Hrvatska Poštanska Banka d.d.

Investor Presentation • Oct 29, 2024

Management Board Jurišićeva ulica 4, HR-10000 Zagreb Phone: +385 1 4804 400, +385 1 4804 409 Fax: +385 1 4810 773

Zagreb, October 29, 2024 No: F21-6/2024-TB

Home Member Stock Exchange Identifier HPB-R-A Regulated Market/

Segment

LEI 529900D5G4V6THXC5P79

State of Issuer Republic of Croatia

ISIN HRHPB0RA0002

Zagreb Stock Exchange Inc. Official Market

Zagreb Stock Exchange Inc. Croatian Financial Services Supervisory Agency ("HANFA") Croatian News Agency OTS HINA

Subject: HRVATSKA POŠTANSKA BANKA, p.l.c. - Other non-regulated information

Hrvatska poštanska banka, p.l.c. announces Investor's materials for the period ended September 30, 2024.

Hrvatska poštanska banka, p.l.c.

HPB p.l.c. 9M 2024 Investor information

October 2024

Limitation of liability

• The information and data contained in this presentation are intended as general background information on Hrvatska poštanska banka p.l.c. (hereinafter referred to as the Bank or HPB) and its activities. They are provided in summary form and therefore do not necessarily represent complete information. Certain statements contained herein may be statements of future expectations and other forward-looking statements about HPB, which are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, words such as "may," "will," "should," "expects," "plans," " contemplates," "intends," "anticipates," "estimates," "potential" or "continues" and similar expressions typically identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As such, forward-looking statements cannot be guaranteed. Accordingly, we cannot guarantee the realization of such forward-looking statements, nor should full reliance be placed on such forward-looking statements. Many factors may affect our results of operations, financial conditions, liquidity, and developments in the industry in which we operate, and these may differ materially from those expressed or implied by the forward-looking statements contained herein.
• This presentation contains financial and non-financial information and statistical data related to HPB. Such information and data are presented for illustrative purposes only. This presentation may include information and data derived from publicly available sources that have not been independently verified, and therefore HPB hereby expressly makes no representation of warranty of any kind including, but not limited to the accuracy, completeness or reliability of the information and data provided. This presentation is for information purposes only and does not contain a recommendation to buy or sell or an offer to sell or subscribe for shares, nor does it constitute an invitation to make an offer to sell shares.
• This presentation has been prepared and the information in it has been checked with the greatest possible care. Nevertheless, rounding and transmission cannot be excluded. When adding up rounded amounts and percentages, differences may appear.

Statement of the President of the Management Board

On the occasion of releasing the nine-month financial results for 2024, Marko Badurina, President of the Management Board of Hrvatska poštanska banka, stated:

"It is HPB's vision to have a relevant market impact, and our results prove that in the past years we are continuously on the right track and that we are achieving this goal. In the third quarter of 2024, asset growth of almost half a billion euros was achieved, resulting in its highest level since the Bank's foundation. HPB's profitability remains very strong, with record revenues and operating profit, thus strengthening our capital structure, and ensuring the potential for the planned further growth.

The Bank's successes have been continuously recognized by the expert community: HPB recently received the "Golden Kuna" Award for the most successful bank in Croatia in 2023, which places an additional responsibility on us to continue investing in client relations, employee expertise and system agility, the most important factors of our successes."

Executive Summary

Macroeconomic Environment

Financials

Risk Management

Additional information

We continue trajectory growth confirming our vision and mission

* Profit and loss account positions in this presentation for the nine-month (9M) of 2021-2022 are presented on stand alone basis, while 9M of 2023 include the result of HPB on a stand-alone basis including the result of Nova hrvatska banka for the period from integration till reporting date (3.7.2023 – 30.9.2023) and 9M of 2024 includes the result of integrated Bank (HPB + Nova hrvatska banka) in accordance with the integration of Nova hrvatska banka in July 2023

** The balance sheet positions in this presentation on the reporting dates 31.12.2021 and 31.12.2022 show the result of HPB on a stand-alone basis, while the reporting dates 31.12.2023 and 30.9.2024 include results of an integrated Bank (HPB + Nova hrvatska banka) in accordance with the integration of Nova hrvatska banka in July 2023

We are creating conditions for a better life in Croatia.

