NLB — Annual Report (ESEF) 2024

Apr 11, 2025

NLB Group Annual Report 2024

Here we are a part of something bigger

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB

Forward-looking statements

The expectations, forecasts and statements regarding future developments that are contained in this report are based on assumptions and are contingent on a number of factors that may turn out to be different.

Contents

• OVERVIEW 3
• NLB Group at a Glance 4
• Statement by the Management Board of NLB 5
• Statement by the Chairman of the Supervisory Board of NLB 6
• Structure and Market Performance of NLB’s Shares and GDRs 20
• Macroeconomic Environment 23
• Regulatory Environment 28
• BUSINESS REPORT 31
• Strategy 32
• Funding Strategy, MR Performance 44
• Segment Analysis 67
• NLB Group Key Members 85
• Risk Management 96
• IT and Cyber Security 109
• Human Resources 113
• Corporate Governance 115
• Compliance and Involvement of Stakeholders and Shareholders of NLB 154
• Events after the End of the 2024 Financial Year 156
• Reconciliation of Financial Statements in Business and Financial Part of the Report 157
• Alternative Performance Measures 168
• Sustainability Statement 168
• FINANCIAL REPORT 369
• NLB Group Directory 555
• Definitions and Glossary of Selected Terms 558

---

in-depth understanding of customer’s needs and business environment, NLB Group charts a path that ensures not only its long-term development, but also the development of wider economic achievements, financial performance, and strategic objectives of NLB Group in 2024.

OVERVIEW

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Group at a Glance

Investment grade rating from Moody’s (A3 long-term deposit rating with positive outlook; as of 7 January 2025, solicited rating) and from Standard & Poor’s (long-term credit rating).

Total capital	EUR 3,411 million
Total operating income	EUR 1,245 million more than
Number of active clients	2.9 million
Employees	8,322
Ratings	A3 2024
	2023

The Group will look after the financial needs of its clients and improve the quality of life in its home region – South-Eastern Europe. In May 2024, the NLB Group launched...

NLB Group and the broader economic environment in Southeastern Europe. Strategy 2030 foresees THE DOUBLING OF NLB GROUP’S BALANCE SHEET, REVENUES, AND PROFIT processes.

NLB Group is committed to the Paris Agreement with a net-zero strategy to reduce emissions in lending, investments, and operations.

ESG Risk Rating: 10.5 (low risk), rank...

Note: Number of active clients in NLB Group banking members. Core financial members include seven banks with 409 branches, five leasing companies and three asset management companies.

NLB Group Annual Report 2024

Overview

Statement by the Management Board of NLB

Esteemed Stakeholders,

By now, you know us well. You know that our deepest commitment extends to continuously providing our customers with a clear understanding of our operations, as well as driving shareholder value and advancing their interests. You also know that we constantly strive to exceed expectations and that we do not shy away from seizing opportunities in 2024.

In the preceding year, we clearly and confidently demonstrated our ambition that reaches beyond the known by introducing NLB Group’s new business strategy for the following growth and development in a rapidly changing financial environment. The strategy called "New Horizons" that was presented during the second NLB Investor Day in May stipulates the following:

• Doubling of the NLB Group’s balance sheet (to more than EUR 50 billion assets)
• Recurring revenues of more than EUR 2 billion
• A profit of more than EUR 500 million

This strategy focuses on growth across three pillars: Retail, Corporate and Investment Banking, and Payments, along with other prominent ones. It includes transitioning to a fully digital business model, which involves leveraging advanced technologies such as artificial intelligence, cloud services, and data analytics.

With prudent consideration of the risks, the new business strategy paves a path that will continue to justify the trust of our shareholders – who will receive strong dividend payments – while at the same time contributing to the economic environment and society in our home region.

Hedvika Usenik Member

Andrej Lasič Member

Archibald Kremser Member

NLB Group Annual Report 2024

Overview

However, the development of such an ambitious business strategy has been supported by the strong business results and milestones we have achieved in recent years, including 2024. Global economic activity in the European Union especially gave way to an evolving interest rate environment, as well as structural changes such as digitalisation, decarbonisation, and demographic shifts. Economic activity and demand for banking services in all client segments, product lines, and geographies, which positively impacted NLB Group’s operations. All of this activity enabled the Group across SEE geographies, with all banking members reporting solid net earnings and contributing 58.1% to the Group’s after-tax result.

The Group’s robust performance in 2024 generated a dividend payment from the previous year’s distribution by 100%, resulting in a combined EUR 220 million pay-out in two tranches. The amount represents a 40% pay-out ratio of the previous year’s earnings. Even this percentage, while at the same time will strive to maintain the capacity for organic and/or M&A-driven growth. The June General Meeting that confirmed the first dividend pay-out members expired in 2024.

The General Meeting re-appointed Primož Karpe (later also confirmed as Chairman for the third time in a row) and appointed two new members, namely Natalia and Sergeja Kočar for another term as an employee representative in the Supervisory Board.

When it comes to expansion through mergers and acquisitions, NLB Group in 2024 marked another milestone in the markets of SEE. The Group successfully completed the transaction and became the sole shareholder of SLS HOLDCO, Ljubljana the parent company of Summit Leasing Slovenija, Ljubljana. The transaction not only enabled NLB to become the leading provider of leasing services on the Slovenian market, but also marks NLB’s re-entry into the market of one of Slovenia’s most important sectors.

NLB also expanded its position in its home region by expanding its asset management into the North Macedonian market by NLB Skladi, Ljubljana acquiring Generali Investments, Skopje, later rebranded to NLB Skladi. The ownership of the Serbian asset management company KomBank Invest, Beograd was also transferred under the umbrella of NLB Skladi, Ljubljana.

In addition to M&As in the targeted markets, NLB also launched an all-cash voluntary public takeover offer aimed at acquiring control over Addiko Bank AG for all issued and outstanding Addiko Bank AG shares to reach the required acceptance threshold of at least 75% of the issued shares, and so it was not extended. NLB nevertheless remains committed to further business development and delivering results.

NLB was active not only on regional financial but also on international capital markets, successfully issuing EUR 300 million in 10NC5 subordinated Tier 2 notes in January to strengthen its capital base.

purposes. The capital position remains rock solid and well above regulatory requirements, representing a firm foundation for further value accretive growth at a maintained and attractive di positive recognition of the Bank and stronger confidence among professional stakeholders and rating agencies. In June, therefore, S&P affirmed NLB’s long-term credit rating BBB with P Officer.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB outlook, reflecting its expectation that NLB will maintain solid financial performance over the next 12–24 months, while prudently expanding across its core markets in Slovenia and SEE indicated a low credit risk and strong financial health. To top off these recognitions, the Ljubljana Stock Exchange, which traditionally recognises excellence among listed companies in var Year. In November, NLB Group also received a new, significantly improved ESG Risk Rating of 10.5 by Morningstar Sustainalytics, reflecting a low risk of material financial impacts from by the rating company. We are proud that our sustainability performance has been acknowledged once again, as we recognise sustainable practices as key drivers of our long-term business and three pillars: sustainable operations, sustainable finance, and contribution to society.

As a systemically important financial institution in the region, NLB Group has set the goal to actively contribute to a greener, fairer, and more inclusive future. Therefore, the Group has integrated a sustainability perspective and ESG factors into its new business strategy and daily operations. Guided by the Agreement goals, and the United Nations’ Sustainable Development Goals, NLB Group actively manages its sustainability-related impacts, and financially material risks and opportunities digitalisation, broader societal issues, and other important sustainability-related topics.

We are aware, however, that financial institutions also hold an important social function. Therefore, wider socio-economic development and an improved quality of life in our home region. This involves supporting communities with donations and initiatives such as NLB Youth Sports, pr natural disasters hit, such as during October’s devastating floods in Bosnia in Herzegovina, and ensuring responsible relations with employees. The latter was once again recognised in 202 certificate for the 9th consecutive year. Additionally, the bank was once again, for the 13th consecutive year, awarded as a Family-Friendly Company with special recognition for promoting strategically structured plans and ambitions keep us firmly positioned for further growth and development.

Consequentially – and perhaps even more importantly – they also ensure our sta specifically, our dedication to South-Eastern Europe, our home region, goes beyond simply providing financial solutions and services. We are committed to fostering a thriving community know that here we are a part of something bigger.

Yours truly, Management Board of NLB

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Statement by the Chairman of the Supervisory Board of NLB

McKinsey & Co: "The Global Banking Annual Review 2024: Attaining Escape Velocity," October 2024.

To Our Shareholders, sector players globally (but even more so applicable for the European market) did not show much, if any, value creation. But then there has been last 3 to 4 years, when banks in general returned both in terms of dividend yield and stock performance, with underlying profitability exceeding the cost of equity by very solid margin for the best performing peers. These were the outcomes with expansion, and long overdue economic post-pandemic resurgence of the economies. But is that really a case? The fact is that banking valuations and still prevailing valuation gap to other industries continue to evolve.

As the rates are now cut and the forward-looking yield curve flattens, the natural questions arise: Who will be the winners within the banking sector of the future? What’s the required period prior to outperformance? In seeking the answers, we could dwell deep into the cost of equity consideration, and even deeper into the underlying structure of the balance and off-balance sheet items.

The best performing banks of today look nothing like they did 10 years ago (and your NLB Group should qualify in this bucket, as it falls into very top decile of all the banks in the world with 2023 period 1). Four operational metrics, along with avoiding risk, largely explain most of the outperformance of total shareholder return: revenue growth and its decomposition; better efficient distribution and credit risk management; growing fee income (from expansion in wealth management, and other fee-heavy businesses) and of course cost efficiency, driven also by the 2030 Strategy.

Your Supervisory Board is of the opinion that when it comes to the future, the rules of the game will predominantly evolve around two softer, yet crucial elements, and that:

• Average ones will lose to focused ones
• Focused ones will lose to (positively) obsessed ones
• And the champions will obsess and focus over fundamentals, not trophies.

Primož Karpe

NLB Group Annual Report 2024

Overview

Excellence comes from perfecting the basics – and when talking about the basics, I’m referring to the bank operating model: to end-to-end process optimisation and subsequent digitalisation, to understanding the data and use it to serve the clients better and with more tailor-made solutions. Furthermore, to applying AI where it brings clear optimisation of costs and better understanding of the curious ones. But all of that must materialise in bolder go-to-market steps and moves and even more focus on talent and culture, all with the purpose to serve the clients the way they will feel.

Least but not last, we are aware we need to understand "disruption" and "transition" of the future banking model equally well as those who sit behind the driving wheels of the largest digital ways the people do digital today and the ways the people will do digital tomorrow (in all aspects of life: from how they "have fun").

These three categories respectively engage people in the digital world more than does digital banking, with the latter nevertheless being on the extremely high 4th place of all the digital activities able to stand on their shoulders.

NLB Group has adopted the 2030 Strategy with the clear mindset of transformation. You must agree it does not lack ambition. You also probably agree it is focused on organic and/or inorganic equity value creation. As the rate curve changes and net interest margin naturally shrinks, the strategy assumes to compensate that in volume growth, it assumes to compensate by tapping into the untapped revenue pools that exist already today, and it should concretely materialise into 16 new customer proposition offerings across the corporate, retail, and payments sectors.

We are aware of the whole scope of ESG responsibilities, as fully outlined in the Sustainability Statement of this Annual Report. But to back our promise of the future, we need to invest into knowledge and into persistence. Because by doing things with the right mindset and alongside the right direction, the future will eventually yield results that embed finance and financial decisions into every pore of today’s trade, investment, and funding ecosystem.

This way we should be committed to: To our shareholders, to our employees, to our wider society and of course, to our clients.

Yours truly,

Supervisory Board of NLB

This is where our community thrives.

(i) Market share as at 30 September 2024.

(ii) Market share of leasing portfolio. Change in methodology in NLB Lease&Go, leasing, Ljubljana and S is no longer included in the calculation.

(iii) Data in local financial statements. Result after tax for full-year 2024.

(iv) On 7 August 2024, Generali Investments, Skopje was renamed NLB Fondovi, Beograd. For further information on NLB Group subsidiaries, please refer to the chapter NLB Group Key Members.

NLB Skladi, Ljubljana

Assets under management	3,048.6	(in EUR millions)

NLB Lease&Go, leasing, Ljubljana

Result after tax	3.3	(in EUR millions)
Total assets	349.0	(in EUR millions)
Market share by total assets	11.3%	(ii)

NLB, Ljubljana

Market share by total assets	16,975.1	(in EUR millions)

Summit Leasing Slovenija, Ljubljana

Result after tax	0.0	(iii)
Total assets	926.2	(iii)
Market share by total assets	27.9%	(ii)

NLB

Result after tax	27.7	(in EUR millions)
Total assets	1,034.5	(in EUR millions)

Mobil Leasing, Zagreb

Result after tax	1.7	(iii)
Total assets	126.4	(iii)

NLB Banka, Sarajevo

Total assets	1,005.1	(in EUR millions)

NLB Banka, Banja Luka

Market share by total assets	20.9%
Active clients	210,580
Result after tax	29.5	(in EUR millions)
Total assets	1,172.1	(in EUR millions)

NLB Lease&Go Leasing Beograd

Result after tax	0.2	(in EUR millions)
Total assets	125.6	(in EUR millions)
Market share of AUM	9.8%
Active clients	1,062,590
Result after tax	140.5	(in EUR millions)
Total assets	5,553.5	(in EUR millions)

NLB Fondovi, Skopje

Assets under management	66.4	(in EUR millions)
Total assets	23.1	(in EUR millions)
Market share by total assets	n.a.

NLB Banka, Skopje

Market share by total assets	15.9%
Active clients	471,007
Result after tax	67.8	(in EUR millions)

NLB Group

Active clients	2,944,493
Result after tax	514.6	(in EUR millions)

---

We connect with societies and their people like no other bank in the region. The NLB Group is the only financial institution headquartered and focused on the SEE region. This is our home. We k

NLB Group Annual Report 2024

Overview

Key Highlights

Robust normalised performance over five years, fuelled by strong loan demand and revenue growth.

Performance Overview

Year	Net Interest Income (in EUR millions)
2018	313
2019	318
2020	300
2021	409
2022	505
2023	833

Gross Loans to Customers (in EUR millions)

Date	Gross Loans (in EUR millions)
31 Dec 2018	7,627
31 Dec 2019	7,938
31 Dec 2020	10,033
31 Dec 2021	10,903
31 Dec 2022	13,397
31 Dec 2023	301

Key Highlights

Performing loans (NPLs) (in EUR millions)

Bank	2023	2024
N Banka	173	138
KB	551	934
DT (ii)	52	14.0

DT = deferred tax: increase of deferred tax assets and first recognition of deferred tax liability for withholding tax on dividends.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Capital

Asset quality	EUR 1,672.5 million
Cost of risk	1.1 %
NPE ratio	18.73 %
MREL ratio	37.47 %
Dividend pay-out in 2024	year’s distribution vs. 35.04% requirement
New MREL funding in 2024	EUR 800 million

Governance

Social

Environmental

EUR 439 million of new sustainable financing, supporting the baseline year 2015

10.5 (low risk) by Sustainalytics ESG Risk rating (improved by 5.5 points)

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL performance indicators

Table 1: Key financial indicators for NLB Group and NLB	NLB Group	NLB
	2024	2023	2022	2024	2023	2022
Income statement data (in EUR millions)	Net interest income	354	300	503	389	277	199
Net revenue	1,683	1,454	1,181	1,069	830	461
	Total costs	-602	-502	-460	-312	-238	-208
	Operating costs (BoS)	-642	-541	-496	-323	-249	-218
Re provisions	-37	-14	-29	14	78	6
	Gains less losses from capital investments in subsidiaries, associates, and joint ventures	3	1	1	-	-	-
	Result before tax	608	578	483	512	479	164
	Result of non-control	-	-	-	-	-	-
Statement data (in EUR millions)	Total assets	28,035	25,942	24,160	16,975	16,015	13,939
	Gross loans to customers	16,721	14,064	13,397	8,816	7,277	6,157
Impairments and valuations of loans	-	-	-	-	-	-
Financial assets	6,324	4,804	4,877	4,548	3,016	2,961
	Deposits from customers	22,206	20,733	20,028	12,294	11,882	10,984
	Equity	3,226	2,883	2,366	2,526	2,249	1,603
	Non-controll	-	-	-	-	-	-

Key financial indicators

a) Capital adequacy

Total capital ratio	18.7%	20.3%	19.2%	24.4%	25.2%	25.6%
Tier 1 ratio	15.8%	16.9%	15.7%	19.6%	19.7%	19.1%
CET 1 ratio	15.3%	16.4%	15.1%	-	-	-
RWA / Total assets	65.0%	59.1%	60.6%	65.7%	57.5%	56.2%

b) Asset quality

NPL coverage ratio (coverage of gross non-performing loans with impairments for all loans)	108.7%	110.0%	98.9%	-	-	-
Impairments for non-performing loans	62.7%	64.6%	57.1%	70.4%	61.2%	58.1%
NPL coverage ratio (EBA definition)	63.5%	65.6%	58.1%	70.6%	61.4%	58.2%
NPL coverage ratio (EBA definition) (BoS)	1.6%	1.5%	1.8%	1.4%	1.2%	1.1%
Net NPL ratio (internal def.; net NPL / Total net loans)	0.6%	0.5%	0.8%	0.4%	0.5%	0.5%
NPE ratio (EBA definition)	1.1%	1.1%	1.3%	0.8%	0.9%	0.9%
NPE ratio (EBA definition) (BoS)	1.1%	1.1%	1.3%	0.8%	0.9%	0.9%

---

NLB Group Annual Report 2024

Overview

Key Highlights

	NLB Group	2024	2023	2022
	NPL Collateral received / NPL (EBA definition)	67.0%	45.6%	54.7%
		Credit impairments and provisions / RWA	0.1%	-0.1%	0.1%	1.3%
Financial intermediation margin (BoS)	4.8%	4.6%	4.4%
		Operational business margin (vi)	5.0%	4.8%	3.6%
		ROE b.t.	19.1%	21.6%	20.6%
ROA a.t.	1.9%	2.2%	1.9%
		Operating costs / Average total assets (BoS)	2.4%	2.2%	2.2%
		CIR (vii)	45.7%	45.9%	57.6%
	Liquidity assets / Short-term financial liabilities to non-banking sector	43.7%	51.9%	48.5%
Liquidity assets / Average total assets	34.5%	235.6%	299.7%	276.5%
	Net stable funding ratio (NSFR)	167.6%	187.3%	183.0%
		Leverage ratio	9.9%	9.6%	9.1%
Total revenues / RWA	6.8%	7.1%	5.4%

Key indicators per share

Shareholders (viii)		4,649	3,457	3,025
Shares		20,000,000	20,000,000	20,000,000
Branches	Number of branches	409	418	440
Employees	Number of employees	8,322	7,982	8,228

NLB Rating

NLB Outlook	2024	2023	2022
Positive	Stable	Stable

Footnotes

(i) The result before impairments and provisions of NLB Group for the year 2022 does not include negative goodwill.

(ii) Loans and advances without loans and advances.

(iii) Loans and advances, including cash balances at CBs and other demand deposits.

(iv) The carrying amount of debt instruments measured at fair value through other comprehensive income basis of average total assets.

(vi) Calculated as Net income from operational business (NII - Tier 2 expenses + Net fee and commission income + Recurring net income from financial operations).

(viii) As per the share register of Central Securities Clearing Corporation (KDD). The shares are listed on the Ljubljana Stock Exchange. The Bank of New York (the "GDR Depositary") holds shares in its capacity as the depositary for the GDR holders. The GDRs representing shares are issued against the deposit of shares and are listed on the London Stock Exchange. The rights under the deposited shares can be exercised by the GDR holders only through the GDR Depositary, and individual GDR holders do not have any voting rights under the deposited shares. Further details on the definition of certain indicators in this table are available in the chapter Alternative Performance Indicators.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Events

1	Issuance of Tier 2 Notes
2	Top Employer certificate
3	Apple Pay available to NLB customers
4	NLB Skladi, Ljubljana as Best Asset Management Company
5	New NLB Skopje First tranche dividend payment
6	New NLB Supervisory Board appointments
7	New NLB website
8	Acquisition of Summit Leasing and entering the Croatian market
9	Re-election of the Chair
10	Donations for flood relief in Bosnia and Herzegovina
11	KomBank Invest, Beograd renamed NLB Fondovi, Beograd
12	Regulatory approvals to acquire Summit Leasing

Generali Investments, Skopje tranche dividend payment Improved ESG risk rating New NLB Group website 10.5 LOW RISK 2024 EUR 110 million EUR 110 million

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

January

· Issuance of Tier 2 Notes: The Bank issued 10NC5 subordinated Tier 2 notes in the amount of EUR 300 million (ISIN: XS2750306511). In parallel, the Bank conducted a liability redemption of subordinated Tier 2 notes with approaching call dates.

· Top Employer certificate: The Top Employers Institute awarded the Bank the prestigious Top Employer certificate for the 9th consecutive year.

February

Notifications of major holdings change: The shareholding of Schroders plc in the Bank changed from 5.12% to 4.98%.

April

· NLB Skladi, Ljubljana declared the Best Asset Management Company over a three- and ten-year period in the category Naj Skladi 2023.

· Apple Pay: Apple Pay became available to NLB customers.

· Redemption of subordinated Tier 2 notes in the aggregate nominal amount of EUR 45 million (ISIN: SI0022103855).

· New NLB Group Strategy 2030: The NLB Group revealed its new Group Strategy 2030.

May

Announcement of NLB’s intention of Addiko Bank AG public takeover offer: On 15 May, NLB announced its intention to launch an all-cash voluntary public takeover offer aimed at acquiring Addiko Bank AG with a consideration of EUR 20.00 per Addiko Bank AG share on a cum dividend basis.

3 The company was removed from the court register on 1 July 2024.

4 The company was removed from the preferred notes in the aggregate amount of EUR 500 million for MREL purposes (ISIN: XS2825558328).

· Acquisition of Generali Investments, Skopje by NLB Skladi, Ljubljana: NLB Skladi, Ljubljana completed the acquisition of Generali Investments, Skopje after receiving all relevant approvals.

· Award from the Slovenian Marketing Association: NLB received the leading award from the Slovenian Marketing Association.

June

· NLB public takeover offer: On 7 June 2024, NLB published a voluntary public takeover offer to acquire control of Addiko Bank AG and publicly presented the offer at a webcast held on its website (nlb.si).

· Offer price: EUR 110 million or EUR 5.5 gross per share.

· Appointment of three members of the Supervisory Board: The NLB General Meeting re-appointed Primož Karpe and two new members.

· Google Pay: Google Pay became available to NLB customers in Kosovo.

· Garmin Pay: Garmin Pay became available to NLB customers in Slovenia.

· The merger of Leasing, Ljubljana – in liquidation ceased to exist, its assets and liabilities were transferred to NLB Lease&Go, leasing, Ljubljana.

· The merger of PRIVATINVEST, Ljubljana with NLB Real Estate, Ljubljana: its assets and liabilities were transferred to NLB Real Estate, Ljubljana.

July

· Re-election of the Chairman of NLB Supervisory Board: The members of the NLB Supervisory Board re-elected the Chairman.

· Takeover offer: NLB announced the improved offer price for the voluntary public takeover offer aimed at acquiring control over Addiko Bank AG by increasing the Share Offer Price from.

Announcement of the Improvement of Voluntary Public Takeover

The Bank published the addendum to the Offering Memorandum and revised Presentation on 22 July 2024.

• Early redemption aggregate nominal amount of EUR 300 million (ISIN: XS2498964209).
• NLB as general sponsor of NLB Ljubljana Marathon: NLB has taken on the role of general sponsor of the largest.
• Approvals to acquire SLS HOLDCO, Ljubljana: NLB obtained all required regulatory and supervisory approvals from the Croatian Financial Services Supervisory Agency (HANFA), the S.
• Public takeover offer: The public takeover offer aimed to acquire control over Addiko Bank AG did not obtain sufficient acceptance declarations.
• NLB Fondovi, Skopje: Asset management.

September · Completion of the acquisition of the SLS Group and entering the Croatian market: After obtaining all regulatory approvals in August, NLB completed the transaction contemplated in the Sale and Purchase Agreement to acquire a 100% shareholding in SLS HOLDCO, Ljubljana, the parent company of Summit Leasing Slovenija, Ljubljana and Croatian subsidiary Mobil Leasing, Zagreb, together forming the SLS Group.

· Completion of the acquisition of KomBank Invest, Beograd by NLB Skladi, Ljubljana: After obtaining regulatory approvals in September 2024, the NLB Group consolidates the ownership of the asset management companies under the umbrella of NLB Skladi, Ljubljana.

· Beginning of a mandate of a member of the Supervisory Board of NLB, following the ECB's decision not to object to his appointment to the function, to which he was appointed at the 42nd General Meeting of NLB.

Devastating floods in Bosnia and Herzegovina: NLB Group donated EUR 1 million to help eliminate the consequences of the disastrous floods in Bosnia and Herzegovina that occurred.

Society of Bosnia and Herzegovina and Pomozi.ba, to ensure that the aid reaches those most in need.

· NLB Fondovi, Beograd: KomBank Invest, Beograd was renamed NLB Fondovi, Beograd.

November 2024, Natalia Olegovna Ansell took up her office as a member of the Supervisory Board of NLB, following the ECB's decision not to object to her appointment to the function.

Market Stock of the Year: Ljubljana Stock Exchange awarded NLB for Prime Market Stock of the Year.

· Garmin Pay: Garmin Pay became available to NLB customers in Montenegro.

The Bank executed an early redemption of subordinated Tier 2 notes in the aggregate nominal amount of EUR 9.9 million (ISIN: XS2080776607).

December · NLB MUZA: The Bank successfully renovated its website (nlbgroup.com).

· Dividend payment: The Bank paid the dividends (the second tranche) of EUR 110 million or EUR 5.5 gross per share.

· Improvement material financial impacts from ESG factors, placing NLB in the top 5th percentile of all banks assessed by Morningstar Sustainalytics.

· Google Pay: After migrating its card issuing to a.

Pay to its customers.

· Notifications of major holdings change: Brandes Investment Partners, L.P. has increased its shareholding in the Bank above 5%, reaching 5.03%.

In a dynamic banking world, we seize opportunities. Our new business strategy foresees doubling the NLB Group’s balance sheet (to more than EUR 50 billion assets), recurring revenues of mo grow with purpose.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Shareholder Structure and Market Performance of NLB’s Shares and GDRs

Shareholder structure of NLB

The Bank’s shares are listed on the Prime Market sub-segment of the Ljubljana Stock Exchange and the GDRs representing shares are listed on the Main Market of the London Stock Exchange (ISIN: US66980N2036 and US66980N1046, London Stock Exchange GDR trading symbol as at 31 December 2024.

Shareholder	Number of shares	Percentage of shares
Bank of New York on behalf of the GDR holders	9,659,425	48.30
of which EBRD/ >5 and <10		of which 25.00
Other shareholders	5,340,574	26.70
Total	20,000,000	100.00

(i) This information is sourced from the NLB’s shareholders’ book that is accessible at the web services of CSD (Central Securities Depository) members. The information on major holdings is based on self-declarations by individual holders pursuant to the applicable provisions of Slovenian legislation, which require that the indirect holdings pass the set thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, or 75%. The table lists all self-declared major holders whose notifications have been received. In reliance on other entities nor any natural person hold directly and/or indirectly ten or more percent of the Bank’s shares.

(ii) The Bank of New York holds shares in its capacity as the depositary (the GDR holders have the right to convert their GDRs into shares. The rights under the deposited shares can be exercised by the GDR holders only through the GDR Depositary, and individual exercise any voting rights under the deposited shares.

(iii) The information on GDR ownership is based on self-declarations by individual GDR holders as required pursuant to the applicable declarations made by Brandes Investment Partners, L.P. on 5 December 2024.

25% + 1 share Republic of Slovenia 26.70% Other shareholders 48.30% Shares in GDR format GDR holders.

NLB Group Annual Report 2024

Overview

Market performance of NLB’s shares and GDRs

The EURO STOXX 600 Index saw a steady rise in Q1, supported by robust performances in the technology and healthcare sectors, while prices. The index experienced a slight dip in July and August due to market corrections, but rebounded in September as investor confidence returned. In Q4, the index closed the year with strong performances in the industrial and consumer goods sectors.

The EURO STOXX Banks Index had an impressive year in 2024. In the first two quarters, the index benefitted from high industry. The H1 saw significant gains as banks reported better-than-expected quarterly results. The momentum continued in H2, with the index climbing 21.4% over the year, marking its cost-cutting measures, which improved profitability.

The SBITOP Index grew throughout the year for the most part, driven by positive market sentiment and strong performances from key the first part of August, as the beginning of the third quarter brought some volatility, which was influenced by broader market corrections and economic uncertainties. A steady recovery gained approximately 33.4% YoY.

Throughout 2024, the NLB stock experienced various fluctuations, reflecting broader market trends and company-specific developments. The stock started in March. This increase was likely driven by positive market sentiment and strong quarterly earnings. During Q2, the stock continued its upward trend, peaking at EUR 126.5 in June. The peak conditions in Q3, the stock experienced some volatility, while the highest price of the year, EUR 136, was recorded at the end of July. However, the stock saw a slight decline towards the end of Q4, closing the year at EUR 127.5, reflecting a positive end to the year despite some mid-quarter volatility, gaining more than 50% in value during the year compared to YoY.

Figure 1: NLB Share price growth in 2024

GDR Shares (NLBR)	GDR (NLB) Shares
30.00	105.00
29.00	100.00
28.00	95.00
27.00	90.00
26.00	85.00
25.00	80.00
24.00	75.00
23.00	70.00
22.00	65.00
21.00	60.00

awarded NLB as "Prime Market Stock of the Year"

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB shares and GDRs

Table 3: NLB share information

Share information	31 Dec 2024
Total number of shares issued	20,000,000
Highest closing price (in 2024)	EUR 136.0
Lowest closing price (in 2024)	EUR 157.1
NLB Group earnings per share (EPS)	EUR 25.7
Price/NLB Group book value (P/B)	0.81
Dividend per share (for the previous business year)	EUR 11.00
Market capitalisation

Included in several indices: the SBITOP index, SBITOP TR index, and ADRIA prime index of the Ljubljana Stock Exchange, FTSE Frontier Index, MSCI Frontier, and MSCI Slovenia, S&P Frontier 150, S&P Frontier BMI, S&P Frontier Ex-GCC BMI, S&P Slovenia BMI, as well as the STOXX All Europe Total Market, STOXX Balkan Total Market, STOXX Balkan Total Market, STOXX Eastern Europe 300 Banks, STOXX Eastern Europe Large 100, STOXX Eastern Europe Total Market, STOXX Eastern Europe Total Market Small, STOXX Global Total Market.

The Bank participated in various forms of engagement, such as investor meetings, calls, conferences, and roadshows to meet the requirements of the Bank’s ownership. Transparent communication with the financial performance of the Group was promoted. The Bank aimed to enhance awareness and understanding of operating businesses, developments, and events that influence the performance of the Bank.

Throughout 2024, the Bank participated in more than 180 investor interactions, meeting with over 170 investors. Those meetings covered various topics, including governance (including remuneration), sustainability, digital transformation, and expanding analysts’ coverage beyond equity research, assisting the Bank with capital markets activities.

In December 2024, the Ljubljana received the "Year" accolade. IR presentations, financial reports, and important information are available on the Bank’s website in line with IR’s Financial Calendar. Expanded analyst coverage of NLB by Erste.

Income side: More than EUR 1.2 million in combined average regular trading volume per day (excluding block trades).

NLB Group Annual Report 2024

Overview

Macroeconomic Environment

The hope was that the euro area economy’s growth would gain traction in 2024, but it stagnated instead. Household consumption was the main driver of growth, remaining elevated, helping to reaccelerate inflation in the final quarter.

The global and European economies saw the U.S. dollar hit a two-year high versus the EUR and posted an annual gain higher than peers, leading the U.S. currency to dominate rivals. The USD has received a boost by rising growth concerns elsewhere against the background of geopolitical risk. The EUR registered fluctuations, and economic indicators shaped oil prices in 2024.

Chinese demand growth was underwhelming, leading to periods of price depression. At the same time, conflicts in the Middle East caused temporary spikes in oil prices due to fears of supply disruptions. Strong global oil production growth and slower demand growth exerted downward pressure on prices.

In 2024, the U.S. economy grew throughout the year, supported by a strong labour market and increased household incomes. Business investments increased significantly, particularly in technology and infrastructure. Fiscal concerns regarding the fiscal deficit remain. The U.S. saw a continued decline in inflation rates that enabled the FED to cut interest rates, which was accommodated by supply chain improvements (reduced bottlenecks).

Year-over-Year (YoY) inflation marked in Q4, partly driven by the low base effects from last year, particularly in energy and an increase in food prices. In 2024, China’s economic growth was driven by strong exports, despite these positive factors. China faced challenges such as weak domestic demand and demographic issues. The manufacturing sector significantly contributed to a sizeable growth confidence to the global economy, reinforcing its role as a key driver of global growth.

However, the euro area economy was hoping for a rebound in 2024 that never materialised, with growth marking in Q4 to reach an average of 0.9% YoY in 2024, while inflation reaccelerated in Q4. Household consumption, aided by increasing government consumption, posed as the main driver of growth.

This caused the retail trade to swing between mild contraction and soft growth in 2024. Therefore, the savings rate jumped by more than one percentage point during the first three quarters compared to YoY. Retail trade showed signs of weakness in subsequent quarters, boding poorly for future growth.

Exports started the year in contraction but broke into positive territory in remaining quarters, while imports contracted in H1 and returned to growth. The economy has been rapidly losing its competitiveness on the global market, leading to stagnation. While households saved more than in 2023, their investment rate diminished slightly, and their gross disposable income was affected.

Oil exports to Europe were down more than 20% YoY due to disruption in the Red Sea shipping lane. The gas transit deal between Russia and Ukraine expired on the last day of 2024, affecting the energy market.

NLB Group Annual Report 2024

Overview

The economic engine is in danger of further stalling, the inflation trend is on a negative trajectory, and governments are worried. Inflation in the euro area receded towards its 2% YoY goal, even dropping below the mandated target in September. However, inflation reaccelerated from then on, to the highest level in 2024. Inflation is expected to be very sticky throughout the year, while food prices growth was slowing down for most of the H2 (but started to grow in December again). Core inflation was slower in coming down and grew by 2.4% YoY in 2024.

Inflation in the euro area accelerated in November and December 2024, supporting the European Central Bank’s gradual approach to reducing interest rates. A large part of the increase comes from fuel price base effects. The boost was not surprising to the ECB, which has repeatedly warned that the path back to its 2% target will be bumpy, and the ECB is worried about the inability of the euro area economy to gain momentum while geopolitical risks remain elevated.

Should Donald Trump enact tariffs, this would pressure international prices, thus exporting its deflation to Europe. In 2024, the FED worked to back its narrative of achieving an economic "soft landing" – avoiding a recession while guiding inflation towards its target. The FED took significant steps to address economic challenges, mainly focusing on inflation and the labour market as it cut key interest rates three times throughout the year.

The FED cut the funds rate by 0.5 p.p. This move was aimed at providing relief to borrowers and addressing a slowing labour market, while the second rate cut of 0.25 p.p. followed in November 2024. The final cut of 0.25 p.p. arrived in December 2024 and brought the target range down to a range from 4.25% - 4.50%. Additionally, the FED was deflating its balance sheet, reducing its long-term treasury and dual mandate of maximum employment and price stability.

Despite this, the FED signalled a slower pace of rate reductions in 2025, reflecting ongoing concerns about inflation and economic risk due to presidential elections. The euro area economy never materialised, having a subdued Slovenia as the only country in NLB Group’s region to experience similar trends of development. At the same time, other countries were experiencing growth driven by government consumption, which was in most cases the driving factor of growth.

It was a good year for the region, attracting foreign and domestic investment. However, it was a weak year for Slovenia’s exports, which performed reasonably well only in Q3 2024, while they grew throughout the year in Serbia and in H1 in Kosovo but mostly contracted in the year in most countries. At the beginning of the year, prices grew above the 5% YoY mark in Serbia. The downward trend in prices persisted in H1 thanks to slower growth in food prices.

Montenegro, Bosnia and Herzegovina, and Serbia exhibited the highest YoY growth rates in retail trade, hinting at more vital household consumption.

NLB Group Annual Report 2024

Overview

Retail and services confidence indicators improving the most among the sub-indicators. The unemployment rates in the region were subsiding throughout 2024, reaching historically low levels in Q3 as the rate rebounded to 4.4% in Q3 from its historical minimum. In Q4, it rose further to 5.0%, bringing the average rate for 2024 to 4.1%. In historical context, this is a tight labour market.

Slowed marginally YoY, reflecting the uncertainty regarding the relatively stagnant growth and calls for additional taxation. Despite the softer industrial momentum, the manufacturing sector was more minor, predominantly due to a slowdown in Q2. In North Macedonia, conversely, the FDI inflows sped up YoY, especially so in Q3, reflecting a favourable investment climate and growth.

Flows sped up compared to YoY, reflecting Serbia’s strategic focus on diversifying its economy and enhancing its industrial base, as investments were focused on mining and construction, with real estate and leasing activities being the most significant beneficiaries. The 2024 was a year of stagnant growth and tight labour markets.

Macroeconomic Snapshot of NLB Group’s Region

The 2024 was a positive year for the region, driven by household and government consumption, while the stagnant euro area acted as a drag. Losing steam throughout the year, more than one p.p. from Q2 to Q3. This resembled the movement in household consumption which was very solid but grew at a slightly slower pace in Q3.

Formation, which grew throughout the year and even started approaching a double-digit annual growth in Q3, confirming the good work done in attracting investment. Government consumption brought the rate for 2024 to 3.9% YoY. Exports picked up from Q1, while imports accelerated notably in Q3, well into double-digit growth.

Inflation gradually came down from January until the end of the year, following similar dynamics exhibited by food prices. Housing and electricity prices were slowing down for the whole year. Industrial production started the year strong, but fluctuated as the year materialised. Retail trade confirmed strong private consumption, but its growth slowed in Q3.

The economy in Bosnia and Herzegovina held a steady pace in 2024, propped by household capital formation in Q1, and the rate was close to double digits in Q2 and Q3. Exports contracted in H1, while imports were slow to gain pace. The inflation rate hovered above the 2% YoY mark in November and December due to food prices accelerating again (above levels exhibited at the beginning and mid-year).

Industrial production was mainly in contraction (compared YoY) in H1 but slowing down in H2. The economy steadily gained pace in 2024 in North Macedonia thanks to strong governmental consumption, which grew throughout the year, experiencing a steady pace during the year.

Gross capital formation started the year strong, but stumbled in Q2 and in Q4. Exports contracted in the first three quarters of the year as did imports, only to a lesser extent. Inflation lingered in the 2.2%–4.3% YoY range, reaccelerating in H2 following the dynamics in food prices.

Industrial production contracted in all quarters, following the disappointing growth. The Slovenian economy grew at a stagnant pace of 1.6% YoY in 2024, primarily relying on household (averaging to 1.6% YoY in 2024) and state consumption; the latter picked up notably in Q.

Formation accelerated from Q1 to Q2, it plummeted into a deep contraction in Q3 and improved slightly in Q4, contracting by 2.4% YoY in 2024. Exports were stagnant at best in H1 but picked up below the 2% mark in June, slowing down to a halt in October and back to the 2% mark at year’s end, as food prices reaccelerated again (and prices of energy broke back into growth from very soft demand from abroad).

While retail trade switched between contraction and smooth growth which resulted in a 0.6% YoY contraction in 2024, hinting at not-too-confident domestic.

Household consumption, but with a fading momentum as government expenditure slowed throughout the year. Gross fixed capital formation YoY growth was among the region’s highest, with the following two quarters. Inflation sped up from January to March, but began slowing down from June to October when it reaccelerated again. Industrial production contracted notably throughout the year, finishing the year strong. Retail trade confirmed strong household consumption, growing throughout the year and finishing the year strong. The economy finished the Q4 in similar fashion.

Growth in Kosovo was solid, led by substantial household consumption that, however, started losing momentum through the year along with robust governmental consumption. Gross fixed capital formation started the year strong, but slowed into contraction in Q3. Inflation was already under control in January, but picked up slightly in H1 to slow down fast from August onwards. Industrial production grew strongly in Q1, contracted in Q2, and remained slow in Q3. 2.9% economic growth in the Group’s region in 2024.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

The banking system in the Group’s region 2024 was a stellar year for regional banking sectors, as profits remained high and the countercyclical capital buffers helped the banking system’s resilience.

Indicators (i)	Corporate loans	Household loans	Corporate deposits	Household deposits	Net interest margin	NPL	CAR in EUR millions
Slovenia	9,762	-2.1	13,311	6.0	10,910	-0.3	27,309
	3.0	3.1	1.5	0.1	19.7 (i)	-0.7
Serbia	15,988	7.9	13,814	10.4	18,433	15.1	21,840
	13.4	4.0	4.1	2.5	-0.7	21.9 (i)	-0.3
North Macedonia	9,006	6.5	4,143	14.6	9,025	9.9	3.3
	3.0	(i)	3.5	(i)	-0.5	19.5 (i)	0.2
Kosovo	3,475	15.8	2,325	22.6	2,299	13.9	4,623
	13.9	3.2	2.5	1.9	-0.1	16.2	2.5
Montenegro	1,678	14.9	2,028	17.0	2,142	-2.7

Note: Net interest margin calculated on interest-bearing assets. Residential loans and deposits for Montenegro. Slovenia was the only country where NFC loans contracted, while clocked in right under that milestone. The decrease in corporate loans suggests potential challenges in the corporate sector, possibly due to economic uncertainties and strict lending criteria.

Double-digit growth rates in three countries, while one finished the year right under that mark. The healthy household loan and deposit growth indicated consumer confidence and economic stability.

The 5% mark. From there, they started diminishing towards year-end to 4.3% in December. In contrast, interest rates for consumer loans went down only marginally, opening the year with a touch more intense dynamics, declining to 3.1% in December from 3.9% in January. In Serbia, a similar dynamic ensued in all three categories as during the year, corporate loan rates surged.

Figure 2: ROE ratio in the euro area and NLB Group region

Source: ECB, National CBs. Note: Return on average equity for Bosnia and Herzegovina and Montenegro are for Q3 2024.

Country	ROE (%)
Slovenia	9.3%
Euro area	10.2%
Serbia	20.6%
Montenegro	18.9%
Kosovo	18.0%
North Macedonia	20.2%
BiH	16.1%
	17.6%
	16.7%
	17.9%
	19.7%

---

NLB Group Annual Report 2024

Overview

While real estate loan interest rates decreased by 0.3 p.p. in the same comparison. However, rates for consumer loans went up by 0.15 p.p. from the start of the year. The situation differed in Kosovo, where the rates for corporate loans decreased by 0.35 p.p., and by 0.75 p.p. in consumer loans, while in real estate, they decreased by 1.1 p.p., in consumer loans by approximately 1.0 p.p., and 0.6 p.p. in real estate loan rates during the course of the year.

The decrease in NPLs in most countries indicates stable and solid liquidity and good credit portfolio quality, which means that the banking system can support economic growth – particularly investment. Due to ECB lowering rates, both categories improved in 2024 in most countries of the NLB Group’s region. There were fewer challenges (than anticipated) in maintaining profitability; hence, 2024 was a year to remember.

They increased their profits by using their deposit base to generate higher income, albeit increasing credit risk and reducing liquidity at the same time.

Figure 3: Loans to non-financial corporations and households

CBs, National Statistical Offices. Note: Data from Q3 2024 for Bosnia and Herzegovina and Kosovo, Residential loans for Montenegro.

Figure 4: LTD ratio in the euro area and NLB Group financial corporations, % GDP

Household loans, % GDP	34.3%	45.8%	14.9%	19.8%	18.1%	16.7%	24.6%	26.1%	20.5%	24.7%	31.6%	21.6%	20.2%	26.0%
Slovenia	Euro area	Serbia	Montenegro	92.9%	60.1%	60.4%	74.3%	73.0%	81.6%	81.5%	75.1%	76.2%	80.2%	84.0%	62.2%	68.9%

---

NLB Group Annual Report 2024

Overview

Regulatory Environment

The Group consistently monitors regulatory developments to maintain full compliance and adapt to new standards. By leveraging technology, strengthening internal processes, and ensuring robust governance, the Group is presented herein as a reliable and forward-looking financial institution committed to meeting the challenges of an evolving regulatory environment and ensuring full compliance with the existing and new requirements.

Regulatory environment in Slovenia

In 2024, significant regulatory developments at both the EU and Slovenian levels influenced the banking sector, prompting changes that reflect the dynamic nature of the regulatory landscape and the Bank’s commitment to maintaining the highest standards of compliance, governance, and risk management. Financial Regulation (CRR III) and Capital Requirements Directive (CRD VI) marked a significant milestone in the implementation of the final elements of Basel III within the EU. Effective as at January 2024, these regulations impact operational risk and capital adequacy frameworks.

The Bank has proactively assessed the impact of these changes, updated its risk management systems, and initiated measures to ensure compliance. The EU regulation on instant payments denominated in euro was adopted, making instant payments the standard across the EU. This framework aims to enhance affordability, security, and accessibility, with deadlines throughout 2025. The Bank is implementing the necessary measures and activities to ensure full compliance with these deadlines, aligning its payment systems and processes accordingly.

Digital Operational Resilience Act (DORA)

In December 2022, the Digital Operational Resilience Act (DORA) Regulation was published in the EU’s Official Journal alongside the revised directive on the security of network and information systems. Significant progress was made in the DORA regulatory framework by adopting Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS). These standards outline detailed requirements for oversight of third-party ICT service providers, further clarifying DORA’s implementation ahead of its application in January 2025. The Bank has taken significant steps to align with DORA, including enhancing incident reporting processes and strengthening governance over third-party ICT service providers. These efforts ensure that the Bank is well-prepared to meet the regulation’s requirements.

Sustainability

Sustainability remained a key priority in 2024, as several regulatory advancements shaped the ESG landscape:

• The Corporate Sustainability Due Diligence Directive (CSDDD) introduced requirements for companies to assess and address human rights and environmental impacts throughout the value chain.
• The regulation on ESG Ratings established standards for transparency and reliability in ESG rating activities, enhancing comparability for stakeholders.
• Amendments to the Corporate Sustainability Reporting Directive (CSRD) mandated companies to disclose sustainability information using the European Sustainability Reporting Standards (ESRS).

---

reflecting its commitment to transparency, accountability, and sustainable growth. Regular internal policies and process updates ensure the Group remains aligned with evolving ESG standards.

2024 Regulatory Developments

In 2024, the EU adopted the sixth Anti-Money Laundering Directive (AMLD VI), further harmonising measures to combat money laundering and terrorist financing across member states. The number of changes in the regulatory environments with material effects, published in 2024, includes:

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Payment Services and Compliance

In 2024, Slovenia adopted the Payment Systems Act (ZPlaSSIED-B) to align with evolving EU regulations. The updated act focuses on enhanced transparency, user protection, and operational security in payment systems compliance with the new requirements, further reinforcing its commitment to providing secure and transparent payment services.

Regulatory Environment in the Group’s Region

The regulatory actions ensure the stable functioning of financial systems. In Serbia, the Law on Amendments and Supplements to the Law on Payments Services, implementing the PSD2, was adopted to enhance competition and transparency in providing payment services, primarily by introducing a payment initiation service and account information service. It also strengthens customer protection for service providers in case of suspected fraud and abuse.

The obligations regarding strong customer authentication and communication standards between payment service providers and payers are outlined in the Standards for Strong Customer Authentication and Common Secure Open Standards of Communication, which shall be applicable as of 1 January 2026. Additionally, the new Decision on ICT system risk management was adopted, with an application date as of 1 January 2026. This decision provides detailed regulations on managing ICT incidents and their reporting and overall information security.

