Consolidated quarterly financial statements for the period from Jan 01 to Mar 31 2017 Unaudited

Zagreb, April 28 2017

In accordance with Capital Markets Act, HPB p.l.c. (Bank) as the parent company of HPB Group (Group), publishes unaudited consolidated quarterly financial statements for the first quarter of 2017 (period from Jan 01 2017 to Mar 31 2017).

This report includes:

Management report of HPB Group,
statement by persons accountable for compiling the report of Group,
unaudited set of consolidated financial statements (balance sheet, profit or loss statement, statement of changes in equity, cash flow statement), and
notes to financial statements.

Financial statements and notes were made in accordance with the TFI-KI reporting methodology by Croatian Financial Services Supervisory Agency. Items in the profit or loss statement are complied in accordance with IFRS.

Management Report of HPB Group

HPB Group is, apart from the parent company – HPB p.l.c., comprised of HPB Stambena štedionica (savings bank), HPB Invest (investment fund management) and HPB Nekretnine (real estate agency). Alongside subsidiaries, where HPB p.l.c. acts as a founder and owner having a 100% ownership stake, results of H1 Telekom d.d. are included in the consolidated balance sheet. Bank has a controlling stake of 58,2% in H1 Telekom. This stake had been acquired through a debt-to-equity swap, during the prebankruptcy settlement proceedings, and is classified as assets held for sale.

In Q1 2017 the Group made a net profit of HRK2.8M which is 94.1% lower than in the same period last year.

The first quarter of 2017 was highly challenging for the Bank and the Group's subsidiaries. HPB Stambena Štedionica made an after-tax loss of HRK770K mainly due to adverse movements in securities prices. This comes after net profit in 2016. On the other hand HPB Invest made a net profit of HRK572K and HPB Nekretnine made a net profit of HRK389K.

Operating profit was HRK78M which is HRK8.4M lower than in the same period of 2016 due to absences of one-off effects from selling securities.

Due to lower deposit base the Group's assets were down by 1.5% to HRK19.5B. In the assets structure gross loans to customers were down by 1.3% as the loans growth is limited by the Bank's capital position.

Tomislav Vuić President of the Management Board

Statement by persons accountable for compiling the report of HPB Group

In accordance with the Capital Market Act, the Management Board of HPB p.l.c., the parent company of HPB Group, states that according to their best knowledge the set of consolidated unaudited quarterly financial statements for the first quarter 2017 (period from Jan 01 to Mar 31 2017), compiled in accordance with the accounting regulation applicable to credit institutions in Croatia, presents complete and accurate view of assets and liabilities, losses and gains, financial position and results of HPB p.l.c., as well as companies included in consolidation as a whole.

Tomislav Katić Executive director Finance division

Consolidated quarterly financial statements for the period from Jan 01 to Mar 31 2017 (unaudited)

HPB GROUP
Appendix 3. Reporting period:			Jan 01		to		Mar 31 2017
							Quarterly financial statements for credit institutions TFI-KI
Registration number (MB):		03777928
Registration number (MBS):		080010698
Personal identification number (OIB):		87939104217
Company:	HPB p.l.c.
Postal code and city		10000		ZAGREB
	Address: JURIŠIĆEVA 4
E-mail address: [email protected]
Internet address: www.hpb.hr
City code and name:	133	ZAGREB
County code and name:	21	GRAD ZAGREB					# of employees:	1.103
Consolidated report:	YES						(as per reporting date) Industry code:	6419
Consolidated companies (in accordance with IFRS):				Headquarters:			Registration number:
HPB Stambena Štedionica d.d.				Savska 58, 10000 Zagreb				02068001
HPB Invest d.o.o.				Strojarska 20, 10000 Zagreb				01972278
HPB Nekretnine d.o.o.				Amruševa 8, 10000 Zagreb				01972260
H1 TELEKOM d.d.			Split, Dračevac 2d					01834649



