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Hrvatska Poštanska Banka d.d.

Quarterly Report Jul 31, 2017

2090_10-q_2017-07-31_71279e7b-ee48-4089-b283-b0c2270cb00e.pdf

Quarterly Report

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Consolidated quarterly financial statements for the period from Jan 01 to Jun 30 2017 Unaudited

Zagreb, July 31 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 period from Jan 01 to Jun 30 2017.

This report includes:

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

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).

In 1H 2017 the Group recorded a net loss of HRK 64,6M, resulting from deteriorated creditworthiness of Agrokor group and related parties, and consequent impairments for these exposures (HRK 187M in 1H 2017).

In spite of 1H 2017 being marked with adverse effects of Agrokor on profitability of the parent company, subisidiaries continue to improve their results. HPB Stambena štedionica made an aftertax profit of HRK527K, whereat trading losses were annuled by net interest income growth. HPB Invest made a net profit of HRK 1,0M and HPB Nekretnine made a net profit of HRK 631K.

Apart from this, subisidiaries have contributed to the parent through a dividend payout from profits earned in 2016. HPB Stambena štedionica has for the first time in its history paid out a dividend amounting to HRK 400K. Meahwhile, after paying out HRK 3,5M in 2016, HPB Invest paid out a dividend amounting to HRK 1,8M in 2017.

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 period from Jan 01 to Jun 30 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.

David Tomašek Deputy Executive Director Finance Division

Tomislav Vuić President of the Management Board

Consolidated quarterly financial statements for the period from Jan 01 to Jun 30 2017 (unaudited)

HPB GROUP
Appendix 3.
Reporting period:
Jan 01 to Jun 30 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: ZAGREB
133
County code and name: GRAD ZAGREB
21
# of employees: 1.124
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
Book-keeping service
provided by:
n/a $\mathbf{1}$
n/a
Contact: Tomašek David
Phone: 014804900 Fax: 014804594
E-mail address: [email protected]
Surname and name: Vuić Tomislav
(person authorized for representation)
  1. Financial reports (balance sheet, profit or loss statement, cash flow statement, statement on changes

in equity and notes to financial statements)

