)
Decrease in financial assets at fair value through profit or loss	33,063	(2,859)
Decrease/(increase) in financial assets at fair value in other comprehensive income	(598,563)	406,355
Decrease in loans and advances to banks and financial institutions	8,973	2,869
(Increase) in loans to customers	(1,028,541)	(297,535)
(Increase) in other assets	(3,337)	(43,499)
Change in operating liabilities	(1,588,405)	65,331
Increase in due to banks	8,621	15,823
Increase in amounts owed to other depositors	696,357	1,375,988
Net increase in other liabilities	5,465	42,896
Interest received	710,443	1,434,707
485,822	395,403
Interest paid	(33,450)	(49,705)
Dividends received	2,348	578
Tax on profit, paid	(14,945)	(5,528)
NET CASH FLOW FROM OPERATING ACTIVITIES	(513,770)	1,794,560
Cash flow from investing activities
(Purchase) of tangible and intangible fixed assets	(27,070)	(35,523)
Sale of tangible and intangible fixed assets	231	15
Sale of other assets	38,338	44,708
(Increase)/decrease of investments	602,654	(1,540,427)
NET CASH FLOW FROM INVESTING ACTIVITIES	614,153	(1,531,227)
Financing activities
Increase in borrowings	315,806	16,679
Increase/(decrease) in subordinated liabilities	1,028	(57,275)
NET CASH FLOW FROM FINANCING ACTIVITIES	316,834	(40,596)
NET INCREASE IN CASH AND CASH EQUIVALENTS
417,217	222,737
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD	2,138,377	1,915,640
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD	2,555,594	2,138,377

The cash flow statement is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 5 to 75.

The financial statements were approved by the Management Board on 12 March 2024 and signed on its behalf by:

Nikola Bakalov	Chavdar Zlatev	Svetozar Popov
Chief Executive Officer	Executive Director	Executive Director
Ralitsa Bogoeva		Ianko Karakolev
Executive Director		Chief Financial Officer
Audited as per the auditors' report dated 08/03/2024:
Athanasios Petropoulos	Mazars OOD	Iva Slavkova
procurator		Registered auditor
		responsible for the audit
George Trenchev, Manager	ECOVIS AUDIT BULGARIA OOD
Registered auditor responsible for the
audit

3

Individual statement of shareholders' equity for the year ended 31 December 2023

	Issued		Other	Revaluation	Revaluation
	share	Share	reserves and	reserve of	Statutory
in BGN '000	reserve on	Total
capital	premium	retained	investments in	reserve
	property
			earnings	securities
Balance at 01 January 2022	149,085	250,017	818,856	6,545	4,500	39,861	1,268,864
Total comprehensive income for the
period
Net profit for the year ended 31 December
2022	-		81,205	-	-	-	81,205
Other comprehensive income for the
period
Revaluation reserve of investments in
securities	-	-	-	(21,860)	-	-	(21,860)
Balance as at 31 December 2022	149,085	250,017	900,061	(15,315)	4,500	39,861	1,328,209
Total comprehensive income for the
period
Net profit for the year ended 31 December
2022	-	-	135,041	-	-	-	135,041
Other comprehensive income for the
period
Revaluation reserve of investments in
securities	-	-	-	9,676	-	-	9,676
Balance as at 31 December 2023	149,085	250,017	1,035,102	(5,639)	4,500	39,861	1,472,926

The statement of changes in equity is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 5 to 75.

The financial statements were approved by the Management Board on 12 March 2024 and signed on its behalf by:

Nikola Bakalov	Chavdar Zlatev	Svetozar Popov
Chief Executive Officer	Executive Director	Executive Director
Ralitsa Bogoeva		Ianko Karakolev
Executive Director		Chief Financial Officer
Audited as per the auditors' report dated 08/03/2024:
Athanasios Petropoulos	Mazars OOD	Iva Slavkova
Procurator		Registered auditor
		responsible for the audit
George Trenchev, Manager	ECOVIS AUDIT BULGARIA
Registered auditor responsible for the	OOD
audit

4

Notes to the financial statements

1. Basis of preparation

1. Statute

First Investment Bank AD (the Bank) was incorporated in 1993 in the Republic of Bulgaria and has its registered office in Sofia, at 111P Tsarigradsko Chaussee Blvd.