Book-keeping service provided by:		n/a		n/a
Contact:	Čižmešija Marko
	Phone: 014888191					Fax:	014804594
E-mail address: [email protected]
Surname and name: Vuić Tomislav		(person authorized for representation)
Documentation to be made public: 1. Financial reports (balance sheet, profit or loss statement, cash flow statement, statement on changes		in equity and notes to financial statements)

Management report
Statement by persons accountable for compiling the report

BALANCE SHEET

AOP Item Dec 31 2016 Mar 31 2017 label 1 2 3 4 ASSSETS 1. CASH AND DEPOSITS WITH THE CNB (002+003) 2.263.303.114 2.658.002.660 001 1.1.Cash 002 421.479.852 435.069.137 1.2.Deposits with the CNB 003 1.841.823.262 2.222.933.523 2. DEPOSITS WITH FINANCIAL INSTITUTIONS 004 774.135.009 624.332.685 3. SHORT-TERM TREASURY BILLS OF THE CROATIAN MINISTRY OF FINANCE 005 415.536.615 411.289.647 4. FINANCIAL ASSETS HELD FOR TRADING 696.314.398 644.145.314 006 5. FINANCIAL ASSETS AVAILABLE FOR SALE 2.630.574.528 2.388.870.141 007 6. FINANCIAL ASSETS HELD TO MATURITY 442.835.059 286.587.689 008 7. FINANCIAL ASSETS VALUED AT FAIR VALUE THROUGH PROFIT OR LOSS, 009 0 0 NOT ACTIVELY TRADED 8. DERIVATIVE FINANCIAL ASSETS 3.780.197 0 010 9. LOANS TO FINANCIAL INSTITUTIONS 81.579.680 76.048.282 011 10. LOANS TO OTHER CUSTOMERS 11.406.936.798 11.217.235.628 012 11. INVESTMENTS IN SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINT VENTURES 7.930.000 7.930.000 013 12. REPOSSESSED ASSETS 014 0 0 13. TANGIBLE ASSETS (LESS DEPRECIATION) 015 155.541.052 143.876.195 14. OTHER ASSETS 016 879.444.143 1.004.843.015 A) TOTAL ASSETS (001+004 to 016) 017 19.757.910.593 19.463.161.256 LIABILITIES 1. BORROWINGS FROM FINANCIAL INSTITUTIONS (019+020) 018 620.995.448 598.907.896 1.1. Short-term 0 0 019 1.2. Long-term 620.995.448 598.907.896 020 2. DEPOSITS (022 to 024) 14.781.982.934 14.532.443.132 021 2.1. Transactional and current accounts 3.981.010.898 3.901.875.848 022 1.480.709.844 2.2. Savings deposits (demand) 023 1.486.719.761 2.3. Term deposits 024 9.314.252.275 9.149.857.440 3. OTHER BORROWINGS (026+027) 025 88.426.108 5.206.873 3.1. Short-term 026 0 0 3.2. Long-term 027 88.426.108 5.206.873 4. DERIVATIVE AND OTHER FINANCIAL LIABILITIES HELD FOR TRADING 028 3.640.667 0 5. ISSUED SECURITIES (030+031) 029 0 0 5.1. Short-term 0 0 030 5.2. Long-term 0 0 031 6. SUBORDINATED DEBT ISSUED 0 0 032 7. HYBRID INSTRUMENTS 0 0 033 8. OTHER LIABILITIES 034 2.317.559.985 2.376.402.251 B) TOTAL LIABILITIES (018+021+025+028+029+032+033+034) 035 17.812.605.142 17.512.960.152 EQUITY 1. SHARE CAPITAL 036 1.214.298.000 1.214.298.000 2. PROFIT FOR THE YEAR 037 190.502.935 2.843.131 3. RETAINED EARNINGS 038 86.030.542 182.260.941 4. REGULATORY RESERVES 039 6.160.835 15.708.573 5. STATUTARY AND OTHER CAPITAL RESERVES 363.623.023 448.347.821 040 6. FAIR VALUE RESERVE 84.690.116 86.742.638 041 7. RESERVES ARISING FROM HEDGING TRANSACTIONS 0 0 042 C) TOTAL EQUITY (036 to 042) 043 1.945.305.451 1.950.201.104 D) TOTAL LIABILITIES AND EQUITY (035+043) 044 19.757.910.593 19.463.161.256 ADDENDUM TO THE BALANCE SHEET (filled-in by the banks submitting consolidated financial statement) 1. TOTAL EQUITY 045 1.945.305.451 1.950.201.104 2. Equity attributable to the shareholders of the parent company 046 1.945.305.451 1.950.201.104 3. Minority interest (045-046) 047 0 0	as per Mar 31 2017		in HRK

