Zagrebacka banka d d : Zagrebačka banka Group unaudited financial results Q1 2024

April 26, 2024 at 10:16 am

Unaudited financial statements of

Zagrebačka banka Group

for the period from 1 January to 31 March 2024

Content:

Management report for the period from 1 January to 31 March 2024

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

III. Financial statements (TFI-KI statements)

General data as at 31 March 2024
Balance sheet as at 31 March 2024
Income statement for the period from 1 January to 31 March 2024
Cash flow statement for the period from 1 January to 31 March 2024
Statement of changes in equity for the period from 31 December 2023 to 31 March 2024
Notes to the financial statements

Management report for the period from 1 January to 31 March 2024

Zagrebačka banka Group realised profit after tax of EUR 154 million in the first quarter of 2024. This is EUR 35 million (+29.4%) higher than in the same period in 2023.

We achieved excellent results and confirmed healthy growth in all key business segments and a leading position on the market. Our operating income increased, cost management is disciplined. Capital and liquidity positions are strong, assets are covered with prudent loan provisions.

We are strongly connected with our community, providing support to the economy and the society in which we operate. We are doing this by financing most loans in the market, 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 are transforming our culture, working on simplification and digitalization of our organization and processes to assure sustainability. We promote the green transition and are committed to activities that have an overall positive impact considering environmental, social and governance (ESG) factors.

We are striving to be the best employer possible, by supporting our employees through work-life balance and wellbeing 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 253 million
Operating expenses: EUR 82 million
Profit before impairment and other provisions: EUR 169 million
Impairment and other provisions: EUR 15 million
Loans and advances to customers: EUR 12,909 million
Deposits from customers: EUR 19,560 million

Management report for the period from 1 January to 31 March 2024 (continued)

Operating income amounted to EUR 253 million, increased by EUR 41 million (+19.3%) Y/Y:

Net interest income amounted to EUR 181 million, increased by EUR 35 million (+24.0%).
Net fee and commission income amounted to EUR 57 million, increased by EUR 4 million (+7.5%).
Net trading and other income and expenses amounted to EUR 15 million, increased by EUR 2 million (+15.4%) mainly due to higher trading result.

Operating expenses - at EUR 82 million, higher by EUR 2 million (+2.5%). Cost to income ratio equals to 32.41%.

Profit before impairment and other provisions amounted to EUR 169 million, higher by EUR 43 million (+34.1%), as a result of the previously described movements in Operating income and Operating expenses.

Impairment and other provisions write back amounted to EUR 15 million, decreased by EUR 1 million.

Total assets of the Group amounted to EUR 24,344 million, lower by EUR 248 million (-1.0%) BoY.

Net loans and advances to customers amounted to EUR 12,909 million, increased by EUR 261 million (+2.1%) mainly due to increase in retail lending.
Deposits from customers represent primary source of funding. They amounted to EUR 19,560 million, lower by EUR 506 million (-2.5%), in corporate and retail deposits.
Deposits from credit institutions at EUR 635 million, lower by EUR 31 million (-4.7%).

Management report for the period from 1 January to 31 March 2024 (continued)
Financial results for the period from 1 January to 31 March 2024

Zagrebačka banka Group				Δ 1Q 2024 vs 1Q 2023
Income statement (EURm)	1Q 2024		1Q 2023	EURm	%
	1		2	3 (1-2)	4 (3/2)
Interest income	237		167	70	41.9 %
Interest expense	(56)		(21)	(35)	166.7 %
Net interest income	181		146	35	24.0 %
Fee and commission income	66		61	5	8.2 %
Fee and commission expense	(9)		(8)	(1)	12.5 %
Net fee and commission income	57		53	4	7.5 %
Net trading and other income and expenses	15		13	2	15.4%
Operating income	253		212	41	19.3 %
Operating expenses	(82)		(80)	(2)	2.5 %
Cash contributions to resolution funds and	(2)		(6)	4	(66.7%)
deposit guarantee schemes

Profit before impairment and other provisions	169		126	43	34.1 %
Impairment and other provisions	15		16	(1)	(6.3%)
Profit from operations	184		142	42	29.6 %
Share of profit from associates	1		1	-	-
Profit from discontinued operations	-	-	-	-
Profit before tax	185		143	42	29.4 %
Income tax	(31)		(24)	(7)	29.2 %
Net profit	154		119	35	29.4 %
Attributable to equity holders of the Bank	154		119	35	29.4 %
Attributable to non-controlling interests	-	-	-	-
Net profit	154		119	35	29.4 %

Management report for the period from 1 January to 31 March 2024 (continued)

Financial results for the period from 1 January to 31 March 2024 (continued)

Zagrebačka banka Group			Δ 2024 vs. 2023
Balance sheet (EURm)	31 Mar 2024	31 Dec 2023	EURm		%
	1	2	3 (1-2)		4 (3/2)
Cash, cash balances at central banks and other	5,062	6,202	(1,140)		(18.4 %)
demand deposits

Financial assets held for trading	286	306	(20)		(6.5 %)
Fair value changes of the hedged items in	3	3	-	-
portfolio hedge of interest rate risk

Financial assets at fair value through other	1,043	1,005	38		3.8 %
comprehensive income

Financial assets at amortised cost:	17,349	16,506	843		5.1 %
Debt securities	1,861	1,718	143		8.3 %
Loans and advances to credit institutions	2,579	2,140	439		20.5 %
Loans and advances to customers	12,909	12,648	261		2.1 %
Tangible and intangible assets	374	371	3		0.8 %
Investments in subsidiaries. joint ventures and	20	18	2		11.1 %
associates

Other assets	207	181	26		14.4 %
Total assets	24,344	24,592	(248)		(1.0 %)
Financial liabilities held for trading	320	429	(109)		(25.4 %)
Fair value changes of the hedged items in	(22)	(16)	(6)		37.5 %
portfolio hedge of interest rate risk

Financial liabilities measured at amortised cost:	20,719	20,980	(261)		(1.2 %)

Debt securities issued	435	151	284		188.1 %
Deposits from credit institutions	635	666	(31)		(4.7 %)
Deposits from customers	19,560	20,066	(506)		(2.5 %)
Other financial liabilities	89	97	(8)		(8.2 %)
Provisions for risks and charges	236	240	(4)		(1.7 %)
Other liabilities	258	278	(20)		(7.2 %)
Total liabilities	21,511	21,911	(400)		(1.8 %)
Equity	2,833	2,681	152		5.7 %
Total equity and liabilities	24,344	24,592	(248)		(1.0 %)

Zagreb, 26 April 2024

Management report for the period from 1 January to 31 March 2024 (continued)

Significant events and transactions

Geopolitical tensions and market uncertainties

At the end of March 2024, the Group's assets were not significantly directly impacted by the geopolitical tensions. Our operations remain indirectly affected, as the overall macro-economic scenario evolves.

The market environment continues to be uncertain, in the short and in the medium-term.

The impacts of uncertainties continue to evolve as of the date of this report. As such, it is fluctuant as to the full magnitude that they will have on the macro-economic scenario and consequentially on the Group's future financial condition and results of operations.

The Group continues to support our clients, while it adequately assesses their creditworthiness, carefully considering the risk classification as well as the related impact on financial reporting.

While having a strong capital and liquidity position, as well as the assets covered by prudent loan provisions, the Group is actively monitoring the situation and assessing its impact on operations, financial performance, capital position and cash-flows.

Ivan Vlaho

Chief Executive Officer,

Chairman of the Management Board

Jasna Mandac