HPB p.l.c. 12M 2023

Investor information

March 2024

Limitation of liability

  • The information and data contained in this presentation are intended as general background information on Hrvatska poštanska banka p.l.c. (hereinafter referred to as the Bank or HPB) and its activities. They are provided in summary form and therefore do not necessarily represent complete information. Certain statements contained herein may be statements of future expectations and other forward-looking statements about HPB, which are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, words such as "may," "will," "should," "expects," "plans," " contemplates," "intends," "anticipates," "estimates," "potential" or "continues" and similar expressions typically identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As such, forward-looking statements cannot be guaranteed. Accordingly, we cannot guarantee the realization of such forward-looking statements, nor should full reliance be placed on such forward-looking statements. Many factors may affect our results of operations, financial conditions, liquidity, and developments in the industry in which we operate, and these may differ materially from those expressed or implied by the forward-looking statements contained herein.
  • This presentation contains financial and non-financial information and statistical data related to HPB. Such information and data are presented for illustrative purposes only. This presentation may include information and data derived from publicly available sources that have not been independently verified, and therefore HPB hereby expressly makes no representation of warranty of any kind including, but not limited to the accuracy, completeness or reliability of the information and data provided. This presentation is for information purposes only and does not contain a recommendation to buy or sell or an offer to sell or subscribe for shares, nor does it constitute an invitation to make an offer to sell shares.
  • This presentation has been prepared and the information in it has been checked with the greatest possible care. Nevertheless, rounding and transmission cannot be excluded. When adding up rounded amounts and percentages, differences may appear.
  • From January 1, 2023, the euro was introduced as the official currency in the Republic of Croatia, and for the purposes of this presentation, the previous periods are prepared using a fixed HRK/EUR conversion rate where EUR 1 = HRK 7.53450.

2

Statement of the President of the Management Board

Marko Badurina, President of the Management Board

"Since the end of 2019, the Bank's focus on the strategic goals has continuously yielded excelent financial results and achievements, representing huge and important leaps not only for us, but for the whole Croatian banking market.

Apart from record breaking financial results from quarter to quarter, HPB stands out by taking an agile approach to growth opportunities on the market - subsequent to successful merger of Nova hrvatska banka we are carrying out operational integration which is in the final phase. Meanwhile, we were the first on the market to significantly increase interest on deposits, which has, alongside the measures of Croatian Government, contributed to the suppression of inflation.

HPB has ended 2023 by rising to the Top 5 banks in Croatia by assets' size and by achieving this we are well positioned to have a great start of the new development phase of the now significantly strengthened Croatian bank"

3

Executive Summary

Macroeconomic Environment Financials

Risk Management Additional information

HPB creates new pages of history

Record

The fastest growing

profitability

Bank in Croatia

4y cumulative

3y growth

149 mn. EUR

2x

80.6

7.0

Financial strength and

Increase in the Bank's

stability

value

3y cumulative growth

3y growth

206 mn. EUR

3x

533.7

378.6

3.4

24.2 26.8

17.6

4.6

3.7

328.2

351.7

347.0

221.7

196.2

126.3

2020

2021

2022

2023

2020

2021

2022

2023

HPB p.l.c. net profit for the year,

HPB p.l.c. assets at the year-end,

EUR mn.

EUR bn.

2020

2021

2022

2023

2020

2021

2022

2023

HPB p.l.c. equity and reserves at the year-end,

HPB p.l.c. market capitalization at the year-end,

EUR mn.

EUR mn.

We are creating conditions for a better life in Croatia.

Sources: HPB p.l.c. non-consolidated quarterly financial reports (TFI-KI) for the period Jan 01 - Dec 31 2023

5

Trading data for HPB share, www.zse.hr

Bank no. 5 in Croatia - we are changing the market and making a

difference

Total assets

Total assets

31.12.2022 EUR bn

31.12.2023. EUR bn

Share

Share

20.0

26.3%

20.4

25.9%

15.8

20.9%

16.2

20.6%

13.6

17.9%

13.3

16.9%

7.6

10.1%

8.0

10.2%

6.4

8.4%

9.0%

7.0 # 5

4.6

# 6

6.0%

6.6

8.4%

6

Source: CNB statistics, SV1 Data on the operations of credit institutions as of 12/31/2022 and 12/31/2023 (preliminary, unaudited)