The Bank has a general banking license issued by the Bulgarian National Bank (BNB) according to which it is allowed to conduct all banking transactions permitted by Bulgarian legislation.

The Bank has foreign operations in Cyprus - a branch.

Following the successful Initial Public Offering of new shares at the Bulgarian Stock Exchange - Sofia, on June 13th 2007 the Bank was registered as a public company in the Register of the Financial Supervision Commission pursuant to the provisions of the Law on the Public Offering of Securities.

The Bank's management has a dual board structure, with the Managing Board and the Supervisory Board having the following members:

• Managing Board

• 1. Mr Nikola Bakalov - Chief Executive Officer
  1. Mr Svetozar Popov - Executive Director
  1. Mr Chavdar Zlatev - Executive Director
  1. Ms Ralitsa Bogoeva - Executive Director
  1. Mr Ianko Karakolev - Managing Board member
  1. Ms Nadya Koshinska - Managing Board member
• Supervisory Board
• 1. Mr Evgeni Lukanov - Supervisory Board chairperson
  1. Mr Jordan Skortchev - Supervisory Board member
  1. Ms Radka Mineva - Supervisory Board member
  1. Ms Maya Georgieva - Supervisory Board member
  1. Mr Jyrki Koskelo - Supervisory Board member

At 31 December 2023 the total number of employees was 2,408 (31 December 2022: 2,454). The Bank's beneficial owners are disclosed in Note 31 below.

1. Statement of compliance

The separate financial statements were drawn up in accordance with the International Financial Reporting Standards (IFRS) endorsed by the European Commission.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Bank's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note

1. • (p).
2. Presentation

The financial statements are presented in Bulgarian Leva (BGN) rounded to the nearest thousand. The financial statements are prepared in accordance with the fair value principle of derivative financial instruments, financial instruments recognised at fair value in profit or loss, investment properties, as well as assets recognised at fair value in other comprehensive income. Other financial assets and liabilities and non-financial assets and liabilities are stated at amortised cost or historical cost convention.

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Notes to the financial statements

The present financial statements of the Bank are not consolidated. These individual financial statements form an integral part of the consolidated financial statements. Information about the basic earnings per share is given in the consolidated financial statements.

1. New standards, amendments and interpretations effective as of 01 January 2023

The following amendments to the existing standards issued by the International Accounting Standards Board and adopted by the EU are effective for the current period:

• IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 Insurance Contracts. IFRS 17 outlines a general model which is modified for insurance contracts with direct participation features, described as the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for remaining coverage using the premium allocation approach. The general model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It takes into account market interest rates and the impact of policyholders' options and guarantees.
  The Company does not have any contracts that meet the definition of an insurance contract under IFRS 17.
• IAS 1 - the amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term 'significant accounting policies' with 'material accounting policy information'. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements.
  The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.
• IAS 8 Accounting policies, Changes in Accounting Estimates and Errors - the amendments replace the definition of a change in accounting estimates with a definition of accounting estimates.
  Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". The definition of a change in accounting estimates was deleted.
• IAS 12 Income taxes: the amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting nor taxable profit. For example, this may occur after the recognition of a lease liability and the respective right-of-use asset upon the application of IFRS 16 on the lease commencement date.
  Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.
  The IASB amends the scope of IAS 12 to clarify that the Standard applies to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes described in those rules.
  The amendments introduce a temporary exception to the accounting requirements for deferred taxes in IAS 12, so that an entity would neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.
  Following the amendments, the Company is required to disclose that it has applied the exception and to disclose separately its current tax expense (income) related to Pillar Two income taxes.
  The adoption of these amendments to the existing standards has not led to any changes in the Bank's accounting policies.