  1. Management report

  2. Statement by persons accountable for compiling the report

BALANCE SHEET

Jun 30 2017
as per
in HRK
Item AOP
label
Dec 31 2016 Jun 30 2017
$\mathbf{1}$ $\overline{2}$ 3 4
ASSSETS
1. CASH AND DEPOSITS WITH THE CNB (002+003) 001 2.263.303.114 3.015.981.751
1.1.Cash 002 421.479.852 552.639.844
1.2. Deposits with the CNB 003 1.841.823.262 2.463.341.907
2. DEPOSITS WITH FINANCIAL INSTITUTIONS 004 774.135.009 476.214.942
3. SHORT-TERM TREASURY BILLS OF THE CROATIAN MINISTRY OF FINANCE 005 415.536.615 410.077.306
4. FINANCIAL ASSETS HELD FOR TRADING 006 696.314.398 674.066.764
5. FINANCIAL ASSETS AVAILABLE FOR SALE 007 2.630.574.528 2.320.703.469
6. FINANCIAL ASSETS HELD TO MATURITY 008 442.835.059 154.375.003
7. FINANCIAL ASSETS VALUED AT FAIR VALUE THROUGH PROFIT OR LOSS. 009 0 0
NOT ACTIVELY TRADED
8. DERIVATIVE FINANCIAL ASSETS 010 3.780.197 0
9. LOANS TO FINANCIAL INSTITUTIONS 011 81.579.680 26.300.164
10. LOANS TO OTHER CUSTOMERS 012 11.406.936.798 11.640.936.202
11. INVESTMENTS IN SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINT VENTURES 013 7.930.000 20.000.000
12. REPOSSESSED ASSETS 014 $\Omega$
13. TANGIBLE ASSETS (LESS DEPRECIATION) 015 155.541.052 143.013.916
14. OTHER ASSETS 016 879.444.143 689.703.842
A) TOTAL ASSETS (001+004 to 016) 017 19.757.910.593 19.571.373.359
LIABILITIES
1. BORROWINGS FROM FINANCIAL INSTITUTIONS (019+020) 018 620.995.448 620.451.541
1.1. Short-term 019 $\Omega$
1.2. Long-term 020 620.995.448 620.451.541
2. DEPOSITS (022 to 024) 021 14.781.982.934 14.661.153.462
2.1. Transactional and current accounts 022 3.981.010.898 4.247.196.028
2.2. Savings deposits (demand) 023 1.486.719.761 1.427.919.853
2.3. Term deposits 024 9.314.252.275 8.986.037.581
3. OTHER BORROWINGS (026+027) 025 88.426.108 5.184.652
3.1. Short-term 026 $\Omega$
3.2. Long-term 027 88.426.108 5.184.652
4. DERIVATIVE AND OTHER FINANCIAL LIABILITIES HELD FOR TRADING 028 3.640.667 0
5. ISSUED SECURITIES (030+031) 029 0 $\bf{0}$
5.1. Short-term 030 $\mathbf 0$ 0
5.2. Long-term 031 0 0
6. SUBORDINATED DEBT ISSUED 032 0 0
7. HYBRID INSTRUMENTS 033 $\Omega$ $\Omega$
8. OTHER LIABILITIES 034 2.317.559.985 2.458.127.163
B) TOTAL LIABILITIES (018+021+025+028+029+032+033+034) 035 17.812.605.142 17.744.916.818
EQUITY
1. SHARE CAPITAL 036 1.214.298.000 1.214.298.000
2. PROFIT/(LOSS) FOR THE PERIOD 037 190.502.935 (64.556.740)
3. RETAINED EARNINGS 038 86.030.542 128.828.687
4. REGULATORY RESERVES 039 6.160.835 15.708.573
5. STATUTARY AND OTHER CAPITAL RESERVES 040 363.623.023 448.347.821
6. FAIR VALUE RESERVE 041 84.690.116 83.830.200
7. RESERVES ARISING FROM HEDGING TRANSACTIONS 042 $\Omega$
C) TOTAL EQUITY (036 to 042) 043 1.945.305.451 1.826.456.541
D) TOTAL LIABILITIES AND EQUITY (035+043) 044 19.757.910.593 19.571.373.359
ADDENDUM TO THE BALANCE SHEET (filled-in by the banks submitting consolidated financial statement)
1. TOTAL EQUITY 045 1.945.305.451 1.826.456.541
2. Equity attributable to the shareholders of the parent company 046 1.945.305.451 1.826.456.541
3. Minority interest (045-046) 047 0 $\mathbf{0}$