PROFIT OR LOSS STATEMENT

for th iod fr e p er om	Ja n 0 1 2 01 7	to	Ma r 3 1 2	01 7				in H R K
Ite m				AO P lab el	Ja n 0 1 - M 31 20 16 Ja n 0 1 - M 31 20 17 ar ar
					Cu lat ive mu	Qu ly art er	Cu lat ive mu	Qu ly art er
1				2	3	4	5	6
1 . In t in ter es co me				04 8	17 9.8 35 .32 0	17 9.8 35 .32 0	17 2.5 47 .27 6	17 2.5 47 .27 6
2 . In ter t e es xp en se				04 9	59 .89 1.3 54	59 .89 1.3 54	38 .72 8.7 08	38 .72 8.7 08
3 . N int inc ( 04 8-0 49 ) et st ere om e				05 0	11 9.9 43 .96 6	11 9.9 43 .96 6	13 3.8 18 .56 8	13 3.8 18 .56 8
4 . F d c mi ion in ee an om ss co me				05 1	11 7.0 83 .46 4	11 7.0 83 .46 4	11 64 .44 3 7.7	11 64 .44 3 7.7
. F d c mi ion 5 ee an om ss ex p en se				05 2	72 .53 4.8 92	72 .53 4.8 92	72 .31 5.4 69	72 .31 5.4 69
6 . N fee d c mi ion in ( 05 1-0 52 ) et an om ss co me				05 3	44 .54 8.5 72	44 .54 8.5 72	45 .44 8.9 74	45 .44 8.9 74
. G ain s l s l ris ing fro inv 7 tm ts es os se s a m es en j oin t ve ntu res	in bs idi ari su es , a ss oc	iat ed co mp	ies d an an	05 4	0	0	0	0
8 . G ain s l s l fro din tivi tie tra es os se s m g ac s				05 5	12 .99 7.8 80	12 .99 7.8 80	8.6 87 .41 2	8.6 87 .41 2
. G ain s l s l fro bu ilt- in de riva tive 9 es os se s m s				05 6	0	0	0	0
10 . G ain s l s l ris ing fro fin cia l a es os se s a m an ss ctiv ely de d t a tra no	lue d a t fa ir v alu ets va	hro h P e t ug	&L ,	05 7	0	0	0	0
11 . G ain s l s l ris ing fro riti es os se s a m se cu es av	ail ab le for le sa			05 8	8.2 14 .83 9	8.2 14 .83 9	33 4.9 16	33 4.9 16
. G ain s l s l ris ing fro riti he 12 es os se s a m se cu es	ld ity to tur ma			05 9	0	0	0	0
. G fro 13 ain s l s l ris ing he dg ing tivi es os se s a m ac	tie s			06 0	0	0	0	0