The Law on the Protection of Financial Service Consumers was also published. Novelties of the Law on Banks mainly focus on the internal control system, competencies, and organisation of the National Bank of Serbia (NBS). One of the main novelties is mystery shopping in the area of financial services, along with the possibility of audio recording of employees without their consent.

Amendments and New Laws

Amendments and Supplements to the Law on the Prevention of Money Laundering and Financing of Terrorism, and the Law on Amendments and Supplements to the Law on Freezing of Assets were adopted in November 2024. The most significant amendments relate to the definition of a beneficial owner, the obligation to assess the risk of financing the proliferation of weapons of mass destruction, and the payee’s payment service provider to reject payment transfers if it has not collected and verified the payer’s data. There are also restrictions on cash transactions and new obligations for banks to retain and process data.

Macedonia continued the process of harmonising its legislation with the Law on Payment Services and Payment Systems, along with related by-laws. Several new by-laws were adopted or already implemented. Two new laws were adopted: the Law on Prospectus and Transparency Obligations of Issuers of Securities, which largely aligns with the European regulations.

December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market), and the Law on instruments and Regulation (EU) No. 600/2014 on markets in financial instruments – MiFID II, as well as other EU directives. These laws were adopted with a delayed application period adopted throughout the year.

The National Bank of the Republic of North Macedonia adopted several significant acts, including: the Decision on Amending and Supplementing the Decision on the Methodology for Determining Capital Adequacy; the Decision on Mandatory Reserve; the Decision on Amending the Decision on Determining the Re Standards; and the Guidelines for Consumers with Disabilities in the Banking Sector from the NBRNM. Additionally, a new Rulebook on the security of personal data processing with a p important regulatory decision in 2024 was the adoption and implementation of the new AML/CFT Law. This regulation harmonises local legislation with elements of the 5th and 6th AML/C of clients, additional indicators of suspicious transactions, specific methods for determining and recording the beneficial owner, and more.

In the same year, implementing acts related to this to ESG continued throughout 2024. In August 2024, the regulator published a draft of a new Decision for Managing the Information Systems in Banks. The draft proposes a clearer and more requirements for the supervision of information systems by the regulator. Banks provided comments on the draft, but the Decision has not yet been adopted.

Following the catastrophic flood NLB Group Annual Report 2024 30 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis NL supervisory expectations regarding the treatment of banks and ensuring business continuity in emergency situations. The aim of these expectations is to ensure adequate business continuity introduced a set of decisions related to the reporting on persons in a special relationship with the bank and maintaining mandatory reserves. The mentioned regulation is in the implementation sector in the Republic of Srpska, several decisions on temporary measures have been made, among which the most important are a Decision on Temporary Measures for the Approval of R Temporary Measures for the Approval of Reliefs to Legal Entities for Settlement of Credit Obligations. These measures aim to grant relief to bank clients by reprogramming or restructuring on Amendments to the Family Law (the amendments exclude "cash" from the property of minors that parents could dispose of with the prior consent of the guardianship authority), and the allowing foreign exchange payments and disbursements of cash foreign currency to be made, not only between accounts of the same person, but also to the foreign exchange account of a c loans, defining the procedure for payments and collections on behalf of participation in syndicated loans.

At the national level, the Parliamentary Assembly of Bosnia and Herzegovina has introduces several updates, such as new terms like "virtual currency," "provider of services related to virtual currencies," "electronic money," and alignment of the definition of politically e and monitoring measures for clients from high-risk countries, provisions on cash payment restrictions, and new reporting obligations to the Financial Intelligence Unit. The manner of cooperation are defined more clearly and strictly.

In late November 2024, the Kosovo Assembly adopted a package of laws, including the updated Law on Banking and the Law on Payment Services. The bank actively participated and contributed to the amendment of these laws which impact banking processes. Following the enactment of the Payment and Services Law, within the SEPA (S with EU requirements, the Central Bank adopted several regulations which will come into force in 2025, 10 days after the law becomes effective. In addition to SEPA-related regulations, the activities concerned the implementation of the requirements from the Regulation on Register of Banking Accounts, the Regulation on Directors and Senior Managers of Banks, the Regulation on Prevention of Money Laundering and Financing of Terrorism, the Regulation on Information That Should Accompany Fund Transfers, Guidance on Policies and Procedures for the Effective mentioning the ongoing efforts and activities by the bank and the banking sector to implement electronic/digital signatures. In 2024, the main activities in Montenegro focused on implementing.

bylaws. The most important novelties introduced by the law include: the obligation for an authorised person to possess a license for the prevention of money laundering and terrorism financing; access the Register of Beneficial Owners (a certain data set); preventing clients from using falsified personal documents by prescribing the possibility for the obligee of the Law to use the client; strengthening of the supervision over the obligee of the law (direct and indirect supervision); establishment of the Register of Politically Exposed Persons, and the Register of Ac.

obligation to appoint a member of the governing body – responsible for the implementation of the law; additional data needed when transferring funds; verification of PEP status for life in correspondent banks in the event of customer identification and verification; the amount of penalties in case of non-compliance with the provisions of the law up to EUR 1 million. To inte.

Montenegrin Central Bank (MCB) adopted the Decision on the Requirements for Credit Transfers and Direct Debits in Euro within the SEPA, which requires certain adjustments to banks’ SEPA-related requirements. An important amendment has also been made to the Decision on the Remuneration in Credit Institutions. By amending the Decision, the postponement applies EUR 30 thousand and 30% of fixed income on an annual basis. There is no deferral of remuneration for employees whose variable remuneration is equal to or below the stated thresholds.

Collaboration, dedication, and a shared vision drive business success. The Business Report provides a detailed analysis of the NLB Group’s financial and operational performance, highlighting st compliance, risk management, and key business updates.

BUSINESS REPORT

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

NLB Group introduced its new Group Strategy 2030 in May 2024. The new strategy equally balances revenue generation based on best practices (housing financing, bancassurance) and the transformation of NLB into the leading operating platform in the region through rigorous simplification and digitalisation, while maintaining its prudent risk practices. The Group has continued its home region, actively participating in market growth and consolidation, and promoting the ESG agenda.

In May 2024, the Group introduced its new Group Strategy 2030, key performance indicators, and how the Group responds to the changing banking environment and upcoming challenges and addresses new opportunities. The Group’s ambition remains to create sustainable growth to support individual needs.

NLB Group balancesheet to more than EUR 50 billion in assets, recurring revenues of more than EUR 2 billion, and a profit of more than EUR 1 billion by 2030 (combining organic growth and strategic investments).

The Group prioritises customers’ needs, delivering on its shareholders’ expectations, ensuring stability, nurturing talent, and fostering culture. Firstly, the Group continuously focuses on enhancing in-class support, products, and solutions. It also focuses on providing all mass banking services and their seamless experience through digital platforms, using advanced technology to deliver excellent returns to its shareholders, aiming to increase the pay-out ratio to 50–60% of the previous years’ profit after tax throughout the period.

The Group is also committed to ensuring stability in financial services across all SEE target markets, supporting the economy, the community, and sustainability, as well as promoting culture and sports. Additionally, the Group focuses on developing employees of the future, ready to thrive in the face of tomorrow’s challenges.

It foresees doubling NLB Group’s balance sheet, revenues, and profit by 2030.

Figure 5: NLB Group's Strategy 2030 key focus

• Delivering on our shareholders expectations: NLB Group aims to increase prudent risk management and strategic investments, safeguarding the financial welfare of the Group and broader economy, supporting Southeast Europe’s development.
• Nurturing talent: Developing employees of the future, ready to thrive in the face of tomorrow’s challenges.
• Prioritising customer’s needs: We will focus on enhancing our customers’ user experience across bancassurance, consumer finance and sustainable financing, and increase digital penetration in our home region.
• Ambitious growth across the SEE region: NLB Group aims to double its balance of recurring revenues and EUR > 1 billion profit.

* Incorporation by reference: The reference is made to this chapter from the Sustainability Statement chapter SBM-1 Strategy, business model.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Retail Banking Segment

In the retail banking segment, the strategic goal by 2030 is to be the leading bank in SEE, to increase the number of customers to over 3 million and achieve more than monetising its existing client base, doubling down on attractive sub-segments, and scaling its product verticals around key customer needs. At the same time, the Group will consciously innovate its delivery model with mobile as the core channel. The Group will move to an advisory-driven branch model, offering a market-leading customer experience on par with international best practices, with a commitment to developing the market for investments and financial protection/insurance across the region.

Corporate and Investment Banking Segment

The Group aims to become the strategic corporate and investment banking leader in the region while driving SME and trade finance, and remaining stewards of prudent risk management. To enable the strategy, the Group will innovate its operating model and underwriting. At the same time, the Group remains deeply committed to the region; accordingly, the Group Corporate and Investment Banking will position itself as the leader in transition investment opportunities to outside investors.

Payments

The Group’s ambition in the field of payments is to support NLB’s growth path towards becoming the leading bank in SEE and driving the cash transition in the markets in which the Group operates. The Group’s strategic goal in the field of payments is that by 2030, the share of mobile active users will exceed through three lines of attack: driving the regional cash transition, focusing on merchant acquiring, and developing new propositions. Payments will also positively contribute to the societies, prosper, increase financial inclusion, and combat the shadow economy.

Further information on the Group Strategy 2030 is available on the NLB website.

SBM-1 Strategy, Business Model, and Value Chain

---

NLB Group Annual Report 2024

34 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Funding Strategy, MREL Compliance, and Capital

Fostering strong client relationships is vital for maintaining a stable and growing deposit base. At the same time, wholesale funding focuses on average funding costs. Nonetheless, the overall funding costs remain low thanks to a reliable deposit base and the stability of sight deposit pricing, which remains unaffected by market fluctuations for the NLB Group, and each bank within the Group has established processes that enable prudent strategic deposit management aligned with business targets and regulatory requirements.

Necessary due to business or regulatory-related reasons. Following the disruptive 2020–2023 period, when NLB Group still maintained a healthy liquidity profile, year 2024 brought inflation. The liquidity position remained robust, with a slightly increased LTD ratio still cruising below 75% through 2024, thus representing a strong structural liquidity position that enables the realization of investment opportunities.

Proactive client relationships and a sound franchise name are crucial for maintaining a stable deposit base. The Group’s fund pricing adheres to international standards, and effective deposit management is essential. In 2024, the significance of agile deposit pricing and active client engagement was further emphasized in competitive markets. All Group banks defended their market positions, aligning with induced trend reversals on deposit markets, prompting NLB Group banks to gradually stabilize deposit interest rates to align with interest rate dynamics on the asset side in terms of business.

The most stable funding source, with around 80% insured by the Deposit Guarantee Scheme. Despite persistently competitive circumstances in deposit markets, Group retail deposits recorded stability, representing 82% of the Group’s total retail deposits, signaling a stable deposit structure supporting planned business performance. Corporate sector deposits represent around 30% of the NLB Group. Due to the economic outlook in recent years, the Group’s corporate deposit base became stronger, grew at a notable pace, and remained structurally stable also in 2024 as well. The overall cost of funding is illustrated in the following table.

Figure 6: Average cost of funding (quarterly data)

Quarter	Q1 2024	Q2 2024	Q3 2024	Q4 2024
Cost of Funding	6.13%	5.96%	6.10%	5.78%
Other Costs	0.98%	1.04%	1.04%	1.01%
Additional Costs	0.53%	0.55%	0.55%	0.56%

---

NLB Group Annual Report 2024

35 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Wholesale funding and MREL

Wholesale funding activities in the Group aim to achieve diversification, improve structural liquidity and capital position, and fulfil regulatory requirements capital markets in 2024, issuing 10NC5 subordinated Tier 2 notes in January to improve the capital position and 6NC5 senior preferred notes in May for MREL purposes.

The Preferred Re strategy. Bail-in at the level of NLB is the primary resolution tool to be applied during the stabilisation phase. Within the NLB Group, seven resolution groups are designated. The resolution group is headed by the banking subsidiaries located in non-EU countries (Bosnia and Herzegovina, Montenegro, and Serbia, while Kosovo and North Macedonia have not yet implemented MREL).

Leasing, SLS Group, NLB Skladi, Other SLO SRB NLB Komercijalna Banka, Beograd MNE NLB Banka, Podgorica BIH NLB Banka, Banja Luka BIH NLB Banka, Sarajevo RKS NLB B the only banking member and other non-banking members, the latter representing 13% in TREA. The entities and their contribution to TREA of the NLB Resolution Group are presented in the table below:

Entity	31 Dec 2024
NLB d.d.	8,782
SLS Group	830
NLB Lease\&Go, leasing, Ljubljana	279
NLB Lease\&Go Leasing Beograd	96
NLB Skladi, Ljubljana	66
Other	63
TREA total:	10,115

NLB h requirement applicable as of 1 January 2024, which amounts to:

• 30.66% of TREA + applicable CBR (4.38% on 31 December 2024),
• 10.69% of LRE.

On 31 December 2024, the MREL level. SEE banking members in Bosnia and Herzegovina, Serbia, and Montenegro are subject to local MREL requirements.

Figure 8: Evolution of MREL eligible funding (in EUR millions)

Year	Funding (in EUR millions)
1	1,057
2	2,358
3	964
4	2,041
5	489
Realised MREL ratio	CET1+T1+T2
MREL requirement (including CBR)	MREL deposits and senior funding

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Capital and Capital Adequacy

Pillar 1	Pillar 2	TSCR	Combined Buffer	P2G
1.00%	2.53%	1.90%	11.07%	4.38%
2.00%	0.53%	2.53%	1.50%	0.40%
1.90%	4.50%	1.19%	5.69%	8.00%

NLB ensures ongoing compliance with capital adequacy requirements set out by the applicable regulatory framework. These requirements are defined by the Supervisory Review and Evaluation Process (SREP) to enhance financial stability. At the end of 2024, the Bank’s Overall Capital Requirement (OCR) on a consolidated basis was 14.50%, which is slightly lower (by 0.01%) than at the end of 2023, reflecting a decrease in the Countercyclical buffer by 0.26%. The OCR comprises:

• Total SREP Capital Requirement (TSCR): 10.12%, which includes:
• • 8.00% Pillar 1 requirements
• 2.12% Pillar 2 requirements

Conservation Buffer
- 1.25% O-SII Buffer
- 0.52% Countercyclical Buffer (CCYB)
- 0.11% Systemic Risk Buffer

In addition to the mandatory capital requirements, the regulatory framework requires the Group to maintain a capital buffer, which serves as a safeguard against severe economic stress scenarios.

The Bank of Slovenia has increased the countercyclical capital buffer for exposures in Slovenia from 0.5% to 1.0% for all retail exposures to natural persons secured by residential real estate and 0.5% for all other exposures to natural persons.

Key Developments During the Year

NLB received a new SREP decision on a consolidated basis for 2024. As per the decision, the Pillar 2 Requirement was reduced by 0.28 percentage points to 2.12%, reflecting an improved overall SREP assessment. The countercyclical capital buffer for the NLB Group was 0.52% (or 26 percentage points increase YoY), also affected by the CCYB buffers of the Group members (NLB, NLB Banka, Skopje, and NLB Banka, Podgorica).

Future capital buffer rates in Slovenia will be implemented as follows:

• The CCYB rate for exposures in Slovenia will increase from 0.5% to 1.0%.
• The sectoral systemic risk buffer for retail exposures to natural persons will also be adjusted.
• In addition, the CCYB for the Group is expected to be higher due to the introduced CCYB in the Group members (NLB Banka, Skopje, and NLB Banka, Podgorica).

Figure 9: NLB Group Capital

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL adequacy

Table 6: Capital realisation YoY and surplus over the regulatory requirement of the NLB Group as of 31 December 2024 in EUR millions
31 Dec 2024	31 Dec 2023	Change YoY	Surplus
Capital	2,872	2,598	275	510
Total capital	3,411	3,109	302	588
Total risk exposure amount (RWA)	18,216	15,337	2,879
Common Equity Tier 1 Ratio	15.29%	16.36%	-1.07 p.p.	4.22 p.p.

As at 31 December 2024, the Group’s TCR stood at 18.7% (or 1.5 p.p. decrease YoY), and the CET1 ratio stood at 15.3% (or 1.1 p.p. decrease YoY), which is well above requirements. The capital increased by EUR 302.1 million YoY. The Group increased its capital by partially including 2024 profit (EUR 257.0 million) and revaluation adjustments (EUR 56.5 million).

Thresholds

Figure 11: NLB Group CET1 (in EUR millions), realised CET1 ratio and regulatory requirement

Figure 12: Capital (in EUR millions) and capital ratios of NLB Group – evolution YoY

	31 Dec 2022	31 Dec 2023	31 Dec 2024
TCR realised	15.50%	15.51%	15.10%
Tier 1	19.15%	20.27%	18.73%
Capital	2,786	2,510	2,208
Result	11.07%	10.96%	10.46%
OCI + other SLS Group impact	15.07%
RWA impact	20.3%	1.4%
31 Dec 2024	3,109	3,411	0.3%
Capital	-0.8%		-2.5%
TCR	18.7%

---

NLB Group Annual Report 2024

38 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Dividend payout

The total cumulative payout in the year amounted to EUR 220.0 million. The dividend payout was structured into two tranches. The first instalment of EUR 110.0 million was paid in December 2024.

Total risk exposure dynamic

In 2024 (YoY), the RWA of the Group for credit risk increased by EUR 2,340.3 million due to lending activity in the corporate sector. RWA increased by EUR +698.0 million. RWA for high-risk exposures increased due to new project financing loans and withdrawal of previously approved project finance loans. Furthermore, higher liquidity surpluses were placed at commercial banks. Starting from 1 January 2025, the calculation of RWA for credit risk is based on CRR3 regulation. NLB Group is using the Standardised approach as expected. Nevertheless, the cumulative result of the new regulation will lead to the increase in RWA, primarily due to increased credit conversion factor (CCF) for unused credit lines and the domestic currency. Partially, the increases will be compensated by more favourable risk weights for residential real-estate collateral. The increase in RWAs for market risks and Credit Value Adjustment (CVA) risk amounted to EUR 58.6 million (mainly the result of more open positions in domestic currencies of non-euro subsidiary banks), and slightly higher RWA for CVA risk of EUR 2.4 million (calculating excluding previous years).

RWA structure (in EUR millions)

Date	RWA	RWA / Total Assets
31 Dec 2021	10,205	59%
31 Dec 2022	12,667	61%
31 Dec 2023	14,653	59%
31 Dec 2024	15,337	65%
	18,216
	1,218
	1,410

Operational risk

CAGR: 12.9% YoY: 18.8% The increase in the RWA for operational risks (EUR 478.9 million YoY) derived from the higher net interest and net fee and commission income in Slovenia, resulting in a higher three-year average of relevant income. There were no significant deviations from previous years in the other components used in the calculations. Further details can be found in the Annual Report and in Pillar 3 Disclosures.

NLB Group Annual Report 2024

39 Overview

Factors and Outlook

Risk factors

Risk factors affecting the business outlook are (among others):

• The economy’s sensitivity to a potential slowdown in the euro area or globally
• Potential high inflation
• Energy and commodity price volatility
• Increasing unemployment
• Geopolitical uncertainties
• Potential cyber-attacks
• Litigation risks
• Regulatory, other legislative, and

While other countries in NLB Group’s region were growing faster, with household consumption being the main driving factor of growth. Wage growth remained elevated, impacting to react interest rate trends, peaked in 2024. Nevertheless, potentially high inflationary pressures, increased unemployment, lower-than-expected GDP growth, and geopolitical and other uncertainties usually increase considerably in times of an economic slowdown.

During 2024, the Group’s credit portfolio remained high-quality and well-diversified, with a stable rating structure and low risk. This is particularly important as geopolitical tensions, the green transition, and other macro developments could materially impact specific industry sectors. The Group monitored the macroeconomic increase in credit risk at a very early stage and was proactive in NPL management.

Furthermore, unfavourable trends in the German automotive industry did not severely influence the Slovenian market. In stage 2, additional impairments were formed, though the overall cost of risk remained at a relatively low level. The aforementioned adverse developments could affect the cost of risk and there can be no certainty that they will be sufficient to ensure the Group’s credit portfolio quality or that the corresponding impairments will remain adequate.

The investment strategy of the Group is expected market trends in accordance with the set risk appetite. Investment activity continued with a balanced approach to finding attractive market opportunities while pursuing a well-managed portfolio.

Volatility in the financial markets, particularly shifts in credit spreads, interest rates, and foreign exchange rate fluctuations, impacted the Group. The Group closely monitors its prominent bond portfolio and has established early warning systems to limit the potential sensitivity of regulatory capital. So far, no material movements regarding the Group’s significant FX positions have been observed.

Current developments are discussed. While the Group monitors its liquidity, interest rate, credit spread, FX position, and corresponding trends, their impacts on the Group positions, and any significant and unanticipated consumer confidence, or other certain factors outside the Group’s control, could adversely affect the Group’s operations, capital, and financial condition.

Special attention is paid to the control of cyber-attacks and potential fraud events. The Group has established internal controls and other measures to facilitate adequate management. However, these measures may only sometimes be entirely effective.

more so in recent periods, the Bank has seen a shift in case law that is generally more favourable to consumers, e.g. litigation cases related to loan processing fees and loan insurance premiums in the number of proceedings against the Bank, which was expected. The current litigations against the Bank referring to CHF are less material, but the Bank is closely monitoring developments and financial services. Respectively, it faces the risk of significant interventions by several regulatory and enforcement authorities in each jurisdiction in which it operates, including changes.

The SEE region is the Group’s most significant geographic area of operations outside the RoS, and the economic conditions in this region are, therefore, crucial to the Group’s operations and any regional instability or economic deterioration. In this regard, the Group closely follows the macroeconomic indicators relevant to its operations:

• GDP trends and forecasts,
• Economic Deposit stability and growth of loans in the banking sector,
• Credit spreads and related future forecasts,
• Interest rate development and related future forecasts,
• FX rates,
• Energy and commodity prices.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

In 2024, the Group regularly reviewed the IFRS 9 provisioning by testing the relevant macroeconomic scenarios to adequately reflect the current circumstances and their future impacts. The Group's Credit Losses (ECL) calculation aims to create a unified projection of the macroeconomic and financial variables for the Group, aligned with the Bank’s consolidated view of the future of associated probability of occurrence for forward-looking assessment of risk provisioning in the context of the IFRS 9. These IFRS 9 macroeconomic scenarios incorporate the forward-looking change when material changes in the future development of the economy are recognised and not embedded in previous forecasts.

The baseline scenario presents a forecasted macroeconomic professional forecasts, with specific adjustments for individual countries of the Group. Key characteristics include decreasing inflation as the energy-related impact on goods and services, interest rates, and strong private consumption due to real wage growth, a resilient labour market and positive expectations, industry and export activity pick-up, and the limited spillover effects on the economy.

The alternative scenarios are based on the plausible drivers of economic development over the next three years. The optimistic alternative scenario demonstrates supply-driven potential – keeping a lid on inflation pressures. Labour skill mismatches are addressed through targeted training programs. Automation and technology adoption create new job opportunities, confidence rebounds. Consumer spending picks up, contributing to overall growth. The ECB considers both demand and supply factors when setting interest rates. In this scenario, the ECB meets its target.

The severe alternative scenario paints a picture of bleak economic developments, where supply constraints, geopolitical tensions, technological shifts, and labour market disruptions hinder investments. Policymakers must navigate these challenges to ensure stability and sustainable growth. This adverse scenario results in a prolonged global recession, with growth falling well below the ECB's expectations. The Bank considers these scenarios when calculating expected credit loss.

The assigned weights were 20%–60%–20% (alternative scenarios receiving 20% each, and the baseline scenario 60%). The Group established a comprehensive internal stress-testing framework integrated into the Risk Appetite, the Internal Capital Adequacy Assessment Process (ICAAP), the Internal Liquidity Adequacy Assessment Process, to assess how unexpected changes in the business, geopolitical, and macro environments might affect the Group’s capital adequacy or liquidity position. The stress-testing framework and recovery plan is...

Circumstances, including capital and liquidity positions from a forward-looking perspective. Risk Management actions that the Group might use are determined by various internal policies. Measures follow a three-layer approach, considering the feasibility analysis of the measure, its impact on the Group’s business model, and the strength of the available measure. Outlook T and is not a guarantee of future financial performance. The NLB Group is pursuing various strategic activities to enhance its business performance. The interest rate outlook is uncertain economic sentiment. GDP growth in the euro area should accelerate in 2025. Private spending will gain traction on lower inflation, and fixed investment is set to rebound due to looser financing.

Germany’s industrial sector. Still, high long-term interest rates could pose a problem for new investments (especially in industry) and governmental borrowing. In Slovenia, economic growth in real income growth, and gradually improving consumer confidence. Public investment is expected to improve due to the increased use of EU funds. Export demand is likely to increase as the economic growth forecast, while those on the inflation side are slightly tilted to the upside. The domestic economic environment remains subject to structural challenges, which are, among other things, unfavourable demographic picture. The unemployment rate is forecast to rise marginally in 2025 and remain low for the remaining years, suggesting a tight labour market. Economic growth in the spending should accelerate. Moreover, exports are expected to rebound due to stronger EU demand. Cooling inflation and looser monetary conditions will boost household spending, while export consolidation efforts, and looser financing conditions will underpin a sharper rise in fixed investment. The NLB Group’s region is growing by 2.9% YoY in 2024, and is expected to grow by 3.3% in 2025; however, the FED’s policy stance is a key factor to watch.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

7: Movement of key macroeconomic indicators in the euro area and the NLB Group region

GDP (real growth in %)	2023	2024	2025	2026
2.2	2.0	2.0	6.5	6.4	6.6	6.5	6.3	Slovenia	2.1	1.6	2.3	2.6	2.6	7.2	2.0	2.5	2.2	2.0	3.7	4.1	4.0	4.0	3.9	Serbia	3.8	3.9	4.2	4.2	4.0	12.1	4.7	3.7	3.2	3.0	9.5	8.6	8.3	8.1	7.9	N. Macedonia	1.0	2.7	3.1	3.2	3.2	9	12.3	11.8	11.7	10.0	9.5	Montenegro	6.3	3.2	3.4	3.3	3.4	8.6	3.3	2.6	2.5	13.1	11.5	10.7	10.3	10.0

Note: NLB Forecasts are highlighted. Provided a solid base for the Group to deliver on its guidance, with some key indicators exceeding initial expectations. Recurring income surpassed the forecasted EUR 1,200 million, reaching the initial "high single-digit" target. The Cost-to-Income Ratio (CIR) was in line with our guidance at 45.7%, reflecting the seasonality of year-end bonuses, strategic investments, and other 14 bps for the year. The RoE a.t. of 16.5% and normalised RoE of 25.5% further highlight the Bank’s ability to generate value for shareholders. The Bank paid the second tranche of dividend EUR 220 million, which amounts to EUR 11 gross per share, represents 40% of the 2023 profit and underscores the Bank’s commitment to meeting its established targets.

Looking ahead to reflects a balanced approach to maintaining profitability amidst a forecasted lower interest rate environment. Despite these headwinds, the Group remains committed to disciplined cost management approximately 48%, influenced by the integration of SLS Group, coupled with ongoing strategic investments into the acceleration of mobile/digital-first transformation, and in 2030 the target digital solutions. These efforts aim to enhance the Group’s operational capacity and position it for sustained growth in the medium term. The cost of risk in 2025 is expected to normalise by dynamic lending environment. Loan growth is expected to remain robust at high single-digit levels, driven by the Group’s strategic focus on core market expansion while preserving sound GDP growth rates and lower indebtedness across both retail and corporate segments in the region. The continued momentum in loan growth is anticipated to enhance revenue generation with projects recurring income to exceed EUR 1,300 million, reflecting the benefits of strategic initiatives and improved operational efficiencies driving the CIR below 48%, and realising the benefits is expected to remain within the 30–50 bps range, maintaining the Group’s conservative risk posture. Loan growth is forecasted to sustain its high single-digit trajectory, accentuating the Bank’s performance. Shareholder returns will remain a priority, with dividend payouts expected at 50% of 2024's profit, presumably in two trenches in 2025, and reaching 50–60% of the 2025's profit.

RoE should remain above 20%, underscoring the Group’s strong capital generation capabilities and resilience in achieving its strategic objectives outlined in Strategy 2030. The provided guidance aims at attracting investors and maintaining its leadership position in the market.

Table 8: Market performance and outlook for the period 2025-2026

Last Communicated Outlook for 2025	Revised Outlook for 2025
1,300 million	CIR \~ 48%
\~ 48%	Below 48%
Cost of risk	30-50 bps
Loan growth	High single-digit
Dividends	More than 40% of 2024 pro
15%	> 20%
\~ 15%	> 20%
M\&A potential	M\&A capacity of up to EUR 4 billion RWA
(i) ROE a.t. normalised	result a.t. divided by the average RWA requirement of average RWA reduced by minority shareholder capital contribution.
(ii) Assisted with the combination of capital from issuing AT1 notes and a temporary reduction of the dividends.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

In May 2024, the Group launched its new Group Strategy 2030, outlining key performance indicators and expected future development.

Table 9: NLB Group’s Strategy 2030 key financial indicators

> EUR 2,000 million	Recurring profit	\~ EUR 550 million
> EUR 1,000 million	CIR	45.7%
< 45%	ROE a.t.	16.5%
> 15%	(1-2 p.p. upside from strategic plays)	ROE a.t. normalised
25.5%	> 20%
0.8x	> 1	Tier 1 capital ratio
15.8%	\~ 15%	CET1 ratio
15.3%	> 13%	Cost of risk
14 bps	30-50 bps	(i) Banking peer group: UniCredit, OTP, RBI (Raiffeisen Bank International), Erste Group, In

Group Strategy 2030 is available on the NLB website.

NLB is systemically important and the most reputable Slovenian bank, managing 70% of the cash, 40% of the payments, and nearly 40% of all the assets in the country. We are more than just a bank.

NLB Group Annual Report 2024

Overview of Financial Performance

The financial year concluded with a strong profit after tax result of EUR 514.6 million, with the profit before impairments and provisions up a respectable 7% decline compared to the previous year, which was positively influenced by the booking of deferred tax, increase of deferred tax assets (EUR 61.9 million) and first recognition of deferred tax.

Also showed a moderate, but still positive cost of risk of 14 bps (2023 still had a negative cost of risk). The following key drivers influenced the Group’s performance in the year 2024:

• Loans amounted to EUR 1,687.4 million, driven by healthy demand, with an additional EUR 970.4 million growth deriving from the acquisition of SLS Group.
• Although interest rates began to decrease in the second half of the year, net interest income increased YoY, with EUR 1,051.7 million from individuals and EUR 445.4 million from corporates.
• A 12% YoY increase in net interest income was driven by healthy loan demand, the effects of falling interest rates in the second half of the year, the annual net interest margin improved YoY by 0.14 p.p. to 3.64%, mostly due to strategic M&A activities, which offset the decline from banking.
• Downward shift in interest rates, yields to EUR -70.7 million or -2.47% of T1 capital, driven mainly by the cash (EUR -17.1 million) and floating rate loan positions (EUR -63.3 million).
• Increased activity, increased engagement in investment funds and bancassurance, and renegotiated conditions with the service providers.
• Total costs of the Group in 2024 amounted to EUR 602.2 million, of which approximately EUR 45 million or 9% was the result of like-for-like cost increases (i.e., normalising for tax on the balance sheet introduced in 2024, SLS Group integration).
• Macroeconomic and geopolitical circumstances, remaining very prudent in identifying any increase in credit risk at a very early stage and proactive in NPL management.
• Furthermore, unfavorable conditions in the export-oriented industry – considering that the Bank downgraded certain clients in Stage 2 and formed additional impairments.
• Nevertheless, the cost of risk remained at a relatively low level; provisions for credit risk in 2024 amounted to EUR 20.6 million. The established impairments derive from portfolio development, new financing, and any portfolio deterioration.
• In contrast, lower total impact.
• Other impairments and provisions were net established in the amount of EUR 16.9 million. The vast majority were established mainly in the last quarter due to provisions for Komercijalna Banka, Beograd and restructuring provisions (mostly in Slovenia, EUR 2.5 million in NLB and EUR 1.4 million in Slovenian leasing companies).
• The effective tax rate (consolidated) was 13%, and for NLB, 7%. The effective tax rate of NLB was significantly influenced by non-taxable income, which consisted mostly of received dividends and the release of impairments.

---

NLB Group Annual Report 2024

Overview

Income tax and the tax on the balance sheet for the year 2024 for the NLB Group was 18% and for NLB 13%.

A sound financial position was confirmed by a robust Total Capital Ratio (T).

The performing credit portfolio stock stopped, as the growth of new NPLs slightly exceeded repayments and recovery of existing NPLs. Additionally, new NPLs from the acquired SLS Group w stock and credit growth of a high-quality portfolio resulted in the decrease of gross NPL ratio (EBA def.) from 2.1% to 2.0% YoY. The NPE ratio (EBA def.) remained almost unchanged at amounted to EUR 9,287.5 million (33.2% of total assets). EUR 514.6 million of net profit.

Key Highlights

Profit after tax of NLB Group – evolution YoY (in EUR millions)

Year	Profit after Tax (EUR millions)
2024	514.6
2023	550.7

The Group’s recurring profit before impairments and provisions grew by EUR 37.2 million or 6% YoY, totalling EUR 64 affected by the accrual of a one-time yearly payment of regulatory costs in NLB (EUR 10.5 million under the Deposit Guarantee Scheme (DGS)). Conversely, the early redemption of Tier million modification loss due to interest rate regulation on housing loans in NLB Komercijalna Banka, Beograd, burdened the non-recurring net non-interest income.

Performance Overview

Net Interest Income	Provisions	Share of Profit from Investments in Associates and Joint Ventures	Income Tax	Result of Non-controlling Interests
100.8	35.0	-100.4	-62.8	-3.1
15.7	1.9	514.6	550.7	-23.3

---

NLB Group Annual Report 2024

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis NL banks recorded a profit on a standalone basis and positively contributed to the Group’s result. The largest contribution again came from NLB, followed by NLB Komercijalna Banka, Beograd 2023 and the establishment of provisions in 2024. The SEE banks contributed 58.1% to the Group result, with all banks reporting growth. For more information on bank operations, see the

NLB Group (in EUR millions)

-17.7	-3.4	1.1	-2.0	-7.5	-7.5	-7.5	-14.9	-0.9	3.6
165.8	163.2	171.3	142.3	2023	2024	Q1	2024	Q2	2024
Q3	2024	Q4	2024	645.4	683.7	179.9	174.2	177.7	151.9

Recurring net non-interest income Regulatory costs 591.4 642.6 +9% -40.2 -39.1 (i) Merger of NLB and N Banka on 1 September 2023. NLB (i) N Banka (i) NLB KB, Beograd NLB Banka, Sk Podgorica 2023 2024 12.7 201.0 269.6 -25% 131.7 139.0 +6% 39.7 58.5 +47% 24.3 29.6 +22% 12.5 14.0 +12% 29.5 30.4 +3% 24.5 27.7 +13%

Figure 16: Profit a.t. by company – contribution

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Income statement

2024	2023	Change YoY	Q4 2024	Q3 2024	Q2 2024	Q1 2024
			Net interest income	934.2	833.3	100.8	12%	240.0	233.0
Dividend income	0.1	0.2	-0.1	-31%	0.0	0.1	0.0
	Net income from financial transactions	24.1	17.3	6.8	39%	2.8	8.5	3.0	9.8
			Net other income	-26.5	-35.4	9.0	25%	-3.0	-4.2	-4.3	-15.0
Net non-interest income	1,093.3	951.5	14%	320.8	320.0	305.9	298.1
Employee costs	-322.2	-282.2	-40.0	-14%	-95.7	-77.0	-77.3	-72.2
			Other general and administrative expenses	-188.6	-170.5	-18.2	-11%	-58.3	-47.8	-43.0
Amortisation	-58.2	-49.2	-9.0	-18%	-15.9	-15.6	-13.6	-13.1
	Total costs	-602.2	-501.9	-100.4	-20%	-178.5	-148.7	-142.7	-132.4
				Result before impairments and provisions	642.6	591.4	51.2	9%	142.3
Other impairments and provisions	-16.9	-25.9	9.0	35%	-12.4	-3.2	-1.0	-0.3
		Impairments and provisions	-37.4	-14.1	-23.3	-166%	-45.3	-2.6	15.1	-4.7
Share of profit from investments in associates	97.8	169.3	179.0	162.1
Income tax	-77.9	-15.1	-62.8		-7.3	-30.1	-21.8	-18.7
		Result of non-controlling interests	15.7	12.6	3.1	24%	3.4	3.7	5.2	3.4
				Result after tax	514.6	550.7	-36.1	-7%	87.0	135.5

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Net Interest Income

The Group’s net interest income increased by 12% and reached EUR 934.2 million, accounting for 75% of total net revenues, consistent with the same period last year. With income would be 1 p.p. lower. All the Group banking members reported increased net interest income, driven by loan volume growth from healthy demand for loans and higher interest income (EUR 77.2 million to individuals and EUR 63.6 million to corporate and state) and securities (EUR 64.3 million). At the same time, interest expenses increased due to higher expenses for customer deposits (EUR 46.8 million). In the last quarter of the year, the Group successfully compensated the drop of interest rates with mitigation measures and improved profitability stabilization is one of the NLB Group’s priorities. To protect future interest income from a declining interest rate environment, the Bank hedged issued securities in the additional amount. According to market expectations, these hedges should positively impact the net interest income in the coming years.

Figure 17: Net Interest Income of NLB Group (in EUR millions)

Year	Interest Income	Interest Expenses
232.2	833.3	-273.5
228.3	934.2	-
233.7	+	12%
240.0	-	-
-60.6	-	-
-63.7	-	-
-72.4	-	-
-76.8	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Net Interest Income Sensitivity

Net interest income sensitivity, simulated by a 100-bps immediate parallel downward shift in interest rates, yielded a net interest income sensitivity of EUR -70.7 million or -2.47% of T1 capital (-63.3 million). The focus on stabilising the net interest income includes ongoing increased fixed interest rate loan stock, active management of the funding mix, liabilities hedging activities. Sensitivity improved by EUR 30.7 million or 145 bps (from -3.92% to -2.47% relative to T1 capital, or EUR 30.7 million to a level of EUR 70.7 million in case of -100-bps parallel shift).

Fixed interest rate loans (EUR 2,853 million) and new interest rate hedges (EUR 1,070 million), while reducing the central bank balances (EUR 2,368 million), and increasing of investment rate shocks of NLB Group (in EUR millions):

Scenario	-100 bps	-50 bps	+50 bps	+100 bps
Net Interest Income Sensitivity	-70.7	-34.8	29.7	58.2

The Group’s annual net interest margin and operational business margin were affected by the monetary easing, marked by four consecutive ECB key interest rate cuts from June onwards. The decline on a Group level was evident in the loan portfolio acquired from the SLS Group. Margins were declining in the last quarter in NLB and the SEE banks, which is a function of the declining rates. The net interest rates are expected to be influenced by balance sheet management activities that have significantly reduced the Group’s net interest income sensitivity; however, the pace of the net interest margin decline should nevertheless be considerably slow.

Quarterly Data (in %)

(i) Calculated based on average interest-bearing assets.

Quarter	2024 Q4	2024 Q1	2024 Q2	2024 Q3
Operational Business Margin	4.44%	5.59%	5.84%	5.69%
Net Interest Margin	5.46%	3.73%	4.98%	5.00%
	4.97%	4.93%	3.02%	3.94%
	3.80%	3.76%	3.69%	2.89%
	2.81%	2.75%	3.63%	3.60%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Net Non-Interest Income

Figure 21: Net non-interest income of NLB Group (in EUR millions)
| 2023 | 2024 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
| ----- | ----- | ------- | ------- | ------- | ------- |
| -8.7 | -3.5 | -2.0 | -14.9 | -0.9 | 278.0 |
| 312.9 | 71.1 | 78.9 | 81.0 | 3.6 | 65.9 |
| 2.2 | 77.7 | 86.2 | 1.0 | 3.3 | 1.8 |
| 80.8 | 260.0 | 310.6 | +19% | -1.4 | -3.1 |

The overall YoY increase in the net non-interest income derives from higher net fee and commission income, a significant component of the net non-interest income, which increased by 13% YoY. This growth can be attributed to the positive impact of banking members, renegotiated conditions with the service providers, and increased activities in investment funds and bancassurance. Notably, NLB Skladi, Ljubljana, recorded an exceptional over a 50% YoY increase. The decline in the last quarter derives mainly from a one-off in NLB Komercijalna Banka, Beograd, due to an adjustment of receivables related to card operations.

Net Fee and Commission Income

2023	2024	Q1 2024	Q2 2024	Q3 2024	Q4 2024
56.6	24.4	81.0	207.1	225.2	87.8
50.3	20.8	58.2	20.7	60.0	21.8
70.9

Payment transactions, Basic accounts, Cards and ATM operations, Other

NLB Group Annual Report 2024

51 Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Costs

Year	Q1	Q2	Q3	Q4	Total
2023	8.3	15.6	58.3	95.7	178.5
2024	15.9	Excl. 53.0 BS tax	33.2	16.0	549.2
	+20%	188.6	322.2	602.2	282.2
	170.5	501.9	+9% normalized	33.2	49.2
	58.2

Total costs of the Group in balance sheet, the costs grew by EUR 67.2 million, of which approximately EUR 45 million or 9% is the result of like-for-like cost increases (i.e., normalising for the tax on the balance sheet). The cost dynamic is a reflection of the strong inflationary pressures of 2024 in HR (around EUR 30 million increase, of which EUR 23 million in banks, the rest across other core businesses) with environment. The considerable HR cost dynamic in the core banking operations is a function of effects of repricing and variable compensation (EUR 31 million) more than offsetting effects.

Will continue to put pressure on costs in 2025, although measures to address headcount efficiencies will be substantially increased. Total costs increased mostly in the fourth quarter, by EUR 10 million in regular general and administrative costs seasonality and EUR 14 million of variable compensation given very strong financial performance. A smaller part of the Group was acquired in September, Q4 showed a full cost effect, being EUR 2.3 million higher QoQ. The Cost-to-Income Ratio (CIR - excluding the tax on the balance sheet from the calculation).

Number of branches

	31 Dec 2023	31 Dec 2024
NLB	5,121	5,202
NLB SEE banks	2,554	2,523
Other NLB SEE banks	7,982	8,322
	+340	-8

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Impairments and Provisions

0.6	-0.3	-1.0	2023	2024	Q1	Q2	Q3	Q4	2024
11.8	-20.6	-4.4	16.0	-32.9	-25.9	-16.9	-3.2	-12.4	-14.1
-37.4	-4.7	-2.6	-45.3	15.1

Impairments and provisions of NLB Group (in EUR millions)

The Group monitored the macroeconomic and geopolitical circumstances closely, remaining very prudent in identifying any increase in credit risk. Trends in the German automotive industry did not severely influence the Slovenian export-oriented industry. Still, the Bank downgraded certain clients in Stage 2 and formed additional impairments.

Impairments and provisions for credit risk were established mainly in Q4 in the amount of EUR 32.9 million. The established impairments derived from additional provisions of EUR 35.6 million (to Stage 2 and Stage 3), repayments of written-off receivables in the amount of EUR 10.7 million due to a favourable environment for NPL resolution, and additional impairments and provisions.

NLB. The Group net established impairments and provisions for credit risk in the amount of EUR 20.6 million in 2024. The established impairments derive from portfolio development, new receivables, and changes in models contributed to a lower total impact. Further information is available in the chapter Risk Management.

Other impairments and provisions were net established last quarter due to provisions for legal risk (mainly in NLB and in NLB Komercijalna Banka, Beograd), and restructuring provisions (mostly in Slovenia, EUR 2.5 million in NLB and EU).

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Tax

The effective tax rate (calculated as income tax divided by profit before tax) for the year 2024 for NLB Group was 13%, and for NLB, 7%. The effective tax rate of NLB was important due to the release of impairments of equity investments in subsidiary banks. In addition, tax losses carry-forward decreased by 50% of the taxable base. The effective tax rate of NLB, excluding non-taxable interest from state securities, according to the local tax legislations, was at the Group level 14% (also excluding non-taxable interest from state securities).

In the year 2024, several changes related to taxes occurred. The tax rate for corporate income tax in Slovenia was increased from 19% to 22% for the years 2024 to 2028. Based on the same law, the tax on balance sheet was introduced for 2024–2028 in Slovenia and included in the contribution rate. For 2024, the tax on the balance sheet amounted to EUR 33.2 million.

Based on the OECD Pillar 2 Model Rules and the related EU Directive, the global top-up tax for the group members in jurisdictions where the effective tax rate, calculated by the rules related to the global minimum top-up tax, is below 15%. NLB, as the parent company, has subsidiaries in Bosnia and Herzegovina, and Kosovo, where the statutory corporate income tax rate is 10%. North Macedonia, where a 10% statutory corporate income tax also applies, incurs a million top-up tax.

The overall contribution rate related to profit before tax, which includes income tax and the tax on the balance sheet for the year 2024 for the NLB Group was 18% and the overall contribution rate is expected to be slightly less or around 20% on NLB Group. From 2029, the effective tax/contribution rate related to profit before tax is expected to be around 14%.

Millions	NLB 2024	NLB 2023	NLB Group 2024	NLB Group 2023
	Profit before tax	512	608	578	Non-taxable income	-266	-236	-44	0
		Non-taxable dividends received	-212	-138	0	0	Non-taxable income	0	-44	-40
Taxable income	246	243	564	538
	Adjustments	-138	-145	-260	-232
	Utilisation of tax loss carry forward	-123	-115	-126	-117
		Other adjustments (i)	-15	-30	-134	-115
		Tax base	108	98	304	118
Global minimum top-up tax	4	6
	Recognition and increase of DTAs	-6	-62	-7	-62
		Non-recognised deferred tax assets on current loss and other	1	0	2	11
		Total tax	34	-36	78	15
Effective tax (ii)	14%	11%	14%	12%
Tax on balance sheet	33	33
Donations to state and municipalities	9	9
		Contribution (total tax, balance sheet tax and donations) (ii)	67	35	111	75
Overall contribution rate income (ii)	27%	14%	20%	14%

(i) Effect of different tax rates in other countries is included in other adjustments.

(ii) One-off events related to recognition of DTA's and non-recognised DTA contribution, and related rates.

NLB Group Annual Report 2024

54 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Statement of financial position

Table 12: Statement of financial position of NLB Group in EUR millions

			31 Dec 2024	31 Dec 2023	Change YoY	31 Dec 2024	30 Sep 2024	30 Jun 2024	31 Mar 2024
		TOTAL ASSETS	28,035.4	25,942.0	2,093.4	8%	28,035.4	27,243.4	26,613.7	26,025.7
			Loans to banks	458.9	547.6	-88.7	-16%	458.9	433.4	410.7	416.3
				Net loans to customers	16,363.6	13,734.6	2,629.0	19%	16,363.6	15,739.3	14,726.7	14,197.1
	- Corporate	7,471.2	6,437.8	1,033.4	16%	7,471.2	7,156.6	6,703.6	6,412.8
				- Individuals	8,735.0	7,235.3	1,499.7	21%	8,735.0	8,469.1	7,632.5	7,394.8
- State	515.2	390.4	124.8	-28.8	-9%	-357.8	-332.0	-327.4	-337.2
			Financial assets	6,324.5	4,803.7	1,520.8	32%	6,324.5	6,106.9	5,919.9	5,485.9
				- Trading book	19.6	15.8	3.8	24%	19.6	15.8	14.6	15.0
					- Non-trading book
Associates, and joint ventures		14.7	12.5	2.1	17%	14.7	13.9	12.3	13.5
				Property and equipment	310.0	278.0	32.0	12%	310.0	300.0	280.9	276.0
				Investment property	26.1	31.1	-5.0	-16%	26.1	24.6	25
TOTAL LIABILITIES				22,206.3	20,732.7	1,473.6	7%	22,206.3	22,206.3
	- Individuals	15,512.0	14,460.3	1,051.7	7%	15,512.0	15,074.3	14,899.9	14,554.6
				- State	389.7	413.2	-23.5	-6%	389.7	405.6	437.1	412.6
					Deposits from banks and central banks	13	218.8	209.4
		Subordinated debt securities	560.1	509.4	50.7	10%	560.1	583.4	558.7	597.3
				Other debt securities in issue	1,048.8	828.8	220.0	27%	1,048.8	1,034.8	1,315.3	838.0
Other liabilities	563.2	3,242.1	3,081.3	3,035.6
		Non-controlling interests	72.1	65.1	6.9	11%	72.1	68.7	64.7	64.4
TOTAL LIABILITIES AND EQUITY			28,035.4	25,942.0	2,093.4	8%	28,035.4	27,243.4	26,613.7	26,025.7

---

NLB Group Annual Report 2024

Overview

Group’s balance sheet volume reached EUR 28,035.4 million at the end of the year, reflecting a EUR 2,093.4 million YoY increase. Growth in the customer’s deposits and additional MRE for the acquisition of the SLS Group.