Executive Summary

Macroeconomic Environment

Financials

Risk Management

Additional information

Macroeconomic indicators

Croatia

Euro area €

Overall

Dec 23:

5.4%

Dec 23: 2.9%

inflation

(HICP)

Dec 22:

12.7%

Dec 22: 9.2%

Unemployment

Dec 23: 6.4%

Dec 23: 6.4%

rate

Dec 22: 6.7%

Dec 22: 6.7%

Real GDP

Q3 23: 3.0%

Q3 23: 0.0%

growth

Q3 22: 5.8%

Q3 22: 2.5%

quarterly

8 Source: ECB Data Portal

Interest rate on deposits

with agreed

maturity

Financial

investment

growth

quarterly

Interest rate

on loans

Croatia

Euro area €

Dec 23: 2.2%

Dec 23: 3.3%

Dec 22: 0.2%

Dec 22: 1.5%

Dec 23: 3.4%

Dec 23: 3.7%

Dec 22: 0.9%

Dec 22: 1.8%

Q3 23: 5.7%

Q3 23: 1.8%

Q3 22: 6.0%

Q3 22: 2.7%

Q3 23: 9.0%

Q3 23: 1.5%

Q3 22: 10.3%

Q3 22: 4.1%

Dec 23: 5.0%

Dec 23: 7.7%

Dec 22: 4.7%

Dec 22: 6.4%

Dec 23: 3.6%

Dec 23: 4.0%

Dec 22: 2.7%

Dec 22: 2.9%

Dec 23: 5.3%

Dec 23: 5.2%

Dec 22: 3.5%

Dec 22: 3.4%

Households

Corporations

Households

Corporations

Households' consumption

Households'

home

purchase

Corporations

Executive Summary Macroeconomic Environment

Financials

Risk Management

Additional information

The rise in interest income leads to a record net profit

Profit and loss account (EUR mn)

12M 2022

1

Y-o-Y

Y-o-Y %

12M 2023

Net interest income

71.1

146.3

75.2

105.7

Net fee and commission income

27.5

29.3

1.9

6.8

Net other income

0.3

7.6

7.3

2,319.0

Operating income

98.9

183.3

84.3

85.3

Employee expenses

(34.7)

(44.2)

9.5

27.4

Administrative expenses

(32.5)

(38.7)

6.2

18.9

Depreciation

(6.5)

(8.7)

2.2

34.2

Operating expenses

(73.7)

(91.6)

17.9

24.2

Operating profit

25.2

91.7

66.5

263.4

Provisions

(4.2)

2.3

6.5

155.4

Tax

(3.4)

(13.4)

10.0

291.3

Profit after tax

17.6

80.6

63.0

358.1

1 The data in the profit and loss statement for the 12M 2023 include the results of both HPB (1.1.-31.12.) and NHB from the merger date (3.7.-31.12)

  • Net interest income is the key driver of the record growth and net profit level in the amount of EUR 80.6 mn
  • A significant increase in interest income caused primarily by an increase in income on deposits with the ECB in line with the movement of the risk-free interest rate during 2023
  • The net fee and commission income slightly increased compared to the previous year
  • The net other income primarily relates to the gain from the increase in the

fair value of the trading portfolio of securities amount to EUR +3.4 mn (compared to EUR -8.6 mn in 2022) and realized one-off net other income in 2023 as a result of legal actions taken in Bank's favor

10 Source: Management report

  • Relative increase in employee expenses primarily due to the impact of the merger of NHB in 2023 (from July 3), and to the lesser extent by labor and service price adjustments due to the inflationary environment and other factors
  • Administrative expenses in 2023 under the pressure of the merger of NHB, higher expenses for deposit insurance, ubiquitous inflation and implemented project activities
  • Provisions under the influence of positive developments in the Bank's preforming portfolio and strong collections that mitigated the negative impacts of the NPL portfolio
  • A strong increase in income with moderate growth in total expenses resulted in an improvement in the CIR indicator, which in 2023 amounts to 50.0% (2022: 74.5%)
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HPB dd published this content on 01 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 March 2024 11:59:36 UTC.