14 . In fro inv in bs idi ari tm ts co me m es en su es , a	iat ed ies ss oc co mp an	d j oin t ve an	ntu res	06 1	0	0	0	0
15 . In fro oth uit ins tru nts co me m er eq me y				06 2	7.1 38	7.1 38	21 .66 8	21 .66 8
. G fro ffe 16 ain s l s l ha ate di es os se s m exc ng e r	ren ce s			06 3	3.7 06 .22 4	3.7 06 .22 4	1.2 29 .63 1	1.2 29 .63 1
17 . O the r in co me				06 4	3.2 17 .65 0	3.2 17 .65 0	1.5 43 .95 1	1.5 43 .95 1
18 . O the tin sts r o p era g co				06 5	11 .26 2.2 59	11 .26 2.2 59	14 .06 4.7 97	14 .06 4.7 97
. G 19 l a nd ad mi nis tra tive ort en era ex p en se s, am	iza tio nd de iat n a p rec	ion		06 6	94 .97 3.5 01	94 .97 3.5 01	99 .01 1.7 32	99 .01 1.7 32
. O ati fit ( 05 05 5-0 ) 20 0+ 3 t o 0 64 -06 66 p er ng p ro				06 7	86 .40 0.5 09	86 .40 0.5 09	78 .00 8.5 91	78 .00 8.5 91
21 . Im air los nd isi nt p me se s a p rov on s				06 8	41 .14 0.0 50	41 .14 0.0 50	71 .71 4.7 77	71 .71 4.7 77
22 . P RO FIT BE FO RE TA XA TIO N ( 06 7-0 68 )				06 9	45 .26 0.4 59	45 .26 0.4 59	6.2 93 .81 4	6.2 93 .81 4
23 . IN CO ME TA X E XP EN SE / D EF ER RE D T AX				07 0	( 2.5 58 .09 1)	( 2.5 58 .09 1)	3.4 50 .68 3	3.4 50 .68 3
D ( ) 24 . N ET PR OF IT FO R T HE PE RIO 06 9-0 70				07 1	47 .81 8.5 50	47 .81 8.5 50	2.8 43 .13 1	2.8 43 .13 1
. E ing sh 25 arn s p er are				07 2	24	24	1	1
AD DE ND UM TO TH E P &L ( fill ed -in by th e b ks an	bm itti oli da su ng co ns	ted fin cia an	l s t) tat em en
1. PR OF IT FO R T HE PE RIO D				07 3	47 .81 8.5 50	47 .81 8.5 50	2.8 43 .13 1	2.8 43 .13 1
2. Att rib ble th ha reh old f th uta to e s ers o e p are	nt co mp an y			07 4	47 .81 8.5 50	47 .81 8.5 50	2.8 43 .13 1	2.8 43 .13 1
3. Mi rity in t ( 07 3-0 74 ) ter no es				07 5	0	0	0	0