Key Highlights

Balance Sheet Structure of the NLB Group on 31 December 2024 (in EUR millions)

Assets		Liabilities
Loans to corporate	44.6%	Deposits from state	1.8%
Loans to individuals	52.3%	Deposits from individuals	69.9%
Subordinated debt securities	560	Deposits from corporate	28.4%
Other liabilities	1,049	Liabilities	22,206
Deposits & placements with banks	4,499	Financial assets	6,324
Other assets	849	Total equity	3,298

Performance Overview

The LTD ratio (net) increased by 7.4 p.p. YoY to 73.7% at the Group level. The increase was driven by deposits. The leverage ratio, which takes into account both on-balance sheet and off-balance sheet items, increased by 0.23 p.p. YoY to 9.9% at the Group level. The increase was driven by.

NLB Group’s LTD Ratio Movement

Net loans (in EUR millions)	Deposits (in EUR millions)
20,733	16,364
LTD
66.2%
73.7%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Geographical Analysis

(i) The geographical analysis includes a breakdown of items with respect to the country in which individual NLB Group members are located.

Customers	Financial Assets	Other Assets	31 Dec 2023	31 Dec 2024
752.5	848.7	6,651.2	4,498.5	13,734.6
16,363.6

Figure 29: Total assets of NLB Group – structure (in EUR millions)

The distribution of total assets be outpacing the growth in Slovenia. 55.5% of the total assets related to the Group members were located in Slovenia and 20.1% in Serbia.

Country	Percentage
Slovenia	57.2%
Serbia	20.1%
Montenegro	5.1%
Kosovo	4.7%
BiH	7.5%
N. Macedonia	7.3%

Figure 30: Total assets of NLB Group by country (year)

NLB Group Annual Report 2024

Overview

Growth of lending in 2024 was very strong. In addition to a EUR 970.4 million YoY increase in gross loans from the SLS Group, the NLB Group achieved a 12% organic loan growth, recorded in NLB and SEE banks in both segments, individuals and corporate and state. NLB recorded a 10% growth in gross loans to individuals, with stronger growth in the second half of the year and consumer loans approved in 2024, reflecting a YoY increase of 30% and 38%, respectively. Corporate and state loans grew by 10%, excluding the intragroup loan to the newly acquired loans to corporate and state, with especially strong growth in the last quarter in all bank members. The growth of the individual loans was similar, 15%.

Figure 31: NLB Group gross loans

Date	Gross Loans (EUR million)	Growth (%)
31 Dec 2024	8,164.1	+10%
31 Dec 2023	7,586.9
31 Dec 2024	3,608.8	+15%
31 Dec 2023	3,523.1
31 Dec 2024	6,8	+17%
Group		+11%
w/o SLS Group		+32%
w/o intragroup loan to SLS Group		+16%
Gross loans to individuals	399.5
Gross loans to corporate & state
Gross loans SLS Group

Consolidated financial statements of the NLB Group.

NLB Group Annual Report 2024

58 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Interest Rates for Loans to Customers

Following the ECB’s key interest rate cuts, quarterly interest rates for loans to customers began to decline in NLB and the SEE banks. However, on NLB Group level, this decline was partly

Customers (quarterly, in %)	Q1 2024	Q2 2024	Q3 2024	Q4 2024
NLB	5.94%	5.25%	6.61%	5.93%
SEE Banks	5.29%	6.52%	5.88%	5.11%

(ii) Sum of data on a stand-alone basis as included in the consolidated financial statements of the NLB Group.

NLB Group Annual Report 2024

Overview

Despite significant portfolio growth in all NLB Group banks in the 2024, and the acquisition of the SLS Group, the loan portfolio remained well-diversified, and there was no large concentration noticed in the retail portfolio, however housing loans prevailed. Most of the loan portfolio is in the euro currency, while the rest in local currencies of the Group banking members.

The interest rate, and the rest mainly to the Euribor reference rate.

Figure 33: Loan portfolio by segment, geography, currency, and interest rate type (in EUR millions)

Institutions	4092	2%
State	SME	4,633	22%
EUR 20.7 billion by segment	Other	919	4%
N. Macedonia	1,705	8%
Montenegro	802	4%
Kosovo	1,208	6%
Serbia	4,624	22%
BiH	1,674	8%
Slovenia	9,751	47%
EUR 20.7 billion by currency	Floating	34%
	Fixed	66%

The loan portfolio also includes account balances, required reserves at CBs, and demand deposits at banks.

(i) The loan portfolio also includes account balances, required reserves at CBs, and demand deposits at banks.

(ii) State following the company size defined in the Companies Act of an individual country in the region.

NLB Group Annual Report 2024

Overview

Banking book debt securities portfolio increased by EUR 1,506 million (book value) YtD, constituting 22.1% of the Group’s total assets, compared to 18.1% in 2023. This increase was i the portfolio’s average duration was 3.6 years (up from 2.8 years in 2023), with an average yield of 2.49% in 2024, reflecting an increase of 0.82 p.p. from the previous year. The ESG po information is available in the Sustainability Statement of this Annual Report.

Two business models are implemented, dividing the portfolio into securities valued at fair value through managing NII sensitivity, the FVOCI portfolio declined by 6.34 p.p. in 2024, accounting for 39.84% of the total Group debt securities portfolio at year-end, with an average duration of 2.1 amounted to EUR 30 million (the net of hedge accounting effects and related deferred taxes). The AC portfolio amounted to 60.16% of the total Group debt securities portfolio at the end o securities portfolio during 2024 amounted to EUR 18 million.

Figure 34: Banking book debt securities portfolio by asset class, geography, currency, rating, and maturity profile as at 31 December

Asset Class	Amount (EUR million)
Government bonds	4,225
Corporate bonds	22
Subordinated debt	59
Covered bonds	228
Bank senior unsecured bonds	699
Multilateral bank bonds and GGB's	961
Total Portfolio	6,193

Portfolio by Rating

Rating	Percentage
AAA	21%
AA	24%
A	28%
NR	0%
B	4%
BB	6%
BBB	17%

Portfolio by Geography

Country	Amount (EUR million)
Finland	216
The Netherlands	249
Austria	271
Luxembourg	278
N. Macedonia	323
Germany	370
France
Total Portfolio	6,193

Maturity Profile

Year	Amount (EUR million)
2025	165
2026-2027	388
2028-2029	698
2030+	1,175

---

NLB Group Annual Report 2024

61 Overview

Liquidity position

The Group’s liquidity remains strong, with a high level of unencumbered liquidity reserves in total assets (33.2%) reflected in the LCR ratio of 197 position, with liquidity ratios well above the risk appetite limit at the Group and individual banking member levels. The Group’s unencumbered liquidity reserves consist of cash, balances and credit claims eligible for CB-secured funding operations. Among others, these liquidity reserves provide the basis for future strategic growth. In 2024, the Group’s unencumbered liquid & CB reserves, mostly resulting from the acquisition of the SLS Group, with funds being transferred to the loan portfolio. At the same time, banking book debt securities increased, while v operational and regulatory purposes, increased by 0.5% YoY to EUR 41.7 million (excluding obligatory reserves) and were excluded from the liquidity reserves portfolio.

Figure 35: Evolution

Date	Liquidity Reserves
	ECB eligible credit claims	Cash & CB reserves	Trading book debt securities (market value)	Banking book debt securities (market value)
30 Jun 2024	10,207.1	6.5%	31.1%	62.3%
30 Sep 2024	9,529.2
	31 Dec 2024	9,287.5

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Liabilities

Deposit from customers	Deposit from banks and central banks	Borrowings	Subordinated liabilities
20,732.7	40.1	509.4	28.8
587.6	2,948.0	22,206.3	136.0
225.1	560.1	1,048.8	3,298.0
Total liabilities			25,942.0
Total liabilities (2023)			28,035.4

Figure 36: Total liabilities of NLB Group – structure (in EUR millions)

The total liabilities of the Group increased and amounted to EUR 24,737.3 million, with an additional deposits, accounting for 79%. Sight deposits prevailed; however, due to increased interest rates and attractive offers on term deposits – as a response to market conditions – the share of term deposits increased (compared to 16% at the end of 2023). The majority of customer deposits came from individuals, accounting for 70%, the same as at the end of 2023.

NLB Group Annual Report 2024

Overview

Deposits from customers increased by 7% YoY. The largest increase of 15% was recorded in corporate and state deposits at the SEE banks due to the region’s improved economic situation, remained stable, supported by an upswing in the second half of the year. Moreover, deposits from individuals grew across all Group member banks. In the SEE banks, deposits increased by individuals. The volume of term deposits in NLB increased by EUR 163.6 million in 2024 as clients shifted from sight to term deposits starting in Q3 2023. Most of these term deposits made.

Instead, these funds were either allocated to alternative investments (e.g., mutual funds) or transferred to savings accounts. Consequently, the share of term and savings accounts in total deposits decreased to 46% compared to 48% (or EUR 4,061.9 million) on 31 December 2023. For more information on the average cost of funding, please refer to the chapter Funding Strategy, MREL Compliance.

Date	31 Dec 2024	31 Dec 2023
Sight deposits	Term deposits	Sight deposits	Term deposits
NLB Group	5,276.9	995.6	5,474.3	1,220.0
SEE banks	14,640.3	1,580.4	15,512.0	2,177.7
NLB	8,543.8	2,282.6	8,965.4	2,785.8
Dynamics (in EUR millions)	+7%
+5%
+11%

(i) On a stand-alone basis. (ii) Sum of data on a stand-alone basis as included in the consolidated financial statements of the NLB Group.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Interest Rates for Deposits from Customers

ECB key interest rate cuts were reflected in the decrease in interest rates on deposits from customers in the Bank. However, some SEE banks increased the interest rates on deposits in the portfolio growth.

Period	SEE banks (ii)	NLB Group	NLB (i)
2024 Q4	0.53%	0.46%	0.63%
2024 Q1	0.55%	0.48%	0.66%
2024 Q2	0.55%	0.49%	0.65%
2024 Q3	0.56%	0.47%	0.68%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL balance sheet items

Figure 39: Off-balance sheet items of NLB Group (in EUR millions)

31 Dec 2023	31 Dec 2024	Items
Guarantees	Loan Commitments	Derivatives
34.6	41.0	2,832.3	2,663.2	1,631.6
		1,805.6	2,140.8	2,487.5

Guarantees items, primarily consisting of guarantees (25%), loan commitments (36%), and derivatives (39%), increased to EUR 7,335.7 million by the end of 2024. This growth was largely driven by stabilisation (EUR 1.070 million in 2024). The share of guarantees in off-balance sheet items remained stable, while the share of loan commitments – mainly divided between loans (56%)

We provide comprehensive banking and financial solutions – in one place. We put our customers first by providing extensive, innovative and simple services – from banking products to investment only bank offering at least one form of financing across all the markets of a former common country.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Segment Analysis

On 10 October 2024, KomBank Invest, Beograd was renamed NLB Fondovi, Beograd. The reference is made to this chapter from the Sustainability report.

Retail Banking in Slovenia covers individuals and micro companies, asset management (NLB Skladi, Ljubljana), and part of NLB Lease&Go, leasing, Ljubljana and Summit Leasing Slovenia, an associated company Bankart.

Corporate and Investment Banking in Slovenia covers Key Corporate Clients, SMEs, Cross-Border Corporate Financing, Investment Banking and Custody, and Summit Leasing Slovenija, Ljubljana operating with corporate clients.

Financial Markets in Slovenia include treasury activities and trading with financial instruments while also preserving strategic banks in the Group operating in strategic markets (Serbia, North Macedonia, Bosnia and Herzegovina, Kosovo, and Montenegro), as well as the investment companies NLB Lease&Go Skopje, NLB Lease&Go Leasing Beograd, and Mobil Leasing, Zagreb.

Other activities include categories, whose operating results cannot be allocated to specific segments, such as the Cultural Heritage Management Institute, and also Real Estate entities from 2024 (the latter were previously in the non-core segment).

Non-Core Segment

Non-Core Members include the following: Srbija, NLB Crna Gora, and SLS HOLDCO, Ljubljana.

NLB Group	Core Segments	Non-Core Segment
Retail Banking in Slovenia	Corporate and Investment Banking
Core Members	Profit b.t. (in EUR millions)	608
	247	95
	-143	38
	-54	-4
Contribution to Group’s profit b.t.	100%	41%
	16%	-2%
	56%	-9%
	-1%
Total assets (in EUR millions)	28,035	4,763
	3,911	6
	42.5% / 46.1%
Cost of risk (bps)	14	68
	20	-17

(i) Tax on the balance sheet excluded from the NLB Group calculation. NLB Group’s main indicator of a segment’s efficiency is net profit that would amount to 10% or more of the Group’s revenues.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Banking in Slovenia

Figure 40: Contribution to NLB Group Result	Net interest income	Net non-interest income
41%	35%	40%

The Bank’s customer-focused approach has been key to its client needs. Digital transformation remains central to the Group’s strategy and reflects technological innovation. With significant growth in loans and asset management, the Bank remains a leader in bancassurance, leveraging exclusive partnerships with major insurance providers to achieve strong business volumes. Strategic leasing operations expanded services for individuals. Excellence was also marked by the Contact Centre’s 30th anniversary and branch network, which focuses on high-demand areas and integrating ESG components. These initiatives solidify sustainability.

Financial and Business Performance

Performance of the Retail Banking in Slovenia segment	in EUR millions	consolidated	2024	2023	Change YoY
Net interest income	3	income from Liabilities(i)	215.4	177.5	38.0
			21%
Net non-interest income	123.1	102.3	20.8	20%
o/w Net fee and commission income	130.1	114.1	16.0	14%
Total net operating income	448.3	367	272.5	213.2	59.3
Impairments and provisions	-28.1	-32.6	4.5	14%
Share of profit from investments in associates and joint ventures	3.0	1.1	1.9	179%
Result before tax	247.3	181.7	65.7	36%
Gross loans to customers	4,709.3	3,760.8	948.5	25%
Housing loans	2,678.8	2,483.5	195.4	8%
Interest rate on housing loans(ii)	3.14%	3.07%	0.07 p.p.
Consumer loans	963.5	818.5	145.0	18%
NLB Lease\&Go, leasing, Ljubljana	132.7	98.2	34.5	35%
Other	385.2	360.6	24.6
Deposits from customers	9,849.6	9,357.8	491.7	5%
Interest rate on deposits (ii)	0.49%	0.32%	0.17 p.
CIR	39.2%	41.9%	-2.7 p.p.
Net interest margin (ii)	4.71%	4.17%	0.53 p.p.

(i) Net interest income from assets and liabilities using Fund Transfer Pricing (FTP).

(ii) The segment is the sum of average interest-bearing assets and liabilities divided by 2.

NLB Group Annual Report 2024

Overview

Interest income saw a 23% YoY increase, primarily due to higher volumes (including from the leasing acquisition) and the relatively high key ECB interest rate, which positively affected the Bank.

In the last quarter of 2023, the Bank offered more attractive interest rates for term deposits and savings accounts for individuals, which customers perceived positively. Most of these funds were renewed. Instead, these funds were either placed in alternative investments (e.g., mutual funds) or transferred to savings accounts.

Net fee and commission income increased by 14% YoY due to client engagement, repricing of accounts and package fees, and renegotiated conditions with the service providers in card operations. The segment’s total costs increased by 14% YoY, primarily in Slovenia, Ljubljana, in the segment.

Impairments and provisions were net established for credit risks related to the portfolio development. The segment’s loan portfolio increased by EUR.

Additionally, the retail part of NLB Lease&Go, leasing, Ljubljana, continued its robust growth, recording a 35% YoY portfolio increase. Housing and consumer lending recorded shares of housing and consumer loans increased and reached 31.2% and 30.6%, respectively, compared to 30.2% and 29.8% as at 31 December 2023.

In 2024, the Bank relaunched a successful initiative where 100 young borrowers were rewarded by reimbursing three of their instalments of up to EUR 1,000. A new mortgage loan offer was introduced, including a property appraisal and an energy commitment to sustainability while simplifying the process for an improved customer experience, which resulted in boosting up the sales of green lending.

The new loan production was robust, reflecting a YoY increase of 30% and 38%, respectively. Consequently, the market shares of the new production of housing and consumer loans in 2024 were also strong, at 36.6% and 33.6%.

The Bank recorded an increase in retail lending to 30.4% (compared to 29.5% as at 31 December 2023) and in deposit-taking to 34.3% (compared to 33.5% as at 31 December 2023). The market share of account (which is part of sight deposits) over traditional short-term deposits.

Customer experience is our priority. The Bank’s product and service development is primarily driven by the requirements of segments and devises processes to support its clients’ life situations. The sales approach and the offer are uniquely tailored to each segment, serving as the foundation for the Bank’s initiative to provide services to cater to an array of diverse segments.

During the year, the Bank also optimised accounts and package offers to provide a clearer offering for customers. The Bank tracks customer measures overall satisfaction, and the transactional Net Promoter Score (tNPS) which assesses satisfaction after interaction with the Bank (after obtaining a new product or service).

30.6% Housing loans Consumer loans

31 Dec 2022 31 Dec 2023 31 Dec 2024

36.1% 36.9% 36.8% Sight deposits Short-term deposits Long-term deposits

Figure 41: Market share of net loans to

21.5% 25.1% 27.6% 31.2% and 30.6% market shares in housing loans and consumer loans More than EUR 1 billion in new loans

NLB Group Annual Report 2024

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis NL growth over the years and has increased by 6 i.p. YoY, reaching 67.

The tNPS also indicates a stable level of satisfaction (the benchmark for the financial sector in 2024 is 55 based on the S services.

Considered less complex – and by differentiated pricing with discounted approval costs for loans concluded through NLB Klik. Digital engagement, measured by the average num towards CE digitally more advanced banks.

Figure 43: Digital sales (i) and digital penetration (ii)

The Bank aims to optimise its branch network by closing less profitable offices and opening a new branch office has been opened, while at the same time renovations of the existing offices ensure improved accessibility for people with impairments.

Employees transactions, enabling faster and more independent future operations. This allows employees to better utilise their expertise and to focus on advisory roles for more complex products, as br 2024 49.1% 6.6% 55.8% 7.1% 61.3% 6.3% 63.0% 26.1% 65.3% 29.6% Sales Penetration (i) Share of the volume of digitally sold products in the total volume of sales for comparable product.

Figure 42: Transactional Net Promoter Score (i)

(i) Source: Enterprise Feedback Management tNPS (measuring satisfaction after completion of service or obtaining new product). The Customer Sa client relationships.

In 2024, the Bank’s client satisfaction improved across all dimensions, surpassing the competition by 4 i.p. The Bank’s advisors remain a key advantage, both in branch confirms the highest satisfaction increase happened in digital channels.

According to their recent independent market evaluation, the Bank has reclaimed its position as the best-ranking digit Klik is an omnichannel solution which offers a broad range of banking functionalities. Its usage is primarily driven by its mobile application, recently recognised as the market’s best mobi digital sales share, and strong engagement levels.

The Bank witnessed an increase in digital users of 7% YoY, with active digital penetration of 4 p.p. YoY, and a significant boost in digital processes for daily banking products – especially credit card limits and overdrafts, which are 2018 2019 2020 2021 2022 2023 2024 15% 15% 11% 13% 11% 9% 22% 21% 20% 18% 17% 15 Detractors NPS.

NLB Group Annual Report 2024

Overview

for affluent customers. As the first step in improving the user experience for these clients, the Bank launched the Premium Plus 24/7 customer service line, providing round-the-clock assistance.

introduced that allows them to schedule branch visits or video calls at their convenience. The micro segment presents a rather challenging segment, as it intertwines the characteristics of segment, recognising its potential for growth and innovation. By providing dedicated advisory and support, effective processes, and tailored offers, the Bank aims to empower micro businesses.

committed to fostering a supportive and dynamic environment for micro businesses. In 2024, the Contact Centre (CC) marked a significant milestone – 30 years of successful operation as responsive to clients’ evolving needs and has become a well-known service for the Bank’s customers.

With the implementation of the first chatbot on the Bank’s website, the automation of solutions for more complex needs. Improving the customer experience at every stage of the Bank’s service development is an advantage in further developing the CC as the virtual bank and significantly strengthened fraud prevention.

Communication via video call enabled CC to facilitate 10.9% of key retail product group sales. Furthermore, good Bank practices are shared and the Bank will also introduce a Cash Deposit System (CDS) machine to enhance cash service for legal entities, with pilot use already underway.

Digitalisation of payments redirects clients to the most used wallets Google Pay, Apple Pay, and Garmin Pay. The app allows users to easily confirm their e-commerce purchases and Flik payments. Further optimisation was achieved by making it even more convenient for clients.

Figure 44: NLB Pay volume of transactions (in EUR thousands)

In acquiring business, the Bank is running cooperation with selected partners to acquire new Group’s mobile POS terminal solution, the NLB Smart POS, which is most suitable for small businesses, enabling them to provide simple, fast, and safe services.

Several marketing campaigns are pushing the acquiring card instalments and payments with cards by using NLB Pay. Added value for our clients Private banking is a leading banking provider for this segment in the market management, combining banking and financial products, and a full spectrum of advisory services.

Products and services are carefully selected and tailored to meet the unique needs of clients. Management was recorded, which doubled in just four years, and reflects a successful approach, new product introductions, and improved internal processes.

Figure 45: Assets under management

Asset management company achieved two milestones in 2024: surpassing EUR 3 billion in assets under management and generating EUR 286.1 million in annual net inflows, which account.

EUR 395.4 million, compared to EUR 260.9 million in 2023. The market share of assets under management in mutual funds reached 40.7%. The total assets under management grew by 29.

EUR 502.9 million from the discretionary portfolio. NLB Skladi, Ljubljana, has introduced a new service, the management of alternative investment funds. It has also completed the acquisition.

Slovenia

Significant progress in digital sales

2021	2022	2023	2024
488,565	122,952	58,924	36,218
+297%

31 Dec 2021 31 Dec 2022 31 Dec 2023 31 Dec 2024

1,243 1,711 2,224 1,377 1,800 2,000 2

NLB Group Annual Report 2024

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis NL

(which was later rebranded to NLB Fondovi, Skopje), and transferred the ownership of the Serbian asset management company KomBank Invest, Beograd (which was later rebranded to NL.

for several years. To its long-term partners, the insurance companies Vita, življenjska zavarovalnica, Generali Zavarovalnica, and Zavarovalnica Triglav, Zavarovalnica Sava was added as a.

Insurance Products

resulted in excellent overall insurance premium volumes.

Figure 46: Active clients’ penetration of ancillary business

In cooperation with NLB Lease&Go, leasing, Ljubljana segment. Expert advice and high-quality financial services are available within branch offices, where clients can choose the best leasing solution tailored to their needs and select car insurance.

Bancassurance

31 Dec 2021	31 Dec 2022	31 Dec 2023	31 Dec 2024
2.5%	10.3%	17.1%	2.7%
10.8%	17.7%	2.3%	11.6%
18.1%	2.4%	12.9%	18.3%
Vita	NLB Skladi	Generali

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Corporate and Investment Banking in Slovenia

The Bank reaffirmed its position as a leading and systemic player in its home region. It supports corporate clients with daily banking and ta border financing. The Bank also strongly emphasises sustainability in all its operations.

Figure 47: Contribution to NLB Group Result

b.t.		16 %	Net interest income	14 %	Net non-interest income

Investment Banking in Slovenia segment in EUR millions consolidated

	2024	2023	Change YoY
Net interest income	131.7	106.5	25.3 (24%)
Net interest income from Assets (i)	81.6	62.2	19.4 (31%)
o/w Net fee and commission income	41.1	40.2	0.9 (2%)
Total net operating income	178.8	149.2	29.6 (20%)
Total costs	-76.0	-70.2	-5.9 (-8%)
Result before impairments and provisions	102.8

As of 31 Dec

	2024	2023	Change YoY
Net loans to customers	3,871.8	3,360.2	511.6 (15%)
	Gross loans to customers	3,946.4	3,413.2	533.2 (16%)
		Corporate	3,749.1	3,306.7	442.4 (13%)
Key/SME/C	Corporates loans (ii)	5.0%	4.54%	0.53 p.p.
Investment banking	0.1	0.1	0.0 (-15%)
	Restructuring and Workout	108.2	97.7	10.5 (11%)
		Summit Leasing Slovenija	203.8	203.8	-
NLB Lease\&Go, lease (ii)	5.60%	5.95%	-0.35 p.p.
Deposits from customers	2,392.0	2,471.8	-79.8 (-3%)
	Interest rate on deposits (ii)	0.37%	0.28%	0.09 p.p.
		Non-performing loans (gross)	79.9	61.8	18.0 (29%)

Footnotes

(i) Net interest income from assets and liabilities using FTP.

(ii) The segment’s net interest margin is calculated as the ratio between annualised net interest income (i).

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Corporate and Investment Banking Segment

The Bank maintains its long-standing tradition and commitment to sustainable and long-term business relationships. Serving over 11,000 corporate clients, the business’s principal revolves around customer centricity and addressing clients’ actual needs. The Bank provides extensive and customised financial solutions to support the broader economy.

Segment income increased substantially by 24% YoY, driven primarily by the rise in loan volume and the relatively high key ECB rate, which positively impacted the net interest income from clients’ deposits. The volume of gross loans grew by EUR 533.2 million YoY, with nearly half related to the acquired corporate part of Summit Leasing Slovenija, Ljubljana’s loan portfolio.

Following a significant decline in deposits during the first half of the year, a rebound occurred in the second half, resulting in an overall 3% decrease. Net fee and commission income increased, particularly from guarantees. Total costs rose by 8%, mainly driven by higher employee costs and the inclusion of the corporate part of Summit Leasing Slovenija, Ljubljana, in the segment. Impairments and parameters and portfolio development were also noted.

As a key and important systemic player in the financial market, the Bank raises awareness and supports clients in the green transformation of companies in Slovenia and the wider region. The Bank primarily finances renewable energy sources, electrical distribution, and sustainable projects in the home region, supporting other key industries such as telecommunications, energy, and real estate.

Cross-border activities saw substantial development in 2024. The cross-border outstanding loan portfolio reached EUR 595.1 million, with additional approved and still unutilised loans. The Bank is exploring options to engage in international syndication deals in the transition finance universe. The trade finance business remains strong, with a significant share in documentary transactions.

Besides supporting all major infrastructure projects in Slovenia and the region, the Bank’s guarantee is recognised as the most requested and accepted, which is reflected in approximately 10% annual growth in volume and income. Through all types of letters of credit, which are also structured to enable financing, the Bank reduces payment risks through different versions of receivables and payment financing, where the Bank is expanding its product range with interfactoring and thus maximising synergies among the NLB Group members and international clients.

At the end of the year, the total value of assets under custody on domestic and foreign markets stood at EUR 13.1 billion compared to EUR 18.6 billion as of 31 December.

NLB Group Annual Report 2024

Overview

Slovenian CSD, as required by the EU regulation, after several years of successful cooperation. In 2024, brokerage services experienced substantial YoY growth, where the Bank executed c previous year. In dealing with financial instruments, foreign exchange spot deals amounted to EUR 1.796 billion, while transactions involving derivatives reached EUR 256.7 million.

Performance Overview

Loans to customers	Deposits from customers	Guarantees and letters of credit	Strong focus on green financing
37.1%	32.2%	Market share in loans to customers	Market share in guarantees and letters of credit

Business Report

NLB Bank has been actively engaged in financial advisory sector, which includes M&A and advisory business, the organisation of syndicated loans, and bond issuance. It acted as a sole mandator amounting to EUR 50.8 million. Additionally, the Bank played a key role in organising bond issuances, acting as a sole lead manager or joint lead manager for bonds in the nominal amount of EUR 258 million.

Intermediary business for NLB Lease&Go, leasing, Ljubljana remained a focus of the Bank’s commercial activities, with the acquisition of Summit Leasing Slovenija, Ljubljana, resulting in the leasing portfolio in this segment expanding notably in Q3 2024, which strengthened the focus on leasing.

Marketing Initiatives

Several initiatives were launched to increase usage and onboard new classic/ NLB Smart POS and E-Comm users. The NLB Smart POS marketing campaign, offering a two-month free trial per user, was introduced. Additionally, a pilot cooperation with Lab4Pay (Elly POS), particularly with Billy POS for new merchant onboarding, has been introduced. An evaluation of this partnership model will be conducted in 2024, particularly well-received marketing campaigns in cooperation with selected partners, focusing on acquiring card instalments and payments with cards via NLB Pay.

In 2024, NLB Pay, following the introduction of Google Pay in 2023, started replacing traditional SMS notifications with modern push notifications in the NLB Pay mobile wallet. The Bank was enabling m-bank users to automatically send out transactions as instant payments – every day of the year in Slovenia and the SEPA area.

As the first banking group in the SEE, the Group enabled a payments service allowing banks to transfer money faster and more safely worldwide. At the same time, it enables full tracking of payment orders and monitoring of related costs.

Transaction Volume

Figure 49: Transaction volume in acquiring (in EUR millions) 17% annual growth in NLB Lease&Go, leasing, Ljubljana corporate portfolio. NLB is the bank of choice for most corporates.

NLB Group Annual Report 2024

76 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Financial Markets in Slovenia

The segment focused on the Group's operations in international financial markets, including ALM, treasury functions, correspondent banking, and wholesale banking played a key role in facilitating international transactions and supporting the Group's global operations.

The Bank actively participated in international capital markets, issuing EUR 2 notes issuances on international capital markets (Tier 2 and SP notes). The growth was driven by a larger securities portfolio and more efficient reinvestment.

Successfully issued 10NC5 subordinated Tier 2 notes of EUR 300 million in January to optimise and strengthen its capital position and 6NC5 senior preferred notes of EUR 500 million in business.

Performance Table

Performance of the Financial Markets in Slovenia segment in EUR millions	2024	2023	Change YoY
Net interest income	-4.1	37.8	-41.8
Net non-interest income	3.2	2.7	0.6 (21%)
Total net operating income	-0.8	40.4	-41.3
Total costs	-12.9	-9.9	-3.0 (-30%)
Result before impairments and provisions	-13.7	30.5	-44.2
Impairments and provisions	-0.7	4

Additional Financial Data

	2024	2023	Change YoY
With Central banks	1,772.3	4,153.2	-2,380.9 (-57%)
Banking book securities	4,499.0	2,981.1	1,517.9 (51%)
Interest rate (ii)	2.03%	1.17%	0.86 p.p.
Borrowings	51.1	82.8	-31.7 (-38%)
Interest rate (ii)	8.33%	6.89%	1.44 p.p.
Other debt securities in issue	1,048.8	828.8	220.0 (27%)
Interest rate (ii)	6.27%	6.56%	-0.29 p.p.

This business overview includes the operations of the Group’s ALM, income from assets and liabilities of trading and treasury after using FTP. (ii) NLB interest rates. (iii) ALM result in 2023 and 2024 is not comparable due to changed methodology in treatment.

Decreased by EUR 2,380.9 million YoY, as they were partially transferred to banking book securities, resulting in a YoY increase of EUR 1,517.9 million. This transformation was undertaken due to the acquisition and refinancing of the SLS Group.

57% government securities in the banking book debt securities portfolio.

NLB Group Annual Report 2024

77 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Group’s ALM

The Group’s ALM process strategically manages the Group’s balance sheet concerning the interest rate, currency, and liquidity risk, considering the macroeconomic environment. The exposure to market risk is decentralised, with uniform guidelines and limits for each type of risk for individual Group members. From the interest rate risk perspective, the surplus liquidity contributed to further growth of fixed interest rate loans, mostly housing loans, and investments in high-quality debt securities.

In terms of funding, the non-banking sector deposits continue to stabilise its interest margin through pricing policy adjustments, whereas to manage interest rate risk exposure, the Group actively adjusts the average duration of liquidity reserves and keeps supported by a highly disciplined deposit pricing policy, enabling the response to a highly competitive loan market all over the Group’s strategic markets.

Liquidity management

The Group manages all due liabilities, minimising the cost of maintaining liquidity, and optimising the structure of liquidity reserves. The Group has developed a comprehensive liquidity contingency plan (LCP) for normal and crisis conditions. For settling due liabilities, the Group uses its liquid assets, which are comprised of liquidity reserves (see the subchapter Liquidity position in the chapter Overview of the report) with other banks and money market placements, which are treated as inflows according to the LCR calculation. Each Group member manages its liquid assets independently.

Capital, liquid average duration of the banking book debt securities portfolio.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Wholesale funding

Wholesale funding activities in the Group aim to achieve diversification, improve structural liquidity and capital position, and fulfil regulatory requirements, especially on international capital markets and has a broad investor base, which is important for securing favourable funding terms. In 2024, the Bank was active on international capital markets by issuing senior preferred notes in May for MREL purposes. In parallel with the issuance of Tier 2 notes, the Bank conducted a liability management exercise (LME), repurchasing EUR 219.6 million. The Bank also exercised call options of some of MREL eligible instruments and Tier 2 instruments. Additionally, NLB Group banking members from SEE obtained funding from international financial financing.

Table 17: Overview of outstanding NLB notes as at 31 December 2024 (i) in EUR millions

Type of bond	ISIN code	Issue Date	Maturity	First call date	Interest Rate	Nominal Value
Senior Preferred	XS2641055012	27 Jun 2023	27 Jun 2027	27 Jun 2026	7.125% p.a.	500
Total SP:	1,000
Tier 2	XS2750306511	24 Jan 2024	24 Jan 2034	24 Jan 2029	6.875% p.a.	300
Tier 2	XS2413677402	5 Feb 2020	5 Feb 2030	5 Feb 2025	3.400% p.a.	10.5 (i) (issued amount: 120)
Total Tier 2:	535.5
Additional Tier 1	SI0022104275	23 Sep 2022	Perpetual	between 23 Sep 2027 and 23 Mar 2028	9.721%

Events After the End of the 2024 Financial Year

Figure 50: Volume of outstanding NLB notes (in EUR millions)

Figure 51: Refinancing needs from matured NLB notes (in EUR millions)

SP	Tier 2	AT
1,617.5	1,300.0	2,107.0
535.5	82.0	525.0
82.0	300.0	0.0

Note: Including issued SP notes of EUR 500 million (in January 2025). Maturity envisaged on call date.

NLB Group Annual Report 2024

79 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Banking Book Debt Securities Portfolio

Figure 52: Banking book securities portfolio of NLB by asset class and geography as at 31 December 2024 (in EUR millions)

Asset Class	Amount (EUR millions)
Multilateral bank bonds and Subordinated debt	59
Corporate bonds	12
EUR	4,449
Other	1,114

Geographical Distribution

Country	Amount (EUR millions)
Slovenia	889
Belgium	522
The Netherlands	204
Luxembourg	278
Germany	312
France	476
Austria	199
Spain	186

In 2024, an ongoing goal was to further diversify the Bank’s banking book securities portfolio, which at the end of 2024, debt securities measured at FVOCI represented 36.01% of the Bank debt securities portfolio, having a duration of 2.5 years, while the duration of the portfolio measured at AC was 5 million (net of hedge accounting effects and related deferred taxes), and unrealised losses from securities measured at AC amounted to EUR 39 million. The average duration of the Bank’s yield on the Bank’s banking book debt securities portfolio increased by 0.87 p.p. YoY to 2.04%. Approximately 15% (or EUR 649 million) of the banking book securities portfolio consists of institutions, of which EUR 368 million were bought in 2024.

Maturity Profile

Figure 53: Maturity profile of NLB banking book securities as at 31 December 2024

Year	Amount (EUR millions)	% of Total Portfolio
2023	1,413	12%
2024	1,038
2025	1,485
2026-2027
2028-2029
2030+

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Strategic Foreign Markets

The market shares (by total assets) of subsidiary banks exceeded 10% in four out of six markets.

Figure 54: Contribution to NLB Group Result

Net interest income	56%

The Foreign Markets segment consists of six banks, three leasing companies, two asset management companies, and one IT services company. The Group banking subsidiaries are regional financial services to retail and corporate clients. All Group subsidiary banks have a stable market position, which, measured by total assets, surpassed 10% in four out of six markets.

Contributing to this positive economic performance include increased foreign direct investment (FDIs), strong export growth, moderate inflation, and significant improvements in the business policies of regional central banks, aligned with the ECB’s accommodative approach in response to evolving economic conditions. The upgrade of Serbia's sovereign rating signalled greater opportunities to boost local infrastructural projects and stimulate regional growth.

The segment achieved excellent results and marked remarkable double-digit growth above the local market average, especially in the retail segment, thereby contributing to the overall economic development of local countries’ households and supporting green financing. In 2024, the Group banks accelerated their digital transformation, adapting to prevailing market conditions, thus ensuring organic growth and keeping an optimal balance sheet structure.

Various solutions further boosted digital sales and digital penetration, especially in the retail segment. The Group banks’ ESG and CSR activities were continuously promoted, including projects for small entrepreneurs, tree planting activities, and many more events, as stated in the Group Sustainability report. For their efforts in digital solutions and green financing, several recognitions were received.

Leasing Operations continued to show solid growth, achieving a market share of 9.7% in Serbia in new production, which elevated the company to 6th position in the market.

In 2024, the Group achieved 20.1% in new production. More information on NLB DigIT is available in the chapter IT and Cyber Security.

NLB Group Annual Report 2024

Financial and business performance

Table 18: Performance of the Strategic Foreign Markets segment

	in EUR millions consolidated	2024	2023	Change YoY
		Net interest income	483.1	423.2	59.9
interest income	135.9	118.4	17.5
	o/w Net fee and commission income	142.1	124.1	17.9
		Total net operating income	619.0	541.6	77.4
		Total costs	-285.2	-251.2	-33.9
Result before tax	338.0	291.5	46.4
	o/w Result of minority shareholders	15.7	12.6	3.1
	31 Dec 2024	31 Dec 2023	Change YoY
		Net loans to customers	7,847.4	6,648.1	1,199.3
Interest rate on retail loans	6.94%	6.63%	0.31 p.p.
	Corporate	3,635.5	3,042.9	592.6
		Interest rate on corporate loans	5.81%	5.37%	0.44 p.p.
		State	304.9	271.4	33.5
Interest rate on state loans
on deposits	0.65%	0.38%	0.27 p.p.
	Non-performing loans (gross)	130.6	134.0	-3.3
		2024	2023	Change YoY
Cost of risk (in bps)		-17	-13	-5
		CIR	46.1%	46.4%	-0.3 p.p.
		Net interest margin	4.3

Increase in gross loans to customers was achieved by NLB Banka, Prishtina (19% YoY), NLB Komercijalna Banka, Beograd (17% YoY), NLB Banka, Banja Luka (15% YoY), and NLB Banka, Skopje (14% YoY). The corporate and retail segments, as several products and services were upgraded, including streamlining and modernising their distribution network and improving their digital offering by introducing new features.

Foreign markets achieved remarkable growth, with a total new leasing financing volume of EUR 184.9 million. Of this amount, 51% (EUR 94 million) was generated by NLB Lease&Go Ljubljana and 9% (EUR 15.9 million) by NLB Lease&Go Skopje. The Group banks maintained solid capital and liquidity positions that are well above regulatory requirements. Six subsidiary banks, three local banks, and three foreign banks contributed to this growth.

Confidence remained strong, and the total customer deposit base increased by 12% YoY. The net interest income increased by EUR 59.9 million YoY due to higher volumes, of which the highest contribution came from NLB Komercijalna Banka, Beograd. The net fee and commission income increased by EUR 17.9 million due to higher volumes of card business and payments, renegotiation of card terms with partners, and improved service offerings.

Income of the segment marked an increase of EUR 17.5 million YoY as a result of banking members’ operations, which contributed EUR 14.2 million of growth to the segment. Total costs increased due to inflation and increased employee costs. However, the segment’s CIR improved to 46.1%.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

55: Result after tax of strategic NLB Group banks (in EUR millions)

NLB KB, Beograd	NLB Banka, Skopje	NLB Banka, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Bank
+12%	+3%	+4%

The higher volumes and still high interest rates on the local markets supported SEE banking members’ results, thus showing a net interest margin between 3.1%. Members realised very high new retail loan production of 15% YoY. The loan portfolio to individuals increased in all banking members. New loan production was still high, significantly achieved by NLB Banka, Prishtina (29% YoY), followed by other banks with double-digit growth of the retail loans portfolio, such as NLB Banka, Banja Luka (17% YoY), NLB Banka Sarajevo (12% YoY), and NLB Banka, Skopje (10% YoY).

Furthermore, all the banks in the Group increased their market share in retail lending, with growth achieved by NLB Komercijalna Banka, Beograd (0.3 p.p. YoY). The market shares of housing and consumer loans showed significant growth. The largest increase was recorded by NLB Banka, Banja Luka with a 0.2 p.p. increase YoY. In the consumer segment, the most significant market share increase was recorded by NLB Banka, Prishtina (1.2 p.p. YoY), followed by NLB Banka, Banja Luka (0.4 p.p. YoY). NLB Banka, Skopje resulted in a market share increase of 0.1 p.p. YoY.

New production in green lending accelerated in 2024 with the offering of various NLB Green appliance loans, electric and hybrid vehicles, and so forth. The Group banks retained customer confidence as the total segment deposits from individuals increased by 11% YoY.

Corporate banking also saw growth with new corporate clients. The portfolio to corporate banking clients recorded a 16% YoY growth, with the highest growth levels achieved by NLB Komercijalna Banka, Beograd (19% YoY). The Group continued supporting green investments, particularly in solar power plants and energy efficiency. The SEE banks attracted corporate deposits by boosting the segment’s corporate balances.

NLB Group Annual Report 2024

83 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Core Members

The Non-Core Members segment includes the operations of non-core Group members. The main objective in the non-core segment remains a rigorous wind-down of all non-core operations. This wind-down has been pursued with a variety of measures, including the sales of portfolios (either packages that include portfolios in a single market or entity, as well as packages combining individual assets), or active collection.

Financial and business performance

Table 19: Performance of the Non-Core Members segment in EUR millions consolidated
			2024	2023	Change YoY
Net income	1.3	-0.1	1.4
	Total costs	-7.6	-13.7	6.1	45%
		Result before impairments and provisions	-6.3	-13.9	7.6	55%
			Impairments and provisions	2.2	3.7	-1.6	-42%
			Result before tax	-4.1	-10.1	6.0	59%
		Gross loans to customers	8.5	10.9	-2.5	-23%
		Gross loans to customers	24.3	28.6	-4.3	-15%
			Investment property and property & equipment received for repayment of loans	5.5	20.1	-14.6	-73%
			Other assets	14.7

The main objective of the non-core segment remains the wind-down of all non-core portfolios. In line with the divestment strategy, the segment’s total assets decreased by EUR 18.4 million YoY. The established collection procedures have been maintained. New business has been suspended for all non-core Group members undergoing wind-down. The decrease of the cumulative non-core subsidiaries’ portfolio includes a reduction of gross loans to customers in 2024 by EUR 3.2 million and a reduction of non-performing loans (gross) portfolio in 2024.

A sporting mentality is something our economies need on the global stage and we incorporate it daily into our business operations. Sports inspire us and bring us together. That is why the NLB Gr

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Group Key Members

NLB Group banking members

NLB, Ljubljana

NLB as Slovenia’s largest and systematically important bank, has demonstrated remarkable business resilience in the dy in 2023, the Bank has expanded its footprint, securing a substantial market share, including in both retail and corporate lending. In 2024, NLB achieved a record-high profit before impairments only 7% compared to the previous year, as the 2023 result benefited from the deferred tax assets booking and the release of impairments of equity investments. EUR 478.2 million result a.t. 31.3% market share by total assets.

Financial and business performance

Key performance indicators	2024	2023	Change YoY
Costs	-312,458	-237,864	-31%
Impairments and provisions	14,386	78,098	-82%
Result before tax	511,990	478,746	7%
Result after tax	478,161	514,287	-7%

Financial position statement indicators

Indicator	2024	2023	Change
Gross loans to customers	8,815,651	7,276,656	21%
Deposits from customers	12,293,708	11,881,563	3%
Equity	2,525,609	2,249,451	12%

Key financial indicators

Indicator	2024	2023	Change
Total capital ratio	24.4%	25.2%	-0.8 p.p.
CIR	34.5%	37.3%	-2.8 p.p.
NPL volume	148,119	138,004	7%
NPL ratio (internal def.: NPL/Total loans)	1.4%	1.2%	0.2 p.p.
Market share by total assets	31.3%	30.2%	1.1 p.p.

Consolidated financial statements. Merger of NLB and N Banka on 1 September 2023. Tax on the balance sheet excluded from the calculation of CIR from 2024 on.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

21: Key performance indicators of N Banka (i) in EUR thousands

Key performance indicators	2023
Net interest income	27,822
Net non-interest income	5,225
Total costs	-16,811
Impairments and

Data for 2023 are for the period January–August, a merger of NLB and N Banka on 1 September 2023.

Table 22: Capital

2023	Change YoY	Surplus over OCR+P2G	31 Dec 2024
Common Equity Tier 1 capital	2,101.4	1,734.6	366.8	863.3
Tier 1 capital	2,183.4	1,816.6	366.8	733.7
Total capital	2,716.8	2,324.1	392.7
Ratio	18.8%	18.8%	0.0 p.p.	7.7 p.p.
Tier 1 Ratio	19.6%	19.7%	-0.2 p.p.	6.6 p.p.
Total Capital Ratio	24.4%	25.2%	-0.9 p.p.	8.8 p.p.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Komercijalna Banka, Beograd

NLB Komercijalna Banka, Beograd, is the second largest bank within the NLB Group. As of the end of 2024, it ranked as the fifth-largest bank in the Republic of Serbia, which is reflected in all segments of its sales activities. More specifically, the bank once again outpaced the market in terms of growth, while at the same time fortified its position as one of the leading banks through the expansion of branches and the digitalisation of operations to provide digital solutions for its customers. Over the past year, it has also devoted much attention to financing green projects. Through its sponsorship, the bank has made significant progress in its region. The bank was once again recognised as the Best Employer in Serbia, and for the first time, it earned the international "Top Employer" award. Additionally, after migrating to digital banking services, the bank is committed to maintaining its position as a top choice for both customers and employees. Its goal is to remain a fast, simple, and efficient bank contributing to a sustainable future.

Financial and Business Performance

	2024	2023	Change YoY
Income	53,237	49,686	7%
Total costs	-125,759	-113,634	-11%
Impairments and provisions	-5,694	1,933	-
Result before tax	159,940	149,281	7%
Result after tax	140,482	132,313	6%
Financial position	3,290,707	2,811,599	17%
Gross loans to customers	3,333,958	2,848,543	17%
Deposits from customers	4,510,793	4,004,112	13%
Equity	865,359	827,575	5%

Key Financial Indicators

ROA a.t.	2.7%	2.8%	-0.1 p.p.
CIR	43.2%	43.5%	-0.4 p.p.
NPL volume	24,020	22,490	7%
NPL ratio (internal def.: NPL/Total loans)	0.5%	0.6%	0.0 p.p.
Market share by total assets	9.8%

Retail Banking

The retail segment recorded 15% YoY growth in gross loans over the average market growth, driven mainly by the increased volume of significant double-digit growth in consumer loans (22% YoY) which increased the market share to 11.0%. Despite a decline in demand in the housing segment, growth above the market peers was achieved, with the interest margin in the retail segment still high, but under pressure from competition.

