Mandatory Disclosure

PUBLIC DISCLOSURE OF INSIDE INFORMATION

MONETA Money Bank, a.s.

Consolidated financial report as of and for the

six months ended 30 June 2022

MONETA Money Bank, a.s. Consolidated financial report

as of and for the six months ended 30 June 2022 (All amounts in CZK millions unless otherwise stated)

Contents

Contents ..........................................................................

2

1

Disclaimer ................................................................

3

2

Letter from the CEO .................................................

4

3

Key Performance Indicators...................................

11

4

Macroeconomic Environment ...............................

12

5

Group Performance ...............................................

14

5.1

Business performance .........................................

14

5.2

Financial Performance.........................................

14

5.3

Outlook for 2022 and risks...................................

15

  1. Basic Information about MONETA Money Bank, a.s.
    ............................................................................... 16
  2. Condensed Consolidated Interim Financial

Statements for the Three and Six-month Period

Ended 30 June 2022 (Unaudited)...........................

18

7.1 Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income for the

Three and Six-month Period Ended 30 June 2022

(Unaudited) .........................................................

18

7.2

Condensed Consolidated Statement of Financial

Position as at 30 June 2022 (Unaudited).............

19

7.3

Condensed Consolidated Statement of Changes in

Equity for the Half-year Ended 30 June 2022

(Unaudited) .........................................................

20

7.4 Condensed Consolidated Statement of Cash Flows for the Half-year Ended 30 June 2022 (Unaudited)

21

8 Notes to Unaudited Condensed Consolidated

Interim Financial Statements .................................

23

8.1

Reporting Entity ..................................................

23

8.2

Basis of Preparation and Presentation ................

23

8.3

Use of Judgements and Estimates.......................

23

8.4

Significant Accounting Policies ............................

24

8.5

Consolidation Group ...........................................

25

8.6

Dividends Paid.....................................................

25

8.7

Net interest income.............................................

26

8.7.1 Analysis of deferred costs and fees directly attributable to origination of new loan products that are integral part of the effective interest rate and fair value adjustment resulting from revaluation of acquired financial

assets for a three and six-month period........

27

8.8

Net fee and commission income .........................

29

8.9

Total operating expenses ....................................

29

8.10 Investment securities ..........................................

29

8.11 Loans and receivables to banks...........................

30

8.12 Loans and Receivables to Customers ..................

30

8.13 Due to banks and Due to customers ...................

30

8.14 Issued bonds........................................................

31

8.15 Subordinated Debt Issued ...................................

32

8.16 Legal Risks ...........................................................

33

8.16.1

Legal disputes .....................................

33

8.17 Segment Reporting..............................................

33

8.18 Related parties ....................................................

35

8.19 Risk management ................................................

36

8.19.1

Capital Management...........................

37

  1. Loans and receivables to banks and customers according to their categorisation . 38
  2. Walk of allowances to Loans and

receivables to customers ...............................

39

8.19.4 Break down of allowances according to

loan type and stages ......................................

41

8.19.5 Coverage of non-performing loans and

receivables.....................................................

42

8.19.6

Net impairment of financial assets .....

43

8.19.7

Maximum credit risk exposures ..........

44

8.20 Fair values of financial assets and liabilities ........

46

8.21 Subsequent Events ..............................................

47

9

Management Affidavit ...........................................

48

10

Alternative Performance Measures .......................

49

11

Glossary

.................................................................

50

MONETA Money Bank, a.s. Consolidated financial report

as of and for the six months ended 30 June 2022 (All amounts in CZK millions unless otherwise stated)

1 Disclaimer

Forward-looking statements

This report may contain projections, estimates, forecasts, targets, opinions, prospects, results, returns and forward-looking statements with respect to, the financial guidance, profitability, costs, assets, capital position, financial condition, results of operations, dividend and business (together, "forward-looking statements") of MONETA Money Bank, a.s. and its consolidated subsidiaries (the "Group" or "MONETA"). The forward-looking statements assume a purely organic growth without regard to any potential acquisition.

Any forward-looking statements involve material assumptions and subjective judgements which may or may not prove to be correct and there can be no assurance that any of the matters set out in forward looking statements will actually occur or will be realised or that such matters are complete or accurate. The assumptions may prove to be incorrect and involve known and unknown risks, uncertainties, contingencies and other important factors, many of which are outside the control of the Group. Actual achievements, results, performance or other future events or conditions may differ materially from those stated, implied and/or reflected in any forward-looking statements due to a variety of risks, uncertainties and other factors. Any forward-looking statement contained in this report is made as at the date of this report. The Bank does not assume, and hereby disclaims, any obligation or duty to update forward-looking statements if circumstances or management's assumptions beliefs, expectations or opinions should change, unless it would be required to do so under applicable law or regulation. For these reasons, recipients should not place reliance on, and are cautioned about relying on, any forward-looking statements.