Consolidated quarterly financial statements for the period from Jan 01 to Mar 31 2017 (unaudited)

CASH FLOW STATEMENT - INDIRECT METHOD

Jan 01 2017 Mar 31 2017 for the period from to			in HRK
Item	AOP label		Jan 01 - Mar 31 2016 Jan 01 - Mar 31 2017
1	2	3	4
OPERATING ACTIVITIES
1. Cash flow from operating activities before changes in assets (002 to 007)	001	89.542.515	88.812.661
1.1. Profit for taxation	002	45.260.459	6.293.814
1.2. Impairment losses and provisions	003	41.140.050	71.714.777
1.3. Amortization and depreciation	004	11.037.613	11.337.253
1.4. Net unrealised gains less losses from financial assets valued at fair value through profit or loss	005	(4.189.383)	696.448
1.5. Gains / losses from sale of tangible assets	006	-	-
1.6. Other gains / losses	007	(3.706.224)	(1.229.631)
2. Net increase / decrease of operating assets (009 to 016)	008	(7.382.228)	73.565.198
2.1. Deposits with the CNB	009	337.654.291	(381.110.261)
2.2. Tresury bills of the Croatian Ministry of Finance	010	(97.635.669)	4.246.968
2.3. Deposits with and loans to financial institutions	011	(7.740.135)	149.802.324
2.4. Loans to other customers	012	(149.918.610)	117.986.393
2.5. Financial assets held for trading	013	(182.606.624)	51.472.636
2.6. Financial assets available for sale	014	34.267.274	239.206.599
2.7. Financial assets valued at fair value through profit or loss, not actively traded	015	-	-
2.8. Other operating assets	016	58.597.245	(108.039.461)
3. Net increase / decrease of operating liabilities (018 to 021)	017	17.758.759	(194.338.203)
3.1. Transactional accounts	018	34.037	(79.135.050)
3.2. Savings and term deposits	019	315.459.829	(170.404.752)
3.3. Derivative financial liabilities and other liabilities actively traded	020	-	(3.640.667)
3.4. Ostale liabilities	021	(297.735.107)	58.842.266
4. Net cash flow from operating activities before taxation	022	99.919.046	(31.960.344)
(001+008+017)
5. Income tax paid	023	-	-
6. Net cash inflow / outflow from operating activities (022+023)	024	99.919.046	(31.960.344)
INVESTING ACTIVITIES
7. Net cash flow from investing activities (026 to 030)	025	(23.368.625)	151.329.397
7.1. Purchase of tangible and intangible assets	026	(7.305.558)	(4.939.641)
7.2. Investment in / disposal of subsidiaries, associated companies and joint ventures	027	-	-
7.3. Investment in / disposal of financial assets held to maturity	028	(16.070.205)	156.247.370
7.4. Dividends received	029	7.138	21.668
7.5. Other inflows / outflows from investing activities	030	-	-
FINANCIAL ACTIVITIES
8. Net cash flow from financial activities (032 to 037)	031	(114.018.594)	(105.306.787)
8.1. Net increase / decrease of borrowings	032	(114.018.594)	(105.306.787)
8.2. Net increase / decrease of issued debt securities	033	-	-
8.3. Net increase / decrease of subordinated debt and hybrid instruments	034	-	-
8.4. Share capital raised	035	-	-
8.5. Dividends paid	036	-	-
8.6. Other inflows / outflows from financial activities	037	-	-
9. Net increase / decrease of cash and cash equivalents	038	(37.468.173)	14.062.266
(024+025+031)
10. Effect of foreign exchange differences on cash and cash equivalents	039	2.870.625	(472.981)
11. Net increase/(decrease) in cash and cash equivalents (038+039)	040	(34.597.548)	13.589.285
12. Cash and cash equivalents at the beginning of the year	041	412.197.218	421.479.852
13. Cash and cash equivalents as per reporting date (040+041)	042	377.599.670	435.069.137