Corporate Banking

The corporate segment offered a strong value proposition for all products and services in the cross- and upselling programme, which also added value to customers. The bank participated in green project financing, thus contributing to renewable energy in Serbia. The bank also approved several project financings for important real estate developments and sovereign funding for road infrastructure development.

EUR 140 million in project financing was approved for the country, with a 9.8% market share by total assets.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Banka, Skopje

The bank is a leading banking institution in the local market, and is recognised by the National Bank as a systemically important bank. In 2024, its success was reaffirmed and re ESG, and corporate practices, and demonstrated humanity and solidarity. The bank continues to support the country’s population and economy. The focus remains on digitalisation and improving experience, and expanding the portfolio of products and services, particularly in "green" offerings and socially responsible projects.

As follows, the bank introduced a new online payment function to pay for goods and services via the link sent by the merchant. Additionally, the Bank introduced Garmin Pay, an innovative and modern solution for contactless payment with just a smartwatch payments through which merchants can use their mobile phones as POS terminals. Throughout the year, the bank also signed two loan agreements to support socially responsible, green, and environmental projects, one with the Development Bank of North Macedonia, and the other with the European Bank for Reconstruction and Development.

Financial and Business Performance

		Table 24: Key performance indicators
Indicators	2024	2023	Change
	Net interest income	76,487	65,406	17%
	Net non-interest income	25,436	21,198	20%
		Total costs	-39,305	-36,416	-8%
		Impairments and provisions	15,110	-761
		Result before tax	77,728
Total assets	2,158,767	1,902,260	13%
	Net loans to customers	1,394,123	1,216,188	15%
		Gross loans to customers	1,439,456	1,276,133	13%
		Deposits from customers	1,733,845	1,499,509	16%
		Equity
Interest margin	4.0%	3.7%	0.3 p.p.
	ROE a.t.	22.9%	16.5%	6.5 p.p.
	ROA a.t.	3.5%	2.4%	1.0 p.p.
		CIR	38.6%	42.0%	-3.5 p.p.
		NPL volume	36,214	48,791	-26%
NPL ratio (internal def.: NPL/Total)	81.1%		-0.7 p.p.

(i) Data on a stand-alone basis as included in the Group’s consolidated financial statements.

Retail Banking

Gross loans grew 10% YoY, with the increase in housing (14%) and loans in the retail segment led to an increase in the market share to 22.8%. The bank focuses on the customer journey and anticipates customers’ needs. The deposit base increased by 16% YoY. The bank stands out from competition. The key drivers of income growth were the portfolio increase, foreign payment operations, account management, and bancassurance.

Corporate Banking

At the end of 20 19% YoY. Considering its strategic orientation, NLB Banka, Skopje kept supporting investments in renewable sources and projects aimed at increasing the corporate segment’s energy efficiency financing of highly creditworthy clients, securing a stable portfolio and revenue generation. The bank’s total outstanding balance in project financing was EUR 51.7 million and almost EUR 40.

NLB Group Annual Report 2024

Overview

Efficient investments, and green buildings (according to the EBRD methodology for green buildings). NLB Banka, Skopje also supported many export-oriented companies by offering them services.

Macroeconomic developments, corporate interest rates were aligned with market conditions throughout the year. EUR 67.8 million result a.t. 11% contribution to NLB Group’s result a.t. 15.9%.

NLB Banka, Banja Luka

In 2024, the bank remained the second largest bank in the Republic of Srpska market, reaffirming its status as a leading retail bank with an increased market share of 23.0% in the corporate and retail segments, as well as its solid deposit base. The bank received several "Golden BAM" awards for the highest ROE, ROA, and, for the second year in a row, the award for sister bank NLB Banka, Sarajevo. Further strengthening its commitment to innovation, the bank introduced Garmin Pay, expanding its range of digital payment solutions.

Financial and Business Performance

Indicator	2024	2023	Change YoY
Total revenues	18,512	14,399	29%
Total costs	-23,228	-19,433	-20%
Impairments and provisions	-1,351	-763	-77%
Result before tax	32,406	26,678	21%
Result after tax	29,510	24,269	22%

Financial Position

Gross loans to customers	556,960	16%
Deposits from customers	664,344	575,960	15%
Equity	927,972	840,115	10%
Total capital ratio	17.8%	15.9%	2.7%
CIR	40.8%	41.5%	-0.7 p.p.
NPL volume	7,445	5,543	34%
NPL ratio (internal def.: NPL/Total loans)	0.8%	0.7%	0.1 p.p.
Market share by total assets	20.9%	20.1%	0.7 p.p.

Retail Banking

Retail banking recorded strong double-digit YoY growth in gross loans (17%), while deposits grew by 12% YoY. Consumer loans increased 1.0 p.p. YoY and reached 23.0%, while the market share in retail deposits was 25.9%. The key drivers of income growth were interest income and income from accounts and payments processing, as well as additional customer services, especially in digitalisation and bancassurance services.

Corporate Banking

Corporate banking recorded YoY growth in gross loans (15%) by supporting local companies, enabling the bank’s organic growth.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Banka, Sarajevo

In 2024, the bank achieved 10% growth in total assets, surpassing EUR 1 billion for the first time, as well as strong profitability and a 12% growth in net profit. The pred contribute to the high share of net non-interest income (32% of net fee and commission income in total net operating income). Additionally, the bank achieved 12% YoY growth in net int contributed to the country’s green financing initiatives and launched new digital products, including introducing Garmin Pay as the first bank in Bosnia and Herzegovina. It also gained sig together with NLB Group, it donated EUR 1 million to flooded areas in Bosnia and Herzegovina and received "Golden BAM" for innovations for 2024. Furthermore, the bank’s President of the Year 2024" and "Ladies In Ambassador 2025." EUR 14.4 million result a.t. 3% contribution to NLB Group’s result a.t. 6th largest bank in the Federation of Bosnia and Herzegovina.

Key performance indicators of NLB Banka, Sarajevo (i) in EUR thousands

2024	2023	Change YoY
Net interest income	28,436	25,490	12%
Net non-interest income	13,09	-	12%
Result before tax	15,401	13,877	11%
Result after tax	14,384	12,819	12%

Financial position statement indicators

Indicator	2024	2023	Change YoY
Total assets	1,005,053	917,233	10%
Net loans to customers	633,666	575,56	11%
Equity	107,662	95,980	12%

Key financial indicators

Indicator	2024	2023	Change
Total capital ratio	16.9%	17.8%	-0.9 p.p.
Net interest margin	3.1%	3.0%	0.1 p.p.
ROE a.t.	14.1%	13.6%	0.5 p.p.
ROA a.t.	1.5%	-	-
NPL/Total loans	1.7%	2.0%	-0.3 p.p.
Market share by total assets	6.0%	6.2%	-0.1 p.p.
LTD	76.3%	76.8%	-0.5 p.p.

Retail banking

Retail banking recorded YoY growth in gross loans, reaching 12%, propelled by the expansion of housing and consumer loans, which continued to increase market share. Housing loans exp attributed to heightened demand, various campaigns, and increased employee engagement. In 2024, the focus was on retail portfolio growth, client acquisition, digital transformation, cash a YoY growth of 13%, which supported the bank’s organic growth.

Corporate banking

The corporate banking segment achieved YoY growth in gross loans, reaching 4%, while corporate dep creditworthy clients for loan growth. A positive trend was observed in the growth of the new clients and the volume of the guarantees portfolio. Additionally, the volume of green lending inc.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Banka, Prishtina

In 2024, the bank ranked second in profitability, increasing its net profit by 3%. It was also the second-largest bank in Kosovo, increasing its total assets by 16% YoY. The bank served both retail and corporate clients, while also leading the market in innovations within the local banking sector. Net interest income grew by 9% YoY, mainly due to increased lending activities. The bank was the first to introduce an end-to-end mobile solution for retail lending. Strengthening its commitment to digital innovation, the bank also introduced Google Pay and Garmin Pay, expanding its offerings.

The bank received awards from the Kosovo Chamber of Commerce for "Employer of the Year 2024" and "Taxpayer of the Year 2024," and from SOS Village for "The Friend of Children for 2024." The bank was recognized for several consecutive years.

EUR	37.0 million result a.t.	6% contribution to NLB Group’s result a.t.	2nd largest bank in the country	17.0% market share by total assets

Key performance indicators

Thousands	2024	2023	Change YoY
Net interest income	51,444	47,165	9%
Net non-interest income	8,164	8,017	2%
Total costs	-17,562	-15,995	-10%
Impairments and

Financial position statement indicators

Total assets	1,426,862	1,229,757	16%
Net loans to customers	996,781	831,333	20%
Gross loans to customers	1,028,521	866,730	19%
Deposits from customers
Capital ratio	18.1%	15.8%	2.3 p.p.
Net interest margin	4.1%	4.2%	-0.1 p.p.
ROE a.t.	23.8%	27.3%	-3.4 p.p.
ROA a.t.	2.9%	3.2%	-0.3 p.p.
CIR	29.5%	29.0%	0.5 p.p.
NPL volume	17,044	16,234	5%
	17.0%	16.9%	0.1 p.p.
LTD	87.6%	82.5%	5.1 p.p.

(i) Data on a stand-alone basis as included in the Group’s consolidated financial statements.

Retail banking

In 2024, the bank achieved YoY growth fueled by heightened loan demand and a further rise in the general consumption pattern. This, in turn, has resulted in an inflation-driven increase in real estate prices. The growth in housing penetration as a share of active users in total increased from 23% to 30% YoY. In 2024, the bank was the first on the market to introduce an end-to-end mobile solution for retail lending.

Corporate banking

Corporate banking recorded YoY growth of 12% in gross loans, mainly driven by the selling of products to existing corporate clients who mainly targeted new retail and SME clients. The optimisation of the bank’s liquidity structure was highlighted by a 15% YoY increase in deposits and overdrafts. Cooperation on the Group level resulted in financing the construction of a major locally recognised project that contributed largely to clean energy production from renewable sources.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Banka, Podgorica In 2024, the bank ranked third among 11 banks in the market and was identified as a systemically important bank. The predominant strength of the bank lies in housing a declared the Best Bank in Montenegro for the third consecutive year and the "Best Bank for Real Estate" by the respected financial magazine "Euromoney." NLB Banka Podgorica received Banker "declared NLB Banka, Podgorica, the "Bank of the Year" for 2024.

The bank expanded its payment services by introducing Apple Pay and Garmin Pay. In the last quarter of 2024 for cross-border payments. The introduction of the new standard is a prerequisite for the bank’s connection to the SEPA Credit Transfer scheme planned for 2025. EUR 27.7 million result a share by total assets.

Financial and Business Performance

Key performance indicators of NLB Banka, Podgorica (i) in EUR thousands	2024	2023	Change YoY
Result before tax	32,622	32,110	2%
Result after tax	27,714	26,658	4%
Impairments and provisions	1,501	3,238	-54%
Total assets	1,686,730	603,349	14%
Deposits from customers	846,589	798,018	6%
Equity	119,729	120,390	-1%

Key Financial Indicators

Indicator	2024	2023	Change
Total capital ratio	18.6%	19.2%	-0.6 p.p.
Net interest margin	5.1%	4.8%	0.3 p.p.
NPL volume	17,897	24,140	-26%
NPL ratio (internal def.: NPL/Total loans)	2.1%	3.2%	-1.1 p.p.
Market share by total assets	14.3%	14.4%	-0.1 p.p.
LTD	79.1%	73.2%	5.9 p.p.

(i) Data on banking. The retail segment recorded 16% YoY growth in gross loans and 7% in deposits. Over half of the retail portfolio consists of consumer loans, while the remainder is allocated to housing loans. Consumer loan growth was affected by timely organised and well-executed consumer loan campaigns following increased pensions. The focus was on retail consumer portfolio growth, with particular emphasis on introducing additional services for customers, especially in digitalisation.

Corporate banking: The corporate portfolio predominantly consisted of large corporates, which increased by 22% YoY. By improving the existing portfolio quality, the new production of EUR 66.7 million was recorded in a signed contract worth EUR 3 million to contribute to developing the SME sector in Montenegro. The funds are provided within the SME Go Green programme, which the EU finances.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Leasing operations

Leasing is one of the strategic pillars of the NLB Group’s operations. Leasing services address customer needs, which is why NLB Group decided to gradually expand in the spring of 2020, and then by establishing two new leasing companies in 2022 in North Macedonia and Serbia, and recently by acquiring SLS HOLDCO, Ljubljana, the parent company of Leasing, Zagreb (MBL) in September 2024. The leasing services offered by the members of the NLB Group complement the banks’ lending and enable individuals and legal entities to choose an important part of the Group. The plan is that through organic growth, it would contribute more than EUR 2 billion to the total balance sheet of the NLB Group by 2030.

NLB Lease&Go, leasing, Ljubljana is a key player in the Slovenian vehicle leasing market, with EUR 349.0 million in total assets, and an 11.2% market share as at 31 December 2024. NLB Lease&Go, leasing, Ljubljana offers services for financing commercial vehicles, production and other equipment, vessels, and more. As at 31 December 2024, the NLB Lease&Go, leasing, Ljubljana gross credit portfolio contribution to the Group refers to individuals and the rest to corporate.

Key performance indicators	2024	2023	Change YoY
Total costs	-8,901	-7,757	-15%
Impairments and provisions	-764	-538	-42%
Result before tax	1,070	2,593	-59%
Result after tax	3,251	1,664	95%
Financial position statement indicators
Customers	319,776	257,509	24%
Equity	29,551	21,251	39%
Key financial indicators
ROE a.t.	13.4%	8.1%	5.3 p.p.
ROA a.t.	1.0%	0.7%	0.4 p.p.
CIR	82.9%	71.2%	11.7 p.p.
NPL volume	2,371
Leasing portfolio	11.2%	9.7%	1.6 p.p.

(i) Data on a standalone basis as included in the consolidated financial statements of the Group. Market share of leasing portfolio. Change in method calculation.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NL Leasing

Slovenija, Ljubljana

With the signing of the Shares Purchase Agreement on 30 November 2023 and closing the transaction on 11 September 2024, NLB became the sole shareholder of Summit Leasing Slovenija (SLS) and its Croatian subsidiary Mobil Leasing, Zagreb (MBL), together forming the SLS Group. Completing the transaction is another step in transforming NLB Group into one of the regional leaders, becoming the only financial institution in the region that offers at least one form of financing in all markets of the former common country. In the Croatian market, where Summit Leasing strengthens our presence.

Summit Leasing Slovenija, Ljubljana, is an undisputed leader in the Slovenian vehicle leasing market, with EUR 926.2 million in total assets, and with a 27.9% market share in new and used passenger cars, and a provider of point-of-sale consumer credit. As at 31 December 2024, the Summit Leasing Slovenija, Ljubljana gross credit portfolio contribution to the Group relates to individuals. The vast majority of the remaining part belongs to corporate. By 31 December 2024, Summit Leasing Slovenija, Ljubljana had generated a result before impairments.

December 2024 is 39.1% (considering the envisaged integration with NLB Lease&Go, leasing, Ljubljana), positioning the NLB Group as the market leader in the Slovenian leasing market. The leasing portfolio in banks is no longer included in the calculation.

Summit Leasing Slovenija, Ljubljana in EUR thousands

	Sep - Dec 2024 (i)	Jan - Dec 2024 (ii)
Key performance indicators	Net interest income	9,793	16,245
	Net non-interest income	3,086	9,757
	Result after tax	-1,009	3

Financial position statement indicators

	31 Dec 2024 (ii)	31 Dec 2024 (ii)
Total assets	920,336	926,217
Net loans to customers	845,181	852,721
Gross loans to customers		25,092
NPL ratio (internal def.: NPL/Total loans)	2.9%
Market share of leasing portfolio	27.9%

(i) Data on a standalone basis as included in the consolidated financial statements of the NLB Group. 2024 data for 2024 are for the period September-December 2024. (ii) Data in local financial statements. Key performance indicators for full-year 2024.

After the takeover of Summit Leasing, governance rules, along with the appointment of the Supervisory and Management Boards changes. The harmonisation of both acquired entities (SLS and MBL) with NLB Group standards is planned for June/July 2025. NLB’s current focus is on managing a seamless merger process to ensure a smooth transition, retaining operational efficiency, and ensuring employees, the dealer network, and all related stakeholders. In 2025, the contribution to profit before tax of the joint entity is expected to be around EUR 20 million and grow further.

NLB Group Annual Report 2024

Overview

from cost synergies with an expected full run-rate for 2026 onward. NLB Group’s result in 2025 will be further strengthened on the consolidated level with EUR 8 million in additional funding for business in the coming years. The planned integration costs are EUR 8–9 million. The realization of cost synergies, funding synergies and business activation, together with a strict cost management approach, will enhance the overall performance.

Management Operations

NLB Skladi, Ljubljana

NLB Skladi, Ljubljana, Slovenia’s largest mutual fund management company, maintains a high market share of 40.7% and is the largest asset manager in the country. The company achieved significant results in 2024, with net inflows into the NLB Skladi Umbrella fund amounting to EUR 286 million, gaining a market share of 55% in net sales on the Slovenian market. The total assets under management reached EUR 3 billion, consisting of mutual funds and EUR 503.8 million in the discretionary portfolio.

In 2024, the company surpassed an important milestone of EUR 3 billion of total assets under management, forming a cornerstone of the Group’s comprehensive business portfolio. The company offers a wide range of mutual funds and discretionary portfolio management services and, in 2024, has ventured into managing alternative investment funds. By providing highly personalized asset management services, NLB Skladi, Ljubljana, delivers innovative and tailored investment solutions.

With years of experience, NLB Skladi, Ljubljana, has solidified its leadership position in Slovenia’s asset management market. As of 31 December 2024, the company holds an impressive 40.7% market share.

In April 2024, NLB Skladi, Ljubljana, was honoured with eight prestigious awards at the annual "Moje finance" event, recognizing the top-performing mutual funds. NLB Skladi, Ljubljana, was awarded "Best Asset Management Company for the Ten-Year Period."

Regionally, NLB Skladi, Ljubljana, continues its growth through strategic acquisitions, further enhancing its presence in the asset management market by acquiring Generali Investments, Skopje, which was renamed to NLB Fondovi, Skopje in August 2024. To consolidate the ownership of the asset management companies, the Serbian asset management company KomBank Invest, Beograd, was transferred from NLB Komercijalna Banka, Beograd, to NLB Skladi, Ljubljana on 19 September 2024. In October 2024, this marked a significant expansion of NLB Skladi’s asset management capabilities. These are key milestones in building a fully integrated financial ecosystem that leverages the strength of NLB Group’s presence in the region, ensuring that asset management services meet the evolving needs of local investors.

Table 31: Key Performance Indicators of NLB Skladi, Ljubljana (i) in EUR thousands

2024	2023	Change YoY	Key Performance Indicators
Total costs	-9,283	-7,453	-25%
Impairments and provisions	0	0	-
Result before tax	15,577	11,719	33%
Result after tax	12,113	9,498	28%
Total assets	29,76	-	-
ROA a.t.	52.9%	60.3%	-7.4 p.p.
CIR	37.3%	38.9%	-1.5 p.p.
Market share by assets under management	40.7%	39.6%	1.1 p.p.
Total assets under management	3,048,581	2,359,847	29%

NLB Fondovi, Skopje

Since the end of May 2024, NLB Group has been enriched with a new member in the field of asset management. After obtaining all relevant approvals, NLB Skladi, Ljubljana, has expanded its operations.

company to NLB Fondovi, Skopje, on 7 August 2024. NLB Fondovi, Skopje, is the third-largest asset manager in the North Macedonian market, holds an 18.8% market share. The company inflows in investment funds amounted to EUR 11.7 million, highlighting steady growth.

NLB Fondovi, Beograd On 6 May 2024, NLB Skladi, Ljubljana, signed a Shares Purchase Agreement Beograd. Following all relevant approvals, the transaction was successfully completed on 19 September 2024. On 10 October 2024, KomBank Invest, Beograd was rebranded to NLB Fond funds and holds a 3.5% market share. The company recorded in 2024 net inflows in investment funds of EUR 9.6 million, reflecting promising investor confidence and market expansion.

NLB Group Annual Report 2024

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis NL Management

The self-funded model, strong liquidity, and solid capital position continued in 2024, demonstrating the Group’s financial resilience. Efficient management of risks and capital management framework is comprehensively integrated into the Group’s decision-making, steering, and mitigation processes, and it aims to support its business operations proactively.

The governance risks into its business strategies, risk management framework, and internal governance arrangements. The Group has a well-diversified business model. Under its strategic orientation, core markets, providing innovative but simple customer-oriented solutions, and actively contributing to a sustainable, more balanced, and inclusive economic and social system.

Risk Management

Risk Management in the Group manages, assesses, and monitors risks within the Bank as the main entity in Slovenia and the competence centre for banking and leasing subsidiaries. Figure strategy, credit risk is the dominant risk category, followed by credit spread, interest rate risk in the banking book, and operational risk. Credit risk management focuses on moderate risk-taking, sustainable cost of risk, and optimal returns considering the risks assumed.

The Group has limited exposure to the other aforementioned risks, while market and other non-financial risks are estimated as low, except for transition risks which are low. The Group must always maintain an appropriate level of liquidity and pursue a proper structure of financing sources.

Table 32: NLB Group’s Key Risk Appetite Indicators (KRIs)

KRIs	Risk
NPL ratio (EBA definition)	2.0%
NPE (EBA definition)	1.1%
Interest rate risk (EVE)	5.0%

Lending growth, which was modest in the previous year due to increasing interest rates, and well-diversified, with a stable rating structure and low level of NPL. There was no large concentration in any particular industry sector. The latter is particularly important as geopolitical specific industry sectors. The Group closely monitored the macroeconomic and geopolitical circumstances, remaining very prudent in identifying any increase in credit risk at a very early stage.

The German automotive industry did not have a significant impact on Slovenian export-oriented industry. Nevertheless, the Bank downgraded some clients in the "Manufacturing of 1.1% low level Credit spread risk Interest rate risk in banking book Operational risk Market risk Business, Strategic and Other risks.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

“metals” sub-industry to stage 2 and formed additional impairments. Despite this, the cost of risk remained relatively low, at 14 bps. The established impairments derive from portfolio development, collection of previously written-off receivables and changes in risk parameters contributed positively to a low total net impact. The Group remained well capitalised and well above the risk.

Liquidity remained strong, with liquidity indicators well above the regulatory requirements, indicating a low tolerance for liquidity risk. Significant attention was given to the structure and concentration of market movements. Investment activity continued with a balanced approach, focusing on identifying attractive market opportunities while managing credit spreads, interest rate risk, and credit risk well within the risk appetite tolerance.

As a systemically important institution, the Group participates in the EBA EU-wide and ECB SSM Stress Test exercise. This EU-wide stress test is designed to assess the evolving macroeconomic environment, namely the aggravation of geopolitical tensions, which could lead to a significant decline in GDP. The results are expected to be published in early April.

The 2024 EBA Fit-for-55 climate risk scenario analysis and the 2024 ECB Cyber Resilience Stress Test Exercise. These exercises allowed the ECB to assess how banks are prepared to handle and control risks.

Risk management and control are carried out through a clear organisational structure with defined roles and responsibilities. The organisation and delineation of competencies are designed to prevent conflict and ensure an appropriate upward and downward flow of information. Competence line Risk Management in NLB is, by encompassing several professional areas, responsible for:

• formulating and coordinating risk harmonisation,
• regular monitoring of risk exposures and limits based on centralised reporting on a Group level.

The Group greatly emphasises the risk culture and awareness across the entire business model and corresponding risk profile. The main risk principles and limits are defined by the Group’s Risk Appetite and Risk Strategy, which are designed in accordance with its business and ILAAP frameworks. All topical risks in this process, including ESG-related ones, are comprehensively assessed, monitored, and mitigated where necessary.

Particular attention is given to levels, ensuring diversification to avoid large concentrations, optimising capital usage and allocation, setting appropriate risk-adjusted pricing, and ensuring overall compliance with international Digital Operational Resilience Act (DORA) requirements. A dedicated second line of defence has been established within the risk management function and ICT risk management framework.

Risk Appetite and Risk Strategy, which form the foundation of the Group’s Risk Management framework. Within these frameworks, the Group monitors a range of risk metrics to ensure it.

NLB Group Annual Report 2024

Overview

Enhancing its Risk Management system, where consistent integration of ICAAP, ILAAP, the Recovery plan, and other internal stress-testing capabilities into the Risk Management system to assure proactive support for informed decision-making.

14 bps cost of risk on the Group level.

Proactive Risk Management in 2024

As a systemically important bank, the jurisdiction of the Joint Supervisory Team (JST) of: The Group adheres to ECB regulations, with its subsidiaries operating outside Slovenia complying with the rules set by the local regulators in Macedonia, aligning local regulations with CRR rules.

Across the Group, risks are assessed, monitored, managed, or mitigated in a uniformed manner, as outlined in the Group’s Risk Management Framework.

Group members operate under ECB BoS.

Key Highlights

NLB Group has established a uniform stress-testing programme, which includes internally developed models, stress scenarios, and sensitivity analysis, regularly revised and complemented. The Group has established stress-testing stemming from climate risk, which is continuously enhanced by incorporating available ESG-related data.

This comprehensive stress-testing framework undergoes a regular internal validation over the applied and selected risk approaches and internal models.

The business and operating environment relevant to the Group’s operations is evolving, driven by trends such as sustainable technologies and competitors. These trends are actively contributing to a more sustainable, balanced, and inclusive economic and social system, alongside increasing new regulatory requirements to address new potential emerging risks.

Figure 57: NLB Group’s Risk Management Framework

Business strategy	ICAAP & ILAAP inputs	Risk identification	Risk Appetite / Risk strategy (Limit and capital (significant deterioration)
ILAAP	Economic and normative assessment of liquidity	Stress tests	Liquidity contingency plan (LCP)
ICAAP	Economic and normative assessment

---

NLB Group Annual Report 2024

Proactive Risk Management in 2024

A prudent capital-level position and attainment of interim MREL targets. One of the key objectives of Risk Management is to maintain a prudent capital position at individual subsidiary bank levels in accordance with its Risk Appetite. It also incorporates normative and economic perspectives as part of the established ICAAP process. As at 31 December, the CET1 ratio, representing the highest quality capital, stood at 15.3% (1.1 p.p. YoY decrease). Capital is higher mainly due to the partial inclusion of the 2024 profit (EUR 257).

Group for credit risk primarily relates to the ramping up lending activity across all NLB Group banks and the contribution from the acquired SLS Group. The growth in RWA was partially and Credit Valuation Adjustments (CVA) is largely due to higher RWA for FX risk. The rise in RWA for operational risks mainly derives from the higher net interests and net fee and commission income.

As of December 2024, the Group meets all fully loaded regulatory requirements. Moreover, the regular ECB SREP assessment resulted in a stable P2R, remaining at 2.12%, while Pillar 2 Guidance is regularly analysed and monitored. NLB complies with all interim targets. More information on MREL is available in the chapter Funding Strategy, MREL.

A solid liquidity position and structure is another key risk objective. The liquidity position remained stable and strong at the Group and individual subsidiary bank levels. The Group’s LCR d level of the unencumbered eligible liquid reserves remained high, representing 33.2% of total assets. The Group holds sufficient liquidity reserves in the form of placements with the ECB, predominantly consisting of retail customer deposits, which are very stable and consistently growing. The LTD ratio increased to 73.7% from 66.2% at the end of 2023, though it remains at a.

Year	Ratio
2020	3.50%
2021	3.25%
2022	2.75%
2023	2.75%
2024	2.60%
	2.40%
	2.12%

---

NLB Group Annual Report 2024

Overview

Maintaining adequate credit portfolio quality

Maintaining an adequate credit portfolio quality is the most important goal, focusing on cautious risk-taking and the quality of new loans, and leveraging advanced approaches in the credit risk assessment segment, in line with best banking practices, to further enhance the existing risk management tools while enabling faster customer response for clients facing potential financial difficulties and their proactive management. The Group actively supports the SEE markets by financing both existing and new creditworthy clients. The Group's business activities within the region and the EU are focused on providing tailored solutions for retail, medium-sized companies, and small enterprises. In the corporate sector, different types of lending or investment instruments are utilized. All other banking members in the SEE region where the Group operates are universal banks, mainly focused on retail, medium-sized companies, and providing services to clients while adhering to prudent risk management principles. In addition, with the acquisition of the SLS Group, the Group strengthened its leasing position in the Slovenian market.

Retail credit portfolio (gross loans) by segment and geography (in EUR millions)

Segment	31 Dec 2022	31 Dec 2023	31 Dec 2024 w/o SLS Group	31 Dec 2024
Retail/Consumer	SME	Retail/Consumer	Retail/Consumer	SME	Retail/Consumer	Retail/Consumer	SME	Retail/Consumer	Retail/Consumer	SME	Retail/Consumer
Slovenia	4,213	4,633	3,649	2,897	3,932	2,812	3,764	2,865	4,105	3,131	4,368	3,101
31 Dec 2022	4,522	3,642	4,633	3,138	4,522	4,213

Geographical Distribution

Country	Amount (EUR millions)
N. Macedonia	1,468
Montenegro	706
Kosovo	1,067
Serbia	3,375
Slovenia	8,026
BiH	1,350
Other

---

NLB Group Annual Report 2024

Overview

Lending growth, which was modest in 2023 due to rising interest rates, peaked in 2024. In the retail segment, fixed-interest rate lending prevailed, especially in the housing loan market. In the corporate clients while focusing on SMEs as its key segment. The current structure of the credit portfolio (gross loans to corporate and retail customers) consists of 53% retail clients, 19% large corporate clients, with housing loans continuing to be the still prevailing segment. The corporate credit portfolio is well diversified, with no large concentration existing in any specific sector. Transition, and other macro factors could pose challenges to specific economic sectors.

Table 33: Overview of the NLB Group corporate loan portfolio by industry as at 31 December 2024

Industry	Amount (in million)	Percentage	Other Amount (in million)	Other Percentage
Accommodation and food service activities	241.9	3%	50.2	43.0
	Act. of extraterritorial org. and bodies	0.0	0%	0.0	0.0
	Administrative and support service activities	150.8	2%	3.9	39.5
Agriculture	0.8
Construction industry	773.9	10%	23.8	216.9
Education	23.2	0%	5.2	8.3
	Electricity, gas, steam and air conditioning	616.5	8%	55.9	73.2
	Finance	229.1	3%	59.0	84.8
Human health and social work activities	Manufacturing	1,764.5	23%	24.8	239.7
Mining and quarrying	42.5	1%	-1.3	-3.6
Professional, scientific and technical activities	348.1	4%	77.9	113.2
Public administration, defence, compulsory social security	213.9	3%
Storage	634.6	8%	4.7	15.6
Water supply	66.1	1%	-0.5	8.9
	Wholesale and retail trade	1,517.3	20%	19.3	227.0
	Other	0.1	0%	0.0	-2.6
	Total Corporate sector	7,770.7	100%	379.9	1,141.4

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Main manufacturing activities of NLB Group by stages as at 31 December 2024

Credit portfolio in EUR millions	Main manufacturing activities	%	NLB Group	o/w Stage 1	o/w Stage 2	o/w Stage 3
303.4	Manufacture of food products	3.9%	271.6	24.6	7.2	21.4
192.1	Manufacture of fabricated metal products, except machinery and equipment	2.0%	122.3	68.7	1.1	36.1
183.4	Manufacture of electrical equipment	2.4%	179.0	4.0	0.3	-7.4
98.5	Manufacture of motor vehicles, trailers and semi-trailers	1.3%	94.2	0.2	4.1	12.6
86.8	Manufacture of machinery and equipment n.e.c.	1.1%	79.1	6.5	1.2	7.4
74.5	Manufacture of basic pharmaceutical products and pharmaceutical preparations	1.0%	74.5	0.0	0.0	47.7
40.7	Manufacture of wood and products of wood		10.2	3.1	3.5	3.4
44.9	Manufacture of furniture	0.6%	38.5	4.2	2.3	-0.4
43.9	Manufacture of wearing apparel	0.6%	43.4	0.2	0.3	33.9
1,764.5	Total manufacturing activities	22.7%	1,537.5	188.6	38.4	239.7

A moderate transition to Stage 2 occurred in the sub-industry factors that led to the downgrade of certain clients and the recognition of Stage 2 impairments in 2024. The German automotive industry, which significantly influences the European market economy, is export-oriented and integrated into the European supply chain. NLB Group has reviewed its portfolio and anticipates no significant threats to company maintenance services. Financing for both automotive industry segments represents a small part of the Bank’s portfolio – manufacturing accounts for 2.0% and sales for 2.9% of the corporate.

Car sales & maintenance in NLB Group banks

Country	Percentage	Amount (EUR)
BiH	10%	130 million
N. Macedonia	10%
Montenegro	4%
Slovenia	40%
Serbia	12%
Kosovo	24%

Car sales & maintenance in NLB Group

Country	Percentage	Amount (EUR)
Serbia	5%	95 million
Slovenia	76%
France	13%
N. Macedonia	6%

Amount (EUR) 158 million

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Bank’s corporate portfolio also includes financing of real estate activities (projects), which account for a smaller part of the portfolio. These projects are carefully monitored at each phase ranges from 1.2 to 1.4, and the LTV is, on average, below 60%. This ensures that a sufficient reserve and repayment to the Bank is not at risk. For most approved loans, an amortisation repayment contracts (offices and shopping malls segment). In the development phase, the Bank requires a minimum equity contribution of 25% and a pre-lease/pre-sale commitment of 30% for office disbursement. The Bank finances projects sponsored by investors with proven track records. In this portfolio, no issues with occupancy rates or rent deterioration have not been observed.

In the operational phase, with 83% of retail shopping centres, 88% of hotels, and all office and conference centres fully operational.

Figure 61: NLB Group specific Commercial Real-Estate Financing

Macedonia	22%
Montenegro	11%
Serbia	23%
Office & Congress centres	Slovenia	37%	Serbia	63%	˜ EUR 126 million
Hotels	Slovenia	73%	Others	2%	Kosovo	16%

---

NLB Group Annual Report 2024

Overview

In the current macroeconomic environment, the Group’s asset quality remains robust. The majority of the Group’s loan portfolio is classified as Stage 1 (93.4%), a relatively small portion as Stage 2. The increase in Stage 2 in Q4 within the corporate sector was affected by the deteriorating financial position in the basic metals manufacturing industry. The increased Stage 2 exposure reflects changes in the early detection of SICR. However, the increase remains modest compared to the total portfolio volume, with 72.2% of the Stage 2 exposure showing no delays. The loans in value through profit or loss (FVTPL). The outflow in the state and institutions segment is due to the redistribution of excess liquidity into high-quality sovereign bonds and financing newly corporate segments has replaced exposures to sovereign and institutions.

Table 35: NLB Group loan portfolio by stages as at 31 December 2024 (in EUR millions)

Credit portfolio	Stage 1	Stage 2	Stage 3 & FVTPL
Credit portfolio	Share of Total	YTD change	Credit portfolio	Share of Total	YTD change	Credit portfolio	Share of Total	YTD change
Total NLB Group	19,313.8	93.4%	74.6	1,036.8	5.0%	332.6	330.5	1.6%	30.0
o/w Corporate	6,960.6	89.6%	955.0	626.5	8.1%	172.2	183.7	2.4%
o/w State	3,766.7	100.0%	-2,161.4	0.0	0.0%	0.0	0.0	0.0%
o/w Institutions	408.4	100.0%	-42.3	//	-0.3	0.2	0.0%	0.1

The portfolio quality remains stable, with increasing Stage 1 exposures and a relatively low percentage of NPLs. The acquisition of the SLS Group increased Stage 1 exposure to the n 562 million. Although the Stage 1 loan portfolio percentage slightly decreased compared to 31 December 2023, it remains high at 93.6% in the retail segment and 89.6% in the corporate sector.

Stage 1 by segment (in EUR millions)

Corporate	Retail	Corporate	Retail	Corporate	Retail
31 Dec 2022	31 Dec 2023	31 Dec 2024	+16% YoY	+19% YoY	+38% YoY
+64% YoY	+8% YoY	+12% YoY

Figure 63: NLB Group corporate and retail loan portfolio (in %) by interest rates as at 31 December 2024

The portfolio interest rate structure shows that 59.3% of the Group corporate and retail loan portfolio is linked to the Euribor reference rate. Floating interest rates dominate the corporate segment. In the retail segment, 75.1% of the retail loan portfolio is linked to a fixed interest rate, with the percentage rising in the retail sector to potential changes in reference rates.

31 Dec 2022	31 Dec 2023	31 Dec 2024	31 Dec 2022	31 Dec 2023	31 Dec 2024
Fix	70%	59%	41%	26%	74%
Float	76%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NPLs formation and NPL management

In 2024, NPL formation amounted to EUR 170 million or 0.8% of the total loan portfolio. In addition to normal portfolio development, the new non-default definition within the acquired SLS Group companies. Despite this, the net NPL increase during 2024 remained low, as evident in the nearly unchanged NPL ratios. The Group’s credit warning systems.

Year	Corporate	SME	Retail	Formation / gross loans (stock)
2022	5170	7	127	43
2023	76118	77	93	170
2024	0.7%	0.6%	0.8%	0

Figure 64: NLB Group gross NPL formation (in EUR 20.6 million). The established impairments derive from portfolio development mostly in the retail segment (Stage 2 and Stage 3 exposures), new financing, and any deterioration in the overall impact. As a result, at year-end, the cost of risk was 14 bps, remaining at a relatively low level. While macroeconomic conditions in the region may continue to grow, and rising unemployment, these developments are unlikely to have a substantial negative impact on the cost of risk.

Changes in models/ risk parameters	Portfolio development	Release	Establishment
-20.6	24.9	-62.1	16.7

Figure 65: Cumulative net new impairments and provisions for credit risk in NLB Group (in EUR millions).

NLB Group Annual Report 2024

Overview

Precisely defined targets and various proactive workout approaches have supported the management of the non-performing portfolio. The Group’s approach to NPL management puts a strong emphasis on foreclosure of collateral, the sale of claims, and pledged assets. In 2024, the multi-year declining trend of the non-performing credit portfolio stock stopped, as the growth of new NPLs slightly increased due to clients and the collection. The acquisition of the SLS Group, whose loans were recognised at fair value, also contributed to the NPL increase at the end of Q3 2024. As a result, the non-performing credit portfolio stood at EUR 300.5 million at the end of 2024, up from EUR 300.5 million at the end of 2023. This slight increase in the non-performing credit portfolio, combined with credit growth in a higher-quality portfolio, resulted in an NPL methodology, which stood at 1.1%. The Group’s indicator gross NPL ratio, as defined by the EBA, was 2.0%.

Performance Overview

31 Dec 2021	31 Dec 2022	31 Dec 2023	31 Dec 2024
1.5%	2.4%	1.8%	1.6%
NPLs	33055.9%	61.7%	61.0%
62.7%	64.6%	86.1%	98.9%
110.0%

Figure 66: NLB Group NPL, NPL ratio, NPL collateral coverage and coverage ratio (i) An important strength of the Group remains high at 108.7. Furthermore, the Group’s NPL coverage ratio 2 (coverage of gross NPLs with impairments for NPL) stands at 62.7%, well above the EU average published by the EBA. The Group strives to further reduce NPLs without significantly impacting the cost of risk in the coming years. The Group ensures the best possible collateral for long-term loans, typically in the form of corporate and retail loans. In corporate loans, government and corporate guarantees are also common types of collateral. Through extensive experience gained over the past few years in managing NPLs, the Group has developed an extensive knowledge base. This expertise encompasses both the prevention of financial difficulties for clients to restructure viable clients in case of need and to efficiently manage the NPL portfolio.

NLB Group NPL by Geography as at 31 December 2024

Slovenia	50%
Other	8%
Kosovo	5%
N. Macedonia	11%
BiH	7%
Montenegro	9%
Serbia	9%

Considering materiality of delays, namely 2% or EUR 50 thousand. (i) By internal definition.

NLB Group Annual Report 2024

Overview

across the Group. Risk units, along with restructuring and workout teams, are adequately staffed and equipped to handle considerably increased volumes, if needed, in a professional and efficient manner.

The Group maintains a low-risk appetite. The exposure to trading (as defined by the CRR) is permitted only for the parent Bank, as the main entity of the Group, and is highly limited. The Group operates in domestic currencies, also in euros, the Group’s reporting currency. The Group’s net open FX position from transactional risk is low, at 0.7% of capital. Regarding structural FX positions, euro currency at the closing FX rate on the balance sheet date. FX differences in non-euro assets and liabilities are recognised in the other comprehensive income, impacting shareholder’s equity.

The Group follows a strategy of maintaining a low Economic Value of Equity (EVE) indicator while simultaneously monitoring the effects on Earnings at Risk (EaR). Bonds and loans with a fixed Economic Value of Equity (EVE) indicator. In contrast, exposure is primarily managed through core deposits, which present the most important and material element of interest rate risk management.

The exposure to interest rate risk remains modest and within the Group’s risk appetite limits. The Group applies different scenarios when assessing the EVE sensitivity. In 2024, the Group established robust operational risk culture. The main qualitative activities focus on reporting loss events and identifying, assessing, and managing operational risks. Based on this, continuous improvement is pursued.

Additionally, the Group also focuses on proactive mitigation, prevention, and minimisation of potential damage. Special attention is given to the stress-testing system, based on a scenario on loss events. The Bank uses the gamma distribution technique for modelling, which proved to be the most suitable. From an economic perspective, the aim is to ensure the necessary capital is available for realised loss events, which are used with a confidence interval of 99.9%. Moreover, some add-ons are added for specific current and significant risks. In a normative view, a 90% confidence level is maintained.

In NLB Group, the reported incurred net loss arising from loss events in 2024 was lower than in the previous year, and remained within the set tolerance limits for operational risk. Certain losses were related to loan processing fees and loan insurance premiums in Serbia. For other realised operational losses, banking members of the Group conducted a comprehensive analysis and defined strategies to address them. In addition to losses already included in the loss event database, the Bank could face one-off and unpredictable extreme events. The list of such potential events is updated annually, based on emerging risks.

these potential and topical events, scenario analyses are prepared. The cyber-attack scenario as an umbrella scenario was further divided into five more detailed scenarios to address different potential events: possible difficulties operating electronic banking channels, anti-money laundering, cyber-attacks, and legal risks. For these scenarios, existent controls were added to address deficiencies. Furthermore, key risk indicators serve as an early warning system for the broader field of operational risks (such as HR, processes, systems, and external conditions). They are system and enable timely reactions. The Group supports proactive discussion of operational risks at all levels of the organisation. Every employee can report loss events. The most significant Committee meeting, while the implementation of the mitigation measures is closely monitored. In addition, the Group diligently manages other non-financial risks, related to its business.

Incorporating ESG risks

The Group contributes to sustainable finance by incorporating ESG risks into its business strategies, risk management framework, and internal governance arrangements. The management of ESG risks follows ECB and EBA guidelines, following the tendency of their comprehensive integration into the risk identification process to determine the level of transitional and physical risk to which the Group is exposed. This process involves identifying environmental risk factors, relevant transmission channels, and assessing their materiality and impact on the Group’s financial performance over short-, mid-, and long-term periods. The management of ESG risks is incorporated into the Sustainable financing is implemented in accordance with the Group’s Environmental and Social Management System (ESMS). In addition to addressing ESG risks at all relevant stages of the evaluation process.

At the portfolio level, the Group does not face any significant concentration in specific NACE industrial sectors exposed to climate risk, with the role of transitional risk corresponding emissions, the Group has a relatively low exposure to emission-intensive sectors within its corporate clients’ businesses. As part of its strategy, the Group does not finance coal. Moreover, as a member of the UN Net-Zero Banking Alliance, the Bank pledged to align its lending and investment portfolio with net-zero emissions by 2050. In its initial round of NZBA (such as power generation and iron and steel) and other sectors where the Bank has substantial emissions and/or exposure and available data. These include residential mortgages and commercial transport and agriculture are underway.

The Group carefully evaluates potential reputational and liability risks that may arise from the sustainable financing of its clients. Special attention is given to clients. Additional key risk indicators have been established to serve as an early warning system for ESG risks. Besides, physical risks, as part of ESG risks in the area of operational risk, are carried out to protect lives, goods, and reputation. Business continuity plans included relevant ESG risks. They are prepared to be used in the event of natural disasters, IT disruptions, and a testing framework was developed to identify the most relevant financial vulnerabilities stemming from transitional and physical climate risks. This was further revised and enhanced by including material impacts on the Group’s capital and liquidity positions. Further information on risk management is available in the Financial Report and the Sustainability Statement of this Annual Report.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

IT and Cyber Security

The Group remains committed to providing its clients with sustainable and efficient services supported by highly reliable and secure technology platforms. The Bank is a systems. IT has made significant progress in the consolidation process at the Group level. Additionally, the Bank has rolled out further group-wide business solutions, including the launch of channels across multiple group members. To address the increased risk in cyber security, the Bank has prioritised investments in additional resources and products to strengthen its overall.

Group dimension covers the following:

IT Strategy 2025–2030

With the adoption and publication of the new Business strategy 2030 (New Horizons) and the conclusion of the current IT Strategy, the elements of the new IT Strategy are:

• Transformation of IT to support the implementation of the new Business Strategy;
• Continue to implement agile ways of development to ensure better solutions;
• Future development and enhancement of information and cyber security capabilities.

IT Infrastructure: Ensuring reliability and resilience

Confirmed high performance with number Balanced Scorecard (BSC) system. The indicators reflect the high performance of IT operations and successful risk management in this segment. With 99.95% IT system availability and a percentage of days without system/service interruptions reached 80% (2023: 79%). Harmonised Service Level Agreements (SLA) are in place with users of the information system, which operational performance (between 99.87% and 99.99%).

Main IT initiatives

Transformation with expanding group-wide capabilities. The primary focus is to transform IT, covering the organization in an agile way of delivery to make a better partner to businesses, resulting in higher efficiency. Specifically, a Group IT domain concept was introduced that promotes shared teams and IT solutions.

Competence Centre in Belgrade, Serbia, which was transferred from the Bank to a separate IT service company called "NLB DigIT," significantly supports development on the Group transformation projects. NLB DigIT’s primary focus is to deliver services of a high level of quality to Group entities in domains where IT resources and expertise are scarce throughout banks, IT delivery, etc. NLB DigIT is dedicated to the digital enablement and reliable IT operations of NLB Group.

Vision

Build the best digital banking IT team in the SEE region. Make a platform, digitise client journeys and interactions (CRM), and achieve operational excellence.

- Have an effective IT architecture using cloud solutions and open-source software where possible.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Change in our delivery approach

The IT team has made significant achievements in the key strategic directions regarding solution delivery. The new operational CRM solution was introduced, origination processes for several products. A new retail and corporate web and mobile banking solution was launched in Montenegro (NLB Banka, Podgorica) and Bosnia and Herzegovina.

Progress in reducing reliance on the mainframe and migrated the next set of applications from the mainframe to distributed systems. Various enhancements have been implemented across digitalising paper documents.

Core systems consolidation

IT has followed the core banking system strategy, and the consolidation of core banking systems is in progress. Following the NLB Group's strategy, work is ongoing on consolidation into the target core system. Key achievements include the migration of the term deposit portfolio and the successful launch of term deposit origination in the target system.

Ensuring new solutions (focusing on Group standard solutions) adhere to Group standards and associated Group roadmaps. The introduction of standard components provides API-first and solutions. New Group platforms have been selected for electronic archiving, document management, data governance and data quality, and the ERP system.

Application portfolio management

Mitigate software obsolescence, enhance IT risk management, and support compliance with the Digital Operational Resilience Act (DORA) requirement organisation through a series of initiatives. The aim is to make necessary data and reports readily accessible across the Group to foster the use of data and analytics in daily operations.