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Notes to the financial statements

1. Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Bank
2. • 
     The following standards, amendments and interpretations, which have also been issued but are not yet effective, are not expected to have a material impact on the Bank's financial statements.
   • IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current, effective as of 01 January 2024, adopted by the EU.
     The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the statement of financial position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about those items, adopted by the EU on 19 December 2023, published in the Official Journal on 20 December 2023
     The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of 'settlement' to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.
   • IFRS 16 Leases: Lease Liability in a Sale and Leaseback, effective as of 1 January 2024.
     The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates to the right of use it retains.
     The new requirements do not prevent a seller-lessee from recognising in profit or loss any gain or loss relating to the partial or full termination of a lease.
     A seller-lessee applies the amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale and leaseback transactions entered into after the date of initial application.
   • Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability, effective 1 January 2025
     The amendments:
     Specify when a currency is exchangeable into another currency and when it is not - a currency is exchangeable when an entity is able to exchange that currency for the other currency through markets or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose; a currency is not exchangeable into the other currency if an entity can only obtain an insignificant amount of the other currency.
     Specify how an entity determines the exchange rate to apply when a currency is not exchangeable - when a currency is not exchangeable at the measurement date, an entity estimates the spot exchange rate as the rate that would have applied to an orderly transaction between market participants at the measurement date and that would faithfully reflect the economic conditions prevailing.
     Require the disclosure of additional information when a currency is not exchangeable - when a currency is not exchangeable an entity discloses information that would enable users of its financial statements to evaluate how a currency's lack of exchangeability affects, or is expected to affect, its financial performance, financial position and cash flows.
     The amendments also extend to conforming amendments to IFRS 1 which previously referred to, but did not define, exchangeability.
     The amendments also extend to conforming amendments to IFRS 1 which previously referred to, but did not define, exchangeability.
   • Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements, effective 1 January 2024.
     The amendments add a disclosure objective to IAS 7 stating that an entity is required to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity's liabilities and cash flows. In addition, IFRS 7 was amended to add supplier finance arrangements as an example within the requirements to disclose information about an entity's exposure to concentration of liquidity risk.
     To meet the disclosure objective, an entity will be required to disclose in aggregate for its supplier finance arrangements:

7

Notes to the financial statements

• The terms and conditions of the arrangements
• The carrying amount, and associated line items presented in the entity's statement of financial position, of the liabilities that are part of the arrangements
• The carrying amount, and associated line items for which the suppliers have already received payment from the finance providers
• Ranges of payment due dates for both those financial liabilities that are part of a supplier finance arrangement and comparable trade payables that are not part of a supplier finance arrangement
• Liquidity risk information

2. Significant accounting policies

1. Income recognition

1. Interest income
   Interest income and expense is recognised in the profit or loss as it accrues, taking into account the effective yield of the asset (liability) or an applicable floating rate. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability to the carrying amount of the financial asset or liability. When calculating the effective interest rate, the Bank estimates future cash flows considering all contractual terms of the financial instrument but not future credit losses.
   The calculation of the effective interest rate includes all fees paid or received as well as discount and premiums which are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or liability.
   Interest income is calculated by applying the effective interest rate on the gross value of the financial asset, except for impaired assets for which the effective interest rate is applied to the amortised cost of the financial asset.
2. Fees and Commissions

Fee and commission income arises on financial services provided by the Bank and is recognised in profit or loss when the corresponding service is provided.

1. Net trading income
   Net gains (losses) on financial assets and liabilities held for trading includes those gains and losses arising from disposals and changes in the fair value of financial assets and liabilities held for trading as well as trading income in dealing with foreign currencies and exchange differences from daily revaluation of the net open foreign currency position of the Bank.
2. Dividend income
   Dividend income is recognised when the right to receive income is established. Usually this is the ex- dividend date for equity securities.

1. Basis of consolidation of subsidiaries
   Investments in subsidiaries are stated at cost, minus the accrued impairment.
2. Foreign currency transactions

1. Functional and presentation currency
   The financial statements are presented in Bulgarian leva, which is the Bank's functional and presentation currency.
2. Transactions and balances
   Transactions in foreign currencies are translated into the respective functional currencies of the operations at the spot exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the spot exchange rate at that date. Foreign currency differences arising on translation are difference

8