for th e p	eri od fro m	Jan 01	20 17	to	Ma r 31	20 17			in H RK
	AO		Att ribu	tab le t o th har eho e s	lde f th nt c rs o e p are om	pan y
Item	P lab el	Sha api tal re c	Ow har n s es	Reg ula tor tatu tor y, s y and oth er res erv es	Ret ain ed nin ear gs	Pro fit f or t he iod per	Fair lue va re ser ve	Min orit y in ter est	Tot al e qui ty
1	2	3	4	5	6	7	8	9	10
Bal er J 01 2 017 anc e a s p an	001	1.2 14. 775 .00 0	( 477 .00 0)	369 .78 3.8 58	86. 030 .54 2	190 .50 2.9 35	84. 690 .11 6	0	1.9 45. 305 .45 1
Effe of c han in a unti olic ies cts ges cco ng p and tion s of co rrec err ors	002	0	0	0	0	0	0		0
Res d b ala r Ja n 0 1 20 17 ( 001 +00 2) tate nce as pe	003	1.2 14. 775 .00 0	( 477 .00 0)	369 .78 3.8 58	86. 030 .54 2	190 .50 2.9 35	84. 690 .11 6		1.9 45. 305 .45 1
Disp l of fina ncia l as aila ble for sale sets osa av	004	0	0	0	0	0	0		0
Cha in t he f air v alue of fina ncia l as aila ble for sale sets nge av	005	0	0	0	0	0	2.4 97. 788		2.4 97. 788
Tax item nise d d irec tly on s re cog in/tr ferr ed f uity ans rom eq	006	0	0	0	0	0	( 445 .26 6)		( 445 .26 6)
Oth ains d (lo s) r gnis ed d irec tly i uity er g an sse eco n eq	007	0	0	0	0	0	0		0
ins /(lo s) r ise irec in e qui Net d d tly ty ga sse eco gn (00 4+0 05+ 006 +00 7)	008	0	0	0	0	0	52. 522 2.0	0	52. 522 2.0
Pro fit f he p erio d or t	009	0	0	0	0	2.8 43. 131	0		2.8 43. 131
Tot al r ize d in nd e fo r th erio d eco gn com e a exp ens e p (00 09) 8+0	010	0	0	0	0	2.8 43. 131	2.0 52. 522	0	4.8 95. 653
e/de Incr in s har pita l eas cre ase e ca	011	0	0	0	0	0	0		0
se/s Pur cha ale of o sh w n are s	012	0	0	0	0	0	0		0
Oth han er c ges	013	0	0	0	0	0	0		0
Tra nsf er t o re ser ves	014	0	0	94. 272 .53 6	96. 230 .39 9	( 190 .50 2.9 35)	0		0
Divi den ds paid	015	0	0	0	0	0	0		0
Pro fit a lloc atio n (0 015 ) 14+	016	0	0	94. 272 .53 6	96. 230 .39 9	( 35) 190 .50 2.9	0	0	0
Bal Ma r 31 20 17 ( 003 +01 0+0 11+ 012 +01 3+0 16) anc e a s p er	017	1.2 14. 775 .00 0	( 477 .00 0)	464 .05 6.3 94	182 .26 0.9 41	2.8 43. 131	86. 742 .63 8	0	1.9 50. 201 .10 4

STATEMENT OF CHANGES IN EQUITY

NOTES TO FINANCIAL STATEMENTS

A) PROFIT OR LOSS ACCOUNT

1) INTEREST INCOME				in HRK
	Jan 01 - Mar 31 2016		Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
Loans	145.693.406	145.693.406	145.299.602	145.299.602
Deposits	457.577	457.577	(609.432)	(609.432)
Debt securities	33.684.337	33.684.337	27.857.106	27.857.106
TOTAL	179.835.320	179.835.320	172.547.276	172.547.276

2) INTEREST EXPENSE in HRK
	Jan 01 - Mar 31 2016		Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
Borrowings	5.587.366	5.587.366	5.912.448	5.912.448
Deposits	54.303.988	54.303.988	32.816.260	32.816.260
TOTAL	59.891.354	59.891.354	5.912.448	5.912.448

3) FEE AND COMMISSION INCOME in HRK
	Jan 01 - Mar 31 2016		Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
Cash payment operations - channels	70.020.839	70.020.839	68.214.213	68.214.213
Retail and card operations	31.227.196	31.227.196	31.203.636	31.203.636
Corporate operations	12.287.189	12.287.189	13.287.726	13.287.726
Other fee and commission income	3.548.240	3.548.240	5.058.868	5.058.868
TOTAL	117.083.464	117.083.464	117.764.443	117.764.443

4) FEE AND COMMISSION EXPENSE in HRK

		Jan 01 - Mar 31 2016	Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
Payment operations	68.162.326	68.162.326	68.358.109	68.358.109
Other fee and commission expense	4.372.566	4.372.566	3.957.360	3.957.360
TOTAL	72.534.892	72.534.892	72.315.469	72.315.469

5) GAINS LESS LOSSES FROM TRADING ACTIVITIES in HRK

	Jan 01 - Mar 31 2016		Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
Securities and equity instruments	4.218.663	4.218.663	715.846	715.846
FX transactions	9.786.627	9.786.627	8.007.655	8.007.655
HRK cash transactions	22.183	22.183	8.050	8.050
Derivatives	(1.029.593)	(1.029.593)	(44.139)	(44.139)
TOTAL	12.997.880	12.997.880	8.687.412	8.687.412