Life cycle through data governance policies and tools, necessary frameworks, as well as setting modern technological foundations across the Group (EDWH, advanced analytics, risk management) is placed on defining the Group-wide GenAI strategy and delivery model to ensure GenAI becomes an integral part of day-to-day business at all Bank levels.

Outlook

In the coming years, supporting the business strategy, especially in digital, data, Cloud, and customer relationship management. The aim is to consolidate the Group’s infrastructure and to endorse the Cloud as innovation, reliability, and security.

Digital transition

The Group is advancing its digitalisation efforts by leveraging cutting-edge information technology tools to boost efficiency and deliver smartphone usage. The Group aims to transition more customers to alternative distribution channels. Committed to developing a comprehensive suite of 24/7 digital solutions, the Group seeks to promote digital banking adoption among active customers.

Figure 68: Digital users and penetration

(i) of the Group banks as at 31 December 2024 (i) Sh

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Cybersecurity

Key activities and progress

The Group focuses on cyber security, ensuring the confidentiality, integrity, and availability of data, information, and IT systems. The Group is constantly tested and upgraded through security assessments, independent reviews, and penetration testing. It is also regularly discussed at the Bank’s Information Security Steering Committee.

The main focus was the DORA regulation and establishing Group IT Security Operations. This will lead to appropriate segregation of duties and faster delivery in the cyber security segment. The Group IT Security team consists of 31 staff members. To fulfil all requirements, the Group IT Security team has created or updated 10 Group Guidelines and/or Policies in collaboration with management, marking a significant increase compared to the previous year.

Management continues to strongly support security functions and investments in the security area. In 2024, funding ended with approximately EUR 4 million, while CAPEX remained at the same level. To achieve the defined goals in terms of optimisation and orchestration, the Group IT Security team has selected an anti-fraud solution and immediately began its implementation. The main focus will also remain on improving the monitoring and response segment in line with compliance and integrity.

Continuous employee education and information exchange are crucial. All employees in the Group are continuously educated about the importance of information/cyber security and customers are provided with security notifications, especially regarding threats in the (global) environment with potential impact on the banks’ IT systems, services, products, and clients. The Bank also shares intelligence data, where all Group members provide information on the latest threats and recommendations on mitigation measures.

In conjunction with routine phishing simulations, the platform effectively executed simulated internal employee phishing tests across all Group members.

Each expert in our field cultivates knowledge and growth across the entire financial sector. We constantly invest in the development of our employees. In 2024, a NLB Group banking employee personal development, generative AI, data analytics and ESG. All these programmes are carefully selected and provided by NLB's Education Centre with more than 50 years of experience.

NLB Group Annual Report 2024

Overview

Human Resources

As a frontrunner in the region, the Group is further striving to embed modern people practices into the everyday focus of Human Resource Management activities. The business strategy in the future. The Group continues to invest in its employees, focusing on their development and expertise, and creating a modern and healthy workplace that promotes goals and driving successful outcomes, the Group will make further investments in leadership development and empowerment. Employees play a key role in transferring good practices and nurturing a new generation of talents for the future, aiming to provide them with on-the-job training by being part of strategic projects.

Employee headcount

The Group continues optimising workforce planning, including a review of the skills and competencies needed.

Country	31 Dec 2024	31 Dec 2023	Change YoY
Slovenia	2,856	2,680
Montenegro	410	390	20
Croatia	411	40
Germany	0	0	0
Switzerland	2	2	0
Group Total	8,322	7,982	340

Employer of choice

The Group’s Human Resource teams work as one, continuously sharing efforts contribute to a stimulating work environment and the well-being of employees. A testament to this excellence is the Top Employer Certificate. In 2025, NLB received the Slovenia Top Employer Certificate, and Banka, Beograd earned its first certification, reflecting dedication to extending excellent and proven HR practices across the Group. This achievement, confirmed by Top Employer Institute digitalisation, talent acquisition and development, performance management, sustainability, and more. The Bank will continue to adopt new practices and adapt to workplace trends.

A long tradition of learning and development: 50 years of the NLB Education Centre

In 2024, the NLB Education Centre celebrated its 50-years anniversary. Located in Slovenia, it has been a treasurer of valuable knowledge libraries for the entire NLB Group. In the last decade, it has been modernised and digitalised, becoming the core of delivering core banking/financial skills, necessary competencies (leadership, change management, and communication) and obligatory training, the main role of the Education Centre today is to have an impact on the Group’s future and support knowledge accumulation that supports the changing business environment. In 2024, special focus across the Group was given to upskilling existing topics, among other areas. The Education Centre is also a central point of support for all new group initiatives, such as educating competency communities, rolling out and building awareness.

On average, employees spent 7.7 days on training activities.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Group members incorporated the philosophy of utilising well-established training and development programmes, as well as maintaining awareness of the learning culture. Employees have which offers over 7,000 trainings that are open to anyone. One of the Group’s core values is developing people, and endeavours will continue in the direction of upskilling and reskilling, a time high engagement.

Talent cultivation

The Group has entered a new generation of talent development, recognising and developing employees in leadership, professionalism, and youth potential through conversations regarding their strengths and career aspirations. The latest generation of talent across the Group has been successfully deployed and promoted, with a talent retention rate of m.

The employer brand regionally through various internal and external activities. As a caring mentor, the Bank cooperates with multiple regional universities, offering scholarships and career opportunities, recommendations for employment, offers various benefits to employees and introduces continuous improvements to its processes.

Employee well-being & health

Employee well-being is being prioritised with psychological support services and offers a range of additional benefits, including those under the Family Friendly certificates. In 2024, the Bank continued to raise awareness about employee mental well-being, mindfulness, personal energy, and effective communication. Various programmes run regionally under the Healthy Bank programme and the Family Friendly certificate include several health-focused prevention programmes.

The Bank organised a Group-wide "Sustainability Festival," celebrating environmental awareness and eco-friendly practices, featuring engaging activities. The value, "Improving Lives" is also manifested in offering work-from-home flexibility where possible to ensure a healthy work-life balance for its employees. By end of 2024, almost all countries' employees had this possibility.

Employee engagement

The Bank’s constant focus is recognising the importance of engaged and motivated employees. The 2024 employee engagement results show the lowest-ever percentage of disengaged employees. The employer Net Promoter Score (26) also proves that employees are the Bank’s best ambassadors. The Bank will continue to enhance constructive dialogue and employee listening.

Figure 69: NLB Group Employee Engagement comparison

8,322 employees in the Group family	Engaged	Not engaged	Actively disengaged
2023

---

NLB Group Annual Report 2024

Corporate Governance

Corporate governance of the Bank is based on legislation in the RoS, particularly (but not exclusively) the provisions of the Companies Act (ZGD-1) and the Banking Act. Adequate Internal Capital Assessment Procedure for Banks and Savings Banks, relevant EBA Guidelines on internal governance, EBA Guidelines on the assessment of the suitability of remuneration, relevant EU regulations regarding sustainability issues and other applicable RoS and EU regulations.

Apart from a binding legal framework, the Bank complies with the Slovene governance, management, and leadership principles based on the "comply or explain" principle for companies listed on the Ljubljana Stock Exchange. Deviations from the recommendations are documented in the Governance Statement of NLB. This statement is prepared in accordance with Article 70 (Paragraph 6) of the Companies Act (ZGD-1). The previously mentioned statement is also published.

The processes through which Bank objectives are set and pursued (directed and controlled) have become an efficient way to channel investor-driven initiatives related to sustainability among different stakeholders in the Bank (the Management Board of NLB d.d. and Supervisory Board of NLB d.d., shareholders, investors, creditors, auditor, regulators, and other stakeholders).

The most important rules and procedures are: Articles of Association of NLB d.d. NLB operates under a two-tier governance system, as defined by the Banking Act (ZBan-3) and Companies Act. The Supervisory Board provides for control and supervision of the Management Board’s work. Shareholders exercise their rights at General Meetings of Shareholders. For more information, refer to the Bank's Group Governance Policy.

The Corporate Governance Policy of NLB, which is the corporate governance framework of the Bank, is drawn up jointly by the Management and Supervisory Boards. It outlines commitments to shareholders, clients, creditors, employees, and other stakeholders as a whole and explains how the Bank is managed and supervised, as well as adopts decisions on which corporate governance principles and mechanisms of the Group members (NLB excluded) are based.

The Code of Conduct defines the values, mission, and core principles of conduct together with a set of guidelines to which the Group is committed. The Code describes the values and basic principles followed by the whole Group. Operating with integrity and responsibility is key to the Group’s corporate culture. The Code demands that every employee, regardless of their job or location, acts with integrity.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Bank’s governing bodies

The Bank’s corporate governance is based on a two-tier system in which the Management Board manages the Bank’s daily operations, and the Supervisory Board.

The shareholders exercise their rights related to the Bank’s operations at the General Meetings of the NLB. Decisions adopted by the General Meeting of shareholders of NLB d.d. include, among others, the allocation of distributable profit, granting a discharge from liability to the members of the Management and Supervisory Boards, changes to the Bank’s share capital, appointing and discharging members of the Supervisory and Management Boards and employees, annual schedules, and characteristics of issues of securities convertible into shares and equity securities of the Bank.

The General Meeting adopted the NLB Group Annual Report 2023 and the Report of the Supervisory Board on the results of the examination of the NLB Group Annual Report 2023. They also adopted the Report on Remuneration in the 2023 Business Year on the basis of SSH’s Baselines and the Internal Audit Report for 2023, adopted decisions on the allocation of distributable profit for 2023 and the first tranche of a dividend payout, and granted a discharge from liability to the members of the Supervisory Board of NLB d.d. and Management Board of NLB d.d.

On the 43rd General Meeting of shareholders held on 9 December 2024, the shareholders approved dividends totalling EUR 220 million, derived from the profits generated in 2023, representing a 100% increase compared to the previous year. More information on dividend policy is available in the chapter Corporate Governance Statement of NLB and on the website.

NLB Group Annual Report 2024

Supervisory Board

According to the Articles of Association of the NLB d.d., the Supervisory Board of NLB consists of 12 members, of which eight represent the interests of shareholders. Members representing the interests of shareholders are elected and recalled by the General Meeting from persons proposed by shareholders or by the Supervisory Board. Members of the Supervisory Council of NLB d.d. consider the conditions for members of the Supervisory Board laid down in the regulations and the Articles of Association of NLB d.d.

As at 31 December 2024:

• Primož Karpe – Chairman
• Shrenik Dhirajlal Davda – Deputy Chairman
• David Eric Simon
• Verica Trstenjak
• Islam Osama Zekry
• Mark William Lane Richards
• Cvetka Selšek
• André-Marc Prudent (employee representatives)

As the mandates of Primož Karpe, David Eric Simon, and Verica Trstenjak expired in 2024, three members were proposed for election at the forthcoming General Meeting in 2025. The new members include:

• Natalia Olegovna Ansell, a seasoned banker with global experience and detailed knowledge of all technical payment and card systems
• Luka Vesnaver, Chairman of the Board of Directors of the British-Slovenian Chamber of Commerce who has vast knowledge and experience in the field of commerce

Primož Karpe was elected as a member of the Supervisory Board. Natalia Olegovna Ansell began her term on 8 November 2024 (both following ECB’s decision not to object to their appointments).

The Supervisory Board also consists of:

• Deputy Chairman Shrenik Dhirajlal Davda
• Islam Osama Zekry
• André-Marc Prudent-Toccanier
• Mark William Lane Richards
• Cvetka Selšek
• Sergeja Kočar (re-appointed in 2024 by the NLB Workers’ Council for another term)

The mandate of Islam Osama Zekry expires in 2025, while the mandates of André-Marc Prudent-Toccanier expire in 2027.

Number of members: 10, of which eight are shareholders’ representatives, while two are employees’ representatives. Out of 10 members, 4 were female (40%).

Sustainability Statement chapter ESRS-2 GOV-1

The role of administrative, supervisory and management bodies.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Supervisory Board Members as of 31 December 2024

Representative	Term of Office	Membership in Committees	Membership in Management Bodies of Related or Unrelated Companies
Primož Karpe, MSc (Chairman)	2016–2020, 2020–2024, renewed term 2024–2027	• Remuneration Committee (Chairman) • Risk Committee (Member) • Audit Committee (Member) • Operations and IT Committee (Member)	• Angler d.o.o., Zagreb – Director • Charity Commission of England and Wales – Commissioner • British Slovenian Chamber of Commerce – President of the Management Board • Managers’ Association of Slovenia – Member
Luka Vesnaver, MSc (Member)	2024–2028	• Operations and IT Committee (Deputy Chairman) • Nomination Committee
Islam Osama Zekry, PhD (Member)	2021–2025	• Audit Committee (Chairwoman) • Risk Committee (Deputy Chairwoman)	• Commercial International Bank, Egypt – Group Chief Financial Officer and Board Member • CIB Housing Association – President of the Supervisory Board
André-Marc Prudent	2019–2023, renewed term 2023–2027	• Audit Committee (Deputy Chairman) • Remuneration Committee (Member)	• VenCap International plc, UK – Chairman • Berry Palmer & Lyle Ltd. Global, Cairo – Chairman
Cvetka Selšek (Member)	2023–2027	• Operations and IT Committee (Chairman) • Risk Committee (Member)
Natalia Olegovna Ansell (Member)	2024–2028

Further Information

Further information about the work and composition of the Supervisory Board is available in the chapter Corporate Governance Statement of NLB.

NLB Group Annual Report 2024

119 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Committees of the Supervisory Board

The Supervisory Board appoints committees that prepare proposals for resolutions passed by the Supervisory Board, ensures their implementation, and making and advisory committees.

Committee	Chairman	Deputy Chairman	Members
Audit Committee	Cvetka Se Karpe
Risk Committee	Shrenik Dhirajlal Davda
Nomination Committee	Mark William Lane Richards	Cvetka Selšek
Remuneration Committee	David Eric Simon	Osama Zekry
Operations and Information Technology (IT) Committee

Members

Cvetka Selšek, Deputy Chairwoman (until 9 September 2024)

Shrenik Dhirajlal Davda, Member (until 9 September 2024)

Islam Osama Zekry, Member (from 9 September 2024)

Luka Vesnaver, Member (from 30 September 2024)

Sergeja Kočar, Member

Tadeja Žbontar Rems, Member

Primož Karpe, Member

André-Marc Prudent-Toccanier, Member (from 9 September 2024)

Natalia Olegovna Ansell, Member (from 8 November 2024)

Verica Trstenjak, Member (until 17 June 2024)

David Eric Simon, Chairman (until 17 June 2024)

NLB Group Annual Report 2024

Overview

Management Board

According to the Articles of Association of the NLB d.d., the Management Board consists of three to seven members (the president and up to six members) that are appointed to a five-year term of office and may be re-appointed or dismissed early by the law and Articles of Association of the NLB d.d.

As at 31 December 2024, the Management Board is as follows:

• Blaž Brodnjak as President & CEO
• Archibald Kremser as Chief Financial Officer (CFO)
• Peter Andreas Burkhardt as Chief Risk Officer (CRO)
• H and Private Banking
• Antonio Argir who is responsible for Group governance, payments, and innovations
• Andrej Lasič as CMO, who is responsible for Corporate and Investment Banking

The mandates of Peter Andreas Burkhardt expire in July 2026, while the mandates of Hedvika Usenik, Antonio Argir, and Andrej Lasič expire in April 2027.

Number of members: 6

5 members-year term of office

Term 2021–2026

Peter Andreas Burkhardt CRO

Term of office: 2013–2016, 2016–2021, renewed term 2021–2026

Archibald Kremser CFO

Term of office: 2013–2016, 2016–2021, renewed term 2021–2026

Functions and Achievements

• More than 24 years of experience in managerial positions on all levels of international banking groups.
• Was a chairman or member of the supervisory boards of 1 asset management company in Slovenia, and a multinational production group.
• Other important functions and achievements: More than 23 years of experience in banking, especially in Central Europe until present.
• More than 24 years of experience in the financial services industry in Austria, CEE, and SEE, focusing on finance and asset management.

Responsibilities

• Strategy and Business Development
• Legal and Secretariat
• Brand and Communication
• Human Resources and Organisation Development
• Internal Audit
• Compliance
• Retail
• Workout and Legal Support
• Restructuring
• Evaluation and Control
• Financial Instruments Processing
• Corporate Clients Review and Account Products Delivery
• Corporate Loan Accounting and Administration
• Controlling
• Financial Markets
• Group Real Estate Management
• Investor Relations
• IT Delivery
• IT Infrastructure
• Data and Artificial Intelligence
• Procurement

Membership in Management or Supervisory Bodies of Related or Unrelated Companies

• Chairman of the Supervisory Board of NLB Banka, Skopje
• Chairman of the Supervisory Board of the Association of Slovenia
• Member of the Board of Directors of Basketball Club Cedevita Olimpija

---

NLB Group Annual Report 2024

Overview

Management Board Composition

As of 2024, the composition of the Management Board was as follows:

Antonio Argir	Responsible for Group governance, payments, and innovations	Term of office: 2022–2027
Andrej Lasič	CMO (responsible for Corporate and Investment Banking)	Term of office: 2022–2027

Other Important Functions and Achievements

Under the management of Antonio Argir, NLB Banka, Skopje marked exceptional growth in profitability and share price increasing fivefold.

Antonio Argir has over 27 years of experience in corporate and investment banking, with more than 18 years of managerial experience.

Direct Responsibility

• Group Steering
• Cash Processing
• Payments Processing
• Structure Advisory and Cross-Border Financing
• Large Corporates
• Small and Mid-Corporates
• Trade Finance Services
• Investment Banking and Custody
• NLB Group Corporate and Investment Distribution Network
• Customer, Product Management, and Digital Services
• Development of Lending Solutions for Retail

Membership in Management or Supervisory Bodies

Membership in management or supervisory bodies of related or unrelated companies:

• Chairman of the Supervisory Board of NLB Lease&Go, leasing, Ljubljana
• Chairman of the Supervisory Board of NLB Banka, Podgorica
• Chairman of the Board of Directors of NLB Banka, Prishtina
• Deputy President of the Supervisory Board of Bank Association of Slovenia
• Chairwoman of the Banka, Banja Luka
• Member of Management Board of the Institute for Economic Research
• Member of Management Board of British–Slovenian Chamber of Commerce

Governance Statement of NLB

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Collective decision-making bodies

The Management Board appoints different committees, commissions, boards, and working bodies to execute relevant tasks within the powers of the Management Board of the NLB Group.

NLB Operational Risk Committee

Chairman	CRO
Number of members	7

Change the Bank Committee

Chairman	CFO
Number of members	16

Risk Committee

Chairman	CRO
Number of members	5

Sales Committee

Chairman	CEO
Number of members	15

Private Individual Credit Committee

Chairman	CEO
Number of members	5

Climate Change Committee

Chairman	CFO
Number of members	12

The Risk Committee is a decision-making body responsible for monitoring credit portfolio quality, topical or certain areas/segments of credit, commercial and other related risks in NLB and NLB Group. The Committee meets quarterly to give opinions and decide on real estate matters.

The Sales Committee adopts decisions on managing the range of products and services and the relations with clients. The Committee decides on the approval of loans and other investment proposals that deviate from standard banking products and services, representing additional risks for the NLB Group.

The NLB Group is a decision-making and advisory body responsible for implementing the net-zero strategy. It comprises Management Board members and core team representatives from key departments.

NLB Group Annual Report 2024

Overview

Target setting and KPI monitoring. As a rule, Committee meetings are convened biannually. The Management Board also appointed working bodies that operate at a lower level:

• Committee for Anti-Money Laundering
• Commission Corporate Customer Acceptability Committee

Advisory bodies of the Bank’s Management Board

• Watch List Committee
• NLB Group Non-Performing Assets Divestment Committee
• NLB d.d. Sustainability Committee

Chairman: CRO

Number of members: 7

Number of members: 20

The Watch List Committee is a body which monitors the progress of activities for clients on the Watch list. As a rule, committee meetings are convened quarterly.

The Committee oversees the integration of operations of Non-Core Group Members and issues opinions, recommendations, and initiatives. As a rule, committee meetings are convened quarterly. The Committee shall discuss, develop, and approve sustainability-related strategic objectives and shall monitor its development and realization. As a rule, committee meetings are convened quarterly.

NLB Group’s governance

As the members in compliance with EU and BoS legislation, the local legislation, and regulatory requirements applicable to respective Group members while also considering internal policy comprehensively defines the Group operating model through corporate and business governance rules, principles, criteria, and mechanisms that define relevant stakeholders’ roles, and business goals.

In the Bank, the Group Steering Department is the principal partner of the Bank’s Management Board in the corporate also partially so in the business governance of strategy which consists of three pillars:

1. Corporate Governance, which is carried out following fundamental corporate rules and governance principles comprised of:
2. Shareholder voting at the General Meeting of Group members
3. Offering professional support to supervisory bodies of NLB Group members
4. Offering professional support in the selection of candidates for management of NLB Group
5. Business Governance which is carried out through mechanisms that ensure efficient business guidance and oversight:
6. Setting up a formal business governance framework by Group Steering Lines.
7. The Internal Control Functions serve as the second and third lines of defence. In addition to standardisation and harmonisation in their respective areas, they also oversee the implementation of Compliance, including AML, Information Security, Prevention and investigation of fraud to detriment of the bank, and Physical Security.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Figure 70: NLB Group Governance Model

NLB Group consists of NLB and Group members who represent:

• financial core members: banks, leasing companies, and asset management companies;
• non-core members: companies in the wind-down process or companies considered non-strategic to NLB Group.

At the end of 2024, the Group completed the transaction and became the sole shareholder of SLS HOLDCO, Ljubljana, the parent company of Summit Leasing Slovenija, Ljubljana, and its subsidiary in Croatia Mobil L.

The remaining changes were as follows:

• NLB Skladi, Ljubljana, has taken over 100% ownership of Generali Investments, Skopje, and further NLB Lease&Go, leasing, Ljubljana.
• The merger of the company NLB Leasing, Ljubljana, – vlikvidaciji, with the company NLB Lease&Go, leasing, Ljubljana.
• The merger of the company NLB Leasing, Ljubljana, with the company NLB Lease&Go, leasing, Ljubljana.

Governance Policy was renewed by enhancing the role of Competence Lines, which is the main business governance counterpart of the Group members. It is responsible for harmonising a business governance hierarchy with professional, competent, and qualified teams that are entirely or at least primarily dedicated to the Group.

Recently, the governance of the two subgroups is responsible for the business and corporate management of its direct subsidiary, i.e. the parent company of the subgroup, and the parent company of the subgroup is responsible for the business requirements of the NLB Group (where appropriate). NLB, however, established governance monitoring mechanisms over all subgroups.

The legal and organisational structure of the bank arrangements about close links and the arrangements regarding the governance of subsidiaries, are available on the Bank’s website.

Sustainability Management

General Assembly of NLB S

Bodies of NLB Group members

Management Board of NLB Group members

Business Governance

Competence Lines

Group functions

Competence Centres

Centres of Excellence

Group domains including also AML, CISO, Prevention and investigation of fraud to detriment of the bank, and Physical Security.

General Assembly of NLB Group members

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Compliance and Integrity

The Group systematically approaches compliance, addressing the complexities of evolving regulatory requirements to ensure that employees and decision-makers continue to strengthen its compliance function and enhance operational due diligence.

Core financial members included, excluding NLB. Incorporation by reference: The reference is made to this chapter from the Sustainability Statement chapter.

Group’s day-to-day business to support its operations, contribute to its robust internal control environment, and mitigate compliance risks.

Group-wide ethics and integrity standards include:

• Prevention of money laundering and terrorist financing (MLTFP), and restrictive measures;
• Personal data protection (DPO);
• Information security (CISO);
• Regulatory conflicts of interest;
• Prevention of abuse on the financial instruments market;
• Cooperation in the procedure of assessment of the suitability of key function holders;
• Efficient, consistent integrity;
• Cooperation in the system of internal controls;
• General professional ethics;
• Physical/technical security.

Within the programme’s framework for ensuring business compliance, the highest standards of ethical conduct are fostered, creating a culture of trust, responsibility, and accountability among employees and stakeholders. Transparency and sustainable practices are integral to the community.

Through its actions, the Group strengthens trust, contributes to economic stability, and fosters positive change in the markets it serves.

Prevention: As part of the Group’s commitment to protect the Group and its stakeholders from the risk of reputation, money laundering, terrorist financing, fraud, corruption, and other forms of financial crime, compliance risks are effectively managed.

The compliance arrangements, fit and proper assessments, and other material changes impacting the Group’s operations are refined in 2024 using insights from the 2023 assessment. These assessments enable the Group to identify, evaluate, and mitigate compliance and integrity risks effectively.

The Group actively promotes a culture of compliance through awareness-raising in conflict of interest mitigation and personal data protection. Regular newsletters provide updates on regulatory changes and practical case studies, ensuring employees are equipped to address compliance areas.

In 2024, the Group introduced a new Compliance Tool to enhance compliance management. This digital solution streamlines compliance activities and automates processes.

NLB Group Annual Report 2024

Overview

The Group ensures greater accuracy, cost-effectiveness, and flexibility in managing its compliance framework while responding to increasing regulatory demands. The Group continuously strengthens its compliance with regulations, industry standards, and best practices to ensure effective risk management and support sustainable business operations.

Prevention of Money Laundering and Terrorism Financing (AML/CFT)

Money Laundering and Countering the Financing of Terrorism (AML/CFT), including the EBA, BoS, and other competent authorities’ guidelines and standards. As a member of the EU, the Republic of Slovenia (RoS) is subject to the European recommendations throughout the EU. For the Bank, effectively mitigating the risk of money laundering, terrorist financing, and breaches of financial sanctions is of paramount importance to strict and unified policies and standards. The same principles also apply to the Bank’s framework on financial sanctions.

The Bank regularly updates and enhances its governance in line with reporting, and constant on-site and off-site control, the headquarters effectively monitor the implementation and execution of standards throughout the Group. The Bank regularly performs cases of increased risk within the "Know your customer" segment and in the ongoing monitoring of transactional activities. In cases of detected deviations and considering the AML/CFT indicators, the Bank reports customers and transactions to the competent Financial Intelligence Unit.

Core Financial Members

Core financial members included, excluding NLB. * Incorporation by reference: A reference is made to data protection.

Acceptance Policy

The Bank has also adopted additional measures to prevent onboarding customers who do not correspond to its risk appetite. The Bank also ensures a high level of information security and personal data protection.

Information Security

The information security area is focused on implementing measures to increase the Bank’s cyber resilience and strengthen its data protection. This includes situational awareness and conducting penetration tests to assess and bolster the resilience of information systems. In 2024, the Bank assessed the information security status of 48 outsourced security and social engineering tested all employees and were divided into three focus groups. A dedicated training session was held for the Bank’s Management Board members as part of this initiative.

Brand Intelligence/Brand Protection

To protect customers, the Bank implemented a robust Brand Intelligence/Brand Protection service and activated Dark Web monitoring. These steps enabled swift detection and proactive takedowns of malicious campaigns. The Bank continues to enhance and optimise security approaches across the Group, ensuring consistent visibility and autonomy for local Chief Information Security Officers, with local accountability for information security in accordance with its executive management’s risk appetite and applicable regulations.

Cyber Threat Intelligence

The Bank also remains active in the global cyber intelligence community, with access to intelligence exchange platforms, cyber resilience resources, and threat mitigation capabilities. NLB Group’s cyber threat intelligence service is actively utilised, focusing on relationships. In 2024, the Group continued conducting cyber-attack incident response exercises and participated in the FS-ISAC CAPS (cyber-attack against payment systems) simulation.

Training and Awareness

2,562 NLB Group employees completed anti-corruption training in 2024.

a ransom demand. The Bank adheres to GDPR requirements in its daily operations, especially the retention and processing of personal data under the supervision of a dedicated Data Privacy Officer. Following the new Slovenian Personal Data Protection Act (ZVOP-2) in 2022, the Bank continues to integrate its provisions into its processes and systems.

Fraud prevention and investigation

The Bank ensures full protection of reporters from any potential retaliation in line with commitments outlined in the Whistleblower Protection Act. Individuals can report misconduct freely and anonymously through several different communication channels. A specialised team centrally manages all received reports in accordance with detailed internal procedures.

Compliance Survey

114 data subject requests under GDPR submitted to NLB in 2024.

NLB Group Annual Report 2024

127 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N 2024, the Bank achieved significant milestones in safeguarding its brand’s integrity by implementing a robust brand protection tool, reinforcing customers’ trust and confidence in the Bank.

The Bank has strengthened its approach to cyber risk management and the prevention of unauthorised payment transactions, reflecting its commitment to safeguarding the security of its operations. The Bank Association (ZBS) initiatives contribute to public awareness campaigns on cyber and payment fraud prevention. Recognising that well-informed employees are critical to maintaining security, the Bank provides insights into observed fraud patterns and offers recommendations to improve processes.

Fraud prevention in loan origination processes is intricately linked to operational risk and requires thorough identity verification checks, credit history analysis, and cross-referencing information from multiple sources to identify inconsistencies or fraudulent activities, fostering a secure and transparent business environment. NLB remains steadfast in its mission to uphold the highest standards of business ethics, ensuring that its customers can confidently engage with the Bank.

NLB Group Annual Report 2024

Overview

Internal Audit

Internal Audit reviews key risk areas in the Group’s operations, advises management at all levels, and deepens understanding of the Bank’s operations. It provides independent assurance on the effectiveness of the governance, risk management, and functioning of internal controls, thereby strengthening and protecting the value of the Bank.

Internal Audit is an independent, objective assurance and advisory service designed to add value and improve the Bank’s operations. It helps to accomplish the Bank’s objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control, and governance processes.

Internal Audit strengthens the Bank’s ability to create, protect, and sustain value by providing the Management and Supervisory Boards with independent, risk-based, and objective assurance. It operates under the responsibilities at its discretion and in compliance with the Annual Audit Plan approved by the Management and the Supervisory Boards.

Based on its internal methodology and comprehensive risk assessment, 84 planned audits were completed, covering various areas of operations within the Bank and the Group. Among these, 27 were branch inspections, eight were group audits, and one was conducted as a joint audit with another entity.

In addition, Internal Audit was involved in several strategic projects as an advisor. Five planned audits were postponed for objective reasons, and one audit was removed from the implementation schedule. All audits were implemented within the agreed-upon deadlines.

Implementation of uniform rules: Internal Audit continuously increases efficiency. It focuses on monitoring the implementation of audit recommendations and the professional operations of the internal audit function within the Group. In November 2024, the Internal Audit Charter and Manual were updated and aligned with the Global Internal Audit standards.

Following the highest standards: In 2022, an external quality review of the internal audit services within the Group was conducted to ensure compliance with the following:

• Code of Internal Auditing Principles
• Code of Ethics of an Internal Auditor
• International Standards for the Professional Practice of Internal Auditing

In total, 84 planned audits were conducted in the Bank by 39 Internal Audit experts.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Corporate Governance Statements

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Statement of Management’s Responsibility

In accordance with the provisions of Article 134 (MFIA, Official Gazette of the RoS, No. št. 77/18, 17/19 – corr., 66/19, 123/21 and 45/24), the Management Board hereby confirms the statements made in the business report, which are in accordance with the attached financial statements as of 31 December 2024, and represent the results in the year that ended 31 December 2024. The Management Board confirms that the Business Report gives a fair view of developments and operating results of the Bank and the NLB Group companies included in the consolidation as a whole.

Ljubljana, 25 March 2025

Management Board of the NLB

Hedvika Usenik

Andrej Lasič

Archib Member

Member

Member

Chief Executive Officer

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Authorisation to Perform Banking Services

Nova Ljubljanska banka d.d., Ljubljana has an authorisation to perform banking services pursuant to Article 5 of the Banking Act (Official Gazette). The services are the acceptance of deposits and other repayable funds from the public and the granting of credits for its own account. The bank has an authorisation to perform mutually recognized financial services, pursuant to Article 5 of the ZBan-3:

1. receiving deposits;
2. granting of loans, including:
3. consumer loans,
4. mortgage loans,
5. purchase of receivables with or without recourse, based on the purchase of non-current non-past-due receivables at a discount and without recourse, secured by financial instruments (forfeiting);
6. payment services and electronic money services (travellers’ cheques and banker’s drafts) in the part in which this service is not included in service of point 4 of this Article;
7. issuing of guarantees and other commitments;
8. trading for own account in foreign exchange, including currency exchange transactions, financial futures and options, exchange and interest-rate instruments, in transferable securities;
9. participation in securities issues, structure, operational strategy and related matters, and consultancy and services in connection with corporate mergers and acquisitions;
10. monetary intermediation on interbank markets;
11. credit rating services: collecting, analysing and disseminating information regarding creditworthiness;
12. leasing of safe deposit boxes;
13. investment services and transactions;

Following additional financial services, pursuant to Article 6 of the ZBan-3:

1. insurance agency service pursuant to the law governing the insurance industry;
2. custodian and administration services;
3. credit brokerage for consumer and other types of loans;
4. other services or transactions:
5. intermediation in financial leasing;
6. sale and purchase of investments in gold.

---

NLB Group Annual Report 2024

Corporate Governance Statement of NLB

The Companies Act (ZGD-1; Official Gazette of the RoS, No. 65/09 and consecutive changes). The Corporate Governance Policy of NLB Companies, December 2021 (valid for this Corporate Governance Statement for the business year 2024). Nevertheless, the mentioned code was changed in December 2024, is valid from 1 January 2025.

Published on the Bank’s website. ZGD-1M recent changes to Companies Act, Official Gazette of the RoS, No. 102/24. NLB hereby gives the following Corporate Governance Statement of NLB as part of the Business Report of the NLB Group Annual Report 2024. The main corporate governance system.

1. COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

1.1. References to the Code on Corporate Governance

The recommended best corporate governance system promotes both domestic and foreign investor confidence, as well as the confidence of employees, other stakeholders (shareholders, regulators, suppliers, etc.), and the public.

The Supervisory Boards of the Bank adopted the Corporate Governance Policy of NLB. Compliance with the Slovenian Corporate Governance Code for Listed Companies is explained regarding deviations, the reasoning for non-compliance with a certain recommendation, or alternative practices performed mostly due to stricter banking regulation.

The statement covers the financial year, which corresponds to the beginning and the end of the calendar year (from 1 January until 31 December). The Corporate Governance Statement of NLB is included and is also published as a separate report on the Bank’s website under the chapter on Corporate Governance.

NLB strives to increase the level of its business transparency and informs the shareholders (Ljubljana Stock Exchange, 25 March 2024) and in line with Rules and Regulation of the Luxembourg Stock Exchange, as well as in line with Rules of the London Stock Exchange.

NLB upholds its own code of conduct. The NLB Group Code of Conduct, which was revised in May 2023, is a standardized document for all members of the Group that defines values, lays down relationships regardless of whether it involves clients, competitors, business partners, state authorities, regulators, shareholders, or internal relationships between employees.

At the same time, it provides specific conduct guidelines to its employees. This approach aims to ensure compliance with all applicable laws, regulations, and standards. It is published on the Bank’s website.

Regarding diversity, NLB implements an internal Policy on the Provision of Diversity of the Management Body and Senior Management (June 2022), which defines the principles and procedures that promote gender diversity.

Management

The Corporate Governance system of the Bank and all relevant information on Bank’s management that exceeds the requirements of Article 70 of the Companies Act (ZG) aspects of the functioning of the Bank’s managing bodies are described in the chapter in Corporate Governance of this Annual Report, as well as in the Corporate Governance Policy of NL 2024 is described in the Sustainability Statement as part of this Annual Report. Information on the Diversity Policy is according to recent changes to ZGD-1M 21 described in the Sustainability Statement. Risks are also described in the Pillar 3 Disclosures according to Basel standards.

Compliance with the Slovenian Corporate Governance Code for Listed Companies

Recent changes are primarily the result of alignment with the amendment to the (diversity, remuneration and independence). The Code provides recommendations for good management, control and management practices of public joint-stock companies whose shares are into force on 1 January 2025. However, the companies should use the recommendation of this Code for the first time when preparing the Corporate Governance Statement for the 2025 financial year.

The Bank does not follow, partially implements, or adhere to different, in most cases stricter, banking regulations with regard to the following recommendations:

• Recommendation 5.6: NL Statement of NLB at least every three years since NLB is a systemically important bank with demanding regulation that takes into account high standards of corporate governance.
• Recommendation 7.4: The Sustainability Policy of NLB d.d. and NLB Group contains basic due diligence guidelines and measures for identifying risks and prevention of serious harm in relation to the guidelines and measures for identifying risk are further elaborated in the Policy on the Respect for Human Rights in NLB and the NLB Group, and are implemented in other domain-specific.

Assessing a candidate’s eligibility to be a Supervisory Board member, statutory criteria are applied. However, according to the Policy to Assess the Suitability of the Management and Supervisory Board members, evidencing their specialised professional competence for membership on a Supervisory Board, such as the Certificate of Slovenian Directors’ Association, or any other relevant certificate. How range of knowledge, skills, and experience.

Recommendation 14.2: Currently, valid Rules of Procedure of the Supervisory Board of NLB d.d. (November 2024) are prepared according to statutory requirements.

The archives after expiration of the term of office of the members of the Supervisory Board, as the access to the archives after expiration of the term of office is determined by the provision agreement.

Recommendation 14.3: The Rules of Procedure of the Supervisory Board of NLB d.d. do not include the scope of topics and timeframe to be respected by the Management Board. The timeframes of periodic reporting to the Supervisory Board are included in the annual Action Plan of the Supervisory Board. Competent organisational units of the Bank ensure that timely information is provided.

Workers’ Council did not report to the Supervisory Board. In 2023, the NLB Workers’ Council sent a letter stating that it would inform the professional services of NLB if it intended to report after the expiration of the term of office of the members of the Supervisory Board is determined by the Rules of Procedure of the Supervisory Board of NLB d.d. Members of the Supervisory Board.

Recommendation 17.6:

The President of the Supervisory Board, together with the Secretary of the Supervisory Board or an expert from the Supervisory Board meeting. Only exceptionally, can a Supervisory Board member also be the minute-taker. The President of the Supervisory Board and the Director of Legal and Secretariat must ensure that the minutes are comprehensible.

Recommendation 19.1:

In 2024, the Supervisory Board members (representatives of capital and representatives of workers) did not receive attendance fees but received payment for their services.

Shareholders dated 21 October 2019, 15 June 2020 and 19 June 2023. Remuneration of the Members of the Supervisory Board is regulated by the Articles of Association of NLB d.d., the Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d.

Recommendation 20:

Minutes of the Supervisory Board meeting are to be taken by the Bank designated by the Head of Secretariat. Only exceptionally, a Supervisory Board member can also be the minute-taker.

Recommendation 23.5:

In accordance with regulations, the list of transactions with related persons is submitted to the Supervisory Board by special demand.

Recommendation 30.4:

NLB draws up its Financial Calendar, published on the Bank’s website, to provide information on the dividend payment date. The date is announced in the publication of the Agenda and Proposed Resolutions to be passed at the Annual General Meeting.

Recommendation 32.7:

NLB does not publish the rules of procedure of its bodies (Management Board, Supervisory Board, and its committees) on its website. However, the managing bodies are included in the Corporate Governance Statement of NLB that is published in this NLB Group Annual Report, as well as on the Bank’s website.

Overview

NLB Group Annual Report 2024

134 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N

In 2024, NLB awarded to the members of its Management Board 50% of their variable remuneration for 2023 in share-linked instruments without any deferral, and the remaining 50% of such instruments will be handed over to the members of the Management Board during a 5-year deferral period.

NLB Group Annual Report 2024

Main Features of Internal Control and Risk Management Systems in Relation to Financial Reporting

NLB is governed by the provisions of the Capital Requirements Directive, the Banking Act (ZBan-3) and the Regulation on Internal Governance Arrangements, the Management Body and the Internal Capital Adequacy Assessment Process for Banks and Savings Institutions. NLB has developed a steady and reliable internal governance system encompassing the following:

• Determined by the independence, quality, and validity of:
• The rules for and controls of the implementation of the Bank’s organisational, business, and work procedures (internal controls).

Internal Controls

The policy entitled "Internal Control System" defines a system of internal controls as a set of rules, procedures, and organisational structures. The system of internal controls is designed to reduce or manage risk, and that process or measure is effective for that purpose. The mentioned policy introduces a new description of the three lines of defence, namely:

1. First-level controls.
2. Second-level controls are divided between Risk Management and Compliance control functions (including AML/CTF and Information security management), which carry out independent assessments.

The third level of control is performed by the internal audit function, which assesses and regularly checks the completeness, functionality, and adequacy of the internal control system. An internal audit is conducted in the event of deficiencies, irregularities, or breaches identified in the process of implementation of internal controls. The breaches are discussed at the Operational Risk Committee (which is established for the execution of individual tasks within the powers of the Management Board of the Bank). The mentioned committee adopts decisions to take appropriate actions and informs the relevant parties.

NLB advances its commitment to sustainable and responsible banking. Updates to the Internal Control System policy, implemented in November 2023, reflect the Bank’s dedication to ensuring responsible business practices.

3.1.2. Internal Control Functions

Internal control functions are part of the system of internal governance in the Bank. Internal control functions include:

• a) The Internal Audit Charter of NLB d.d., approved by the Management Board, to which the Supervisory Board of NLB gave its consent.
• The Management Board of NLB has established and provides the Bank’s Management and Supervisory Boards with objective and independent assurance and advisory services designed to add value and improve an organisation’s operations.

This function is primarily responsible to the Supervisory Board of NLB and its Audit Committee and secondarily to the Management Board of the Bank.

Approach to Evaluate and Improve the Effectiveness of Governance, Risk Management, and Control Processes

In addition, the Internal Audit conducts regular Quality reviews of the Internal function in NLB Group. The Supervisory Board of NLB must give its agreement to the appointment and dismissal of the Chief Audit Executive, which ensures his independence and, thus, Risk Management Function is organised according to the Charter of the Risk Management Function of NLB adopted by the Management Board, in agreement with the Supervisory Board management and governance system in the Group.

This function in NLB is organised within the Risk stream, covered by the member of the Management Board in charge of risk (Chief Risk function). In accordance with the competences, authorisations, and responsibilities, Global Risk is represented by its General Manager. Global Risk is in functional and organisational terms conflict of interest may arise with the Risk Management Function.

The head of the Risk Management Function has direct access to the Management Board of the NLB and, at the same time, Committee of the Supervisory Board of the NLB.

NLB Group Annual Report 2024

Overview

Management and control is performed through a clear organisational structure with defined roles and responsibilities. The organisation and delineation of competences are designed to prevent and are subject to an appropriate upward and downward flow of information.

The competence line, Risk Management in NLB, encompasses several professional areas and is in charge of the harmonisation, regular monitoring of risk exposures and limits based on centralised reporting at the Group level. In members of the Group, the risk management function is organised in risk management in the members, as defined in the document "Risk Management Standards in the NLB Group."

Compliance Function

The Compliance Function, Information Security Function, and AML function, performs control activities with respect to the main following areas:

• anti-money laundering and counter-terrorist financing (separately for NLB and the Group);
• information security;
• prevention and investigation of fraud to detriment of the bank;
• security;
• development of compliance risk methodologies, and setting and monitoring ethics and integrity standards;

Compliance and Integrity is an organisational unit of the Bank, placed directly under the Bank’s Management Board in the organisational structure. The Bank adopted the Integrity method and scope of the activities of the compliance function in the Bank. Supervision over compliance of operations is within the competence of Compliance and Integrity. This enables the Bank to provide an explanation of the selection of an audit firm and the independence of the statutory auditor.

Compliance and Integrity to operate independently from other Bank at the Bank that could possibly lead to a conflict of interest. To ensure his independence, the Director reports directly to the Management and Supervisory Boards. Additionally, the Director is responsible for overseeing compliance areas (including information security, personal data protection, and AML/CTF functions). This arrangement provides additional assurance for the independence through equal reporting lines as the Director of Compliance and Integrity.

Following NLB’s model, the compliance function was established in the core members of the Group.

Financial Reporting

To ensure appropriate financial reporting procedures, NLB pursues the adopted Policy on Accounting Controls. The accounting controls are provided through the operational accounting information and, thereby, accurate and timely financial reporting. The principal identified risks in this area are managed with an appropriate system of authorisations, segregation.

system, posting on the day of a business event, in-built control mechanisms in source applications, and archiving pursuant to the laws and internal regulations. Furthermore, the policy prec and secondary accounting controls, i.e., checking the efficiency of implementation of primary accounting controls. With an efficient mechanism of controls in accounting reporting, NLB en timely accounting data, the resulting accounting, and other reports of the Bank; • compliance with legal and other requirements.

a) Selection of an audit firm

Through a process, the Ban Supervisory Board actively participate and appoint an auditing company that will ensure an independent and impartial audit of the financial statements in accordance with professional and selection process, a proposal for the criteria for the appointment of the audit company and the minimum conditions for cooperation are prepared, which also include the mandatory disclosure its affiliated companies in the last year (namely statement that an audit firm or any member of the network to which the audit firm belongs, did not directly or indirectly provide to the aud audit services in the financial year immediately preceding the period being audited). The proposed criteria are approved by the Audit Committee and the Supervisory Board. After consider the appointment of an audit company to the Supervisory Board. Based on the recommendation of the Audit Committee, the Supervisory Board proposes the appointment of an audit company.

The consolidated financial statements of NLB Group are audited by the auditing company KPMG Slovenia d.o.o., Ljubljana. The mentioned auditing company was appointed as the auditor of financial years 2023 to 2026.

NLB Group Annual Report 2024 137 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N selected audit company audits all members of NLB Group, except in case of other valid reasons (possible legal or other local restrictions). In 2023, there was a change of audit company du can perform the audit.

b) Independence of the Statutory Auditor

The statutory auditor must assess and document compliance with independence requirements before accepting or continuing a independence from the statutory auditors, which must apply to the audit firm, the audit partners, and senior personnel involved in the audit engagement. When assessing the auditor’s independ financial investments in the company, • personal and business relationships (which also include close family members, close relatives and business partners), • the relationship between the type and scope of other services performed by the auditor in addition to the audit. Independence is ensured during the period covered by the financial statements being audited and during t.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

INFORMATION ON POINT 4, PARAGRAPH 6, OF THE ARTICLE 70 OF THE ZGD-1

regarding points 3, 4, 6, 8, and 9 of paragraph 8 of the same article

Explanation regarding significant direct and indirect ownership of the company’s securities in ter 2024.

Table 37: NLB’s main shareholders as at 31 December 2024

(i) Shareholder	Number of shares	Percentage of shares
Bank of New York on behalf of the GDR holders (ii), (iii)	9,659,425	48
Republic of Slovenia (RoS)	5,000,001	25.00
Other shareholders	5,340,574	26.70
Total	20,000,000	100.00

(i) This information is sourced from the NLB’s shareholders’ book that is accessible and available to CSD members.

(ii) The Bank of New York holds shares in its capacity as the depositary (the GDR Depositary) for the GDR holders and is not the declarations by individual GDR holders as required pursuant to the applicable provisions of Slovenian law.

More information on the Bank’s Share Capital is available on the NLB website.

The Bank did not issue any securities carrying special controlling rights. Explanation regarding the restrictions related to voting rights, in particular, deadlines for executing voting rights, and (iii) agreements in which, based on the company’s cooperation, the financial rights arising from securities are separated from the rights of owners of the Bank are freely transferable, subject to the provisions of the Articles of Association of the Bank, which require the approval of the Supervisory Board, namely for the transfer of shares.

Such an acquisition and the shares held by third parties for the account of the acquirer, exceeds the share of 25% of the Bank’s voting shares. Approval for the transfer of shares is issued by the acquirer, together with the shares held by the acquirer before the acquisition and the shares held by third parties for the account of the acquirer, exceeded the 25% share of the Bank with voting rights.

Approval for the transfer of shares is not required if the acquirer of the shares has acquired them for the account of third parties, so that it is not entitled to exercise voting rights from the shares if, together with the instructions for voting, it does not receive and that this person is not, directly or indirectly, a holder of more than 25% of the Bank’s voting rights.