$\overline{6}$

FRUFILUR LUSS STATEMENT
Jan 01 2017
Jun 30 2017
for the period from
to
in HRK
AOP
Item label Jan 01 - Jun 30 2016 Jun 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
1 $\overline{2}$ 3 4 5 6
1. Interest income 048 365.690.958 185.855.638 341.825.460 169.278.184
2. Interest expense 049 116.446.129 56.554.775 74.026.129 35.297.421
3. Net interest income (048-049) 050 249.244.829 129.300.863 267.799.331 133.980.763
4. Fee and commission income 051 241.954.682 124.871.218 249.466.296 131.701.853
5. Fee and commission expense 052 149.128.168 76.593.276 148.995.769 76.680.300
6. Net fee and commission income (051-052) 053 92.826.514 48.277.942 100.470.527 55.021.553
7. Gains less losses arising from investments in subsidiaries, associated companies and
joint ventures
054 n
8. Gains less losses from trading activities 055 22.727.328 9.729.448 18.646.006 9.958.594
9. Gains less losses from built-in derivatives 056 $\Omega$
10. Gains less losses arising from financial assets valued at fair value through P&L, 057 n
not actively traded
11. Gains less losses arising from securities available for sale 058 41.698.418 33.483.579 5.457.492 5.122.576
12. Gains less losses arising from securities held to maturity 059 0 0
13. Gains less losses arising from hedging activities 060 n $\Omega$
14. Income from investments in subsidiaries, associated companies and joint ventures 061 $\Omega$
15. Income from other equity instruments 062 787.350 780.212 815.653 793.985
16. Gains less losses from exchange rate differences 063 3.844.336 138.112 181.823 (1.047.808)
17. Other income 064 5.365.831 2.148.181 4.588.804 3.044.853
18. Other operating costs 065 27.488.004 16.225.745 28.547.626 14.482.829
19. General and administrative expenses, amortization and depreciation 066 192.051.622 97.078.121 196.859.876 97.848.144
20. Operating profit (050+053 to 064-065-066) 067 196.954.980 110.554.471 172.552.134 94.543.543
21. Impairment losses and provisions 068 104.014.667 62.874.617 237.033.993 165.319.216
22. PROFIT/(LOSS) BEFORE TAX (067-068) 069 92.940.313 47.679.854 (64.481.859) (70.775.673)
23. INCOME TAX EXPENSE / DEFERRED TAX 070 (2.023.479) 534.612 74.881 (3.375.802)
24. NET PROFIT/(LOSS) FOR THE PERIOD (069-070) 071 94.963.792 47.145.242 (64.556.740) (67.399.871)
25. Earnings per share 072 47 23 (32) (33)
ADDENDUM TO THE P&L (filled-in by the banks submitting consolidated financial statement)
1. PROFIT FOR THE PERIOD 073 94.963.792 47.145.242 (64.556.740) (67.399.871)
2. Attributable to the shareholders of the parent company 074 94.963.792 47.145.242 (64.556.740) (67.399.871)
3. Minority interest (073-074) 075 O 0 $\mathbf{0}$

DROEIT OR LOSS STATEMENT

CASH FLOW STATEMENT - INDIRECT METHOD
for the period from $\begin{bmatrix} \text{Jan 01 2017} \ \text{Jan 01 2017} \end{bmatrix}$ to $\begin{bmatrix} \text{Jun 30 2017} \ \text{Jun 30 2017} \end{bmatrix}$