6) OPERATING EXPENSES in HRK

		Jan 01 - Mar 31 2016	Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
General and administrative expenses	83.935.888	83.935.888	87.674.479	87.674.479
Amortization and depreciation	11.037.613	11.037.613	11.337.253	11.337.253
Savings deposit insurance costs	8.761.391	8.761.391	9.246.539	9.246.539
Other costs	2.500.868	2.500.868	4.818.258	4.818.258
TOTAL	106.235.760	106.235.760	113.076.529	113.076.529

7) IMPAIRMENT LOSSES AND PROVISION EXPENSES in HRK
	Jan 01 - Mar 31 2016			Jan 01 - Mar 31 2017
	Cumulative	Quarterly	Cumulative	Quarterly
Individually identified impairment losses
(risk group B i C)	44.778.716	44.778.716	76.759.386	76.759.386
Portfolio based provisions for identified losses (risk group A)	(3.726.603)	(3.726.603)	(6.476.383)	(6.476.383)
Other provisions	87.937	87.937	1.431.774	1.431.774
TOTAL	41.140.050	41.140.050	71.714.777	71.714.777

B) BALANCE SHEET

8) CASH AND DEPOSITS WITH THE CNB in HRK

	Dec 31 2016	Mar 31 2017
CASH	421.479.852	435.069.137
DEPOSITS WITH THE CNB	1.841.823.262	2.222.933.523
Mandatory reserve	1.300.796.321	1.241.826.051
Account for transaction settlement	541.026.941	981.107.472
MANDATORY TREASURY BILLS	-	-
Portfolio based impairment allowance for identified losses	-	-
TOTAL	2.263.303.114	2.658.002.660

9) DEPOSITS WITH FINANCIAL INSTITUTIONS in HRK

	Dec 31 2016	Mar 31 2017
Deposits with foreign banking institutions	753.064.739	578.104.034
Deposits with domestic banking institutions	21.070.270	46.228.651
Portfolio based impairment allowance for identified losses	-	-
TOTAL	774.135.009	624.332.685

10) EQUITY INSTRUMENTS AND SECURITIES	in HRK
---------------------------------------	--------

	Dec 31 2016	Mar 31 2017
Short term Treasury bills of the Croatian Ministry of Finance	415.536.615	411.289.647
Financial assets held for trading	696.314.398	644.145.314
Financial assets available for sale	2.630.574.528	2.388.870.141
Financial assets held to maturity	450.105.787	287.890.577
Portfolio based impairment allowance for identified losses	(6.771.524)	(1.014.844)
Deferred front-end fee	(499.204)	(288.044)
TOTAL	4.185.260.600	3.730.892.791

11) LOANS TO CUSTOMERS in HRK

	Dec 31 2016	Mar 31 2017
Gross loans
Financial institutions	81.583.376	76.052.125
Companies	3.831.863.830	3.812.814.914
Retail	4.966.265.650	5.007.370.338
therein: housing loans	1.608.068.882	1.610.595.026
Other loans	4.040.077.723	3.860.503.718
SUBTOTAL	12.919.790.579	12.756.741.095
Impairment allowance	(1.280.732.419)	(1.312.073.591)
Portfolio based impairment allowance for identified losses	(104.459.180)	(106.492.011)
Deferred front-end fee	(46.082.502)	(44.891.583)
TOTAL	11.488.516.478	11.293.283.910

B) BALANCE SHEET (continued)

12) DEPOSITS		in HRK
	Dec 31 2016	Mar 31 2017
Financial institutions	1.153.448.334	1.097.434.499
Corporations	3.009.235.694	3.010.482.071
Retail	9.166.235.142	9.081.987.646
Other	1.453.063.764	1.342.538.916
TOTAL	14.781.982.934	14.532.443.132

in HRK 13) BORROWINGS
	Dec 31 2016	Mar 31 2017
Borrowings from HBOR	624.696.401	603.136.147
Borrowings from domestic banking institutions	-	-
Borrowings from domestic non-banking institutions	-	-
Borrowings from foreign banking institutions	88.426.109	5.206.873
Deferred front-end fee	(3.700.954)	(4.228.251)
TOTAL	709.421.556	604.114.769