The acquirer who exceeds the share of 25% of the Bank’s shares with voting rights without the approval of the Bank, may exercise the voting right from 25% of the shares with the voting rights. There are no restrictions other than those mentioned and those that are regulatory.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Explanation on the (i) company’s rules on appointment or replacement of members of the management or supervisory bodies, and (ii) changes to the company’s Articles of Association

Members of the management or supervisory bodies:

• The Management Board

Articles of Association define that the Management Board of the Bank is comprised of three to seven members. The number of Management Board members is determined by a resolution of the Bank’s Supervisory Board. The President and other members of the Management Board are appointed and recalled by the Supervisory Board of the Bank to appoint or recall an individual member or the remaining members of the Management Board of the Bank. The President and members of the Management Board may be recalled prior to the expiry of their term of office in accordance with applicable laws and Articles of Association with a period of notice of three months. Written notice shall be delivered to the Chair of the Supervisory Board of the Bank. The notice term may be shorter than three months and is subject to the approval of the Supervisory Board of the Bank. A member of the Bank’s Management Board may only be a person who fulfills the legally prescribed conditions for the BoS or the ECB, if executing the competences and tasks from Item (e) of paragraph 1 of Article 4 of Regulation (EU) no. 1024/2013 for the performance of the function of a bank’s management candidate following the Bank’s Policy governing the Fit & Proper assessment prior to the appointment.

The Supervisory Board:

According to the Articles of Association of the NLB d.d., represent the interests of shareholders and four members represent the interests of employees. Members of the Supervisory Board representing the interests of shareholders are elected and recalled by the Bank’s General Meeting from persons proposed by shareholders or the Supervisory Board of the Bank, and members representing the interests of employees shall be elected by the Workers' Council, taking into account the conditions for members of the Supervisory Board. At the end of 2024, the Supervisory Board of the Bank consists of a total of 10 members, of which eight members represent the interests of shareholders and two members represent the interests of employees. Members representing the interests of shareholders are elected by an ordinary majority of votes cast by the shareholders. The term of office of the Supervisory Board members commences on the day of the end of the Bank’s Annual General Meeting of shareholders, which decides on the use of accumulated profit for the fourth business year since the start of their term of office unless otherwise stated.

year is deemed the business year in which the members of the Supervisory Board of the Bank started their term of office. The General Meeting of the Bank may dismiss an individual or a expiration of their term of office. A resolution on dismissal shall be valid if adopted with at least a three-quarter majority of all votes cast. The Supervisory Board of the Bank shall, at its fi Deputy Chair of the Supervisory Board of the Bank. A member representing the interests of employees cannot be elected Chair or Deputy Chair of the Supervisory Board of the Bank. All Articles of Association. A member of the Bank’s Supervisory Board may only be a person who fulfils the legally prescribed conditions for a supervisory board member under the Banking tasks from Item (e) of paragraph 1 of Article 4 of Regulation (EU) no. 1024/2013 for the performance of the function of a bank’s supervisory board member under the law regulating banking assessment prior to the appointment.

Amendments to Articles of Association

A qualified majority of at least 75% (seventy-five per cent) of the votes cast by shareholders at the general meeting of Association. Explanation regarding the authorisation of the members of the management, particularly authorisations to issue or purchase own shares (Point 9 of the eight paragraph of Article management to issue or purchase own shares of the Bank.

*Incorporation by reference: The reference is made to this chapter from the Sustainability Statement chapter ESRS-2 GOV-1 The NLB Group Annual Report 2024 140 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N INFORMATION ON THE WORK AND KEY POWERS OF THE SHAREHOLDERS’ MEETING AND OF ITS KEY POWERS, AND A DESCRIPTION OF SHAREHOLDERS’ RIGHTS AND T through which shareholders exercise their rights, which include, among others: adopting and amending the Articles of Association of the NLB d.d., use of distributable profit, granting a di to the Bank’s share capital, appointing and discharge members of the Supervisory Board who represent the shareholders’ interests, remuneration and profit-sharing by the members of the M securities convertible into shares and equity securities of the Bank.

The General Meeting is convened by the Management Board. The General Meeting may be convened by the Supervisory Board where a convocation is necessary to ensure unhindered operations of the Bank. The Supervisory Board may amend the agenda of the General Meeting convened in line with the bylaws. As may also be convened at another venue specified by the convenor. The Management Board may stipulate that shareholders may attend or vote before or at the General Meeting by electron resolutions by a simple majority of the votes cast unless the applicable laws or the Bank’s Articles of Association stipulate a larger majority or other conditions (adoption and amendments Bank, exclusion of a pre-emptive right of existing shareholders, decrease in share capital, the status restructuring of the Bank, liquidation of the Bank, and discharge of Supervisory Board right, the pre-emptive right to subscribe for new shares in case of share capital increase, the right to profit participation (dividends), the right to a share in surplus in the event of liquidation Companies Act, NLB informs shareholders of their rights as shareholders in an Information on the Rights of Shareholders that is published among the documents for the convocation of each G proposals by shareholders’, and the shareholders right to be informed).

There were two General Meetings in 2024. At the 42nd General Meeting dated 17 June 2024, shareholders took note Board on the results of the examination of the NLB Group Annual Report 2023. They also adopted the Report on Remuneration for the members of the Management Body of NLB d.d. in 2023 Business Year on the basis of SSH’s Baselines and the Internal Audit Report for 2023, adopted decisions on the election of Supervisory Board members (as already mentioned above) d.d. and the Members of the Management Board of NLB d.d. The General Meeting also adopted decisions on the allocation of distributable profit for the 2023 (the first dividend payment.

NLB Group Annual Report 2024

141 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

INFORMATION ABOUT THE COMPOSITION AND WORK OF THE MANAGEMENT AND SUPERVISORY BOARDS AND THEIR COMMITTEES

6.1. Composition of the Management

At the 43rd General Meeting held on 9 December 2024, the shareholders confirmed the payment of the discharge from the liability to the members of the Management Supervisory Boards. Together, both pay-outs in the amount of EUR 220 million from the profit generated in 2023, represent a 100% increase from dividend payments made that year. The outcome of the vote.

The Management Board is composed as follows: Blaž Brodnjak as President & CEO; Archibald Kremser as Chief Financial Officer (CFO); Peter Andreas Burkhardt as Chief Risk Officer; Antonio Argir who is responsible for Group governance, payments and innovations; and Andrej Lasič as CMO, who is responsible for Retail Banking and Private Banking. The mandates of Blaž Brodnjak and Peter Andreas Burkhardt expire in July 2026, while the mandates of Hedvika Usenik, Antonio Argir, and Andrej Lasič expire in April 2027.

Work of the Management Board

In 2024, the strategy stipulates a doubling of the NLB Group balance sheet (more than EUR 50 billion assets), recurring revenues of more than EUR 2 billion, and a profit of m. The strategy is designed to enable NLB Group to grow and develop in a rapidly changing financial environment. The strategy includes key goals and directions for the future, such as digitalisation.

As part of this strategy, NLB launched an all-cash voluntary public takeover offer aimed at acquiring control over Addiko Bank AG for all issued and outstanding Addiko Bank AG shares, requiring sufficient acceptance percentage of shares, so the offer was not successful. The Management Board worked on an acquisition that marks NLB’s re-entry into the Croatian market with Leasing.

In 2024, NLB completed the transaction and became the sole shareholder of SLS HOLDCO, Ljubljana, the parent company of Summit Leasing Slovenija, Ljubljana and its Croatian subsidiary. NLB Skladi, Ljubljana successfully completed the takeover of Generali Investments, Skopje (renamed NLB Fondovi, Skopje). The Management Board is focused on streamlining processes, improving scalability, and increasing efficiency.

To that extent, NLB enhanced its digital services, as Apple Pay became available to NLB customers in Slovenia and Montenegro, North Macedonia, Bosnia and Herzegovina, Kosovo and Serbia, while Garmin Pay became available in Slovenia, Montenegro, North Macedonia, Bosnia and Herzegovina, and Kosovo. In 2024, NLB Group delivered remarkable business results, reaffirming NLB Group’s stable and successful business operations and strong capital position.

The Management Board is deeply aware of the Banks’ vital role in fighting climate change.

Sustainable Practices as Key Drivers of Long-Term Business Success

The Group has integrated a sustainability perspective and ESG factors (environmental, social and human rights, and governance) also recognised by ratings. In November 2024, NLB Group received a Sustainalytics ESG Risk Rating of 10.5, which was assessed as being at a low risk of experiencing material financial issues among banks assessed by Morningstar Sustainalytics. Besides environmental issues, the Management Board is equally active in addressing social and governance topics, advocating equal opportunities.

6.2. Composition of the Supervisory Board

At the beginning of 2024, the composition of the Supervisory Board included:

Davda – Deputy	David Eric Simon	Verica Trstenjak	Islam Osama Zekry	Mark William Lane Richards	Cvetka Selšek	André-Marc Prudent-Toccanier (shareholders’ representatives)
Primož Karpe	David Eric Simon	Verica Trstenjak
Expired in 2024

Three members were proposed for election at the forthcoming General Meeting in June 2024. The General Meeting *Incorporation by reference: The reference is made to this chapter from the Sustainability Statement chapter ESRS-2 GOV-1 The role of administrative, supervisory and management bodies paragraph 1 and subchapter Statement of Independence of the Members of the Supervisory Board.

NLB Group Annual Report 2024 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N

Luka Vesnaver as members of the Supervisory Board of NLB. Luka Vesnaver took up his office as a member of the Supervisory Board on 30 September 2024, while Natalia Olegovna Ans object to their appointments. Primož Karpe was elected as President of the Supervisory Board on 7 July 2024 for the third time in a row. The Supervisory Board also consists of Deputy Chair Mark William Lane Richards, Cvetka Selšek, and employee representatives Tadeja Žbontar Rems (whose mandate expires in 2025) and Sergeja Kočar (re-appointed in 2024 by the NLB W).

While the mandate of Shrenik Dhirajlal Davda, Mark William Lane Richards, Cvetka Selšek and André-Marc Prudent-Toccanier expires in 2027. Statement of Independence of the Members of the Supervisory Board, all Supervisory Board members must be independent experts. Persons representing the interests of employees in the Supervisory Board of the Bank are considered independent despite conditions. A Statement of Independence, in which they declare themselves on their meeting of the criteria of a conflict of interest, is provided by a candidate for a function of a member.

Independence status, and once a year (with the new statements published as of February 2025). The statement is published on the Bank’s website. Work of the Supervisory Board In 2024, sessions. In its work, the Supervisory Board of NLB received professional assistance from five operational committees (as further defined below). Based on their findings, the Supervisory Board adopted a new business strategy until 2030. The strategy is very ambitious, with the aim of transforming the Bank. It is focused on unlocking even more shareholder value, backed by doubling the balance sheet total of NLB Group (to more than EUR 50 billion), also by tapping into the untapped revenue pools that exist already today, with regular revenues of more than.

A combination of organic growth and selected mergers and acquisitions, while at the same time, the strategic goal of the Group remains to create sustainable growth to support individuals and documents received from the regulator(s), namely, the BoS and ECB, and the implementation of the requirements of regulators. The Supervisory Board acted within its powers to ensure the strategies and policies for assuming and managing risks. The Supervisory Board was regularly informed on the risk profile of the Group and the corresponding types of risk to steer the Group.

A comprehensive assessment of the main risks and vulnerabilities for NLB Group, the Supervisory Board adopted the IT Security Architecture and Protection of the NLB Group and updated NLB Group Risk Strategy, the IRRBB management report and improvement agenda, and the NLB Group Recovery Plan were regularly revised, upgraded, and discussed. The functioning.

NLB Group Annual Report 2024

Extent, the Supervisory Board adopted the Internal Audit’s Annual Report for 2024, the Internal Audit Plan (2025 & the long-term plan), the Action Plan for Compliance & Integrity for 20 and monitored implementation of the Policy on the Provision of Diversity of the Management Body and senior management by adopting the Annual review of the Diversity Policy of the B risk-taking behaviour with NLB’s risk profile and long-term interests, the Supervisory Board also approved goals for each member of the Management Board of NLB, as well as adopted and members of the Management Board of NLB d.d. (on 17 June 2024 approved by the General Meeting of shareholders, whereby the vote on this resolution is of a consultative nature in a inclusive economic and social system.

The Supervisory Board monitored the implementation and effectiveness of NLB Group’s Strategy and adopted the regular NLB Group Sustainability Report related to the adopted NLB Group Annual Report 2023 and NLB Group Sustainability Report 2023, Information on NLB Group’s sustainability reporting process for 2024, and eng Analysis, the Annual Internal Audit Plan, the Plan of Compliance & Integrity, and adopted the Comprehensive Opinion of the Internal Audit.

Furthermore, the Supervisory Board adopted General Meeting of shareholders dated 17 June 2024, the General Meeting acknowledged itself with the NLB Group Annual Report 2023, Report of the Supervisory Board of NLB, on the Remuneration for the members of the Management Body of NLB d.d. in the 2023 Business Year, Independent Auditor Report, as well as on Additional information to the Report on Remu adopted Internal Audit Report for 2023.

The General Meeting adopted a decision on the allocation of distributable profit for 2023 (the first tranche of the distributable profit for 2023 at EUR 5.5 gross per share or EUR 110 million, making members of the Management and Supervisory Boards. The General Meeting adopted decisions on four proposed candidates for the Supervisory Board and determined payments to members.

Chapter from the Sustainability Statement

Chapter ESRS-2 GOV-1 The role of administrative, supervisory and management bodies.

NLB Group Annual Report 2024 143 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N and its committees.

The shareholders adopted changes to the Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of N shareholders dated 9 December 2024, adopted a decision on the allocation of the second tranche of the distributable profit for 2023 at EUR 5.5 gross per share or EUR 110 million, making to shareholders in June 2024, and approved the Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d., where Supervisory Board adopted periodic reports of the Internal Audit and Compliance, and issued approval for the transactions with persons in a special relationship with the Bank, and for the.

According to the recommendation of the Slovenian Corporate Governance Code for Listed Companies, the evaluation of efficiency and self-assessment of the Supervisory Board of NLB a (SDA) at the beginning of 2024. Based on the findings of SDA, an Action Plan was made, and deficiencies were eliminated. Throughout the year, the Supervisory Board has maintained a comprehensive, and data-supported inputs from the latter, enabling the Supervisory Board to adopt all its decisions in line with the professional interests of the Bank, whilst always adhering.

The Supervisory Board and sessions of committees, members of the Supervisory Board, in particular, take into account all necessary precautionary measures to avoid conflicts of interest. P Board of NLB established and ensured that it regularly and thoroughly monitored the Bank’s and NLB Group’s operations in 2024 within its powers, and efficiently supervised the Bank’s.

Members is described in Table 39 in Appendix of this statement.

6.3. The Supervisory Board Committees

All five Committees for the Supervisory Board function as consulting bodies of the NLB for the Supervisory Board meetings related to a particular area. The Supervisory Board has the following committees:

• The Audit Committee
• The Risk Committee
• The Nomination Committee

Committees are composed of at least three members of the Supervisory Board, although at the end of 2024 the actual number of members in the committees was five. The Workers' Council Committee. The member of the Committee may only be appointed from among the members of the Supervisory Board. The term of office of the Chair, the Deputy Chair, and members of responsibilities of Committees are defined in the Rules of Procedure of the Committees of the Supervisory Board of NLB d.d. (November 2024).

6.3.1 The Audit Committee of the Supervisory Board

On accounting reporting, internal control and risk management, internal audit, the compliance of operations, and external audit. It also supervises the setup of policies, mo.

Regulatory Measures

At the end of 2024, the composition of the Committee was as follows: Cvetka Selšek (Chairwoman), André-Marc Prudent-Toccanier (Deputy Chairman), Primož Karp.

Membership that occurred during the year, as well as the academic degrees of the Audit Committee members are reflected in the chart on the Supervisory Board Committees (Table 39 in A).

Audit Committee

The following is a summary of the key topics considered by the Audit Committee:

• Report of the NLB Group Operations and Business Performance Indicators for NLB d.d.
• Report after the final audit of financial statements 2023;
• Internal Audit Overall Opinion for 2023;
• Internal Audit Annual Report for 2023;
• Corporate Governance Statement of NLB;
• Statement of the Supervisory Board of NLB on the results of the examination of the NLB Group Annual Report 2023;
• Report of the Audit Committee of NLB on the statutory audit for financial year 2023;
• Audit services provided by the external auditing firm KPMG for 2023;
• Annual Report for the 2023 ECRA compliance risk assessment at the NLB and NLB Group levels;
• Regular internal Compliance, and Integrity Reports, Anti-Money Laundering Reports;
• NLB Group Sustainability Implementation update;
• External audit of the NLB Group’s Sustainability Report 2024;
• Presentation of the audit plan for 2024 audit by auditor KPMG;
• Information on NLB Group’s sustainability reporting process for 2024 and engagement of the NLB Management and Supervisory Board;
• NLB Group Internal Audit Plan (2025 & long-term);
• Reports of the Compliance of NLB;
• Action Plan for Compliance and Integrity Centre for 2025;
• Reports on the documents received from NLB Group Annual Report 2024.

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N and on the implementation of the requirements of the BoS and ECB;

• Appointment / Prolongation of the mandate and a salary increase for the Director of Global Risk and for the Director;
• Confirmation of the goals assessment of the heads of control or supervisory functions for the year 2023;
• Acknowledgment with Self-assessment of the performance, effectiveness, and efficiency;
• Information about the costs of the Management and Supervisory Boards;
• Cash withdrawals in Branches for Legal Entities in NLBG (excl. Slovenia);
• Integrity and Compliance Policy of pre-approval Policy for NLB and NLB Group;
• Information on updated Rules on the relations of NLB d.d. and the Audit Committee with the audit firm;
• Internal Audit Manual;
• Internal Audit of the Action Plan.

The Audit Committee performs its tasks both at the meetings themselves and outside of the meetings. In addition to considering materials at the meetings themselves and representatives of professional services for individual areas covered by the Committee. The President of the Committee also meets regularly with representatives of the external auditor.

Supervisory Board of NLB

The Risk Committee monitors and drafts resolutions for the Supervisory Board in all risk areas relevant to the Bank’s operations. It is consulted on the Group’s strategy, and helps carry out control over senior management concerning implementation of the risk management strategy. At the end of 2024, the composition of the Committee was as follows: Shrenik Davda, Luka Vesnaver, and Natalia Olegovna Ansell (members).

Risk Committee

Changes in the Committee’s membership that occurred during the year are reflected in the chart on Supervisory Risk Committee in 2024. The following is a summary of key topics considered by the Risk Committee:

• Risk Report (Dashboard) of NLB and NLB Group;
• Periodic Reports on information for 2024;
• Internal liquidity adequacy process (ILAAP) for 2023;
• The Internal Capital Adequacy Assessment Process (ICAAP) for 2023;
• ALM update: IRRBB management report and implementation report on the implementation of the requirements;
• IT Security Architecture and Protection of NLB Group;
• The Trinity of Data Quality;
• Presentation & Report on the Top 50 groups of clients proceedings in NLB and NLB Group;
• Information about the final deletions of the receivables over EUR 5 million from the off-balance for 2023;
• Report on the real estate market and collateral;
• Supervisory functions for the year 2023;
• NLB Group Risk Strategy update;
• Risk Appetite NLB Group update;
• NLB Group Recovery Plan;
• Annual Review of Prior Consent for Limit.

---

Supervisory Board of NLB

to conclude legal transactions with Central Banks; Prior consent for the conclusion of legal transactions with a client in a special relationship with NLB.

6.3.3. Nomination Committee

drafts proposed resolutions for the Supervisory Board concerning the appointment and dismissal of the Management Board members; recommends candidates for Supervisory Board members and Supervisory Boards (representatives of capital); prepares the content of executive employment contracts for the President and members of the Management Board; evaluates the performance and experience of individual members of the Management and Supervisory Boards and the bodies as a whole.

At the end of 2024, the composition of the Committee was as follows: Prim Zekry, and Shrenik Davda (members). Changes in the Committee’s membership that occurred during the year are reflected in the chart on Supervisory Board Committees (Table 39 in Appendix).

The following is a summary of key topics considered by the Nomination Committee:

• Assessment of collective suitability of the Management Board of NLB;
• Assessment of members of the Supervisory Board for 2024;
• Reassessment of fit and proper for Management Board member;
• Election of members of the Supervisory Board of NLB;
• Assessment of collective suitability of the Supervisory Board.

6.3.4. The Remuneration Committee of the Supervisory Board of NLB

The Remuneration Committee formulates initiatives for measures related to improving the management of the Bank’s risks, capital, and liquidity; prepares proposals for remuneration-related decisions of the Supervisory Board; and supervises the remuneration of senior management performing the risk management and compliance functions.

At the end of 2024, the composition of the Committee was as follows: William Lane Richards (Deputy Chairman), Islam Osama Zekry, Sergeja Kočar, and André-Marc Prudent-Toccanier (members). Changes in the Committee’s membership that occurred during the year are reflected below.

There were five regular, three extraordinary and one correspondence sessions of the Remuneration Committee in 2024. The following is a summary of key topics considered by the Committee:

• Assessment of the member of the Management Board of NLB for the short-term and long-term incentive (STI and LTI), additional performance criteria for subsequent performance period, and financial goals;
• Confirmation of the Assessment of the NLB Group and NLB financial heads of control or supervisory functions for the year 2023;
• Confirmation of goals of identified employees in controlled and supervisory functions for 2024;
• Confirmation of an annual self-assessment of the salary for the business year 2023 for the members of the Management Board and payment of the deferred part of the variable part of the salary for previous years for the members;
• Draft Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d.;
• Proposal of Amendments to the Remuneration Policy.

IT Committee of the Supervisory Board of NLB

The Committee monitors and prepares draft resolutions for the Supervisory Board, whereby the main tasks that it performs are the following:

• Monitoring the management of AI, its orientation in the area of sustainability, goals, and measures for their achievement, related to the Bank’s strategy, IT Security Strategy, and Operations Strategy;
• Monitoring compliance with the rules on AI;
• Monitoring key projects and initiatives related to operations, IT and artificial intelligence;
• Monitoring operating risks in the area of Operations, IT, and Security;
• Monitoring the recommendations for ensuring and increasing the security of IT;
• Monitoring violations, events, and incidents in the area of IT security;
• Monitoring the Target Operating Model implementation in the areas of IT, the Security Operating System, Competence Centre, and others.

At the end of 2024, the composition of the Committee was as follows: William Lane Richards (Chairman), Islam Osama Zekry (Deputy Chairman), Primož Karpe, Tadeja Žbontar Rems, and Natalia Olegovna Ansell (members). Changes in the Committee’s membership that occurred during the year are reflected below.

Committees

There were four sessions of the Operations and IT Committee 2024. The Operations and IT Committee acknowledged itself with:

• Periodic Rev reports; Initiative progress, status, lessons learned (BackBase case) & periodic reports;
• Report on implementation of the Procurement Strategy.

NLB Group Annual Report 2024

146 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N

DESCRIPTION POLICY ON THE PROVISION OF DIVERSITY OF THE MANAGEMENT BODY AND SENIOR MANAGEMENT

Pursuant to Article 70 (paragraph 7) of the ZGD-1, NLB representation in the management or control bodies of the company (from the point of view of gender and other aspects, and a statement of the goals and results of the policy) in the Sustainability Role of the Administrative, Management And Supervisory Bodies), which is part of this Annual Report.

7.1. Statement on changes that occurred between the end of the accounting period up

Companies, point 7.3.2 (Ljubljana Stock Exchange, 25 March 2024), NLB hereby states that on 20 February 2025, the Supervisory Board of NLB, following a recommendation from the Board. Following the necessary approvals, he will assume the role of Chief Transformation Officer (CTO), overseeing the acceleration of the mobile/digital-first business model transition.

NLB

Hedvika Usenik Andrej Lasič Archibald Kremser Peter Andreas Burkhardt Antonio Argir Blaž Brodnjak

Member Member Member Member Member Chief Executive Officer Superv

NLB Group Annual Report 2024

38: Composition of Management in financial year 2024

Name and Surname	Position held (President, Member)	Area of work covered within the Management Board	First appointment to the position	Professional profile	Membership in supervisory bodies in companies not related to the company
Blaž Brodnjak	President	CEO	6 July 2016	(i) 6 July 2026	S Slovenian 1974 MBA Banking/Finance
	CEO/Member	CFO	31 July 2013	6 July 2026	Austrian 1971 MBA Banking/Finance
Peter Andreas Burkhardt	Member	CRO	18 September 2013	6 July 2026	German 1971 MBA Banking/Finance
Andrej Lasič	Member	CMO (responsible for Corporate and Investment Banking)	28 April 2022	28 April 2027	Macedonian 1975 MBA Banking/Finance
	CMO (responsible for Retail Banking and Private Banking)		28 April 2022	28 April 2027	Slovenian 1972 MBA Banking/Finance Institute for Economic Research, British–Slovenian Chamber of Commerce

---

NLB Group Annual Report 2024

39: Composition of Supervisory Board and Committees in financial year 2024

Name and Surname	Position held (Chairman, Deputy Chairman, Member)	First appointment to the position	Conclusion	Attendance at SB session in regard to the total number of SB session (for example 5/7) applicable on his/her mandate	Gender	Citizenship	Year of birth	Qualification	Professional profile	Independence (YES/NO)	Membership in supervisory bodies in other companies or institutions
Primož Karpe	Chairman	10 February 2016	2028	7/7	male	Slovenian	197		Representative of the company‘s capital structure	YES	NO
David Eric	Chairman/Member	10 June 2019	2027	7/7	male	British	1960	MBA Finance	Banking/ Finance	YES	NO
					male	Egyptian	1977	PhD IT		YES	NO
Mark William Lane Richards	Member	10 June 2019	2027	7/7	male	British	1948	Higher National Diploma in Business Studies	Banking/ Finance	YES	NO
					female	Slovenian	1951	University Degree	Banking/Finance	YES	NO
André-Marc Pruden		15 June 2020	17 June 2024	4/4	male	French	1955	MSc Banking/Finance		YES	NO
Natalia Olegovna Ansell	Member	17 June 2024	2028	1/1	female	British	1972	Finance		YES	NO
					male	Slovenian	1972	MSc Banking/Finance		YES	NO
Tadeja Žbontar Rems	Member	22 January 2021	2025	7/7	female	Slovenian	1968	MSc IT		YES	NO

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Name and Surname	Membership in committees (audit, nominal, income committee, etc.)	First appointment to the position	Conclusion of the position/term of office (applicable on his/her mandate)	Chairman/Deputy Chairman/Member	Attendance
Shrenik Dhirajlal Davda	Remuneration Committee	28 June 2019	2027	Chairman	5/5
Mark William Lane Richards	Remuneration Committee	26 June 2020	202	Member	2/2
André-Marc Prudent-Toccanier	Remuneration Committee	9 September 2024	2027	Member	2/2
Sergeja Kočar	Remuneration Committee	26 June 2020	2024	Member	5/5
Primož Karp	Nomination Committee	18 September 2023	2027	Deputy Chairman	5/5
Shrenik Dhirajlal Davda	Nomination Committee	9 September 2024	2027	Member	2/2
Sergeja Kočar	Nomination Committee	2023	2025	Member	5/5
Cvetka Selšek	Audit Committee	9 September 2024	2027	Chairwoman	6/6
André-Marc Prudent-Toccanier	Audit Committee	9 September 2024	2027	Deputy Chairman	1/1
Luka Vesnaver	Audit Committee	30 September 2024	2028	Member	0/0
André-Marc Prudent-Toccanier	Risk Committee	18 September 2023	2027	Member	7/7
Shrenik Dhirajlal Davda	Risk Committee	8 July 2021	2027	Member	7/7
Luka Vesnaver	Risk Committee	30 September 2024	2028	Member	2/2
Natalia Olegovna Ansell	Risk Committee	8 November 2024	2027	Chairman	4/4
Islam Osama Zekry	Operations and IT Committee	8 July 2021	2025	Deputy Chairman	4/4
Primož Karpe	Operations and IT Committee	15 April 2016	2024	Member
Natalia Olegovna Ansell	Operations and IT Committee	8 November 2024	2028	Member	0/0

(i) There were also extraordinary sessions of the committees that are not reflected in this table.

NLB Group Annual Report 2024

Overview

Statement of Management of Risk

NLB d.d.’s Management and Supervisory Boards provide herewith a concise statement of risk management according to Article 17 of the Decision on Inadequacy Assessment Process for Banks and Savings banks (Official Gazette of the RS, no. 73/15 and 115/2021), Regulation (EU) 575/2013, article 435 (Risk management objectives and EBA/GL/2021/05) and EBA Guidelines on Disclosure requirements (EBA GL/2016/11).

Risk management in NLB Group, representing an important element of the Group’s overall corporate internal policies, and procedures which take into account European banking regulations, the regulations adopted by the Bank of Slovenia, the current EBA guidelines, and the relevant good practices. Subsidiaries operating outside Slovenia are also compliant with the rules set by the local regulators.

NLB Group gives high importance to the risk culture and awareness of all relevant risks strategy of the Group. The business and operating environment, relevant for the Group’s operations, is changing with trends such as sustainability, social responsibility, governance, changing new regulatory requirements. Respectively, risk management is continuously adapting with the aim of detecting and managing new potential emerging risks.

NLB Group uses the ‘three lines of defence’ model. Risk management function acts as a second line of defence. The Group’s Risk management function has enhanced overall corporate governance, which is reflected in lower SREP requirements, organised with regard to the Group’s business and risk profiles, and is based on a forward-looking perspective to meet internally set strategic objectives and all external requirements.

The primary strategy, which are consistent with the Group’s Business and focused on early risk identification and efficient risk management. Set governance and different risk management tools enable a structured approach to risk and its management by incorporating escalation procedures, and use of different mitigation measures when necessary.

In this respect, the Group is constantly enhancing and complementing the approach in contributing to sustainable finance by incorporating environmental, social, and governance (ESG) risks into its business strategies, risk management framework, and internal governance. The Group has implemented the main sustainability elements into its business model.

The goal of this strategic, organisation-wide initiative is to ensure the sustainable financial performance of the Group and a more balanced and inclusive economic and social system. So, sustainable finance integrates ESG criteria into the Group’s business and investment decisions for the lasting benefit of the Alliance, publicly disclosed its Net-Zero commitment and corresponding targets. With this step, the Bank pledged to align its lending and investment portfolio with net-zero emissions by 2050.

NLB Group Annual Report 2024

Overview

to the NLB Group business model. The management of ESG risks addresses the Group’s overall risk management framework, namely its credit approval process, collateral evaluation process, and their comprehensive integration into all relevant processes. The availability of ESG data in the region where NLB Group operates is still lacking. Nevertheless, the Group has a prerequisite for adequate decision-making and the corresponding proactive management of ESG risks. NLB Group plans for a prudent risk profile, optimal capital usage, and profitable operations.

Risk Appetite and Strategy

The Risk Appetite, the Risk Strategy, and the key internal risk policies of NLB Group, approved by the Management and Supervisory Boards of NLB d.d., specify the strategic objectives and guidelines for monitoring, measuring, mitigating, and managing all types of risk at different relevant levels. Moreover, main strategic risk guidelines are consistently integrated into a regular business strategy to ensure that decision-making is assured.

NLB Group regularly monitors its target risk appetite profile and internal capital allocation, representing the key component of proactive management. Risk limits are set by respective committees and/or the Management Board of the Bank, the Risk Committee of the Supervisory Board, and the Supervisory Board of the Bank. Additionally, NLB Group establishes risk areas with the intention of contributing to setting and pursuing the Group’s business strategy, to support decision-making on an ongoing basis, to strengthen the existing internal controls for all material types of risk, as well as those related to ESG, and various relevant stress scenarios or sensitivity analyses according to the vulnerability of the Group’s business model.

Stress testing is performed, namely from profitability, capital adequacy, and liquidity, with a forward-looking perspective. As such, it is embedded into the Group’s Risk Management system, namely Risk Appetite, Internal Capital Adequacy Assessment Process (ICAAP), and risk management. Besides internal stress testing, NLB Group, as a systemically important institution, also participates in the regulatory stress test exercises carried out by the ECB.

Market Position and Strategy

NLB Group is the largest Slovenian banking and financial group with an important presence in the SEE region and aims to provide international best practices across the customer and operating models. The Group continues strengthening its market position in its home region, actively participating in market developments and focuses on the transformation of NLB into the leading operating platform in the region through rigorous simplification and digitalisation while maintaining its prudent risk practices. NLB Group considers this crucial for the Group to sustain long-term profitable operations.

Risk Categories

Based on the Group’s business strategy, credit risk is the dominant risk category, followed by credit spread risk on the banking market risk, and other non-financial risks. The Group integrates and manages ESG risk within the established risk management framework, where the aforementioned risk is one of the risk drivers. Regular risk identification and their assessment is performed within the ICAAP process with the aim to assure their overall control and effective risk management on an ongoing basis.

Management of credit risk, representing the Group’s most important risk, focuses on the taking of moderate risks – with a diversified credit portfolio, adequate credit portfolio, and liquidity risk tolerance is low. NLB Group must maintain an appropriate level of liquidity at all times to meet its short-term liabilities, even if a specific stress scenario is realised.

The Group limits exposure to credit spread risk, arising from the valuation risk of debt securities portfolio servicing as liquidity reserves to the medium level of unexpected negative effects on revenues and capital that would arise from changed market interest rates and, therefore, a medium tolerance for this risk is stated. Moreover, in 2024 the Group aims to manage operational risk, with the orientation that such risk must not significantly impact its operations. The Risk Appetite for operational risks is low to medium, with a focus on a warning system.

To adequately manage ICT risks and ensure compliance with the requirements of the Digital Operational Resilience Act (DORA), a dedicated second line of defence will be established. The conclusion of transactions in derivative financial instruments at NLB is primarily limited to servicing customers and hedging the Bank’s own positions. In the area of currency risk, environmental and climate risk assessment, the impact of these risks is estimated as low, except for transition risk in the area of credit risk, which is assessed as low to medium.

The main NLB Group Risk Appetite Statement objectives are the following:

- preservation of regulatory and internal capital

NLB Group Annual Report 2024

Overview

adequate quality of the credit portfolio, sufficient NPL coverage, sustainable credit risk volatility, sustainable cost of risk across the economic cycle, limited Stage 2 exposures, sustainable transactions, M&A, real estate financing and specialised lending;

• maintenance of a solid liquidity position, maintaining stable customers’ deposits as the main funding base,
• diversification
• limited exposure to interest rate risk;
• limited exposure to foreign exchange risk;
• sustainable exposure to ESG risks, including portfolio decarbonisation strategy, which is based on NZBA

of the most important risk appetite indicators of NLB Group as at the end of year 2024, reflecting interconnection between strategic business orientations, the risk strategy and the targeted:

Common Equity Tier 1 ratio (CET1)	15.3%
MREL ratio	37.5%
Leverage ratio	9.9%
Cost-of-risk	14 bps
The share of non-performing exposure (NPE %)	1.1%
LCR	197.2%
NSFR	167.6%
EVE sensitivity (of 200 bps)	5.0% of capital
Transactional FX risk	0.7% of capital
No new financing of coal mining and coal-fired electricity

operational risk. Sustainable ESG financing in accordance with the Environmental and Social Management System (ESMS) is integrated in the Group’s Risk appetite and overall risk management, which is addressed in the Group’s Risk Appetite. In its initial round of NZBA targets, NLB Group has focused on the fossil fuel-based and highly energy-intensive sectors, such as power generation and/or exposure and available data. These include residential mortgages and commercial real estate. Defined Net Zero targets are regularly followed. Activities for setting a second round of...

Performance Overview

Lending growth, which was modest in the previous year due to increasing interest rate trends, picked up in 2024. During 2024, the Group’s credit portfolio remained high-quality and well-concentrated in any selected industry sector. The latter is particularly important as geopolitical tensions, the green transition, and other macro developments could materially impact on specific circumstances closely, remaining very prudent in identifying any increase in credit risk at a very early stage and proactive in NPL management. Furthermore, unfavourable trends in the Ge...

Having that in mind, the Bank downgraded some selected clients in Stage 2 and formed additional impairments. The cost-of-risk remained at a relatively low level. The established impairments contrast, the successful collection of previously written-off receivables and changes in risk parameters contributed positively to a low total net impact. The Group stayed well capitalised and the liquidity position of the Group also remained solid, with liquidity indicators high above the regulatory requirements, indicating its low tolerance for this risk. Significant attention was considered potential adverse negative market movements. Investment activity continued with a balanced approach to finding attractive market opportunities while pursuing a well-managed risk exposure remained moderate and stayed well within the Risk Appetite tolerance. Consequently, NLB Group concluded the year 2024 as self-funded, with strong liquidity and a very...

Rating that was assigned by Morningstar Sustainalytics further improved in 2024, reflecting a low risk of material financial impacts from ESG factors. In September 2024, Summit Leasing and enabling the entrance into the Croatian leasing market. Moreover, in May 2024 acquisition of Generali Investments, Skopje by NLB Skladi, Ljubljana was concluded, enabling NLB S...

other transactions of a sufficiently material nature to impact on NLB Group’s risk profile or distribution of the risks on the Group level. The Condensed Statement of the Management of R employees at daily operations of the Bank, as regards the definition and importance of a consistent tendency of the adopted risks and ways to take into account when adopting its daily business.

Usenik Andrej Lasič, Archibald Kremser, Peter Andreas Burkhardt, Antonio Argir, Blaž Brodnjak, Member, Member, Member, Member, Member, Chief Executive Officer, Supervisory Board of

With our experience and future vision, we keep pace with modern times, as well as the desires and needs of our clients. More than 56.4% of our clients actively use digital channels for payment.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure on Shares and Shareholders of NLB

1. Information pursuant to the Companies Act (ZGD-1), Article 70, paragraph 8

1.1. Structure of the Bank’s share capital

The Bank has issued only one class of shares to participate in the General Meeting of the Bank’s shareholders, the pre-emptive right to subscribe for new shares in case of a share capital increase, the right to profit participation (dividends), and the right to be informed. All shares belong to a single class and are issued in book-entry form. Information regarding the shareholder structure of NLB (as at 31 December 2024) is available.

1.2. All restrictions relating to the transfer of shares and the restrictions on voting rights

The shares of the Bank are freely transferable with the approval of the Supervisory Board, namely for the transfer of shares of the Bank by which the acquirer, together with the shares held by the holder before such an acquisition and the shares of the Bank’s voting shares. Approval for the transfer of shares is issued by the Supervisory Board. The Bank rejects the request for approval of transfer shares if the acquirer, together with the shares held by the acquirer, exceed the 25% share of the Bank with voting rights, increased by one share. Notwithstanding the provision mentioned in the first paragraph, approval for the transfer parties so that (s)he is not entitled to exercise voting rights from these shares at his/her sole discretion, while at the same time committing to the Bank, (s)he will not exercise voting rights on the shares if, together with the instructions for voting, (s)he does not receive a written guarantee from the person that this person has shares on his/her own account and that this person is not, directly or indirectly, exceeding the share of 25% of the Bank’s shares with voting rights and does not require the issuance of approval for the transfer of shares or does not receive the approval of the Bank may exercise other than those mentioned and those that are regulatory.

1.3. Qualifying holdings

This information is included in the chapter Corporate Governance Statement of NLB.

1.4. Securities carry

This information is included in the chapter Corporate Governance Statement of NLB.

1.5. The employee share scheme

If used by the company, for shares to which the scheme relates and about the method of exercising control over this scheme, it is an employee share scheme. In accordance with the relevant remuneration policies (when required by ZBan-3), a part of variable remuneration of NLB’s Identified Staff shall consist of NLB shares determined by the Supervisory Board. So far, the Bank has not used its own shares for this purpose. It currently uses NLB share-linked instruments. More information will be available in the Report for the Business Year.

1.6. Explanation regarding restrictions related to voting rights

This information is included in the chapter Corporate Governance Statement of NLB.

1.7. All agreements among

---

Corporate Governance Statement of NLB

1.8. The company’s rules on the appointment or replacement of management and supervisory board members

The Bank is not aware of such agreements.

1.10. Authorisations given to management, particularly authorisations to issue or purchase own shares

This information is included in the chapter Corporate Governance Statement of NLB.

1.11. All agreements between the Bank and the members of its management or supervision bodies or its employees which envisage compensation

There are no major agreements to change in control over the Bank resulting from a bid.

In line with the employment contracts of the members of the Management Board, if the Supervisory Board recalls a member of the Management Board, the Management Board is entitled to compensation for early discontinuation of his term of office. The Supervisory Board may reduce the compensation for early discontinuation of the term of office.

The member of the Management Board shall not be entitled to compensation for early discontinuation of the term of office or in case of regular termination of the term of office. In the event of resignation, the member of the Management Board shall not be entitled to any compensation.

Table 40: Number of shares held by members of the Supervisory Board and Management Board Shares held as at 31 Dec 2024

Name of member	Shares held	Percentage
Islam Osama Zekry
Mark William Lane Richards
André-Marc Prudent-Toccanier
Cvetka Selšek
Luka Vesnaver
Natalia Olegovna Ansell
Sergeja Kočar	190	0.009%
Brodnjak	1,700	0.009%
Archibald Kremser	791	0.004%
Peter Andreas Burkhardt	800	0.004%
Antonio Argir	620	0.003%
Hedvika Usenik	450	0.002%
Andrej Lasič	325	0.002%

Dividend taxation

Withholding tax In 2024, a Slovenian payer was required to deduct and withhold the amount of Slovenian corporate or personal income tax from dividend payments made to entities (other than Intermediaries): 15%. There are some exemptions if dividends are paid to intermediaries and legal entities.

For the purposes of Slovenian tax legislation, the GDR depositary will be subject to the deduction and withholding of Slovenian tax at the rate of 25%. A holder, an owner of a GDR or a beneficial owner will be entitled, if and to the extent applicable, related to the characteristics of the legal entities.

Application of double tax treaties If the payee is not an intermediary, Financial Administration of the RoS (FURS) may approve the application of residence of the payee if the Slovenian payer provides certain information on the payee and a confirmation that the payee is a resident for taxation purposes in such a country, issued by.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Events after the End of the 2024 Financial Year

On 21 January 2025, NLB issued new 4NC3 senior preferred notes of EUR 500 million to meet its MREL requirements (ISIN: XS2972971).

On 20 February 2025, the Supervisory Board of NLB, following a recommendation from the Management Board, will assume the role of Chief Transformation Officer (CTO), overseeing the acceleration of the mobile/digital-first business model transition of NLB and its Group.

NLB must comply with MREL requirement on a consolidated basis at NLB Resolution Group, consisting of 29.93% of TREA (excluding CBR) and 11.24% of LRE. This decision supersedes the previous BS decision on MREL requirement from December 2023, which amounted to 30.66% of TREA.

Tax Information

Dividends with respect to the shares received by a legal person are deducted and withheld at a higher tax rate than it would be paid if a Slovenian payer would make the dividend payment directly to such person as a payee or a higher tax rate than the one overpaid tax. The tax refund is enforced by filing a claim to the Financial Administration of the RoS (FURS).

The amount of tax withheld from a dividend payment received by an individual constitutes the final amount of Slovenian Personal Income Tax (dohodkov pravnih oseb).

NLB Group Annual Report 2024

Reconciliation of Financial Statements in Business and Financial Part of the Report

				Table 41: Income Statement of NLB Group for the annual period ended 31 December 2024
Business repo and similar income		1,207,638
4.1. Interest and similar expenses			(273,477)
				4.1. Net fee and commission income
4.3. Fee and commission income				435,284
				4.3. Fee and commission expenses	(12)
transactions	24.1
			Gains less losses from financial assets and liabilities not measured at fair value through profit or loss	(160)
4.4. Gains less losses from financial assets and liabilities held for trade through profit or loss		3,263
			4.6. Gains less losses from financial liabilities measured at fair value through profit or loss	(2,903)
				Fair value adjustments in hedge accounting	(1,411)
5.5.a) Foreign e financial assets		(4,280)
			4.12. Net other income	(26.5)
				Gains less losses on derecognition of non-financial assets	3,032
				Other operating income and expenses	10,020
4.8. Cash contributions to reso assets held for sale		676
			Net non-interest income	310.6
			Total net operating income	1,244.8
				Employee costs	(322.2)
				Administrative expenses	(543,995)
4.9. Other general and administrative expenses		(58,217)
			4.11. Total costs	(602.2)
			Result before impairments and provisions	642.6
				Impairments and provisions for credit risk	(20.6)
				Provisions for credit losses	10,7
(16.9) Provisions for other liabilities and charges			(12,847)
4.13. Impairment of non-financial assets				(4,014)
4.14. Impairments and provisions				(37.4)
Gains less losses from capital investments in associates and joint ventures (accounted for using the equity method)			2,990
				5.12.h) Result before tax	608.1
				Profit before income tax	608,149
				Income tax	(77.9)
				Income tax	(77,916)
				4.15. Result of	514.6
		Attributable to owners of the parent	514,552

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

42: Statement of Financial Position of NLB Group as at 31 December 2024

Business Report in EUR millions

Financial Report in EUR thousands

ASSETS
Cash, cash balances at central banks and other demand deposits at banks	4,039,581
Loans to banks	458.9
Financial assets measured at amortised cost - loans and advances to banks	458,921
Net loans to customers	16,363.6
Financial assets	6,324.5
Trading book	18.3
Financial assets held for trading	18,338
Non-trading book	6,306.1
Non-trading financial assets mandatorily at fair value through other comprehensive income	2,563,516
Financial assets measured at amortised cost - debt securities	3,725,195
Investments in subsidiaries, associates, and joint ventures	14.7
Equipment	310,017
Investment property	26.1
Investment property	26,132
Intangible assets	100.5
Intangible assets	100,496
Other assets	397.4
Financial assets measured at amortised cost - value changes of the hedged items in portfolio hedge of interest rate risk	(6,353)
Current income tax assets	604
Deferred income tax assets	120,701
Other assets	56,819
Non-current assets
LIABILITIES
Deposits from customers	22,206.3
Financial liabilities measured at amortised cost - due to customers	22,206,310
Deposits from banks and central banks	136.0
Financial liabilities measured at amortised cost - borrowings from banks and central banks	120,612
Financial liabilities measured at amortised cost - borrowings from other
Financial liabilities measured at amortised cost - debt securities issued	1,608,939
Other debt securities in issue	1,048.8
Other liabilities	560.9
Financial liabilities held for trading	6,995
Financial liabilities measured at amortised cost - other financial liabilities	296,725
Derivatives - hedge accounting	3,592
Provisions	104,388
Current income tax liabilities	18,026
Deferred income tax liabilities	17,694
Equity attributable to the parent	3,225,960
Non-controlling interests	72.1
Non-controlling interests	72,085
TOTAL LIABILITIES AND EQUITY	28,035.4
Total liabilities and equity	28,035,367

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Alternative Performance Indicators

The Bank has chosen to present these APIs, either because they are in common use within the industry or because they are commonly used by investors. The operations of the Bank and the Group, and are not considered to be directly comparable with similar KPIs presented by other companies. The Bank’s APIs are described below together with:

Description	Calculation	Notes
Cost of risk (CoR)	Calculated as the ratio between credit impairments and provisions annualised from the income statement and average net loans to customers.	Credit impairments and provisions are annualised, calculated as all established and released impairments on loans and provisions for off-balance (from the income statement) in the period divided by the balance of the previous year end (31 December) and monthly balances of the last day of each month from January to month t divided by (t+1).
Cost to income ratio (CIR)	Indicator of cost efficiency.	Total costs / Total net operating income.
Total average cost of funding (quarterly)	Calculated as the ratio between interest expenses annualised and average interest-bearing liabilities.	Interest expenses in the period divided by the number of days in the quarter and multiplied by the number of days in the year. Interest expenses on interest-bearing liabilities also include interest expenses from wholesale funding.
Average interest-bearing liabilities (quarterly)	Calculated as the sum of monthly balances (t) for the corresponding quarter.	NLB internal information.
Funding (quarterly)	Calculated as the ratio between interest expenses on deposits from customers annualised and average wholesale funding.	Wholesale funding includes deposits from banks and interest expenses from wholesale funding.
Interest expenses from wholesale funding (quarterly)	Annualised, calculated as the sum of interest expenses from wholesale funding in the period divided by the number of days in the quarter.	Denominator: Average wholesale funding.
Interest rate for deposits from customers (quarterly)	Calculated as the ratio between interest expenses on deposits from customers annualised and average deposits from customers.	Numerator: Interest expenses on deposits from customers (quarterly) are annualised, calculated as the sum of interest expenses on deposits from customers in the period divided by the number of days in the quarter.

