Patria Bank : Remuneration report for the financial year 2023

Remuneration Report

regarding the remuneration granted to the executives of Patria Bank S.A.

in 2023

Responsible structure: Human Resources Direction

Approval level: General Assembly of Shareholders (advisory vote)

Table of contents:

Cap. I General provisions ................................................................................... 3

Cap. II Remuneration granted by Patria Bank in 2023 ........................................ 4

Cap. III Annual change of remuneration 2017-2023 .......................................... 6

Cap.IV Remuneration received from the group entities, in 2023 ........................ 9

Chapter I. General provisions

Considering the provisions of the Remuneration Policy of the management body in PATRIA BANK S.A., as well as those of Article 107 of Law no. 24/2017 regarding issuers of financial instruments and market operations, with subsequent amendments and completions, this Remuneration Report regarding the remunerations granted to the executives of Patria Bank S.A. in the year 2023 is hereby issued.

In accordance with the above provisions, as well as those of the Law on Companies no. 31/1990, the leaders of Patria Bank S.A., whose remuneration is the subject of this report, are:

• • Chairman of the Board Members of Patria Bank;

• • Members of the Board of Patria Bank:

  Member 1 ... Member 4 - Board Members;

• • Members of the Executive Committee of Patria Bank, having the position of General Manager or Deputy General Manager.

The Board Members:

It consists of 5 members appointed by the General Assembly of Shareholders, who do not hold an executive position in the Bank, having the duties and authority stipulated in the Articles of Incorporation, supplemented by applicable legal provisions.

In 2023, the composition of the Board Members was complete, and there were no new members or members whose mandate had ended.

The Executive Committee:

The Executive Committee represents the senior management and ensures the executive management. The members of the Executive Committee are appointed by the Board Members.

General Manager (CEO):

Leads the Bank towards the achievement of its strategic imperatives and financial targets, namely profitability, return on investment, and efficient use of capital.

Deputy General Manager - Operation & IT Division (COO)

Coordinates the Bank's operational support and IT systems operations, as well as ensuring the security of the Bank's IT system.

Deputy General Manager - Risk Division (CRO)

Coordinates the management and risk control activities (compliance, risk management, internal control and anti-fraud, credit risk assessment, credit collection). In March 2023, the appointment of a new DEPUTY GENERAL MANAGER - RISK DIVISION (CRO) within the bank was approved by the National Bank of Romania (BNR).

Deputy General Manager - Financial Division (CFO)

Organizes and leads the process of developing the annual budget and the Bank's strategy, coordinates financial accounting and treasury activities, ensures continuous coordination of liquidity management activities, and oversees procurement activities and expenditure authorization competences.

Deputy General Manager - Commercial Division (CCO)

Coordinates the commercial activities of the Bank. He was appointed in December 2023, and his appointment is currently under review by the National Bank of Romania (BNR).This position was newly created during December 2023.

Chapter II. Remuneration granted by Patria Bank in 2023

In 2023 fixed remunerations were granted and paid, presented in the table below, for:

• • The Board Members, according to the decisions of the General Meeting of Shareholders of Patria Bank S.A., receive a monthly net amount of EUR 3,000 both for the Chairman and for the members, none of whom hold an executive position in the Bank;

• • The members of the Executive Committee, according to the mandate contracts and the decisions of the Board Members;

No other types of benefits, besides those defined and recognized as benefits in accounting, have been granted.

No performance bonuses or other forms of variable remuneration have been granted, as defined in the Remuneration Policies for the Management Board, in PATRIA BANK S.A. .

Four project bonuses were granted to four members of the Board Members, approved by the Board of Directors of Patria Bank, totaling 494.740 a gross lei, categorized as fixed remuneration, in accordance with the criteria established by the Remuneration Policy of the management body in PATRIA BANK S.A., through the EBA/GL/2021/04 Guide on sound remuneration policies under Directive 2013/36/EU, and applicable legislation. These amounts were capitalized within the respective projects.

The fixed remuneration granted was in line with the principles of the Remuneration Policy of the management body in PATRIA BANK S.A. and with the current mandate contracts.

No compensatory payments were granted upon termination of the mandate contract.

The ratio between variable and fixed remuneration in 2023 was 0% for all Patria Bank executives.

The provisions of the Remuneration Policy of the management body in PATRIA BANK S.A were respected and no derogations were granted from its provisions.

Patria Bank did not implement any Stock Option Plan program by the end of 2023, as provided for in the Management Remuneration Policy.

No shares and stock options were granted to Patria Bank executives.

The amounts presented below are gross values of the remuneration, which contain the obligatory social contributions and the income tax, in lei, but also converted into EUR, at the average annual exchange rate of the NBR, communicated for 2023.

The objectives set for 2023 are in line with the Bank's strategy, the way of fulfilling them being reflected in the net positive result, registered at the end of 2023, also creating the premises for the development of the Bank for the following years.