Dividend Guidance

Subject to corporate, regulatory and regulator's limitations, the Bank's target is to distribute the Group's excess capital above that required to meet the Group's internal target of the capital adequacy ratio, which is currently 14.6%. However, the internal capital adequacy ratio target is not legally binding upon the Group and is subject to change on the basis

of the ongoing re-assessment by the Management Board of the Bank based on the business results and development.

Material assumptions for forward-looking statements

When preparing Guidance for 2022 - 20251 MONETA has made several economic, market, operational, regulatory and other assumptions of both quantitative and judgemental nature. These assumptions include the following:

  • Gradual recovery of the Czech economy after COVID-19 pandemic impacts.
  • 1M PRIBOR assumed to decrease from
    4.7% in 2022 to 2.7% in 20252.
  • Gross performing loan balance is expected to grow at 6.2% CAGR in the 4 years until 2025.
  • Customer deposits balance is expected to grow at 6.5% CAGR in the 4 years until 2025.

Third parties' data

Certain industry and market information in this report has been obtained by the Bank from third party sources. The Bank has not independently verified such information and the Bank does not provide any assurance as to the accuracy, fairness or completeness of such information or opinions contained in this report.

  1. Five-yearguidance published on 4th February 2022.
  2. Internal forecast derived from macroeconomic forecast from CNB published on November 2021 https://www.cnb.cz/en/monetary- policy/forecast/cnb-forecast-archive/CNB-forecast-Autumn-2021/

3

MONETA Money Bank, a.s. Consolidated financial report

as of and for the six months ended 30 June 2022 (All amounts in CZK millions unless otherwise stated)

2 Letter from the CEO

Dear Shareholders,

The continuing war in Ukraine has cast a shadow over the first half of this year as the destruction wrought upon the country by Russia has had repercussions for European economies, including the Czech economy. Moscow has cut or reduced the supply of gas to the west in response to wide ranging sanctions imposed upon Russia by the international community. This has increased upward pressure on energy prices, exacerbating the inflationary pressures that have been bubbling for several successive quarters. Inflation in the Czech Republic reached 17.2 per cent in June, the highest since 1993. In its battle against inflation, the Czech National Bank (CNB) increased the two-week repo rate to 7 per cent on 23 June, taking the cost of borrowing to its highest in 23 years.

On 30 May, MONETA and PPF Group announced the mutual termination of the acquisition process of Air Bank Group. Further down in my letter I provide more details about this matter, which, although disappointing, does not impact the standalone outlook for MONETA. Indeed, despite the deterioration in the economic environment, MONETA is doing well, and our performance in 1H 2022 was better than expected. It is, however, difficult to assess future developments as the economic consequences of Russia's aggression against Ukraine are unpredictable.

CURRENT ECONOMIC ENVIRONMENT

Russia's war against Ukraine has had direct and indirect impacts on global trade. Ukrainian exports are hampered by the war in general, and in particular by Russia's control over Black Sea shipping lanes, the traditional route for Ukraine's significant exports of wheat, maize and other foodstuffs. The difficulties in bringing Ukraine's substantial harvest of grains to market are driving up the price of food. Moscow's intentional reduction in gas deliveries to the west has triggered price rises. The economic sanctions imposed upon Russia by the international democratic community, in particular Europe's move to wean itself off of Russian oil and gas, have further contributed to the rise in energy and commodity prices. On 31 May the leaders of the European Union (EU) agreed to reduce imports of Russian oil into the EU by 90 per cent by the end of this year. On the other side of the world, China is implementing anti-epidemic measures, which contributes to a dampening of global economic growth. The complicated situation in the supply of components, raw materials and commodities, combined with higher

energy costs, are pressuring industrial producer prices, which feeds into consumer inflation already under pressure from food and fuel increases. Both the European Central Bank and the Fed are tightening their monetary policies and are planning to increase interest rates in an effort to dampen inflation and preserve price stability.