Jun 30 2017
Jan 01 2017
for the period from
to
in HRK
Item AOP
label
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
$\overline{1}$ $\overline{2}$ 3 4
OPERATING ACTIVITIES
1. Cash flow from operating activities before changes in assets (002 to 007) 001 212.280.166 196.316.874
1.1. Profit/(loss) before tax 002 92.940.313 (64.481.859)
1.2. Impairment losses and provisions 003 104.014.667 237.033.993
1.3. Amortization and depreciation 004 21.914.367 22.445.964
1.4. Net unrealised gains less losses from financial assets valued at fair value through profit or
loss
005 (2.744.845) 23.999
1.5. Gains / losses from sale of tangible assets 006 $\mathbf 0$ 1.476.600
1.6. Other gains / losses 007 (3.844.336) (181.823)
2. Net increase / decrease of operating assets (009 to 016) 008 (795.214.115) (146.400.284)
2.1. Deposits with the CNB 009 (111.498.102) (621.518.645)
2.2. Tresury bills of the Croatian Ministry of Finance 010 (98.455.125) 5.459.309
2.3. Deposits with and loans to financial institutions 011 129.131.318 297.920.067
2.4. Loans to other customers 012 (545.056.413) (339.485.304)
2.5. Financial assets held for trading 013 (198.963.521) 22.223.635
2.6. Financial assets available for sale 014 20.685.409 311.669.025
2.7. Financial assets valued at fair value through profit or loss, not actively traded 015
2.8. Other operating assets 016 8.942.319 177.331.629
3. Net increase / decrease of operating liabilities (018 to 021) 017 864.651.599 16.097.039
3.1. Transactional accounts 018 387.734.131 266.185.130
3.2. Savings and term deposits 019 393.063.535 (387.014.602)
3.3. Derivative financial liabilities and other liabilities actively traded 020 $\Omega$ (3.640.667)
3.4. Ostale liabilities 021 83.853.933 140.567.178
4. Net cash flow from operating activities before taxation
$(001+008+017)$ 022 281.717.650 66.013.629
5. Income tax paid 023 (65.680) (776.410)
6. Net cash inflow / outflow from operating activities (022+023) 024 281.651.970 65.237.219
INVESTING ACTIVITIES
7. Net cash flow from investing activities (026 to 030) 025 (9.917.403) 148.805.259
7.1. Purchase of tangible and intangible assets 026 (18.874.869) (16.363.476)
7.2. Investment in / disposal of subsidiaries, associated companies and joint ventures 027 $\Omega$
7.3. Investment in / disposal of financial assets held to maturity 028 8.170.116 164.353.082
7.4. Dividends received 029 787.350 815.653
7.5. Other inflows / outflows from investing activities 030 0 $\mathbf{0}$
FINANCIAL ACTIVITIES
8. Net cash flow from financial activities (032 to 037) 031 (233.595.293) (83.785.363)
8.1. Net increase / decrease of borrowings 032 (202.833.078) (83.785.363)
8.2. Net increase / decrease of issued debt securities 033 0 0
8.3. Net increase / decrease of subordinated debt and hybrid instruments 034 $\overline{0}$ $\overline{0}$
8.4. Share capital raised 035 $\overline{0}$ $\overline{0}$
8.5. Dividends paid 036 (30.762.215) $\overline{0}$
8.6. Other inflows / outflows from financial activities 037 $\mathbf{0}$ 0
9. Net increase / decrease of cash and cash equivalents 038 38.139.274 130.257.115
$(024+025+031)$
10. Effect of foreign exchange differences on cash and cash equivalents 039 193.857 902.877
11. Net increase/(decrease) in cash and cash equivalents (038+039) 040 38.333.131 131.159.992
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) 042 450.530.349 552.639.844

8

STATEMENT OF CHANGES IN EQUITT
for the period from Jan 01 2017 to Jun 30 2017 in HRK
AOP Attributable to the shareholders of the parent company
Item label Share capital Own shares Regulatory, statutory
and other reserves
Retained earnings Profit/(loss) for the
period
Fair value reserve Minority interest Total equity
$\mathbf{2}$ 6 $\mathbf{R}$ 9 10
Balance as per Jan 01 2017 001 1.214.775.000 (477.000) 369.783.858 86.030.542 190.502.935 84.690.116 1.945.305.451
Effects of changes in accounting policies
and corrections of errors
002 (53.432.254) (53.432.254)
Restated balance as per Jan 01 2017 (001+002) 003 1.214.775.000 (477.000) 369.783.858 32.598.288 190.502.935 84.690.116 1.891.873.197
Disposal of financial assets available for sale 004 817.457 817.457
Change in the fair value of financial assets available for sale 005 (1.797.966) (1.797.966)
Tax on items recognised directly
in/transferred from equity
006 120.593 120.593
Other gains and (losses) recognised directly in equity 007
Net gains/(losses) recognised directly in equity
(004+005+006+007)
008 (859.916) (859.916)
Loss for the period 009 (64.556.740) (64.556.740)
Total recognized income and expense for the period
$(008 + 009)$
010 (64.556.740) (859.916) (65.416.656)
hcrease/decrease in share capital 011
Purchase/sale of own shares 012
Other changes 013
Transfer to reserves 014 94.272.536 96.230.399 (190.502.935)
Dividends paid 015
Profit allocation (014+015) 016 94.272.536 96.230.399 (190.502.935)
Balance as per Jun 30 2017 (003+010+011+012+013+016) 017 1.214.775.000 (477.000) 464.056.394 128.828.687 (64.556.740) 83.830.200 1.826.456.541