5

Continuous strengthening of the market position

Executive Summary

Macroeconomic Environment

Financials

Risk Management Additional information

Macroeconomic indicators

	Croatia	Euro area €		Croatia	Euro area €
Overall inflation (HICP)	3.0% Sep 24: Sep 23: 7.4%	Sep 24: 1.8% Sep 23: 4.3%	Interest rate on deposits with agreed maturity	24: 1.8% Aug 23: 1.4% Aug 24: 3.3% Aug 23: 3.0% Aug	24: 3.0% Aug 23: 3.1% Aug 24: 3.4% Aug 23: 3.4% Aug	Households Corporations
Unemployment rate	24: 4.9% Aug 23: 6.1% Aug	24: 6.4% Aug 23: 6.6% Aug	Financial investment growth* quarterly	24: 7.2% Q2 23: 4.3% Q2 24: -1.1% Q2 23: 7.3% Q2	24: 2.1% Q2 23: 2.0% Q2 24: 2.2% Q2 23: 2.5% Q2	Households Corporations
Real GDP growth quarterly	24: 3.0% Q2 23: 3.3% Q2	24: 0.6% Q2 23: 0.5% Q2	Interest rate on loans	24: 5.0% Aug 23: 5.1% Aug 24: 3.8% Aug 23: 3.5% Aug 24: 4.7% Aug	24: 7.8% Aug 23: 7.9% Aug 24: 3.7% Aug 23: 3.9% Aug 24: 4.9% Aug	Households' consumption Households' home purchase
				Aug 23: 5.0%	Aug 23: 5.0%	Corporations

Source: ECB Data Portal * Total value of financial investment transactions during the year compared to the same period last year, according to current prices.

Executive Summary Macroeconomic Environment

Financials

Risk Management Additional information

Record 9M operating profit of EUR 87.1 mn achieved

Profit and loss (EUR mn) account	9M 2023*	9M 2024*	Y-o-Y	Y-o-Y %
Net interest income	100 1	135 1	35 0	34 9
Net fee and commission income	21 8	26 9	1 5	23 6
Net other income	7 9	5 2	(2 7)	(34 1)
Operating income	129 8	167 2	37 4	28 8
Employee expenses	(30 6)	(40 7)	10 1	33 1
Administrative expenses	(25 0)	(31 7)	6 7	26 9
Depreciation	(5 9)	(7 7)	1 8	30 9
Operating expenses	(61 5)	(80 1)	18 7	30 4
Operating profit	68 3	87 1	18 8	27 4
Provisions	7 4	(12 7)	(20 1)	(270 6)
Tax	(10 3)	(13 1)	2 8	26 9
Profit after tax	65 4	61 3	(4 1)	(6 3)

* 9M of 2023 include the result of HPB on a stand-alone basis including the result of Nova hrvatska banka for the period from integration till reporting date (3.7.2023 – 30.9.2023) and 9M of 2024 includes the result of integrated Bank (HPB + Nova hrvatska banka) in accordance with the integration of Nova hrvatska banka in July 2023

• Net interest income is the key driver of the nine-month (9M) net profit in the amount of EUR 61.3 mn.
• A significant increase in net interest income compared to 9M 2023 (+35%) primarily due to the market movement of interest rates on deposits with central banks which neutralized the increase in operating expenses of EUR 18.7 mn and kept the CIR below 50%.
• Net fee and commission income recorded a growth of EUR 5.1 mn (+24 %) in the observed period due to higher income from payment transactions.
• Net other income lower due to the absence of non-recurring effects such as those recorded in 2023, which related to the results of legal actions taken in favour of the Bank.
• The movement of employee expenses primarily due to the impact of the integration of Nova hrvatska banka in 2023, the increase in employees' material rights in 2024 and to the lesser extent by labor and service price adjustments due to the inflationary environment.
• Operating expenses in the observed period increased in line with the integration of Nova hrvatska banka, the general increase in expenses and the increase in depreciation due to the activation of newly acquired assets.
• Although there was no significant increase in default, in accordance with the cautious approach to risk management that the Bank nurtures, the increase in provisions was caused by the migration of part of loans from Stage 1 to Stage 2, which follows the trends in the main foreign trade markets according to macroeconomic environment. In accordance with the described approach, the share of exposure in Stage 2 increased from 12.0% to 14.7% in corporate portfolio and from 16.1% to 17.5% in retail portfolio.