The Czech economy is under the same pressures, and the CNB has until now taken an orthodox and disciplined approach of using interest rates to pursue price stability and to fight inflation. That approach may change following the appointment, by President Zeman, of Aleš Michl as the new Governor of the CNB. Mr Michl began his six-year term in office on 1 July. He has expressed different views about fighting inflation and voted against raising interest rates at the last CNB Board meeting. This has given rise to concerns about continuity in the CNB's strategy. President Zeman also appointed Eva Zamrazilová as Deputy Governor and Karina Kubelková and Jan Frait as Board members, who to some observers tend towards a more dovish approach. Oldřich Dědek, Tomáš Holub and Deputy

4

MONETA Money Bank, a.s. Consolidated financial report

as of and for the six months ended 30 June 2022 (All amounts in CZK millions unless otherwise stated)

Governor Marek Mora remain members of the seven- person Board, which takes decisions by majority vote.

Mr Michl assumes the CNB Governorship at a time when Czech inflation is running at 17.2 per cent, its highest since 1993. His predecessor, Jiří Rusnok, chaired the CNB Board meeting of 22 June at which the Board, by five votes to two, increased the two-week repo rate to 7 per cent. The CNB reckons that inflation will remain in double figures this year but will fall in the first half of next year and return closer to the 2 per cent target by the end of 2023. Ordinarily, such a forecast would imply further rate hikes.

According to the CNB's spring forecast, the Czech economy will "slow markedly this year and even decline slightly in year-on-year terms in the second half of the year." The CNB is predicting GDP growth of 0.8 per cent for the full year. This represents quite a slow-down given that annual GDP growth to the end of the first quarter was, according to the Czech Statistical Office, a healthy 4.8 per cent. And yet despite the slowdown, unemployment remains the lowest in the EU at 2.5 per cent in May 2022. The Czech koruna has been reasonably stable throughout the period under review, at 24.7 CZK/EUR, and the CNB says there will be no change to its strategy of foreign exchange interventions. The government of Prime Minister Petr Fiala is determined to manage its spending as prudently as possible. The state budget deficit for this year is expected to reach CZK 280 billion; as of June 2022 it stood at CZK 183.0 billion.

Notwithstanding the so far prudent approach of the CNB and the government, the Czech Republic, like most European countries, is currently in a rather difficult and uncertain economic environment. At MONETA we are seeing signs that people and businesses are starting to feel the pinch of increased living costs as the number of foreclosed current accounts is rising. There is always

  1. lag in statistics, so it is tricky to talk with precision, but the signs are unmistakeable: more people are facing challenges.

ATM SHARING AGREEMENT

In May, MONETA and Komerční banka signed an agreement to share their ATM networks across the Czech Republic. This will increase the availability of cash services for the clients of both banks and contribute to our sustainability as ATM locations are optimised and resources saved regarding the operation and servicing of ATMs. In our joint statement, MONETA and Komerční banka ("KB") invited other banks to join the initiative in order to make the national network of ATMs more efficient and more environmentally

friendly. I am pleased to report that several banks, including Air Bank, have expressed interest in participating.

We are familiar with ATM-network sharing arrangements in a number of other European countries, including the Netherlands, Belgium and France. These have been providing unquestionable benefits for many years for customers and operators alike. From 1 June our customers can withdraw cash free of charge from our respective ATMs, and over the coming year we will roll-out the sharing of deposit functions across our networks. Customers will therefore enjoy greater availability of cash withdrawals and more convenience. Our ATM network was expanded by KB's 863 ATMs as of 30 June 2022. In due course, we will jointly establish ATMs in new locations where neither MONETA or KB are present.

MONETA currently has 558 ATMs, of which 186 include deposit functions. For MONETA and KB, the sharing of selected banking infrastructure will have a positive impact, reducing energy consumption and other costs associated with the operation of separate ATM networks, and reducing the carbon footprint of our respective banking networks.

TERMINATION OF THE ACQUISITION OF AIR BANK GROUP

On 30 May 2022 MONETA and PPF agreed to terminate the acquisition process of Air Bank and Home Credit's Czech and Slovak businesses (Air Bank Group) following a review of the transaction by the new management at PPF. The termination was initiated by PPF, and although the Management Board of MONETA continues to believe in the strategic merit of the transaction, it was necessary to reach an amicable settlement.

Under the termination agreement, MONETA secured the reimbursement of transaction-related expenses in the amount of CZK 113 million. Additionally, the termination agreement requires that PPF holds its current 29.94 per cent shareholding in MONETA for at least 12 months, that it refrains from seeking control of MONETA through increasing its current shareholding, and that it refrains from decreasing its ownership position via the capital markets. PPF does, however, have the right to potentially sell its stake to a strategic investor, one deemed to be a qualified financial institution.

5

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Moneta Money Bank a.s. published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 05:07:05 UTC.