STATEMENT OF CHANGES IN EQUITY

NOTES TO FINANCIAL STATEMENTS

A) PROFIT OR LOSS ACCOUNT

1) INTEREST INCOME

.
.
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
Loans 297.408.428 151.715.022 290.748.923 145.449.321
Deposits 913.215 455.638 (1.269.860) (660.428)
Securities 67.369.315 33.684.978 52.346.397 24.489.291
TOTAL 365.690.958 185.855.638 341.825.460 169.278.184

2) INTEREST EXPENSE

in HRK
2) INTEREST EXPENSE
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
Borrowings 9.809.647 4.222.281 6.904.796 992.348
Deposits 106.636.482 52.332.494 67.121.333 34.305.073
TOTAL 116.446.129 56.554.775 74.026.129 35.297.421

3) FEE AND COMMISSION INCOME

3) FEE AND COMMISSION INCOME
in HRK
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
Cash payment operations - channels 142.299.923 72.279.084 138.969.150 70.754.937
Retail and card operations 64.313.267 33.086.071 72.862.756 41.659.120
Corporate operations 26.791.777 14.504.588 27.722.194 14.434.468
Other fee and commission income 8.549.715 5.001.475 9.912.196 4.853.328
TOTAL 241.954.682 124.871.218 249.466.296 131.701.853

4) FEE AND COMMISSION EXPENSE

in HRK
4) FEE AND COMMISSION EXPENSE
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
Payment operations 141.241.685 73.079.359 139.228.922 70.870.813
Other fee and commission expense 7.886.483 3.513.917 9.766.847 5.809.487
TOTAL 149.128.168 76.593.276 148.995.769 76.680.300

5) GAINS LESS LOSSES FROM TRADING ACTIVITIES

in HRK
5) GAINS LESS LOSSES FROM TRADING ACTIVITIES
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
Securities and equity instruments 2.974.434 (1.244.229) 805.087 89.241
FX transactions 20.729.422 10.942.795 17.652.385 9.644.730
HRK cash transactions 189.105 166.922 209.545 201.495
Derivatives (1.165.633) (136.040) (21.011) 23.128
TOTAL 22.727.328 9.729.448 18.646.006 9.958.594

6) OPERATING EXPENSES

in HRK
6) OPERATING EXPENSES
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
General and administrative expenses 170.137.255 86.201.367 174.413.912 86.739.433
Amortization and depreciation 21.914.367 10.876.754 22.445.964 11.108.711
Savings deposit insurance costs 17.540.795 8.779.404 17,803.541 8.557.002
Other costs 9.947.209 7.446.341 10.744.085 5.925.827
TOTAL 219 539 626 113 303 866 225.407.502 112.330.973

7) IMPAIRMENT LOSSES AND PROVISION EXPENSES

in HRK
7) IMPAIRMENT LOSSES AND PROVISION EXPENSES
Jan 01 - Jun 30 2016 Jan 01 - Jun 30 2017
Cumulative Quarterly Cumulative Quarterly
Individually identified impairment losses
(risk group BiC) 81.526.739 36.748.023 249.310.558 172.551.172
Portfolio based provisions for identified losses (risk group A) 5.512.889 9.239.492 (301.474) 6.174.909
Other provisions 16.975.039 16.887.102 (11.975.091) (13.406.865)
TOTAL 104.014.667 62.874.617 237.033.993 165.319.216

$in HDR$

BALANCE SHEET $B)$

8) CASH AND DEPOSITS WITH THE CNB

8) CASH AND DEPOSITS WITH THE CNB in HRK
Dec 31 2016 Jun 30 2017
CASH 421.479.852 552.639.844
IDEPOSITS WITH THE CNB 1.841.823.262 2.463.341.907
Mandatory reserve 1.300.796.321 1.215.090.831
Account for transaction settlement 541.026.941 1.248.251.076
MANDATORY TREASURY BILLS
Portfolio based impairment allowance for identified losses
TOTAL 2.263.303.114 3.015.981.751