The most profitable quarter in history by operating profit

Strong non-interest income contribution in Q3 2024

Expenses kept under control, while supporting operating growth in Q3 2024

Quality and safe loan portfolio NPL coverage at 76.1%

Cost of risk dynamics – stage 3 (EUR mn)

Asset exceeded record level in 2023

Balance sheet (EUR mn)	31 12 2023	30 9 2024	YTD	YTD %
Cash and cash equivalents	3 103 ,	3 218 ,	115	3 7
Securities financial and other instruments	915	1 093 ,	178	19 5
Net loans and advances	2 908 ,	2 915 ,	7	0 2
Other assets	120	112	(8)	(6 5)
Total assets	046 7 ,	339 7 ,	293	4 2
Deposits	929 5 ,	6 208 ,	279	4 7
Loan liabilities	468	451	(17)	(3 7)
Other liabilities	115	85	(31)	(26 5)
Total liabilities	512 6 ,	6 743 ,	231	5 3
Total equity and reserves	534	595	61	11 5

• Total assets higher by EUR 293 mn (+EUR 455 mn in Q3 2024) compared to the end of 2023 primarily as a result of the increase in the volume of deposits.
• In total deposits, term deposits recorded a growth of 20.3% in the observed period which is a result of attractive interest rates on Super Štednja, while a vista deposits records a slight decrease of 4.3%.
• Relatively high loan returns neutralized by new placements, hence the level of loans is stable (+EUR 7 mn).
• Liquidity surplus from the collected deposits was placed in securities and other financial instruments (mainly bonds and treasury bills of the Republic of Croatia) for the purpose of 'locking' the yield following the reduction of reference rates.
• Loan liabilities refer to MREL instruments and received loans from financial institutions (CBRD, CNB repo loans and foreign financial institutions), where reduction refers to regular repayment.

Client deposits as a backbone of the balance sheet with a robust liquidity position

Source: Management reports

16

Balance sheet growth with stable structure

Liabilities and equity (EUR mn)

Stable level of gross loan portfolio with a focus on quality

18 Source: Management report

Gross loans share 31.12.2023 Gross loans share 30.9.2024

The long-term trend of decreasing NPL ratio continued

* Data as of June 30, 2024, source: CNB statistics, SV2 Selected indicators of the structure, concentration and operations of credit institutions

NPL ratio is continuing the positive long-term trend which, with a significant reduction in the exposure of NPLs, primarily through efficient collection and the necessary write-offs of non-performing exposures, gives an excellent result that was ultimately influenced by performing loans, mostly through reclassifications into the performing portfolio. The NPL coverage is still above the sector average.

Strengthened deposit base with strong growth in term deposits

20 Source: Management report Deposit share 31.12.2023 Deposit share 30.9.2024

Secure portfolio of securities

*Securities are presented in nominal amount

The securities portfolio consists of 81.4% bonds, with government bonds covering 76.8% of the total portfolio as the most significant investment.

Executive Summary Macroeconomic Environment Financials

Risk Management

Additional information

Prudent RWA management

RWA development (EUR mn)

Market risk Operational risk Credit risk

Strong capital position significantly above regulatory requirements 30.9.2024

Regulatory capital and MREL eligible instruments development

-150

-100

-50

0

50

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

A highly diversified and stable credit portfolio

* Hrvatske autoceste are included in construction industry, with a share of 54.04% of the total exposure to that industry

25 Source: Management report, according to National Classification of Activities (NKD) Executive Summary Macroeconomic Environment Financials