The collective objectives as well as the degree of their achievement, related to the year 2023, for the members of the Executive Committee, are presented in the table below:

Collective objectives	Performance standard	Level of achivement
1	Consolidation of the Bank's profitability	Achievement of budgeted profitability targets (operational result)	80%
2	Optimal capital adequacy	Ensuring prudential requirements for own funds	100%
3	Achieving the strategic objectives set in 2023	Achievement of budgeted financial and prudential targets	90%
4	Human resource development	Continuous employee training Internal promotion rate	85%

Individual objectives	Performance standard
1	Implementation of the Bank's business strategy	Achievement of established profitability targets Customer satisfaction	85%
2	Implementention of the prudential structure	Compliance with regulatory requirements Establisment of an efficient internal regulatory structure Establisment of a risk culture and risk appetite	100%
3	Development of a strong organizational culture	Ensuring an ethical structure of activity Apropiate managerial culture and behavior Employee satisfaction	85%

Year 2023 - Gross amounts granted by Patria Bank - RON
Criteria number	Position	Fixed remuneration	Variable remuneration	Total remuneration	Paid period - months	Average fixed remuneration	Average variable remuneration	Total average remuneration
1	Chairman of the Board Members	304,554	0	304,554	12	25,380	0	25,380
2	Member 1 - Board Members	304,554	0	304,554	12	25,380	0	25,380
3	Member 2 - Board Members	304,554	0	304,554	12	25,380	0	25,380
4	Member 3 - Board Members	304,554	0	304,554	12	25,380	0	25,380
5	Member 4 - Board Members	304,554	0	304,554	12	25,380	0	25,380
6	General Manager (CEO)	1,611,655	0	1,611,655	12	134,305	0	134,305
7	Deputy General Manager - Operation &IT Division(COO)	1,168,785	0	1,168,785	12	97,399	0	97,399
8	Deputy General Manager - Financial Division (CFO)	811,655	0	811,655	12	67,638	0	67,638
9	Deputy General Manager - Commercial Division (CCO)	76,374	0	76,374	1	76,374	0	76,374
10	Deputy General Manager - Risk Division (CRO)	706,080	0	706,080	12	58,840	0	58,840
TOTAL	5,897,319	0	5,897,319	109	56,146	0	56,146

In the Report have been including all the members of Management Body including those who ended their term or those who started a new term during the year 2023, highlighting their paid period of time.

Chapter III. Annual change in remuneration, net profit and average remuneration based on the full-time equivalent of non-managerial employees, during the period 2017-2023

In the tables below these amounts are included in a consolidated way, in order to allow the comparison, for the whole period, with the following specifications:

• • The amounts are gross values of the remuneration, which contain the social contributions and the income tax, in RON, but also converted into EUR, at the average annual exchange rate of the NBR, in order to have a reasonable term of comparison between years;

• • For 2017, the remunerations were restated, taking into account the contributions passed from employer to employee, starting with 2018, in order to allow the comparison with the following periods;

• • The year 2017 was an atypical year, in May has been the merger between B.C. CARPATICA S.A. and PATRIA BANK S.A., the net result of 2017 being influenced by the costs of the merger, by the takeover of the assets and liabilities of B.C. CARPATICA S.A., but also the additional costs with the employees, following the reorganization and restructuring processes that followed.

Gross amount - RON
Indicator	2017	2018	2019	2020	2021	2022	2023
Fixed compensation for executives	4,486,332	5,328,475	5,253,835	4,397,443	4,762,307	5,281,368	5,897,319
Variable compensation for executives	1,015,957	0	63,821	99,960	182,038	0	0
Total compensation for executives	5,502,289	5,328,475	5,317,656	4,497,403	4,944,345	5,281,368	5,897,319
Average fixed compensation for executives	40,785	46,741	43,782	40,344	45,355	49,149	56,146
Average variable compensation for executives	9,236	0	532	917	1,734	0	0
Average total compensation for executives	50,021	46,741	44,314	41,261	47,089	49,149	56,146
Net profit	-42,543,615	-266,914	5,332,203	2,797,395	9,461,645	20,247,092	23,153,733
Average compensation - employees, excluding executives	5,665	5,932	6,735	7,426	7,986	8,961	9,687

Gross amounts - EUR equivalent (BNR annual average rate)
Indicator	2017	2018	2019	2020	2021	2022	2023
Fixed compensation for executives	982,100	1,145,047	1,107,189	909,107	967,870	1,070,946	1,192,221
Variable compensation for executives	222,403	0	13,450	20,665	36,997	0	0
Total compensation for executives	1,204,503	1,145,047	1,120,639	929,773	1,004,866	1,070,946	1,192,221
Average fixed compensation for executives	8,928	10,044	9,227	8,341	9,218	9,966	11,351
Average variable compensation for executives	2,022	0	112	190	352	0	0
Average total compensation for executives	10,950	10,044	9,339	8,530	9,570	9,966	11,351
Net profit	-9,313,197	-57,358	1,123,705	578,321	1,922,942	4,105,666	4,680,831
Average compensation - employees, excluding executives	1,240	1,275	1,419	1,535	1,623	1,817	1,958

The remuneration of the management body presented in the tables above includes both the remuneration of the Board's Members of Patria Bank and the remuneration of the members of the Executive Committee of Patria Bank.

It can be seen that the profitability of the Bank has increased in the last 7 years, from a net loss of EUR 9,313,197, recorded in 2017, to a net profit of EUR 4.680.831, the highest level in the last 7 years, and the remuneration of managers decreased between 2017 and 2023 from 1.2 to 1.19 million euros, while the remuneration of other employees increased steadily during this period.

Thus, it can be observed that during the analyzed period of time, the average remuneration of employees increased from 1,240 Eur, level recorded in 2017, to 1,958 Eur, level recorded in 2023, which means a 58% increase in the average remuneration of Patria Bank employees (excluding managers).

Chapter IV Remuneration received by Patria Bank Management Body from the group entities, in 2023

In 2023, the following remunerations were granted from the entities from the Patria group, respectively from Patria Credit IFN S.A. and from SAI Patria Assest Management S.A.:

This Remuneration Report will be submitted to the consultative vote of the General Assambly of Shareholders in the meeting of 25/26.04.2024.

Chairman of the Board,

Dragos Horia Manda

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