9) DEPOSITS WITH FINANCIAL INSTITUTIONS

9) DEPOSITS WITH FINANCIAL INSTITUTIONS
in HRK
Dec 31 2016 Jun 30 2017
Deposits with foreign banking institutions 753.064.739 451.763.427
Deposits with domestic banking institutions 21.070.270 24.451.515
Portfolio based impairment allowance for identified losses
ITOTAL 774.135.009 476.214.942

10) EQUITY INSTRUMENTS AND SECURITIES

10) EQUITY INSTRUMENTS AND SECURITIES in HRK
Dec 31 2016 Jun 30 2017
Short term Treasury bills of the Croatian Ministry of Finance 415.536.615 410.077.306
Financial assets held for trading 551.322.886 674.066.764
Financial assets available for sale 2.630.574.528 2.320.703.469
Financial assets held to maturity 450.105.787 155.168.902
Portfolio based impairment allowance for identified losses (6.771.524) (775.376)
Deferred front-end fee (499.204) (18.523)
TOTAL 4.040.269.088 3.559.222.542

11) LOANS TO CUSTOMERS

Dec 31 2016 Jun 30 2017
Gross Ioans
Loans to financial institutions 81.583.376 26.304.310
Loans to companies 3.831.863.830 4.074.743.681
Retail Ioans 4.966.265.650 5.154.345.019
therein: housing loans 1.608.068.882 1.702.950.185
Other loans 4.040.077.723 3.935.230.902
TOTAL GROSS LOANS 12.919.790.579 13.190.623.912
Impairment allowance (1.280.732.419) (1.363.681.540)
Portfolio based impairment allowance for identified losses (104.459.180) (111.251.948)
Deferred front-end fee (46.082.502) (48.454.058)
TOTAL 11.488.516.478 11.667.236.366

in HRK

B) BALANCE SHEET (continued)

12) DEPOSITS in HRK
Dec 31 2016 Jun 30 2017
Financial institutions 1.153.448.334 1.156.813.796
Corporations 3.009.235.694 3.203.283.977
Retail 9.166.235.142 9.062.666.285
Other 1.453.063.764 1.238.389.404
TOTAL 14.781.982.934 14.661.153.462
13) BORROWINGS in HRK
Dec 31 2016 Jun 30 2017
Borrowings from HBOR 624.696.401 624.712.782
Borrowings from domestic banking institutions $\overline{\phantom{a}}$
Borrowings from domestic non-banking institutions
Borrowings from foreign banking institutions 88.426.109 5.184.652
Deferred front-end fee (3.700.954) (4.261.241)
TOTAL 709.421.556 625.636.193
14) OTHER LIABILITIES in HRK
Dec 31 2016 Jun 30 2017
Restricted deposits 1.715.292.949 1.946.450.797
Interest and fees payable 58.731.565 52.160.373
Provisions for off-balance sheet exposure 22.291.290 35.371.408
Other 521.244.181 424.144.585
TOTAL 2.317.559.985 2.458.127.163

C) INVESTMENTS IN SUBSIDIARIES

The Group's subsidiaries are as follows:

Industry Country Ownership
as per Jun 30 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

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.

As per the reporting date, Bank has a 58,17% ownership stake in H1 TELEKOM d.d., acquired via debt-to-equity swap. This ownership stake is classified as assets held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discountinued Operations.

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. Merger has commenced in front respective commercial courts of both companies, and corporate governance change in H1 TELEKOM has begun.

As per reporting date, financial position of H1 Telekom is no longer included in the consolidated financial statements of HPB Group, because conditions for consolidation outlined in IFRS 10 Consolidated Financial Statements with respect to control that Bank had over the subject, are not met.

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%

HPB-R-A STOCK $E)$

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 549,99 (Jun 30 2017) representing a decrease of 26,8% when compared to the last traded price in 2016 (HRK 751,00 on Dec 30 2016).

Trading during the reporting period was as follows:

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