Central Cooperative Bank : Financial statement for the fourth quarter or 2022

2022' FOURTH QUARTER INTERIM FINANCIAL REPORT

ON THE ACTIVITIES OF

CENTRAL COOPERATIVE BANK /CCB/

ASSETS

At the end of the fourth quarter of 2022, CCB's balance sheet total assets were BGN 7,786,339 thousand. As of 31th of December 2022, the Bank's net profit amounted to BGN 36,851 thousands.

CCB is developing sustainably and as of the end of December was at 7-th position in the Bulgarian Banking System, based on the balance sheet total amount of assets, according to BNB.

The bank's total amount of assets grew by 5.45% or by BGN 402,396 thousands in absolute terms, against BGN 7,383,943 thousands a year ago. From the end of previous quarter, assets are up by 2.33% or BGN 177,481 thousands.

At the end of the fourth quarter of 2022 the amount of granted loans and advances reached BGN 3,031,246 thousands so their amount increased by 4.94% on an annual base and decreased by -1.68% compared to the end of previous quarter.

LIABILITIES

At the end of December 2022, the liabilities due to other depositors were approximately

98% of total liabilities and amounted to BGN 7,045,300 thousands. For the 12-month period, they increased by 6.11% compared to BGN 6,639,742 thousands as of December 2021 and compared to the end of previous quarter - they increased by 2.55%.

FINANCIAL RESULTS

The CCB's net profit as of the end of 2022' Fourth quarter is BGN 36,851 thousands and is increased by 42.13%, compared to BGN 25,928 thousands a year ago.

At the end of 2022' Fourth quarter, the Bank was able to meet all regulatory compliance requirements and has complied with all applicable minimum regulatory requirements during the period.

The liquidity ratio (LCR) of CCB on individual basis as of 31.12.2022 is:

∙ Liquidity coverage ratio(LCR)

390,88 %.

with the required value of 100% as a minimum.

1. Information related to significant events that occurred during the reported period of financial 2022, accumulated and its impact on the financial result.

During the fourth quarter of 2022, Nikola Kedev was elected as a member of the Management Board and Executive Director of CCB Plc. George Konstantinov was released as a member of the Management Board and Executive Director of the Bank.

II. Information about major risks and instability during the next quarter of 2022.

In the time of geopolitical turmoil, rising energy and commodities prices and sharp global inflation and potential decline of the economic growth, the Bank will strive to continue its development while maintaining its results and market share. Potential negative effects would occur if war actions on the territory of Ukraine continue to escalate and the economies go to a recession in 2023.

Potential differences between observed and expected results are the major source of risks and instability during the next quarter of 2022.

Therefore, the most significant risks are detailed in the following list:

1. Credit risk - the possibility that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms. Detailed policies are applied in process of lending, concerning the assessment of the creditworthiness of Bank's clients, and the control over the use of the advanced funds and the associated administration. In accordance with the credit risk mitigation policy, CCB accepts different types of collaterals and guarantees depending on the internal rules, the approach applied in the calculation of minimum required capital and the effective banking legislation. Evaluation of the risk exposures in the portfolio is done once per month, by classifying and making provisions for loans in the portfolio. The exposures treated as big exposures are subject to constant supervision and reporting. The Bank has adopted and keeps the credit exposure in the limits set by sector and by regional level. The above limits aim at avoidance of concentration, either geographically or by sector, in loan portfolios, which could lead to an increased credit risk.
2. Liquidity risk - the risk of having difficulties in meeting payment obligations due to a mismatch in maturity and amount between anticipated cash inflows and outflows. The Bank manages its assets and liabilities so as to address regularly and without any delay its daily liquidity obligations, under both normal and potentially adverse market conditions.
3. Market risk - the probability for the Bank to experience losses from fluctuations in stock prices, interest rates and foreign exchange rates.
4. Operational risk - the probability of direct or indirect losses resulting from inadequate or failed internal processes, people and systems.

The levels of CCB's risk ratios and indicators are similar to the average values of the Bulgarian banking system.

1. Information of the concluded significant transactions with related parties in the sense of the applicable accounting standards:

1. The transactions between related parties, concluded during the reporting period of the current financial year, which impacted significantly on the financial state, or the results of the company activity during this period;
   No such transactions
2. The changes in the concluded transactions with related parties, announced in the annual report, which have a significant impact on the financial state, or the results of the company activity during the respective accounting period of the current financial year.

No such transactions