Risk Management

Additional information

HPB share outperformed the relevant market indices

44.9%

Sustainable operations in 2024

ESG segment	Activities in focus in 2024
E T N E M N O R VI N E	Development of methodologies and metrics for environmental goals from the Climate Strategy and Transition Plan of the HPB Group ➢ defined base year 2023 for GHG (greenhouse gas emissions) with initial values Range 1 = 649.41 tCO2e, Range 2 = 597.05 tCO2e, Range 3 = 799,574.21 tCO2e ➢ defined base year 2023 for GAR (green asset ratio) with an initial value of 0.75% ➢ selection of sectors, scenarios and methodology for setting goals (focus on reducing GHG emissions and increasing GAR) in accordance with the regulatory framework		Improvement of the methodology of general assessment and assessment of the significance of environmental risks ➢ greater granularity - assessment at the cadastral parcel level ➢ a wider range of physical risks (sea level rise, wind power) ➢ inclusion of climate change projections according to NGFS scenarios until 2050		Integration of environmental risks in the credit process ➢ defined sectoral policies from the perspective of environmental risks (credit criteria, restrictions, thresholds and exclusions) ➢ defined methodology for determining the ENV (environmental) rating of industries and clients ➢ integration of ESG questionnaires into credit documentation		Development of products with elements of sustainability in accordance with the adopted framework for the development of sustainable products ➢ implementation of project sustainability assessment in the credit process, in accordance with the criteria of the EU Taxonomy ➢ identification and monitoring of sustainability components of projects financed by the Bank ➢ modification of the profitability calculator
S Y T E CI O S	Development of methodologies and metrics for social sustainability goals ➢ application of ESRS sustainability reporting standards ➢ defined base year 2023 and material topics as a basis for setting goals (gender equality, turnover, adequate salaries)	responsibility ➢	Implementation of activities in accordance with the recommendations of ISO 26000: Guidelines on social continuous identification and improvement of business activities in accordance with sustainability standards	Conducting employee satisfaction surveys ➢ October 2024		Corporate volunteering ➢ 9 volunteer actions were organized during 2024	Financial literacy program ➢ (pupils ➢ focus on marking the	education in 8 counties and students) European Money Week	Business cooperation ➢ project Safer Schools and Kindergartens in cooperation with the Red Cross
G E C N A N R E V O G	Preparation for sustainability reporting according to ESRS standards for the 2024 reporting period ➢ implementation of an IT solution for data management and sustainability reporting: ❑ Module I – monitoring and reporting on greenhouse gas (GHG) emissions ❑ Module II – monitoring and reporting on taxonomic indicators ❑ Module III – monitoring of indicators and reporting according to ESRS standards		Implementation of the ESG questionnaire in the Bank's operations ➢ creating an ESG questionnaire to collect data from clients on sustainability factors ➢ establishing a data management process from the ESG questionnaire ➢ Informing clients and starting the application / filling in of questionnaires by clients		Implementation of the Principles of Implementation Responsible Banking UNEP FI ➢ conducted an analysis of the impact of ➢ principles the Bank's portfolio ➢ publication of the first report in process accordance with the Bank's ➢ membership in the UNEP FI initiative ➢ ongoing setting of SMART goals in the most significant areas of influence (minimum 2 goals)		of ESG questionnaire for suppliers for suppliers already implemented in the procurement definition of the questionnaire for suppliers, the process and methodology of supplier evaluation is in progress

Abbreviations

Abbreviation	Definition
CAR	Capital Adequacy Ratio
CBRD	Croatian Bank for Reconstruction and Development
CET 1	Common Equity Tier 1
CIR	Cost-to-income ratio
CNB	Croatian National Bank
CROBEX	Croatian Benchmark Stock Exchange Index
ECB	European Central Bank
ESG	Environmental, Social and Governance
GDP	Gross Domestic Product
HICP	Harmonised index of consumer prices
HPB	Hrvatska poštanska banka
ISIN	International Securities Identification Number
LCR	Liquidity Coverage Ratio
MREL	Minimum Requirement for Own Funds and Eligible Liabilities
NSFR	Net Stabile Funding Ratio
Q	Quarter
ROAA	Return on Average Assets
ROAE	Return on Average Equity
RWA	Risk-Weighted Assets
Stage 1 and 2	Performing Loans
Stage 3 or NPL	Non-Performing Loans
Y-o-Y	Year-over-Year
YTD	Year to Date
9M	Nine-month period

Indicies calculation

Indicator	Calculation
Liquidity coverage ratio (LCR)	The ratio of liquid assets to net liquidity outflow
NPL coverage	Ratio of accumulated impairments for non-performing loans to total non-performing loans
NPL ratio	Ratio of non-performing loans to total loans
Net stable funding ratio (NSFR)	Ratio of the available amount of stable funding relative to the required amount of stable funding
Loan to deposit ratio	Ratio of net loans to deposits as of the reporting date
Cost to income ratio (CIR)	Operating cost to net operating income ratio
Return on average assets (ROAA)	Ratio of annualized profit for the current year to average assets (arithmetic mean of the balance in assets at the end of the reporting period and the balance in assets at the end of the previous year) Ratio of annualized profit for the current year to average equity (arithmetic mean of the balance in equity at the end of the reporting period and the
Return on average equity (ROAE)	balance in equity at the end of the previous year)
Common Equity Tier 1 (CET 1)	Common Equity Tier 1 (CET1) capital to risk-weighted assets (RWA) ratio