Zagrebacka banka d d : Zagrebačka banka Group unaudited financial results Q1 2023

Unaudited financial statements of

Zagrebačka banka Group

for the period from 1 January to 31 March 2023

Content:

1. Management report for the period from 1 January to 31 March 2023

1. Statement of the persons responsible for the preparation of the financial statements

III. Financial statements (TFI-KI statements)

1. General data as at 31 March 2023
2. Balance sheet as at 31 March 2023
3. Income statement for the period from 1 January to 31 March 2023
4. Cash flow statement for the period from 1 January to 31 March 2023
5. Statement of changes in equity for the period from 31 December 2022 to 31 March 2023
6. Notes to the financial statements

1. Management report for the period from 1 January to 31 March 2023

Zagrebačka banka Group realised profit after tax of EUR 119 million in the first quarter of 2023. This is HRK 36 million (+43.4%) higher than in the same period in Q1 2022.

Our operating income increased, inflation pressure on costs was well managed. Capital and liquidity positions are strong, assets are covered with prudent loan provisions.

Zagrebačka banka Group is resilient and reliable. The purpose we declare as part of the UniCredit Group is to empower our communities to progress, to provide support to the economy and the society in which we operate. We are doing this by financing most loans in the market we operate, by investing in optimal user experiences as well as in the security of our solutions, by maintaining the robust payment infrastructure and offering the wide scale of services to companies and citizens.

We aim to integrate sustainability into our strategies and guide capital reallocation towards economic activities which generate a positive overall impact.

We are striving to be the best employer possible, by supporting our employees through work-life balance, health, family support and other important initiatives.

Major contributors to Group result are Zagrebačka banka dd, UniCredit Bank dd Mostar and UniCredit Leasing Croatia doo.

Key performance indicators:

• Operating income: EUR 212 million
• Operating expenses: EUR 80 million
• Profit before impairment and other provisions: EUR 126 million
• Impairment and other provisions: EUR 16 million
• Loans and advances to customers: EUR 12,124 million
• Deposits from customers: EUR 18,305 million

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1. Management report for the period from 1 January to 31 March 2023 (continued)

Operating income amounted to EUR 212 million, increased by EUR 63 million (+60.6%) Y/Y:

• Net interest income amounted to EUR 146 million, increased by EUR 54 million (+58.7%) Y/Y.
• Net fee and commission income amounted to EUR 53 million, increased by EUR 5 million (+10.4%).
• Net trading and other income and expenses amounted to EUR 13 million, decreased by EUR 13 million (-50.0%)Y/Y mainly due to lower trading result.

Operating expenses - at EUR 80 million, higher by EUR 7 million (+9.6%). Cost to income ratio equals to 37.74%.

Profit before impairment and other provisions amounted to EUR 126 million, higher by EUR 38 million (+43.2%) Y/Y, as a result of the previously described movements in Operating income and Operating expenses.

Impairment and other provisions - at HRK 16 million, changed by EUR 8 million (+100%).

Total assets of the Group amounted to EUR 22,931 million, lower by EUR 729 million (-3.1%) BoY.

• Net loans and advances to customers amounted to EUR 12,124 million, increased by EUR 323 million (+2.7%) due to increase in corporate and retail lending.
• Deposits from customers represent primary source of funding. They amounted to EUR 18,305 million, lower by EUR 753 million (-4.0%) BoY mainly in corporate deposits.
• Deposits from credit institutions at EUR 854 million, lower by EUR 83 million (-8.9%) BoY.

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1. Management report for the period from 1 January to 31 March 2023 (continued)
   Financial results for the period from 1 January to 31 March 2023

Zagrebačka banka Group					Δ 1Q 2023 vs 1Q 2022
Income statement (EURm)	1Q 2023		1Q 2022		EURm		%
	1		2		3 (1-2)		4 (3/2)
Interest income	167		104		63		60,6 %
Interest expense	(21)		(12)		(9)		75,0 %
Net interest income	146		92		54		58,7 %
Fee and commission income	61		54		7		13,0 %
Fee and commission expense	(8)		(7)		(1)		14,3 %
Net fee and commission income	53		48		5		10,4 %
Net trading and other income and expenses	13		26		(13)		(50,0 %)
Operating income	212		166		46		27,7 %
Operating expenses	(80)		(73)		(7)		9,6 %
Cash contributions to resolution funds and	(6)		(5)		(1)		20,0 %
deposit guarantee schemes
Profit before impairment and other provisions	126		88		38		43,2 %
Impairment and other provisions	16		8		8		100,0 %
Profit from operations	142		96		46		47,9 %
Share of profit from associates	1		1		0		0,0 %
Profit from discontinued operations	-	3		(3)		100,0 %
Profit before tax	143		100		43		43,0 %
Income tax	(24)		(17)		(7)		41,2 %
Net profit	119		83		36		43,4 %
Attributable to equity holders of the Bank	119		83		36		43,4 %
Attributable to non-controlling interests	-	-	-	-
Net profit	119		83		36		43,4 %

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1. Management report for the period from 1 January to 31 March 2023 (continued)

Financial results for the period from 1 January to 31 March 2023 (continued)

	Zagrebačka banka Group					Δ 2023 vs. 2022
	Balance sheet (EURm)	31 Mar 2023		31 Dec 2022		EURm		%
		1		2		3 (1-2)		4 (3/2)
	Cash, cash balances at central banks and other	6,703		7,152		(449)		(6.3 %)
	demand deposits
	Financial assets held for trading	203		265		(62)		(23.4 %)
	Non-trading financial assets mandatorily at fair	17		16		1	6.3 %
	value through profit or loss
	Financial assets at fair value through other	1,008		996		12		1.2 %
	comprehensive income
	Financial assets at amortised cost:	14,497		14,692		(195)		(1.3 %)
	Debt securities	1,317		1,194		123		10.3 %
	Loans and advances to credit institutions	1,056		1,697		(641)		(37.8 %)
	Loans and advances to customers	12,124		11,801		323		2.7 %
	Tangible and intangible assets	339		346		(7)		(2.0 %)
	Investments in subsidiaries. joint ventures and	20		11		9	81.8 %
	associates
	Other assets	144		182		(38)		(20.9 %)
	Total assets	22,931		23,660		(729)		(3.1 %)
	Financial liabilities held for trading	198		259		(61)		(23.6 %)
	Financial liabilities measured at amortised cost:	19,386		20,220		(834)		(4.1 %)
	Debt securities issued	151		151		0	0.0 %
	Deposits from credit institutions	854		937		(83)		(8.9 %)
	Deposits from customers	18,305		19,058		(753)		(4.0 %)
	Other financial liabilities	76		74		2	2.7 %
	Provisions for risks and charges	239		238		1	0.4 %
	Other liabilities	301		258		43		16.7 %
	Total liabilities	20,124		20,975		(851)		(4.1 %)
	Equity	2,807		2,685		122		4.5 %
	Total equity and liabilities	22,931		23,660		(729)		(3.1 %)

Zagreb, 27 April 2023

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