14) OTHER LIABILITIES		in HRK
	Dec 31 2016	Mar 31 2017
Restricted deposits	1.715.292.949	1.684.225.351
Interest and fees payable	58.731.565	53.698.279
Provisions for off-balance sheet exposure	22.291.290	19.575.219
Other	521.244.181	618.903.402
TOTAL	2.317.559.985	2.376.402.251

C) INVESTMENTS IN SUBSIDIARIES

The Group's subsidiaries are as follows:

			Ownership
	Industry	Country	as per March 31 2017 (%)
HPB Invest d.o.o.	Investment Fund Management	Croatia	100,00
	Real Estate Agency and
HPB Nekretnine d.o.o.	Construction	Croatia	100,00
HPB-Stambena štedionica d.d.	Savings Bank	Croatia	100,00
H1 Telekom d.d.	Telecommunications	Croatia	58,17

Subsidiaries are consolidated in the Group's financial statements. HPB Invest d.o.o., HPB Nekretnine d.o.o., HPB-Stambena štedionica d.d. are fully consolidated.

Investment in H1 Telekom d.d.

On March 25 2008, the Bank made an agreement with H1 Telekom d.d. to convert credit receivables from long-term loan into the company's equity. HPB acquired an ownership stake of 41,25% through this agreement. The stake was increased to 58,17% after converting receivables from bond, long-term loan and interest receivables into equity after the completion of the pre-bankruptcy settlement on July 29 2015.

H1 Telekom d.d. signed the merger agreement with OT-Optima Telekom d.d. Pursuant to the agreement, H1 Telekom d.d. as the transferor company, will be merged with OT-Optima Telekom d.d. as a transferee, by transferring the entire property and all rights and obligations of H1, without liquidation of the transferor company. The effect of merger should occur after obtaining all necessary permits and approvals.

Financial position of H1 Telekom is included in the consolidated balance sheet of HPB Group by using short-cut consolidation procedure as described in IFRS 5 Non-Current Assets Held for Sale and Discountinued Operations.

D) CHANGES IN ACCOUNTING POLICIES

There were no changes in accounting policies of the Group during the reporting period which might have impact on financial position or results of the Group.

D) BANK'S OWNERSHIP STRUCTURE

Ownership structure of HPB p.l.c., the parent company of Group, as per March 31 2017 was as follows:

Shareholder	Ownership stake
Republic of Croatia (Ministry of State Assets)	42,43%
HP Hrvatska pošta Plc	11,93%
State Agency for Deposit Insurance and Bank Resolution	8,98%
Croatian Pension Insurance Insitute (Ministry of State Assets)	8,76%
Prosperus Invest d.o.o., for Prosperus FGS	4,94%
PBZ CROATIA OSIGURANJE OMF (B category)	4,12%
ERSTE d.o.o. for ERSTE PLAVI OMF (B category)	3,90%
Allianz ZB d.o.o., for AZ OMF (B category)	2,88%
CROATIA osiguranje Plc	2,47%
Fund for Financing the Decommissioning of the Krško Nuclear Power Plant and the Disposal of NEK Radioactive Waste and Spent Nuclear Fuel	2,36%
RAIFFEISEN D.D., for Raiffeisen OMF (B category)	2,20%
Minorities	4,99%
Own shares	0,04%

E) HPB-R-A STOCK

Share HPB-R-A is listed on the Official Market of ZSE. The last price per share at the end of the reporting period was HRK 699,00 (Mar 30 2017), representing a decrease of 6,9 percent in comparison with the last traded price in 2016 (=HRK 751,00 on Dec 30 2016).

Trading with HPB-R-A during the reporting period was as follows:

AI Terminal

Hrvatska Poštanska Banka d.d.

2090_10-q_2017-04-28_2b75ae3b-a9ed-42dd-b28c-3813c57edf0e.pdf