---

NLB Group Annual Report 2024

Overview

from customers and change of ECB deposit facility interest rate over the selected period. Numerator: Interest rate on deposits from customers NLB internal information. Interest rate on deposits from the ECB. Deposit facility interest rate (quarterly average).

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Alternative Performance Indicators

(i) Description

Calculation

Notes

Credit portfolio under IFRS 9

IFRS 9 requires an expected loss model, where an allowance for the expected credit losses is recognized in stages (before deduction of loan loss allowances):

• Stage 1 – A performing portfolio: no significant increase of credit risk since initial recognition, NLB Group recognises an allowance based on a
• Stage 3 – An impaired portfolio: NLB Group recognises lifetime allowances for these financial assets. The definition assumed: i) when a credit rating significantly deteriorates at the reporting date in comparison to the credit rating at initial recognition; ii) when a financial asset has material delays over 30 days (d grant the client forbearance or if the client is placed on the watch list.

Financial assets measured mandatorily at fair value through profit or loss (FVTPL) Financial assets measured mandatorily at fair value through profit or loss (FVTPL) of the loan portfolio (before the deduction of fair value for credit risk; loans with contractual cash flows that are not solely payments of principal and interest on the p source, by which the NLB Group measures the loan portfolio quality, and which is also published in the Business Report of Annual and Interim Reports.

AC - IFRS 9 classification into Stage 1

Numerator: Total (AC) loans in Stage 2 Denominator: Total gross loans and advances AC + FVTPL - IFRS 9 classification into Stage 3 Numerator: Total (AC) and advances AC - Corporates - IFRS 9 classification into Stage 1 Numerator: Total (AC) loans in Stage 1 to Corporates Denominator: Total gross loans to Corporates

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Alternative Performance Indicators

Description	Calculation	Notes
AC - Corporates - IFRS 9 classification into Stage 2	Numerator: Total (AC) loans in Stage 2 to Corporates
	Denominator: Total gross loans to Corporates
AC - Corporates - IFRS 9 classification into Stage 3	Numerator: Total (AC) loans in Stage 3 to Corporates + Total (FVTPL) non-performing loans
AC - Retail - IFRS 9 classification into Stage 1
Retail - IFRS 9 classification into Stage 2	Numerator: Total (AC) loans in Stage 2 to Retail
	Denominator: Total gross loans to Retail
AC - Retail - IFRS 9 classification into Stage 3	Numerator:
	Its calculation uses Tier 1 as the numerator, and the denominator is the total exposure of all active balance sheet and off-balance-sheet items after the adjustments are made in the context of which and other off-balance sheet items are especially pointed out.
	Numerator: Tier 1
	The leverage ratio is a non-risk based supplementary measure to the risk-based capital requirements. A minimum leverage ratio is required.
	Denominator: Total Leverage Ratio
	by the financial institution to cover its net liquidity outflows over a 30-calendar day stress period.
	Numerator: Stock of HQLA
	The LCR requires financial institutions to maintain a sufficient reserve.
	The assets to hold must equal to or greater than their net cash outflow over a 30-calendar-day stress period (having at least 100% coverage).
	The parameters of the stress scenario are defined under the calculation based on the European Commission’s Delegated Act on LCR.
	Denominator: Net liquidity outflow
	Net loan to deposit ratio (LTD) Calculated as the ratio between net loans to customers.
	defined limitation on the LTD; however, this measure aims to restrict the extensive growth of the loan portfolio.
	Denominator: Deposits from customers
	Net interest margin on the basis of interest-bearing assets.
	Numerator: Net interest income
	Net interest income is annualised, and calculated as the sum of interest income and interest expenses in the period divided by the number of interest-bearing assets.
	NLB internal information. Average interest-bearing assets for NLB are calculated as the sum of total assets of the previous year end (31 December) and daily balances in the.
	Average interest-bearing assets for NLB Group and for individual bank members are calculated as the sum of balance of the previous year end (31 December) and monthly balances of the last day.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Alternative Performance Indicators

(i) Description

Calculation	Notes
Net interest margin on the basis of interest-bearing assets (quarterly)	Calculated as the ratio between the net interest income (quarterly) is annualised, calculated as the sum of interest income and interest expenses in the period divided by the number of days in the quarter and multiplied by the number of days in interest-bearing assets (quarterly) for the NLB Group are calculated as the sum of monthly balances (t) for the corresponding quarter and monthly balance at the end of the previous quarter.
Numerator: Net interest income	Net interest income is annualised, and calculated as the sum of interest income and interest expenses in the period divided by average total assets.
Denominator: Average total assets	Average total assets for the NLB Group are calculated as the sum of balance of the previous year end (31 December) and monthly balances of the last day of each month divided by (t+1).
Percentage of all exposures to clients in the Finrep18 before the deduction of allowances for the ECL; the ratio is in gross terms.	Numerator: Total Non-Performing on-balance and off-balance exposures, which are included in the report Finrep18; before the deduction of allowances for the ECL. Non-performing exposures measured by fair value changes for credit risk.
Denominator: Total on-balance and off-balance exposures in Finrep18	Where carrying amount of FVOCI is increased by value adjustments due to impairments.
NPL per cent allowances; ratio in gross terms.	Numerator: Total Non-Performing Loans. Non-performing loans include loans to D- and E-rated clients, namely loans at least 90 days past due or loans unlikely to be repaid.
Denominator: Total gross loans	NPL coverage ratio 1 (NPL coverage ratio) is calculated based on an internal data source, with which the NLB Group monitors the quality of the loan portfolio.
NPL coverage ratio 1	It shows the level of credit provisions that the entity has already absorbed into its profit and loss accounts with respect to the entire loan portfolio - loan impairment in respect of non-performing loans.

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Alternative Performance Indicators

(i)	Description	Calculation	Notes
Received collaterals for NPLs/NPL	The coverage of the gross non-performing loans portfolio with collateral for non-performing loans.	The collateral market value is used for calculation.	The calculations are based on internal data sources.
Gross NPL ratio (EBA def.)	The ratio of the gross volume of Non-Performing Loans and advances, in accordance with the EBA methodology (report Finrep18).	Numerator: Gross volume of Non-Performing Loans and advances without loans held for sale, cash balances.	Cash balances at CBs and other demand deposits are excluded from the denominator and the numerator.
NPL ratio (EBA def.) (BoS)	The ratio of the gross carrying amount of non-performing loans and advances to the total gross carrying amount of loans and advances, in accordance with the EBA methodology.	Cash balances at CBs and other demand deposits are included in the calculation.	The EU banking sector indicator is published quarterly by the EBA in the Risk dashboard.
Finrep18 NPL coverage ratio (EBA def.)	The ratio of the amount of accumulated impairment, negative changes in fair value due to credit risk to the non-performing loans and advances.	Loans and advances classified as held for sale, cash balances at CBs and other demand deposits are excluded from the denominator.	Volume of allowances and value adjustments for credit losses on Non-Performing loans and advances.
NPL coverage ratio (EBA def.) (BoS)	The NPL coverage ratio is the ratio of the amount of accumulated impairment, negative changes in fair value due to credit risk to the non-performing loans and advances.	Cash balances at CBs and other demand deposits are included in the calculation.
NPL collateral ratio	The ratio of the collateral received for non-performing loans and advances to the gross carrying amount of collateralised non-performing loans and advances.	The calculation is provided on a single loan basis.	The NPLs where the amount of collateral received exceeds the net non-performing loans.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Alternative Performance Indicators

Description	Calculation	Notes
Net stable funding ratio (NSFR)	The net stable funding ratio is a liquidity risk standard requiring financial institutions to measure the amount of available stable funding relative to the amount of required stable funding and is based on the current Basel Committee guide.	“Funding” is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. The amount of such stable funding required is based on the maturities of the various assets held by that institution and those of its off-balance-sheet (OBS) exposures. The calculations presented are based on internal data sources.
Denominator	Amount of available stable funding
Numerator	Interest risk in banking book – EVE	Measures the sensitivity of changes in market interest rates on the economic value of financial instruments. EVE represents the present value of net future cash flows and provides a comprehensive assessment of the impact of a change in interest rates of 200bps on the economic value of the banking book position.
Denominator	Equity (Tier I)
Operational business margin (OBM)	Calculated as operational business net income annualised, and calculated as operational business income in the period divided by the number of days in the period.	Numerator: Operational business net income is annualised and calculated as operational business income in the period divided by the number of days in the period. Operational business income consists of net interest income (excluding interest expenses from subordinated securities), net fees and commissions and net gains and losses from financial assets and liabilities held for trading that derive from exchange trading.
Average total assets	Calculated as a sum of balance as at the end of the previous year end (31 December) and monthly balances of the last day of each month from January to month t divided by operational business net income annualised and average assets.	Numerator: Operational business net income (quarterly) is annualised, and calculated as operational business net income by the number of days in the year.
Return on equity before tax (ROE b.t.)	Calculated as the ratio between result before tax annualised and average total equity (including non-controlling interests).	Numerator: Result before tax is the number of months for the reporting period and multiplied by 12. Denominator: Average total equity NLB internal information.

---

NLB Group Annual Report 2024

Overview

Alternative Performance Indicators

Description	Calculation	Notes
Return on equity after tax (ROE a.t.)	Calculated as the ratio between result after tax annualised and average result after tax in the period divided by the number of months for the reporting period and multiplied by 12.	Denominator: Average equity
Return on equity after tax (ROE a.t.) normalised	Calculated as the ratio between result after tax annualised and average capital.	Average risk adjusted capital is calculated as a Tier 1 requirement of average Risk Weighted Assets (RWA) reduced for minority shareholder capital contribution.
Return on assets before tax (ROA b.t.)	Calculated as the ratio between result before tax annualised and average total assets before tax in the period divided by the number of months for the reporting period and multiplied by 12.	Denominator: Average total assets
Return on assets after tax (ROA a.t.)	Calculated as the ratio between result after tax annualised and average result after tax in the period divided by the number of months for the reporting period and multiplied by 12.	Denominator: Average total assets
Total capital ratio (TCR)	TCR is the own funds of the institution expressed as a percentage of the total risk amount (Total RWA).	All alternative performance indicators are expressed in %, except the cost of risk (CoR) is expressed in bps.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Legend: The chart shows voting rights shares. The Group includes entities according to the definition in the Financial Conglomerates Act (Article 2).

(i.a)	100% direct ownership	Prvi Faktor	Ljubljana	5%	NLB d.d.	5%	SID banka d.d.
		(ii)	46.03% direct ownership	NLB d.d.	Abanka merged into Nova KB	in September 2024 Nova KBM and SKB merged into
(iii)	51% direct ownership	NLB Lease\&Go	leasing	Lease\&Go, leasing, d.o.o.	Ljubljana	48.91%	NLB Komercijalna Banka AD Beograd
			(vi)	100% direct ownership	NLB Skladi d.o.o.	Ljubljana	(viii)	100% direct ownership	Summit Leasing	Ljubljana
		Core	Non-Core	Financial organisations	Companies	Financial organisations	Companies	Slovenia	Bankart, Ljubljana
(ii)	46.03%	46.03%	Nepremičnine, Horjul	75%	75%	SLS HOLDCO, Ljubljana	100%
		Slovenia	Summit Leasing Slovenija, Ljubljana	(vii)	100%	100%	NLB MUZA, Ljubljana	100%	100%
	Foreign markets	NLB Banka, Sarajevo	97.35%	97.35%	NLB Banka, Podgorica	99.87%	99.87%	NLB Banka, Prishtina
82.38%	82.38%	NLB Banka, Banja Luka	99.85%	NLB Fondovi, Beograd	(vi)	100%	100%
		NLB Lease\&Go Skopje	(iii)	51%	100%	NLB Lease\&Go Leasing Beograd	(iv)	50.89%	99.80%
			NLB DigIT, Beograd	100%	100%	NLB InterFinanz in Frankfurt am Main	100%	100%	NLB Crna Gora, Podgorica	100%
		NLB Srbija, Beograd	100%	100%	OL Nekretnine u likvidaciji, Zagreb	100%	100%	Subsidiary	% direct share
		% indirect share at the group level	Prvi faktor u likvidaciji, Zagreb	(i.a)	100%	100%	Prvi faktor-faktoring, Beograd – u likvidaciji	(i.b)	90%
			95%	NLB Group Chart	*	NLB Leasing, Zagreb	(viii)	100%	100%	NLB Real Estate, Ljubljana
	100%	100%	NLB Car\&Go, Ljubljana	(ix)	100%	100%	NLB Real Estate, Beograd	100%
			NLB Real Estate, Podgorica	100%	SBM-1 Strategy, business model, and value chain.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Organisational Structure of NLB

Workers’ Council

(i) Compliance and Integrity Group Steering Strategy and Business Development Legal and Secretariat Brand and Communication Human

Retail

Evaluation and Control Restructuring Workout and Legal support CRO CFO CMO IT Delivery Business Intelligence and Analytics Data and Artificial Intelligence Governance IT Gove

Business Development

Payments Processing Cash Processing COO Understanding of the tasks and responsibilities of Global Risk, Compliance and Integrity and Internal Audit is taken into

Workers’ Council

is independent organisational unit with no subordinate or superior organisational units, and it operates in accordance with ZSDU. Internal Audit Management Board Super

Administration

Financial Markets Investor Relations Distribution Network Area Branch Ljubljana Area Branch Northwest and Central Slovenia Area Branch Northeast Slovenia Area Branch E

Enterprises

Mobile Banking Distribution Network Coordination CSA & Cross-Border Financing Large Corporates Small and Mid-Corporate Trade Finance Services Investment Banking and C

Management

and Digital Services Private Banking KC 24/7 Development of Lending Solutions for Retail Financial Instruments Processing Corporate Clients Review and Account Products D

Money Laundering and

Counter-Terrorism Financing

SUSTAINABILITY STATEMENT

Sustainability is embedded in our strategy and guides our efforts to improve the quality of life in our home region. In this chapter of the Business report we discuss their importance to the NLB Group’s development, performance, and position.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Content

General Information

170 NLB Group Sustainability Journey*

174 General Disclosures

178 Environmental Information

209 Climate Change

210 (Mitigation and Adaptation)

Socia users

280 Governance Information

289 Business Conduct

290 Complementary Information: Sustainable Supply Chain*

303 Appendices

306 ESRS Appendices

Appendix 1: EU Taxonomy Emission Calculation

354 Appendix 3: Disclosure Requirements in ESRS Covered in the Sustainability Statement

359 Appendix 4: List of Datapoints That Derive from Other EU Legi

Banking Progress Statement – Summary

365 Appendix 6*: TCFD Index Table

367 * Not subject to external assurance.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

KPMG SLOVENIJA, podjetje za revidiranje, d.o.o.

Telefon: +386 (0) 1 420 11 60

Železna cesta 8a

Internet: http://www.kpmg.si

SI-1000 Ljubljana Slovenija

© 2025 KPMG SLOVENIJA, družba z omejeno odgovornostjo in članica globalne organizacije neodvisnih članic, ki so povezane s KPMG International Limited, osnovni kapital: 54.892,00 EUR, matična št.: 5648556000

Independent Auditor’s Limited Assurance Report on the Sustainability Statement

To the shareholders of NOVA LJUBLJANSKA BANKA D.D., LJUBLJ

We have reviewed whether the Consolidated Sustainability Statement of Nova Ljubljanska banka d.d., Ljubljana (»the Bank«) and its subsidiaries (collectively, »the Group«) as of and for the year ended 31 December 2024 is prepared in accordance with the requirements of the European Sustainability Reporting Standards (ESRS), including the process carried out by the Group to identify the information reported in the Sustainability Statement.

Our review was conducted in accordance with articles 70(c) and 70(č) of the Companies Act dated 4 May 2006 (Official Gazette of the Republic of Slovenia no. 42/2006 with amendments), including the requirements of the Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (»Delegated Regulation«).

Based on the procedures performed and evidence obtained, nothing has come to our attention to cause us to believe that the Group’s Sustainability Statement as of and for the year ended 31 December 2024 is not prepared in compliance with the European Sustainability Reporting Standards (ESRS), including:

• compliance of the disclosures in the EU Taxonomy Regulation section within Appendix 1: EU Taxonomy of the Sustainability Statement with the reporting requirements;
• compliance of the Sustainability Statement with the XHTML format referred to in the Delegated Regulation.

Our conclusion on the Sustainability Statement does not extend to any assurance report thereon, nor to any information within the Sustainability Statement not in scope of our assurance engagement. We have not performed any assurance procedures as part of this engagement.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

However, we audited the Group’s consolidated and the Bank’s separate financial statements as of and for the year ended 31 December 2024 prepared in accordance with International Financial, and our auditor’s reports thereon are also included with the other information.

Basis for Conclusion

We conducted our limited assurance engagement in accordance with International Standards on Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board (IAASB). Our responsibilities under this standard are with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International requirements that are relevant to our assurance engagements on the Sustainability Statement in Slovenia.

Our firm applies International Standard on Quality Management (ISQM) 1, Quality Assurance or Related Services Engagements, issued by the IAASB. This standard requires the firm to design, implement and operate a system of quality management, including policies or procedures to meet legal and regulatory requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Other Matter – Comparative information

Our conclusion is not modified in respect of this matter.

Responsibility for the Sustainability Statement

The Management of the Bank is responsible for designing, implementing and maintaining the Sustainability Statement in accordance with the ESRS and for disclosing this process in the Impacts, risk, and opportunity management note of the Sustainability Statement. This responsibility includes:

• understanding and developing an understanding of its affected stakeholders;
• identifying the actual and potential impacts (both negative and positive) related to sustainability matters, as well as risks and opportunities affecting financial performance, cash flows, access to finance or cost of capital over the short – , medium– , or long – term;
• assessing the materiality of the identified impacts, risks and opportunities relative to methodologies and making assumptions that are reasonable in the circumstances.

The Management of the Bank is further responsible for the preparation of the Sustainability Statement, in accordance with preparing the disclosures in the EU Taxonomy Regulation section within Appendix 1: EU Taxonomy of the Sustainability Statement, in compliance with Article 8 of the Taxonomy Regulation; determining necessary measures to enable the preparation of the Sustainability Statement such that it is free from material misstatement, whether due to fraud or error; and selecting and applying individual sustainability disclosures that are reasonable in the circumstances.

Those charged with governance are responsible for overseeing the reporting process for the Group’s Sustainability Statement.

– looking information in accordance with the ESRS, Management of the Bank is required to prepare the forward – looking information on the basis of disclosed assumptions about events that may be different since anticipated events frequently do not occur as expected. Also, as described in the BP-2 Disclosures in relation to specific circumstances note within the Sustainability Statement, result of both scientific and estimation uncertainty. In determining the disclosures in the Sustainability Statement, Management of the Bank interprets undefined legal and other terms. Under their interpretation and, accordingly, are subject to uncertainties.

Our Responsibilities

Our objectives are to plan and perform the assurance engagement to obtain limited assurance about whether the Sustainability Statement is free from material misstatement, whether due to fraud or error, and reporting our limited assurance conclusion to the Bank’s shareholders. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Sustainability Statement as a whole.

Our responsibilities in relation to the Process for reporting the Sustainability Statement include:

• obtaining an understanding of the Process but not for the purpose of expressing a conclusion on the Process; and
• designing and performing procedures to evaluate whether the Process is consistent with the Group’s description of its Process, as disclosed in the Impacts, risk, and opportunity management note.

These procedures include:

• obtaining an understanding of the Group’s control environment, processes and information systems relevant to the preparation of the Sustainability Statement but not evaluating the design or operating effectiveness;
• identifying disclosures where material misstatements are likely to arise, whether due to fraud or error; and
• designing and performing procedures focused on disclosing the risk of not detecting a material misstatement.

NLB Group Annual Report 2024 172 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Summary involves performing procedures to obtain evidence about the Sustainability Statement. We designed and performed our procedures to obtain evidence about the Sustainability Statement. The extent of our procedures depended on our understanding of the Sustainability Statement and other engagement circumstances, including the identification of disclosures where material misstatements are likely to arise.

We exercised professional judgment and maintained professional scepticism throughout the engagement. In conducting our limited assurance engagement, with respect to the Process, performing inquiries to understand the sources of the information used by management (including stakeholder engagement, business plans and strategy documents); and inspecting the Group’s reporting processes.

From our procedures about the Process was consistent with the description of the Process set out in the Impacts, risk, and opportunity management note. In conducting our limited assurance engagement, we included:

• obtaining an understanding of the Group’s reporting processes relevant to the preparation of its Sustainability Statement by performing inquiries of the relevant personnel and inspecting documentation;
• evaluating whether the structure and the presentation of the Sustainability Statement is in accordance with the selected disclosures in the Sustainability Statement;
• performing substantive assurance procedures on a sample basis on selected disclosures in the Sustainability Statement;
• obtaining evidence about the forward-looking information and on how these methods were applied;
• obtaining an understanding of the process of calculating by the Group of the Green Assets Ratio and preparing related disclosures;
• assessing whether the taxonomy disclosures reconciled, where relevant, with the Group’s consolidated financial statements;
• assessing whether the Sustainability Statement has been properly prepared in the XHTML format referred to in Delegated Regulation.

The procedures performed in a limited assurance engagement are substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.

podjetje za revidiranje, d.o.o. Domagoj Vuković, FCCA Certified Auditor Partner Ljubljana, 9 April 2025

General Information

This section starts with highlighting the NLB Group's sustainability journey, key milestones, performance indicators, and overview of received awards and recognitions.

Statement preparation

We present essential disclosures on governance, strategy, and management of impacts, risks, and opportunities (IROs), including an overview of the double materiality as

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Group Sustainability Journey

At NLB Group, we recognize the significant global challenges of climate change, social equity, and ethical governance. This is why the Group has responsibly committed to "meeting the needs of the present without compromising the ability of future generations to meet their own needs".1 As a systemically important financial institution in the region, NLB Group has set the goal to actively contribute to an inclusive future. To achieve this, the Group has integrated sustainability and ESG (environmental, social and human rights, and governance) factors into its business model, strategy and daily operations, addressing the financial needs of its clients and at the same time improving the quality of life of the home region where we operate, and its core values which are growing people, encouraging entrepreneurship on the markets within the Southeast Europe (SEE) region, where the Group operates. The commitment extends beyond the Group’s companies in Slovenia and Croatia, both EU members, but includes companies in all other countries of operation: Serbia, Bosnia and Herzegovina, North Macedonia, Montenegro, and Kosovo. Hence, the harmonization process groupwide considers EU legislation.

Key milestones Since its establishment, NLB Group has upheld a tradition of responsible, stakeholder-centric operation. The Group’s sustainability journey was formally established with an organization-wide initiative and the adoption of the Sustainability Programme. • NLB was the first bank from Slovenia to align with the Sustainable Development Goals (United Nations Development Programme) and the Paris Climate Agreement. NLB Group started to integrate these commitments into its operations, financing, and risk management. The Programme was replaced by the NLB Group Sustainability Framework which became the mandatory framework for all NLB Group core members in the region. • The Sustainability Committee was established under the Management Board of NLB. • The Environmental and Social Management System (ESMS) was established as a part of a comprehensive risk management system within NLB Group, addressing credit and liability risks arising from ESG considerations. • NLB joined the UNEP FI Net-Zero Banking Alliance (NZBA). Guided by NZBA principles, the Group aims to reduce emissions by 2050 or sooner. • The comprehensive NLB Group Sustainability Policy was established, enhancing the existing internal framework and reaffirming a foundation for integrated sustainability practices. The first NLB Group Net-Zero Disclosure Report was published aligned with NZBA methodology and reaffirming our commitment to achieving net zero by setting targets for reducing its emissions.

NLB Group Annual Report 2024

Overview

integrated in the NLB Group’s new business strategy (New Horizons), in which commitment to environmental risk management and sustainable banking reflects in several strategic Operational Emissions Net-Zero Strategy aiming to reduce emissions from the Group’s own operation.

Risk Rating history

Improved ESG Risk Rating NLB Group’s efforts and progress on its sustainability journey have been recognized by Morningstar Sustainalytics, one of the world’s leading organizations assessing the financial materiality of risks stemming from NLB Group’s environmental, social, and governance issues. In recent years, the Group’s ESG Risk Rating has been assessed as low and has improved by 5.4 points, being at the same time the first bank with headquarters and exclusive strategic interest in SEE to obtain this rating, as well as the first among companies listed on the Ljubljana Stock Exchange, ranking the Group in the top 13 percent of all banks assessed.

In 2024, NLB Group recorded a significant 5.4-point improvement, achieving an overall ESG Risk Rating of 10.5 points. This achievement placed the Group among the 432 highest rated companies in Europe, among the Top-rated companies in Europe and the Top-rated banks globally.

Risk Rating Scale

NEG	0-10	LOW
10-20	MEDIUM	LOW RISK

2024 Low ESG Risk Rating placed NLB Group among the Top-rated companies in Europe and the Top-rated banks globally.

NLB Group Annual Report 2024

Overview

Key Highlights

EUR 439 million New sustainable financing

Net asset value EUR 151 million

Asset management in two sub-funds allocation as at 31 March 2024

Sustainability Performance Indicators

tCO2 eq	11.183 million
GHG emissions financed and operational emissions (market-based)
Employee engagement	54%
Client satisfaction	32
Net Promoter days/employee	7.7
Completed training and education	17%
Gender diversity	40%
Gender diversity employees	7,056
Women in the NLB Management Board
Women in the NLB Supervisory Board

---

NLB Group Annual Report 2024

Awards and Recognitions

In 2024, several NLB Group banking members received notable awards for their sustainability-related contributions:

• Slovenia
• NLB, Ljubljana - Top Employer for Slovenia (independent study by E-laborat, January 2025)
• Serbia
• NLB Komercijalna Banka, Beograd - The first certified family-friendly bank in Serbia (since 2023)
• Top Employer of the year
• "Title of heart is a world full of opportunities"
• "NLB Organic" - The special award for the socially responsible campaign "NLB Organic", which has been held for 13 consecutive years and promotes organic banking.
• Banka, Sarajevo
• Both banks received the Golden BAM award for innovation in the banking sector for introducing Smart POS services to the market.
• The CEO of NLB Banka Sarajevo received the award.
• Banka, Prishtina
• Employer of the year (Kosova Chamber of Commerce)
• Taxpayer of the year (Kosova Chamber of Commerce)
• The "Friend of Children" award in recognition of its significant contributions.
• Recognition for special contribution and support of the Special Olympics of North Macedonia
• "Golden Supporter" of the activities of the Red Cross of the City of Skopje
• Recognition from the Macedonian Stock Exchange and the American Chamber of Commerce
• "Leaders in donating" (Konekt organization and USAID North Macedonia)
• "Best Practices in Corporate Philanthropy" - Recognition from the European Bank for Reconstruction and Development (EBRD) for its contribution to the success of the Green Economy Financing Facility.
• Montenegro
• NLB Banka, Podgorica - Responsibility integrated into its corporate culture and identity (The Fund for Active Citizenship)

---

NLB Group Annual Report 2024

Overview

The Group has a strong tradition of sustainability reporting, which has evolved significantly over the years. Until 2020, the Group published CSR or non-financial reports guided by the GRI framework. The Principles for Responsible Banking, Net Zero Banking Alliance, and Taskforce for Climate Related Financial Disclosures were included in reporting. In 2023, the Group started to prepare the presented Sustainability Statement, which replaces previous reports, while still integrating various above-mentioned frameworks.

It is prepared in accordance with the EU Corporate Sustainability Reporting Standards (ESRS) as transposed to the Slovenian Companies Act (ZGD-1) in December 2024, and the disclosure requirements related to Article 8 of the EU Taxonomy and underlying delegated acts provide stakeholders with information on NLB Group’s material impacts on people and the environment, and the effects of sustainability matters on the Group’s development, performance, and additional insights for consistency with previous reports.

The Sustainability Statement has been prepared on a consolidated basis following the same principles as those following from the subsidiaries (over which NLB has control as at 31 December 2024) from the date on which NLB obtains direct or indirect control over the financial and operational management and receives a variety of data.

Data is reported for the period from January to 31 December 2024, except for:

• Financed emissions, which included data as of 31 December 2023 due to the unavailability of data for the 2024 year-end.
• Operational emissions concerning Leasing Zagreb, NLB Car & GO, NLB Fondovi Skopje. In this case, emissions were included from the month of acquisition onwards.
• NLB Green Bond, which included data as of 31 March.

Figures are stated in EUR thousands and millions tonnes of CO2 equivalent (tCO2 eq), with possible rounding discrepancies. Although disclosure of comparative information in respect of certain disclosures, such as EU Taxonomy, GHG emissions, and some of S1 Own workforce and E1 Climate Change disclosures, is presented, only disclosures for the following were gradually improving.

NLB Group's Sustainability Statement and Double Materiality Assessment were prepared using available data. Data collection and assessment in the downstream value chain were conducted; therefore, some data were unavailable or inapplicable, leading to the use of management judgments, estimates, and third-party data, with explanations provided for any gaps. NLB Group obligations are noted, and the Group plans to extend the assessment scope to more activities, including upstream and downstream. Efforts will continue to enhance the accounting data framework, upgrading sustainability data quality.

NLB Group's DMA considered its entire value chain: upstream, own operations, and downstream. For details, please refer to the chapters NLB Group’s Value.

classified or sensitive information corresponding to intellectual property, know-how, or innovation results has been omitted from the Sustainability Statement. The Group partially used an about its downstream and upstream value chain for the first three years after CSRD came into effect. The partial exemption refers to cases where all the necessary information regarding the explanations and estimates are provided alongside respective disclosures.

ESRS 2 General Disclosures

BP-1 General basis for preparation of the Sustainability Statement

NLB Group Annual Report 2024 179 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Impacts, risks, and opportunities were assessed over time horizons as defined in ESRS, namely short (1 year), medium (1-5 years) and long-term (more than 5 years), with the ex term: until 2030; mid-term: 2030–2050; and long-term: 2050–2100, as internal methodology relies on studies and scenarios mainly project temperature and climate change until 2100.

For metrics for downstream value chain data, the information includes data from clients and estimates from third-party providers or sector averages. These estimates may significantly impact the GHG emissions data reflect measurement uncertainty due to methodological and data limitations, including reliance on third-party data. Our analysis and climate targets use estimates based and figures may become outdated. GHG emission factors are expected to increase as more data becomes available and associated companies are included. In cases where the disclosed quality has uncertainty, this is clearly stated and explained along the metrics.

Expectations, forecasts and statements Sustainability targets and initiatives, particularly climate-related ones, require long-term planning. The Sustainability Statement is based on current expectations, projections, and estimates, which involve several factors that will come into play in the future. These factors include evolving scientific maturity and availability, data accuracy, and regulatory changes.

Changes in preparation or presentation of sustainability information and reporting errors in prior periods Based on further controls, we have identified some non-significant errors or minor inconsistencies in the 2023 calculations related to the calculation of the EU Taxonomy-GAR and operational emissions. These are not considered material.

Disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements NLB Group’s Transition plan, disclosed in the chapter Environment use all phase-in provisions in accordance with Appendix C of ESRS 1, except for S1 Own workforce information, where available data is disclosed in this Sustainability Statement for the following:

• Collective bargaining coverage and social dialogue
• S1-13 Training and skills development
• S1-14 Health and safety

BP-2 Disclosures in relation to specific circumstances

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Incorporation by reference

Parts of ESRS disclosures in this Sustainability Statement are incorporated by reference to other information in other parts of the Annual Report as shown in the Report Page.

GOV-1	The role of administrative, supervisory, and management bodies	page 181
	The Supervisory Board	117, 118
	The Management Board	120, 121
	The appointment or replacement of the Board
	The Management Board	139
	Information about the composition and work of the management and Supervisory boards and their committees	141, 142
SBM-1	Strategy, business model, and Consumers and end-Users	chapter Cybersecurity
	Cyber security	page 269
	Information security and personal data protection	126
G1	Business Conduct	chapter Corporate culture, ethical governance
	subchapters:
	• Group-wide ethics and integrity standards
	• Prevention	125
G1-4	Business Conduct	chapter Prevention of AML and financing of terrorism
	Prevention of Money Laundering	page 296
	performance	page 302
	Income Statement for the Annual Period ended 31 December	378
	Other references in this Sustainability Statement to other information, outside the Business report or purposes only and are not subject to external review.
	The contents of such other documents or websites are not incorporated by reference into this Sustainability Statement, nor should they

---

NLB Group Annual Report 2024

Overview

Composition

NLB Group, which is organized as a so-called corporate group, consists of NLB as a parent bank and members of the NLB Group. Members of statutory duties and responsibilities in line with legislation in the operating market. The NLB’s corporate governance is based on a two-tier system in which the Management Board manage Board’s work.

The composition of the NLB Management Board and Supervisory Board, including the number, representation of employees and other workers, the information on the Supervisory Board, the Management Board and in the Corporate Governance statement:

• The appointment or replacement of members of the management or supervisory boards and their committees.

The relevant experience of the Management Board and Supervisory Board is described in Chapter Governance of sustainability-related impacts, risks, and opportunities stipulated in the Policy on the Provision of Diversity of the Management Body and Senior Management of NLB (hereinafter: Diversity Policy).

As part of its ongoing efforts, NLB is progressing compliance in regions where local regulations mandate such policies. Currently, NLB actively monitors gender diversity ratios and raises the awareness of the importance of gender balance.

The composition of the management body and senior management encompasses a collective proficiency in knowledge, skills, and experience, while taking into consideration business and strategic challenges, and the associated risks.

The diversity principles are considered when appointing or re-appointing members of the management body and also in the annual assessment of the collective suitability of the management bodies. The Diversity Policy concurrently establishes a framework to promote diversity across the following:

• Recruitment, promoting adequate gender representation in the management.
• If two candidates for the management body meet all criteria and gender representation targets are unmet, the age groups to reflect its demographics, balancing younger and older members in management.
• Professional competencies: ensuring diverse knowledge, skills, and experience of the management body and senior management.
• Continuity: maintaining a suitable ratio between existing and new members by not changing all members of the management body or senior management simultaneously.
• Geographical provenance: seeking diverse geographical backgrounds in the management body and senior management to ensure a suitable knowledge of the culture, market characteristics.

---

of the management body is achieved through a predetermined replacement plan and fulfilling roles as defined by the Articles of Association. In line with the Diversity Policy, the condition various recruitment pathways are used to attract a wide range of candidates. NLB regularly monitors the achievement of target representation. NLB will amend the Diversity Policy in 2025 transposed to Slovenian Companies Act (ZGD-1) in December 2024. Following this provisions NLB will determine what proportion of gender balance it aims to achieve by 30 June 2026:

• members of the supervisory body,
• or at least a 33% representation of the underrepresented gender (i.e. women) in total among the members of the management and supervisory bodies.

Governance GOV-1

The role of administrative, supervisory, and management bodies NLB Group Annual Report 2024 182 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N Group Annual Report 2024 182 Governance of sustainability-related IROs NLB Group has established a comprehensive framework for sustainability-related governance. The framework enc progress towards them. The framework also sets out roles, responsibilities, and procedures, and reporting lines for:

• the Supervisory Board of NLB and supervisory bodies of NLB Group members, and their committees.
• the NLB Sustainability Unit.
• competence lines and organizational units in NLB Group members.
• internal control function.

Functions are outlined in the Sustainability Policy, Standard – Rulebook for Sustainability Management in NLB Group. In addition, their sustainability roles are intertwined with their scope. NLB Group acknowledges the complexity and interconnectivity of sustainability matters; therefore, all business areas are involved in sustainability governance to some extent. The highest and opportunities lies with the management boards and supervisory boards of each NLB Group member. In accordance with Group governance, collective decision-making and consultative their respective powers. Operational responsibility is assigned to competence lines, organizational units, and sustainability experts, which manage and monitor impacts, risks, and opportunities in daily operations and is reported regularly to the management boards or its respective bodies and quarterly to the Sustainability Committee.

Table 2: Share of women in governance bodies

Governance Body	Women in NLB Group
Supervisory Board	40% (4 of 10 members)
	36% (16 of 44 members)
	38% (33 of 87 directors)
Management Board	16.7% (1 of 6 members)
	19% (5 of 26 members)
	22%

Table 3: Diversity of the NLB management bodies

Governance Body	2024 Plan for 2024	Wide range of knowledge, skills, and pro	Continuity of composition of the management body	Age structure
Supervisory Board of NLB	Medium High	High	High	20-30 = 0
Management Board of NLB	Medium High	High	High	30-40 = 0
Senior Management of NLB	Medium High	High	High	40-50 = 1
	Medium High	High	High	50-60 = 6

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

In accordance with the Banking Act and the EBA guidelines on assessing the suitability of members of the management body (i.e. the NLB Management Board), NLB assesses the collective suitability of its management body, including its collective knowledge. By this, NLB detects potential deficiencies in the collective suitability and ensures that members are able to understand the NLB Group’s activities and its main risks. In this context, climate-related and other ESG risks and opportunities, as well as broader sustainability considerations, have been taken into account.

Once a year, the Supervisory Board assesses the composition of the Management Board, performance, potential conflicts of interest of individual members, and performance of individual members. If it is determined that the number of the members of the Management Board is inappropriate or that the number of members of the Management Board must be increased, or that certain knowledge, skills, and experience are lacking to perform this function because they do not meet the required conditions, or because one or several members are unsuitable and thus the Management Board as a whole no longer meets the required standards, appropriate actions will be taken.

In 2024, the composition of the Management Board remained the same as in 2023. The collective suitability of the members of its management bodies covers five major pillars: business decision-making and experience overview of its members. Each of these pillars relates to several sustainability topics, such as (and not limited to): discovering and exploiting opportunities with adverse environmental and social impact, social ethical, and professional standards, risk strategy, risk culture and risk appetite, internal culture, remuneration, compliance, whistleblowing, and group sustainability topics.

In December 2024, the Management Board concluded that their knowledge, skills, and experience are generally high. Similarly, the Management Board's assessment in March 2024, which included management and supervisory bodies of NLB Group core financial members, indicated that they are expected to have adequate competences regarding climate and other environmental risk, which is stipulated in the selection of suitable candidates for members of the Supervisory Board of NLB d.d. and the Policy on the selection of suitable candidates for members of the Management Board of NLB.

The selection process for members encompasses seven steps: identification of the need to search for and nominate a candidate for the member, definition of the profile, search for candidates, selection of the candidate, and appointment of a candidate as a management body member. In NLB, candidates provide a self-assessment of their competencies in the questionnaire, which are further assessed by the HR department and the Supervisory Board. In the second step, their competencies are also assessed by the Bank of Slovenia and the ECB as part of the licensing procedure.

The assessment of climate-related competencies is ongoing.

NLB Group Annual Report 2024

Throughout 2024, several training courses on sustainability-related topics were organized for the Management Board members, covering their pertinent area, focused on topics of strategic relevance, including sustainability. Key training programmes that the Management Board members completed include:

• Respecting Human Rights
• Cybersecurity Risk
• Compliance

In the last two years, several Supervisory Board members completed the sustainability-related programmes with the following topics:

• Sustainability – competence building for supervisors (legal, strategic, and financial aspects, sustainability reporting and oversight)
• The Corporate Sustainability Due Diligence Directive
• 2023: Sustainability Leadership Programme
• Diverse and effective boards and committees in a changing and competitive landscape
• An internal session on ESG – regulatory requirements

NLB Group were guest speakers on sustainability-related topics at conferences, panel discussions, and other events organized by partnering professional associations. Thus, NLB Group enhances its visibility and influence in the sustainability domain.

NLB also continued collaboration with the Chapter Zero Slovenia initiative, which was launched in April 2023 under the patronage of the Slovenian Directors’ Association (SDA) and British-Supervisory Board Members to build their capacity in regard to principles and frameworks for climate change strategy and action. At the beginning of 2025, the collaboration was extended into the region.

An overview of the governance framework for sustainability matters is shown in the figures on the next page, followed by explanations of the roles of each body or function.

Low, MH=medium-high and H=high

Collective Decision-Making Body	Supervisory Board of NLB
The Audit Committee	The Risk Committee
The Nomination Committee	The Remuneration Committee
Credit Committee	Assets and Liabilities Committee of NLB d.d. and NLB Group
Operational Risk Committee of NLB d.d.	Group Real Estate Asset Management Committee
Sales Council	Governance Council
Advisory Body	Sustainability Committee
Risk Committee	Strategy and Business Development Division - Sustainability Unit

Sustainability management in NLB Group is part of the Group's internal control system. This system is designed to ensure that a process and measures are in place for each key risk to actively reduce and manage that risk, and that the process or units manage sustainability-related IROs within their respective work areas and responsibilities, reporting to their respective superiors, committees, or boards.

Management Board Members oversee the management of sustainability-related IROs across NLB Group. Appointed ESMS officers, ESG Coordinators, and Sustainability Representatives are responsible for sustainability initiatives locally and report to their local Management Boards.

The Sustainability Unit makes proposals related to Sustainability Policy, drives and oversees the implementation of the sustainability-related roadmap, measuring results and monitoring progress in the management of sustainability-related IROs.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Group Steering co-operates in the process of sustainability/ESG harmonization and management in NLB Group banking members NLB d.d. (parent bank) Supervisory Board, Management Sustainability Coordinators ESMS Team Sustainability representatives in key OUs that constitute CL Banking members Supervisory Board, Management Board, Committees Sustainability- Sustainability Unit OR Sustainability Advisor to the MB ESMS Officer(s) Sustainability representatives in key OUs that constitute CL.

Sustainability matters are integrated in NLB Group’s e are established. Central sustainability / ESG steering at NLB d.d. and NLB Group level is ensured. ESG Risk Management is implemented throughout the Risk Competence Line. Sustainability m Organizational Units. Internal controls in each NLB Group member through the first (organizational units), the second (risk management, compliance), and the third level of control (internal sustainability profiles, capacity and culture-building Leasing and asset management companies Supervisory Board, Management Board, Committee Sustainability-related body (committee Representatives in key OUs that constitute CL Non-financial core members Supervisory Board, Management Board, Committees Sustainability-related body (committee, workgroup…)

Coordinating, Delivering and overseeing an overarching NLB Group sustainability policies, strategies, guidelines, expert advisory Delivering and overseeing ESG Risk m Delivering and overseeing business lines specific policies, strategies, guidelines, expert advisory.

Figure 2: Organization of sustainability management in NLB Group

Mandatory body/function

NLB Group Annual Report 2024

Overview

Governance bodies

The Supervisory boards of NLB and supervisory bodies of NLB Group members perform their function by monitoring the individual NLB Group members’ operations, legislation, and in accordance with established Corporate Governance Policy in NLB d.d. and the NLB Group Governance Policy and the Guidelines, respectively. Moreover, the Supervisory Board obtains information and performs site visits in the NLB Group members.

The Management Board of NLB and NLB Group member represents the entity and manages its daily operations in accordance with the articles of association. The Management Board of NLB represents and acts on behalf of NLB, including the governance of the entire NLB Group.

Governance bodies of NLB and other NLB Group members adhere to principles regarding sustainability and ESG matters in NLB Group. Their key responsibilities include:

• Integrating sustainability and ESG (environmental, social, governance) into business practices.
• Having a board member responsible for ESG.
• Assessing board members' knowledge on sustainability and climate risks.
• Overseeing sustainability and ESG risks.
• Aligning remuneration policies with sustainability, including training and appointing experts.

Committees

To assist and advise in sustainability implementation processes, as well as to execute individual tasks within the powers of decision-making bodies that provide decision-making support to the whole Management Board:

• Corporate Credit Committee
• NLB Group Assets and Liabilities Management Committee
• Sales Committee
• Risk Committee

Additionally, there are three decision-making bodies that provide decision-making support to respective Management Board members:

• Committee for New and Existing Products

Committees identify and address IROs related to environmental, social, and governance issues within their area of work. Committees operate in line with their rules and procedures and regularly plan meetings. In 2024, the majority of them were held once a week, with some meetings occurring monthly or every two or three months. Ad-hoc meetings are convened if certain issues arise.

The work is provided by its five committees, namely: the Audit Committee, Risk Committee, Nomination Committee, Remuneration Committee, and the Operations and IT Committee. They address proposed resolutions of the Management Board in individual areas intended for discussion or adoption at meetings of the NLB Supervisory Board.

In line with the internal rules and procedures, there were 19 meetings of NLB Supervisory Board’s committees in 2024. The Supervisory Board’s committees (audit, risk, nomination, remuneration) may also include Group members if specific regulation requires so. In line with a member’s specific needs, the Supervisory Board may also establish other committees and bodies.

Sustainability Committee in NLB

The NLB Sustainability Committee is the central sustainability-reintegration of the ESG factors into NLB and the NLB Group members’ business model in a focused and coordinated way across the company and issues opinions, recommendations, and validates sustainability strategies, policies, initiatives, methodologies, KPIs, and other relevant documents and procedures, and recommends these for the approval of the NLB Management Board.

It provides the overall vision and sustainability strategy, defines key policies, reviews progress on major initiatives, decouples the programme with the Bank’s mission. The Rules of Procedure of the Sustainability Committee determine the composition and powers of the Sustainability Committee and its members, as well as the frequency of meetings, which is quarterly and is composed of the senior officials across all areas of the Bank and chaired by the CEO of NLB.

3 Expectations for significant institutions

Stipulated in the Guide on climate-related disclosure, ECB, November 2020, taking into account the materiality of their exposure to climate-related and environmental risks and in connection with Basel Committee Principles for the Banking Supervision (BCBS), June 2022.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N.

Group members establish local sustainability-related bodies considering the nature, scale, and complexity of the activities and organizational structure of the member. Sustainability-related working groups, committees, etc., and may include internal and external members. The members of the local sustainability-related body are appointed by the management body of the NLB body.

Climate Change Committee

The Climate Change Committee has full authority and responsibility over the development and implementation of the NLB Group Net-Zero Strategy, to streamline decision-making composed of key individuals who cover both strategic and operational aspects of the decarbonization efforts. The Committee comprises all six members of the Management Board, as well as the Sustainability Unit and representatives of Global Risk, Retail Banking, Corporate Banking, Data/IT, and Group Steering divisions/departments.

The core team is charged with designing the decarbonization process and ensures a holistic approach. It brings together executives and experts from various areas to provide comprehensive guidance and insight. This collaborative effort facilitates effective decision-making.

The Sustainability Unit

The Sustainability Unit is set up within the Strategy and Business Development Division (which is part of the CEO stream) through the central coordination team. The team consists of sustainability coordinators and is led by the head of the Sustainability Unit, who reports to the director of the Strategy and Business Development to the Management Board and Supervisory Board of NLB d.d.

The Sustainability Unit is the overall coordinator of sustainability management and closely cooperates with the individual competence lines without unduly infringing upon the established internal governance system and control functions. The general roles and responsibilities of the Sustainability Unit are described in detail in important topics that need to be strongly embedded in all key business areas in NLB Group.

Each key competence line is therefore responsible for the harmonization and oversight of the implementation of sustainability and ESG matters communicated to the relevant key competence line in advance by the Sustainability Unit. The established governance mechanism of the competence lines in general is as follows:

• To monitor the lines’ field of work.
• To ensure that the relevant rules and principles (group-wide) related to sustainability and ESG are incorporated into the competence line’s documentary framework.
• To adhere to the rules and principles of sustainability and ESG that are related to the competence line’s field of work.

NLB Group members are responsible for complying with the local or sector-specific regulations.

Sustainability expert profiles

In each NLB Group member, sustainability expert profiles are appointed who are responsible for the implementation of sustainability matters subject to their sustainability manager deputies, ESMS officers, and sustainability representatives. Sustainability is embedded in all NLB Group key business areas.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Internal controls

To ensure efficient and consistent implementation of strategies and operations of NLB Group, its processes and procedures, protection of the value of bank assets, and reliable system of internal controls has been set up in NLB Group members. The appropriateness of the internal control mechanisms is defined based on the independence, quality, and applicability of the internal controls in NLB Group, and the internal control functions. The foundation is defined by the internal document NLB Internal Control System, which outlines the internal control improvement. In accordance with internal procedures, the internal document is also implemented in NLB Group members. Sustainability is integrated into NLB Group's internal control system at three levels of defence. Each level has clearly defined sustainability-related responsibilities, ensuring effective management and oversight.

First line of defence

First-level controls ensure proper supervision and implementation of procedures according to the Rules on Authorizations and Signing. All units are the first line of defence, responsible for daily risk management in climate and sustainability. Their main responsibilities include:

• conducting client activities within the ESMS framework, managing climate and ESG risks.
• gathering sustainability profiles of clients and identifying products while avoiding greenwashing.
• providing clear directions on new products and processes.
• managing ESG risks related to their work.
• ensuring data for reporting and disclosures on sustainability topics.

Back office employees also identify and manage sustainability IROs in their work, following internal principles and procedures, reporting to superiors, and engaging control functions, risk management, and business compliance; the latter carries out independent controls and supervision over the operation of the first line of defence.

Risk management

The risk management function focuses on holistic risk management and cross-risk oversight to enhance risk steering and mitigation within NLB Group. Additionally, it ensures data for reporting and disclosures, especially for climate-related risks. The business compliance function supervises and ensures compliance with the regulatory framework at NLB Group. It identifies, assesses, prevents, and mitigates risks. Responsibilities include overseeing the implementation of laws, directives, standards, and regulations, and providing guidance to ensure compliance. In line with the internal document Rules, the legal environment includes climate-related and ESG risks. Compliance monitors regulatory developments, communicates updates to relevant units through internal channels, such as newsletters, and ensures proper oversight over the implementation activities. The status of legal changes or adjustments to the Group's operations is reported at least quarterly to the Management and Supervisory Board.

sustainability working groups, the Sustainability Committee, and cooperates with the Sustainability Unit. Third line of defence The third level of control is performed by the independent in functionality, and adequacy. Sustainability and ESG matters are included in the Audit Universe and integrated into the annual planning process of NLB and other NLB Group members.

We remain fully committed to sustainable development and empower the green transition with sustainable financing. We continuously create services and solutions that address environmental challenges in our operations and financing. We are pleased that our commitment has been recognised with a significantly improved ESG risk rating of 10.5 as awarded by Morningstar Sustainalytics.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Information provided to and sustainability matters addressed by the administrative, supervisory, and management bodies

Throughout 2024, information on the NLB Group's sustainability into sustainability-related topics were provided to the Management Board or Supervisory Board, when needed or required.

• at meetings of the Management Board and Supervisory Board committees,
• quarterly at Sustainability Committee sessions,

Management and Supervisory Boards’ review and approval process involves organizational units. They prepare and coordinate the statements and reports and submit them for discussion and approval to the Management Board, which then reports to the Supervisory Board.

Assessment and the Sustainability Statement, which underline and present the NLB Group's approach to sustainability matters.

Integration of sustainability-related performance

designed to support the achievement of strategic and business targets, as well as the recruitment, motivation, and retention of members of management bodies, senior executives, and other identified employees, i.e. the governance bodies, and other identified employees (those who can significantly impact the risk profile of NLB and/or NLB Group in the scope of their tasks).

and Management Board of NLB d.d. (hereinafter: Remuneration Policy for Management Bodies) and in the Remuneration Policy for Employees in NLB d.d. and in NLB Group (hereinafter: Remuneration Policy for Employees).

In 2024 both policies were updated:

• The 2024 remuneration policy for management bodies was amended to clarify wording, remove retention bonus stipulations, and introduce provisions for Instruments with yields equal to NLB d.d. dividends. It also detailed performance indicators for LTI and removed compensation.
• Approved on 22 April 2024 at the General Meeting on 17 June 2024, and effective from 1 January 2024.
• The 2024 remuneration policy for all employees was amended to include yields, adjust target weights in the NLB Group, and allow variable payouts up to EUR 50,000 or 1/3 of total remuneration in cash without deferral. Adopted by the Supervisory Board on 7 November 2024.

In relation to their function, a member of the Supervisory Board may only receive remuneration that is compliant with the relevant resolutions of the General Meeting.

Supervisory Board members are entitled to reimbursement of travel expenses, meal allowance, and accommodation costs up to expenses and other income from the employment relationship. Remuneration for members of the Supervisory Board is related only to performing their function and is not related to achievement.

Remuneration Policy

Board member consists of a fixed part of the salary and a performance bonus, which is divided into short-term incentive (STI) and long-term incentive (LTI), and reflects sustainable and responsible performance. The remuneration of a Management Board member depends on performance criteria which comprise:

• the achievement of the financial goals of the NLB Group,
• the achievement of the financial and/or strategic business goals functional responsibilities,
• the personal goals of the Management Board member,
• upon separate assessment at the end of the subsequent performance period the LTI is adjusted for pension benefits.

Sustainability-related Targets in the Management Board Remuneration

Members of the NLB Management Board and other identified employees are committed to achieving sustainability-related targets, which are delegated to the organizational units and then further to employees under the responsibility of each management board member. The annual performance evaluation process for the NLB Management Board targets includes those which are related to the implementation of sustainability strategy in NLB Group and material sustainability matters: ESG risk management, climate change, sustainability, service quality and customer satisfaction, digitalization, contribution to society.

In 2024, the weighting for sustainability-related targets was as follows:

• CEO of NLB: 45% weighting
• Targets related to climate change are allocated to all members of the NLB Management Board, with a 4%–5% weight, and refer to the development and implementation of climate (net-zero) strategies. The Board is assessed against the emission targets.

Long-Term Incentive (LTI) Plan

In addition, the Long-Term Incentive (LTI) plan for 2026–2028 for the NLB Management Board was approved by the Supervisory Board in the overall LTI plan:

• linked to organizational culture, employee development: decrease in gender pay gap, decrease in actual, and desired organizational culture.
• linked to customer-related targets per each member of the NLB Management Board for the financial year 2024 is presented in the following tables.

Overview of the Remuneration Policy

Table 4: Overview of the remuneration policy for identified employees regarding appropriate professional experience, responsibilities, powers, and duties of a Management Board member. Considering the regional benchmark of comparable banks with regard to the assessment, a system of setting smart goals is in use, cascading top-down. Performance is assessed against agreed goals of the Management Board Member. Qualitative and quantitative performance criteria are aligned with our core values – entrepreneurship, growing people, and improving lives.

Short-term Incentive (STI)

The Short-Term Performance Criteria and methodology for evaluating the performance of goals of NLB Group, financial or development goals in the areas covered by the member of the Management Board, and personal goals of the member of the Management Board. Long-term incentive performance of the Management Board members during the Subsequent Performance Period is set by the Supervisory Board. LTI consists of relative total shareholder return (RTSR) and goals.

NLB Group Annual Report 2024

Overview

Development of the Bank and are linked to the promotion of organizational culture, employee development, and customer relations (cost of risk for CRO only). NLB Management Board 26-45% w financial calendar and corporate governance, the 2024 remuneration report will be published after the approval at the shareholders' meeting in June 2024.

Key Highlights

Tables 5a-f: Breakdown of sustainability-related targets in the remuneration of the NLB Management Board member

Target	Mapping to the material sustainability topic	Weight per target
NPS Service quality and customer satisfaction	5%	30%
Implementation of the NLB Group HR Strategy and ensure consistent practice and collaboration throughout NLB Group	Employee attraction
Climate change	Contribution to society: enhanced youth engagement in sports activities, sponsored by NLB; and enhanced engagement in financial and/or	4%
Personal targets of CEO	Acting in accordance with the NLB Group values	Corporate culture 5%
Employee engagement enhancement in NLB Group	Employee attraction and development	5%
Realization of the individual development plan		5%
Sustainability-related weights (Total)		45%
Targets for areas under the responsibility of CFO	Enhancement of NLB Group NPS Service quality
Projects with IT component	15%
Groupwide reduction of energy consumption	Climate change	5%
Development of an ESG IT & data strategy to support ESG data management (collection and reporting)
NLB Group values	Corporate culture	5%
Employee engagement enhancement in NLB Group	Employee attraction and development	5%
Employee development / succession planning
Sustainability-related weights (Total)		30%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Target Mapping to the Material Sustainability Topic

Weight per target	Weight (total)	Targets for Areas Under the Responsibility of CRO
Cost of risk	30%	60%
Implementation of the NLB Group Operational Efficiency with Head of IT	10%
NLB Group Climate Strategy: implementation & execution of NLB Group Net0 portfolio strategy related to risk management	Climate change	4%
Plans (in line with ECB Guide on climate-related and environmental risks)	ESG risk management	4%
Developing templates and data collection process for the regular reporting (quarterly basis)		2%
Personal targets of CRO	Acting in accordance with the NLB Group values	Corporate culture
	4%	20%
Realization of the individual development plan	4%
Enhancement of NLB Group NPS	Employee attraction and development	4%
Employee engagement enhancement in NLB d.d. CRO stream	Employee attraction and development	4%
Sustainability-related weights (Total)	30	26%
Payments System, Cards and Payment Operations as per Payments Strategy	7%	30%
Increase groupwide digital and specifically mobile penetration	Digitalization and innovation	8%
Enhancement and Rulebook: implementation in core subsidiaries	Sustainability strategy	5%
NLB Group Climate Strategy: a) implement Net0 operations strategy in core subsidiaries b) implement Net0 portfolio	Change	5%
Personal targets of CGPO	Acting in accordance with the NLB Group values	Corporate culture
	5%	20%
Realization of the individual development plan	5%
Employee engagement enhancement / development / succession planning	Employee attraction and development	5%
Sustainability-related weights (Total)	30	38%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Mapping to the material sustainability topic

Weight per target	Weight (total)	Targets for areas under the responsibility of CMO
5%	30%	Enhancement of NLB Group NPS - Corporate
5%		Service quality and customer satisfaction
5%		Implementing critical IT projects: CRM, OMNI for corp, credit granting process
		green lending portfolio (volume of new production or exposure planned)
5%		Climate change, Sustainable finance
5%		NLB Group Climate Strategy: implement Net 0 portfolio strategy; developing & employees
5%		Climate change, Sustainable finance
5%		Personal goals of CMO CORPORATE Acting in accordance with the NLB Group values
5%		Corporate culture
20%		Realization of Individual Employee attraction and development
5%		Employee development / Succession planning
5%		Employee attraction and development
	30%	Sustainability-related weights (Total)
5%		Targets for project delivery
5%		Enhancement of NLB Group NPS (Retail)
5%		Service quality and customer satisfaction
5%		Growth in market share of retail lending
		Retail green lending portfolio: annual planned
5%		Climate change, Sustainable finance
5%		NLB Group Climate Strategy: implement Net 0 portfolio strategy
5%		Climate change, Sustainable finance
5%		Digital penetration: achieve annual growth
		with the NLB Group values Corporate culture
5%		Realization of the individual development plan
5%		Employee engagement enhancement in NLB d.d. retail stream
5%		Employee attraction and development
	35%	Sustainability-related weights (Total)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

In 2024, sustainability targets were integrated into personal goals, with a 10%–15% weight for training and corporate culture. These targets were also included in the goals of organizational units.

Table 6: Sustainability-related goals in the variable remuneration structure for other identified employees

Goal Category	NLB / NLB Group	Employees in control/supervisory function
Sustainability - related targets for other identified employees	20%	60%	20%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

4 Statement on due diligence

NLB Group performs various due diligence activities that are guided by UN Guiding Principles on Business and Human Rights and the OECD Guidelines for its strategic and business model framework, which ensures that due diligence is part of the Group’s ongoing operations, specifically in identifying and managing negative impacts.

NLB is responsible for coordinating the Sustainability Statement and the underlying Double Materiality Assessment, while competence lines and business units are responsible for data accumulation.

Group has actively developed an implementation of IT system support to reporting on green financing, GHG emissions, EU Taxonomy, and other sustainability-related topics. To mitigate errors, the development of a comprehensive sustainability-related data governance framework is underway, which includes risk management and an internal control framework supporting controls, and risk management across all competence lines, similar to financial reporting.

The risk and control framework for this Sustainability Statement were based on detailed data points. A "comply or explain" approach was used for disclosures. The following risk management and internal control procedures were applied:

• As responsible for preparation of the Sustainability Statement, subject-matter experts from competence lines who were identified as data point owners were thus responsible for collecting, preparing, and verifying data for disclosure requirements.
• Employees in the responsible competence lines checked for accuracy and completeness, and reviewed by the immediate superior.
• Each disclosure requirement was then assessed by others to ensure it was complete and adequate in relation to the disclosure requirement.
• Given the early stages of implementing new legislation, the external auditor has also made recommendations on the limited assurance.
• During the preparation of the Sustainability Statement, the Sustainability Unit reported at least quarterly to the NLB Management Board or Audit Committee.

NLB adopted a Greenwashing Policy. This policy outlines the key processes that require caution to prevent any form of greenwashing in the process or reporting in general. The policy is in accordance with 2024 referenced in this Sustainability Statement.

Core elements of due diligence

Paragraphs in the sustainability statement:

• Embedding due diligence in governance, strategy, and the business model
• Human rights commitments related to employees
• Human rights commitments related to suppliers
• Engaging with affected stakeholders in all key steps of the due diligence process

Processes for engaging with employees and workers’ representatives about impacts

• S1-2 Processes for engaging with employees and workers’ representatives about IROs
• S3-2 Processes for engaging with affected communities about impacts
• S4-2 Processes for

---

SBM-3: Material impacts, risks and opportunities and their interaction with strategy and business model

• E1 Climate change
• S1 Own workforce
• S3 Affected Communities
• S4 Consumers and End-users

Material IROs

• G1-3 Prevention of corruption and bribery
• Taking actions to address those adverse impacts
• E1-1 Transition plan for climate change mitigation

• E1-3 Actions and Resources related to climate change

• S4-1, S4-4, S4-5 Consumers and End-users

• S1 Own workforce
• S3-3 Processes to remediate negative impacts and channels for affected communities

• S4-3 Processes to remediate negative impacts

• Harmful conducts

• G1-10 Whistleblower protection
• Tracking the effectiveness of these efforts and communicating
• E1-4 Targets related to climate change mitigation and adaptation

IRO-1 Impacts, S3-5 Affected communities: Key actions and targets

• S4-1, S4-4, S4-5 Consumers and End-users

NLB Group Annual Report 2024

Overview

• MB Statement
• SB Statement
• Key Highlights
• Business Report
• Strategy
• Risk Factors & Outlook
• Performance Overview
• Segment Analysis

Strategy

SBM-1 Strategy, business model, and value chain

Strategy and business model NLB Group is the leading banking and financial group with headquarters and an exclusive strategic interest in subsidiary banks, several companies for ancillary services (asset management, real estate management, leasing services, etc.), and a limited number of non-core subsidiaries in a controlled manner across North Macedonia, Serbia, and Croatia. The Group utilizes a universal banking model and operates in core segments and non-core segments.

For details please refer to the chapters NLB launched its new Group Strategy 2030, to which sustainability is integrated, while ESG IROs have been gradually embedded into the Group’s business processes over the last few years.

NLB Group had 8,322 employees. For an overview of employee headcount per countries and other data please refer to the chapter S1-6 Employees characteristic metrics.

Value chain

The downstream activities of NLB as the parent company and its subsidiaries. This holistic approach includes activities, resources, and relationships that drive value creation within the Group's own operations and internal processes. These operations involve resources in all business units, such as HR and organization development, governance, compliance, legal, tax, financial supportive expert function, which is established as a separate legal entity providing services to NLB Group.

Key subsidiaries in own operations are NLB as a parent bank and other financial institutions. By the end of 2024, NLB and six subsidiary banks (NLB Komercijalna Banka, NLB Banka Banja Luka, NLB Banka Sarajevo, NLB Banka Skopje, NLB Banka Prishtina, NLB Banka Podgorica) will account for more than 99% according to its client base, 92% of total equity and net revenue, and 97% of profit after tax.

Derived from its core business, i.e., financing, they generate the greatest impact on non-financial core members (own real estate management companies, NLB Cultural Heritage Institute MUZA), and non-core members (companies in the wind-down process or companies with lower sustainability impact and financial materiality).

Upstream value chain

The key upstream value chain actors are suppliers of products or services to NLB Group through direct and indirect channels. NLB Group has a direct impact on the environment and society through its procurement decisions, while the Group’s impact on the suppliers’ management procedures, including employee workforce, is not material to NLB Group.

Nevertheless, in recent years the Group has started to implement sustainability in procurement processes as we acknowledge the relevance of this process to the expectations of rating agencies, analysts, and other stakeholders who occasionally seek such information and to provide consistency with reporting in previous years.

NLB Group Annual Report 2024

Overview

by ESRS requirements, but does not fully comply with them and is described in the section Complementary information.

Downstream value chain

The key downstream value chain actors are debt or equity issuance, interest on deposits, investments in companies, and leased assets. NLB Group has a direct impact on the environment and society through financing and investment impact through provision of funds to clients and may not directly impact clients’ management procedures in this respect or clients’ relations with their workforce. Investors provide capital to NLB Group.

By collaborating with regulators and investors, NLB Group has an indirect impact on the environment and society.

UPSTREAM

Stakeholder

Suppliers, Investors, Regulatory authorities

Impact on environment and society

DIRECT INDIRECT

Description

Suppliers of utilities provide electricity, heating, water services provide various services, such as: security, logistics, communications, cleaning, data, consulting etc. Providing capital for NLB Group to grow, innovate, and expand. Providing regulatory dependencies/resources.

Key dependencies/resources

NLB Group depends on provided utilities to perform basic business operations, provision of IT equipment and other goods necessary to perform basic business operations, types of services necessary to perform basic business operations. NLB Group is not dependent on the supply of specific resources or materials. NLB's shareholders provide capital and express expectations. The regulated sector and thereby the role of regulators is critical. NLB Group collaborates with them in line with legislation and engages in policy discussions.

OWN OPERATIONS

Stakeholder

Retail asset management, Leasing, Cultural Heritage, Organisational operations

Impact on environment and society

DIRECT

Description

Providing loans and other types of banking products and services to corporate clients (large, SMEs). Providing investment banking services to retail and corporate clients. Providing asset management products and services to private individuals and business clients. Preserving and promoting Slovenian cultural heritage and providing cultural experience to the general public. Carrying out all basic business functions necessary to perform business operations and treasury, IT…

Key dependencies/resources

NLB Group depends on human capital, i.e., own employees to create value, ensure day-to-day running of operations, manage business, develop strategies.

Clients

Impact on environment and society

DIRECT INDIRECT

Description

Using provided products and services to fund various goods and activities. Using provided products and services to realize projects that are funded by NLB Group.

Key dependencies/resources

NLB depends on client relationships as clients provide funds, repay loans, realize projects that the bank funds. Clients operating in resource goods.

Notes: The figure presents key actors in the value chain through which NLB Group has either direct or indirect impact on the environment and society, and constitutes dependencies allocated both in retail banking and corporate banking. See details in the Business Report, Chapter Segment Analysis.

Figure 3:

NLB Group’s value chain

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Group’s approach to sustainability

Sustainability policy

NLG Group’s approach to sustainability is laid down in the Sustainability Policy in NLB and NLB Group, adopted at the beginning of legislative requirements, recommendations, and guidelines of the supervisory bodies, professional institutions, and initiatives in the financial industry, in NLB d.d. and other NLB Group members. The aforementioned requirements, recommendations, and guidelines related to sustainability are recognized and respected in NLB d.d. and NLB Group members.

• to comprehensively finance, and contribution to society.
• to establish overarching and forward-looking sustainability-related principles and objectives, as well as governance and management rules and processes.

Policy is supplemented by the internal document Standard – Rulebook for Sustainability Management in NLB Group. Together, they define a top-down and bottom-up process for management bodies. The Policy is intertwined with domain-specific policies and instructions related to risk management, environmental management, HR, diversity and inclusion, human documents, developed in the Sustainability Unit and respective business areas (competence lines), in accordance with the NLB Group Governance Policy. The Policy and the Standards are mandatory for all core financial members: banks, leasing companies, and asset management companies across all markets.

For non-core members (companies in the process of being dissolved or companies that are not strategic for the NLB Group), the Policy and Standard are available to employees on the intranet in the internal documents register. The overview of the Sustainability Policy is also communicated to external stakeholders and is available.

NLB Group aims to achieve three overarching objectives:

• to ensure the sustainable financial performance of NLB Group, and at the same time
• to achieve added value for its key stakeholders
• to successfully manage ESG impacts, risks and opportunities arising from these factors.

The figure on the next page presents NLB Group’s approach to sustainability, anchored by three key principles. This approach ensures that sustainability is integral to NLB Group’s commercial and other activities. It is embedded in its lending activities, leasing, asset management, treasury activities, and trading.

In relation to sustainability, details are presented in the chapter Sustainable finance. Moreover, sustainability is also integrated in functions in NLB Group’s own operations, and in our relations with clients, as detailed in the respective chapters of this Sustainability Statement. The main mission of sustainability in NLB Group is to improve the quality of life and contribute to a sustainable economy and society.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Figure 4: NLB Group's approach to sustainability

3 2 SUSTAINABLE OPERATIONS

SUSTAINABLE FINANCE

CONTRIBUTION TO SOCIETY

Sustainability Mission

Sustainability Objectives

Value for stakeholders + successfully manage ESG impacts, risks, and opportunities

1 Leading by example

Improving quality of life

Contributing to a sustainable economy and society

Commitment to stewardship, based on double materiality

Stakeholder engagement and inclusion, developing partnerships

High corporate governance standards, compliance, integrity and respecting human rights

NLB Group Annual Report 2024

1. Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

GROUP SUSTAINABILITY PILLARS

Principle 1: Alignment

Principle 2: Impact & Target Setting

Principle 3: Clients & Customers

Principle 4: Stakeholders

Principle 5: Governance & Compliance

Promote well-being for all at all ages

SDG 4:

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

SDG 5:

Achieve gender equality and empower all women and girls

SDG 6:

Ensure availability and sustainable management of water and sanitation for all

SDG 7:

Ensure access to affordable, reliable, sustainable, and modern energy for all

SDG 8:

Promote inclusive and sustainable economic growth, employment, and decent work for all

SDG 9:

Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation

SDG 11:

Make cities and human settlements inclusive, safe, resilient, and sustainable

SDG 12:

Ensure sustainable consumption and production patterns

Sustainable Operations

Sustainable Finance Contributions

DEVELOPMENT GOALS

• To decarbonize NLB Group’s own operations by achieving net-zero operational emissions by 2050 or sooner
• To ensure positive impacts and to minimize risks, and to pursue opportunities stemming from business relations with key stakeholders that might affect financial operations of NLB Group or our stakeholders
• To ensure a positive impact by financing a sustainable transition (green and social)
• To identify and mitigate climate-related and other ESG risks in relation to NLB Group
• CSR activity with at least one UN Sustainable Development Goal
• To create added value by focusing on genuine societal needs and actively responding to these societal needs with appropriate actions

Contribution to Society

• Group employees
• Financial literacy and mentoring
• Responsibility to the environment
• Sustainable entrepreneurship
• Supporting professional and youth sports
• Culture and protection

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

To deliver on the Bank’s mission and objectives in all three sustainability pillars, NLB Group embraces and invests in overarching sustainability drivers:

• Responsible engagement with key stakeholders and adherence to high standards of corporate governance, responsibility, compliance, ethics, and integrity in everything we do.
• Comprehensive and efficient sustainability stewardship through all three ESG dimensions.
• Strong corporate governance and culture with regard to sustainability matters.
• Commitment to global sustainability initiatives and goals, such as the UN Sustainable Development Goals (SDGs).

Commitments to UN SDGs

NLB Group officially endorsed the UN SDGs by becoming a signatory to the UNEP FI Principles for Responsible Banking in 2020. In 2021, NLB Group defined its sustainability-related commitments and initiatives, which address the following priority SDGs:

• 3 – Good health and well-being
• 7 – Affordable and clean energy
• 8 – Decent work and economic growth
• 12 – Responsible production and consumption
• 13 – Climate action

Additionally, NLB Group has enlarged the list to include 10 priority SDGs. At the same time, the Group indirectly contributes to all 17 SDGs to varying degrees, as all of them are interconnected.

Commitment to UN PRBs

NLB Group conducts its business with the six principles for responsible banking and transparently reviews and publicly discloses the progress annually in a self-assessment report. The six underlying principles are:

1. Principle 1: Alignment. NLB Group aligns its business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the UN SDGs, Paris Climate Agreement, and relevant national and regional frameworks such as the Sofia Declaration.
2. Principle 2: Impact and target setting. NLB Group continuously increases our positive impacts while reducing the negative impacts on, and managing the risks to, people and the environment. We set and publish targets where we can have the most significant impacts.
3. Principle 3: Clients. NLB Group works responsibly with its clients to encourage sustainable practices and enable them to achieve their sustainability goals.
4. Principle 4: Stakeholders. NLB Group proactively and responsibly consults, engages, and partners with relevant stakeholders to achieve society’s goals.
5. Principle 5: Governance and Responsible Banking through effective governance and a culture of responsible banking.
6. Principle 6: Transparency and accountability. We will periodically review our individual and collective impacts and our contribution to society’s goals.

For the UNEP FI PRB self-assessment report, please refer to the Appendix 5.

A comprehensive overview can be found at UNEP FI.

Commitment to the Net-Zero Banking Alliance

In line with NLB’s commitment to a climate-positive future (i.e., creating a mindset...

UNEP FI Net-Zero Banking Alliance (NZBA) in May 2022

For a comprehensive overview of NLB Group decarbonization activities and net-zero commitment, please refer to the chapter commitments to the UN global sustainability initiatives and goals.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

SBM-2 Interests and views of stakeholders

Stakeholder engagement NLB Group continually engages with a wide range of stakeholders to provide them with relevant information on various sustainability-related issues to enhance trust and partnerships. A materiality analysis, conducted in 2021, identified the six key stakeholder groups, which were reconfirmed in the 2024 Double Materiality Assessment: e.g., SMEs, regulatory authorities, suppliers and contractual partners. In addition, NLB Group ensures constructive dialogue with other stakeholders, such as local communities, professional associations, as well as sustainability-related issues through various communications channels, such as the NLB Group members’ internet sites, public reports, marketing communications, social media, in person or online, consultations, and conferences and special events.

The engagement activities also include insight gathering, feedback, and dialogue instruments such as polls and research. The Sustainability Unit primarily, and also other NLB Group expert representatives (in connection with their field of work), participate in the dialogue with internal and external stakeholders. Financial members have established the sustainability e-mail inbox (for example in NLB: sustainability@nlb.si), which is accessible on their internet sites. This channel also provides a grid of stakeholder engagement that was re-confirmed in the conducted Double Materiality Assessment included views of the key stakeholders through their assessment of sustainability-related impacts via a questionnaire, while regulatory authorities were included indirectly via a conducted context analysis.

For details please refer to the Chapter Double Materiality Assessment. Our objectives are considered in our business strategy design and implementation. Consequently, stakeholder engagement is deeply integrated into our business model, continuously shaping and informing our policies and activities in different business areas. The highest governance bodies are informed on key findings, views, and are regularly discussed in board sessions and committees and are included in policies and decisions that affect stakeholders.

Table 8: Key areas of stakeholder engagement

Purpose and content of internal channels	(intranet, internal newsletters, personal meetings, coaching, etc.)
Measuring employee engagement	Providing feedback opportunities and a grievance mechanism
Ensuring engagement, growth and personal development	Providing various training possibilities to enhance knowledge and skills
Ensuring work/life balance	Ensuring teamwork and well-being
Information on activities and engagement process with employees
Investors – Shareholders	Identification and communication of topics and initiatives relevant for investors’ decisions

---

NLB Group Annual Report 2024

Overview

into our operations • Organising special investor days • Presenting business results of NLB Group (reports, presentations, website publications, with publications in the electronic information regular information at relevant business events Clients: Retail (Private Individuals, micro companies) Corporates (large companies, SME) • Ensuring professional and friendly relationships with corporates and private individuals in their sustainability-related projects with financial products, professional services and relevant dialogue • Offering new green products, at a lower interest communication • Keeping clients informed about reliable sustainability solutions • Special focus on data and cybersecurity • Promoting the sustainability agenda at various regional events • M

Please refer to S4 – Consumers and End-users for more information on activities and engagement process with clients.

Regulatory Authorities

• Regular cooperation with the ECB, Bank of Slovenia and dialogue on relevant topics

Suppliers and Contractual Partners

• Implementation of sustainability requirements in the procurement process • Personal meetings, dialogue on cooperation, challenges for more information on activities and engagement process with clients.

Local Communities

• Maintaining a close relationship with key representatives to support local communities in achieving donations and sponsorships. Please refer to S3 – Affected communities for more information on activities and engagement process with communities.

Professional Associations

• Active members regulation discussions • Active memberships in key international initiatives, principles, recommendations and associations in sustainability-related areas.

Media

• Professional communication with other media events.

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

SBM-3 Material IROs and their interaction with strategy and business model

Impacts of material IROs By conducting a double materiality analysis NLB Group identified 50 material impacts mapped to 21 material sustainability sub-topics. Material IROs are connected with our business model and value chain and derive from own operation and downstream (clients), while upstream were identified which were mapped to 21 material topics. In line with the Group’s risk management and the business model, the IROs and their current and anticipated effects are managed to the Group’s approach in the future. The financial effects of material risk and opportunities are integrated into NLB Groups existing business practices, and such effects are taken into consideration profit and loss effects. No significant changes to this approach are expected over the course of the next annual reporting period.

A detailed overview of IROs is presented in chapters on particular model, location in the value chain, and expected time horizon of each IRO. NLB Group demonstrates a solid performance, maintains a robust financial position, and has effective risk management (IROs) effectively. A climate resilience analysis of the Group’s lending and investment activities is conducted across short-, medium- and long-term horizons. The uniform stress-test analysis, which are regularly revised and complemented. For details see the chapter Resilience Analysis in Environmental information.

NLB Group conducted its first materiality analysis methodology assessed two dimensions: (1) the economic, environmental, and social impacts on the environment and society according to NLB Group, (2) Stakeholders' needs and expectations comparisons between the two analyses are not possible. Among identified subtopics 5, 7 derived from ESRS 1, while additional 14 entity-specific subtopics were identified as crucial to N engagement.

Table 9: Material sustainability topics

Material Topical Standard	Material ESRS sub-topic	Material entity-specific sub-topic
E1 Climate change	• Climate change	• Energy
	• Sustainability attraction and development	• Diversity, equity and inclusion
	• Cybersecurity
S3 Affected communities	• Financing community and regional development	• Sponsorships and donations
S4 Consumers and End-users	• Inclusion	• Service quality and customer satisfaction
	• Cybersecurity	• Digitalization and innovation
G1 Business conduct	• Corporate culture, regulatory compliance and governance	• Prevention of money-laundering and financing terrorism
	• Tax transparency	• Participation in associations and policy discussion
	Not material standards/topics.
E2 -	chain: working conditions and human rights of employees in the supply chain and of corporate clients’ employees

---

NLB Group Annual Report 2024

Overview

Material environmental topics (E1) are mainly connected to impacts of NLB Group’s financing activities, climate-related risks, and sustainable finance offering.

Material social topics relate to our workforce (S1) included care for working conditions and human rights of employees, diversity, equality and inclusion as well as talent attraction and development.

Operations, within the financing community and regional development topic, and through our contribution to society through sponsorships and donations. Impacts, risks and opportunities include responsible marketing and communication, service quality and customer satisfaction, and cybersecurity.

Digitalization and innovation are seen as key tools to improve our services and communication.

Governance-related topics (G1) were identified as material, reflecting the critical importance of governance, compliance, and integrity in the banking sector. These include corporate culture management, tax transparency, participation in associations and policy discussion related to sustainability, prevention of corruption and bribery, and prevention of money-laundering and financing of terrorism.

Financial performance (stability) of the NLB Group was recognized as a necessary precondition that allows us to manage our material IROs effectively.

Note: IROs under topics "Climate change" own operations and value chain considerations.

Financial Materiality

Resource use and waste	Working conditions and human rights of employees	Diversity, equity and inclusion	Employee attraction and development	Cybersecurity
Working conditions and human rights of corporate clients	Financing community and economic development	Sponsorships and donations	Responsible marketing and communication	Financial health and inclusion
Service quality and customer satisfaction	Governance	Whistleblower protection	Participation in associations and policy discussions	Sustainable supply chain
Prevention of corruption and bribery	Financial performance	Tax transparency

Impact Materiality

Figure 5: Double materiality matrix

Each sustainable step that we take today leads to a better future for all of us. The NLB Group is the first bank headquartered in South-Eastern Europe committed to achieve climate neutral finance.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Methodology

The basis for the preparation of this Sustainability Statement is the conducted DMA, which defined the matters that are material from at least one of the following perspectives: people and the environment.

• Financial materiality: Sustainability topics may involve risks and opportunities for the Bank’s financial position and performance.

The Double Materiality approach was guided by the European Financial Reporting Advisory Group (EFRAG), and included specifics of the banking sector by using best available tools and data, such as the UNEP FI Impact Materiality Tool.

An internal subject matter expert group in NLB took into consideration the entire NLB Group. The internal expert group included sustainability representatives of key competence lines in leasing and asset management stream.

In the initial stage of the DMA, all NLB Group members were preliminarily assessed for their impact on sustainability and financial performance in relation to the most relevant activities in NLB Group. The core financial members (NLB and its subsidiaries: banks, asset management, leasing companies) were deemed to have the highest impact.

The operations of all core financial members, and their stakeholders were engaged via a pool to assess impacts. Non-financial members were considered to have minor IROs, and their operations (in liquidation and those with a small number of employees) were deemed to have negligible or no impact, risk, or opportunity, and were not subject to further DMA stages.

Finally, IROs were presented to the NLB Supervisory Board, and investors.

DMA Process

1. Defining the sustainability context: We first scanned various information sources to identify relevant ESG topics for the wider financial context. This included a review of internal documents, specific regulatory requirements, sector-specific standards and materiality assessments, the annual reports of peers, and an analysis of our value chain.
2. Based on the sustainability context, we prepared a long list of topics based on the list of topics and subtopics from paragraph 16 of Annex A to ESRS 1, as well as additional topics specific to the sector detected in the reviewed documentation, and prepared a shortlist of 28 potentially material topics by grouping several sub-topics together.
3. Identification of IROs: Based on the shortlist, we conducted consultations to identify positive and negative, actual and potential IROs (IROs). We identified the source of each IRO, namely own operations, portfolio, upstream value chain (namely, suppliers).

Each IRO was assessed to be either short-term, medium-term or long-term, based on the expectation of when it would materialize. We also identified short-, medium- and long-term risks and opportunities registries derived from specific impacts we identified, or were identified based on additional research and internal expert input. Altogether, 141 unique impacts, 84 unique risks and 46 unique opportunities were identified.

IROs (Double Materiality Assessment)

assessed each impact considering the severity and likelihood on a 1–5 scale (with an individual assessment scale, scope and irremediability within the severity parameter). Impact identification Assessment, which was used as an input for assessing positive and negative impacts related to our portfolios. The UNEP FI has created an ESRS interoperability package to improve compliance with ESRS sustainability topics in Appendix A of ESRS 1, mapping tool outputs to the 'Scale', 'Scope', 'Severity', and 'Irremediable character' parameters required by ESRS 1, and describing how to assess impacts.

Following the UNEP FI Impact Assessment Toolkit, we identified impacts of our retail, corporate and investment portfolios for our banking units in Slovenia, Bosnia and Herzegovina. Internal experts were corroborated through the impact assessment within an extensive stakeholder engagement. The final score reflects the assessment of all stakeholders.

Financial materiality assessment

Internal NLB experts assessed each financial risk and opportunity considering the magnitude of financial effects, defined as positive or negative impact on the financial effect of each risk and opportunity in monetary terms. Throughout the process, we worked to align and integrate our methodology and procedures with already existing risk processes.

NLB Group risk materiality following ECB guidelines as outlined in chapter SBM-3 Material climate-related IROs and were not subject to additional assessment. In the coming years, we will integrate the Double Materiality Assessment into our overarching risk management framework and overall management in the competence lines.

Stakeholder engagement

We carried out stakeholder engagement with stakeholders on the IROs that are most material from their point of view. Stakeholder engagement was focused on affected stakeholders, namely employees, clients, and suppliers (and various other stakeholders) on different ESG topics (based on identified impacts) and also provide their own input on potentially missing impacts. Investors as key users of financial statements were also included in the impact, risk, and opportunity perspective. The Management Board and the Supervisory Board member were similarly included, assessing IROs through a survey. The survey was conducted in Kosovo. In total, we gathered 2,179 responses from our stakeholders. The results of stakeholder engagement were integrated into the final Double Materiality Assessment.

Analysis and materiality

with the highest assessment of any impact, risk, or opportunity, identified under a specific topic, determining the materiality. A materiality threshold for impact materiality and financial materiality was established, identifying 21 topics as material. The list of material topics is presented in chapter Overview of ESRS and entity-specific topics. The list of material IROs is presented alongside each sustainability topic.

Materiality Assessment (DMA)

was conducted by internal subject matter experts from all relevant NLB competence lines and in cooperation with the Management Board. This ensured the coordination with various competence lines and NLB Group members to maintain a clear decision-making line. Together with representatives from the Competence Lines, the Sustainability Unit, who oversaw the entire DMA process. The final results of the DMA were confirmed by the NLB Management Board and presented to the Supervisory Board.

The Group will also monitor the development of the DMA for financial institutions and adjust the process as needed to improve assessment quality. Since the DMA process is ongoing, we will continue to refine our approach.

Changes in Future Sustainability Statements

Key Steps in the DMA Process

1. Defining the sustainability context
2. Preparation of the list of sustainability topics
3. Identification of IROs
4. Impact mate
5. Selection of IROs and material topics

Environmental Information

The conducted DMA reconfirmed Climate Change as a material sustainability topic for NLB Group. In this section, we unveil our transition plan, ie. the NLB Group matters - Climate Change, Energy, and Sustainable Finance. We highlight our policies, targets, metrics, and actions for reducing emissions and managing climate risks, and report on our energy creation, reinforcing our commitment to sustainability.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Climate Change

NLB Group acknowledges the pivotal role it plays in supporting the transition to a net-zero emissions economy by 2050. Thus, NLB Group has committed to managing decarbonizing its financing and investment portfolio, supporting clients in high-impact sectors with credible transition plans, and reducing emissions in its own operations. Transitioning towards this objective requires changes in capital allocation or granting criteria, engagement with clients to navigate their net-zero orientation of capital flows towards "transition" activities and solutions. By acting in an aligned manner, banks can support a consistent best practice approach and drive further efficiency.

(Scope 3, Category 15 under the GHG Protocol) make up more than 99% of NLB Group’s carbon footprint, making them the core focus of the overall NLB Group net-zero transition strategy. Positive financing is essential to achieving net-zero commitments and sectoral decarbonization. Following a holistic approach, in addition to the Net-Zero Portfolio Strategy, NLB Group has committed to a climate-positive future (i.e., fostering a mindset of proactive positive impact, rather than merely reducing harm).

NLB Group joined the Net-Zero Banking Alliance (NZBA) in May 2022. Thus, NLB Group committed to aligning its financing activities with decarbonization and climate resilience. This commitment is supported by policies such as efficiency projects. The NLB Group is included in the EU benchmarks aligned to the Paris Agreement according to the exclusion criteria of Commission Delegated Regulation (EU) 2020/.

Zero Portfolio Targets

As the first part of its Net-Zero Portfolio Strategy, NLB Group has set emissions intensity targets for high-emitting sectors, specifically Power Generation and Iron & Steel for Residential and Commercial Real Estate, in line with its NZBA commitment. These targets are benchmarked against science-based sectoral pathways to ensure alignment with a 1.5°C target.

The General scope Baselining Net-Zero Strategy Transformation Roadmap Steering and Implementation Reporting and Assurance Targets shall cover lending activities and should cover (on both sides) the establishment of an emission baseline. Banks’ targets apply to the bank’s lending and investment activities and shall include their clients’ Scope 1, Scope 2 (and Scope 3 emissions, where possible).

Within 36 months, banks shall use widely accepted science-based decarbonization scenarios. Banks’ first 2030 targets will focus on priority sectors where the bank can have the most significant impact. Bank intermediary targets are to be set every five years from 2030 onwards. Annually publish absolute emissions intensity. Banks shall publicly disclose their targets and report annually on progress.

Net-zero Transition Plans

at a minimum every five years E1-1 Transition plan for climate change mitigation 6 GFANZ defines net zero as the state when anthropogenic emissions of greenhouse gases to the atmosphere state of net zero when they reduce their GHG emissions following science-based pathways, with any remaining GHG emissions attributable to that organisation being fully neutralised, either.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N

The dynamic nature of sectoral decarbonization, data availability, and market developments. To achieve its 2030 NZBA sector targets, NLB does not rely on offsets but instead focuses on sector credible net-zero pathways, and financing solutions that drive low-carbon transitions. Target development follows a structured governance framework with executive oversight and cross-functional alignment with evolving climate science, regulatory developments, and international commitments. Annual disclosures will track progress, while continuous enhancements in data quality, climate transition efforts.

The second round of NZBA-aligned sector-specific targets, covering additional carbon intensive sectors such as, is scheduled for public disclosure in Q2 2025, further.

Decarbonization levers, and risk factors are detailed in the transition plan to ensure credibility and alignment with science-based targets, as outlined in chapter E1-4 Targets related to climate operational emissions, as part of the Operational Emissions Net-Zero Strategy, is progressing. Given the energy market specifics and complexity in each country where NLB Group operates, finalization of these targets is expected by the end of 2025.

Decarbonization levers and key activities NLB Group is committed to accelerating the transition to a low GHG emissions, climate capabilities to support high-emitting sectors in the real economy. To drive this transition, the Group is prioritizing key actions such as financing low-carbon technologies, mobilizing transition climate risks into decision-making frameworks. As targets evolve, NLB Group will continually refine its approach to incorporate emerging climate risks and opportunities, ensuring steady progress.

In the NLB Group’s comprehensive Net-Zero Climate Strategy focuses on two core levers:

• Net-Zero Portfolio Strategy (Portfolio Strategy) – Aligning financing activities with net-zero sustainable activities, and engaging with clients on their transition pathways.
• Operational Emissions Net-Zero Strategy (Operational Strategy) – Reducing the Group’s direct and indirect procurement, and operational optimizations.

Operational strategy Portfolio strategy Operational strategy approved (action plans will be prepared in 2025) Scope 3 (financed emissions - ca commitment in May 2022 First Net Zero target setting (18 months after NZBA commitment Q4 2023) Second Net Zero target setting (36 months after NZBA commitment Q2 2025) Scope for emissions from purchased electricity and heat) Scope 3 (indirect emissions from the value chain e.g. business travel, waste management, employee commuting) Iterative process Strategy Climate Strategy.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Portfolio Strategy

The levers and key actions essential for achieving NLB Group's climate targets are further elaborated in the chapter E1-3, where the Group outlines specific step portfolio strategies. Through a baselining exercise, NLB Group has identified key decarbonization levers in carbon-intensive sectors central to its financed emissions baseline, with approximately elaborated in the chapter E1-4. The Group has set objectives for four priority sectors—Iron & Steel, Power Generation, Residential Real Estate, and Commercial Real Estate—which together have been excluded from the initial targets due to data challenges and will be monitored for future disclosures.

NLB Group is committed to engaging clients in these sectors to implement emission technologies and financing energy-efficient real estate projects. The Group’s capital allocation strategy supports sector-specific decarbonization objectives and integrates policies on environmental impact, especially by conducting qualitative assessments of operational emissions and adopting its first Operational Emissions Net-Zero Strategy, which defines the steps to achieve GHG emissions balance at the latest by 2050.

Key Activities

Key activities are further elaborated under E1-3 Chapter, whereas among the main important ones are:

• Energy efficiency and reduced energy reduction through improvements in energy efficiency. Main anticipated activities are introducing energy-efficient technologies and practices, building renovations, implementing energy-saving practices.
• Transition from fossil fuel driven vehicles to low/zero emission vehicles: steadily transform NLB Group fleet to be electrified, by installing adequate charging infrastructure for fuel change for special vehicles.
• Refrigerants: Cooling systems use refrigerants with high GWP value resulting in difficulties to reduce GHG emissions. As EU adopted legislation to monitor technical quality of cooling systems to prevent any leakage.
• Procurement/investment in renewable sources for electricity production: Procuring and installing/investing in renewable activities. Main activities in facilitating the transition to low-carbon economy are installing photovoltaic panels and entering into power purchase agreements with renewable energy producers.
• Emission commuting: During COVID-19 years first positive experiences with work from home stimulated NLB Group to introduce the possibility for employees to work from home, with expected results in reducing working area and reducing energy consumption.
• Reduced paper and water consumption and waste production.

For a detailed list of measures in climate change mitigation and adaptation - Operational emissions net-zero strategy.

NLB Group Annual Report 2024

Overview

Resources for transition plan implementation

For timely and effective implementation of the transition plan, both on the portfolio and operational level, the Group utilizes human and financial knowledge to contribute to guaranteeing compliance with the latest regulations, technologies, and best practices, while well-trained employees are more efficient and effective in their role.

IT infrastructure

Essential to providing the NLB Group's internal and external stakeholders with comprehensive, relevant, trustworthy, and timely information on sustainability initiatives and commitments, which not only builds trust but also attracts sustainable investments and grows the retail business, giving the NLB Group a competitive advantage.

Targets and external factors

The targets are significantly influenced by external factors, particularly the decarbonization of industry and infrastructure. Locked-in emissions, stemming from long-term assets and investments embedded in past financing activities, limit flexibility in meeting near-term reduction goals. Each target has been set with an understanding of the sector-specific dependencies on external factors.

Collaboration and decarbonization

Decarbonizing the industry requires collaboration between NLB Group, industry stakeholders, and governments. NLB Group will continue to support public policy developments in Slovenia and the region, as these measures require collective action. Clients must take steps towards decarbonization, and governments need to establish frameworks and policies to guide the transition.

Sector-specific challenges

In sectors like steel production, national energy mixes influence efficiency milestones, especially in regions where fossil fuels still dominate electricity generation. Homeowner engagement in energy efficiency measures, such as retrofitting and energy-saving investments, is critical. This progress relies on consumption patterns affected by volatility.

Operational GHG emissions

Although operational GHG emission reduction targets aim to minimize operational GHG emissions, there will always be a certain number of residual emissions which are not under the Group’s control. The reasons are the following: i) dependency on the technology and infrastructure provided by (state) utility companies, which influence the energy mix for district heating, upgrade the electricity infrastructure, and provide more charging stations for electric vehicles.

measures to a certain extent and ii) due to the nature of the banking business and employees’ commute to work, causing emissions from transport. When conducting a qualitative assessment credits to offset; however, the NLB Group has yet to decide how it will strategically address this and will continue to closely monitor carbon credit market(s). Alignment of transition plan w aligned with NLB Group’s new business strategy (New Horizons), sets a clear path for the Group’s ambition to become a leader in transition finance and a regional ESG frontrunner. NLB G ambition of contributing to the real-economy transition, through both financing activities and its internal operational goals. These metrics are aligned with the Group's overarching sustainability mobilization of capital for sustainable finance. The financial targets set by the Group reflect its commitment to advancing its transition plan’s strategic ambition, with a focus on key sector transportation. NLB Group classifies activities as green using the EU Taxonomy, NLB Green Bond Framework, and MIGA and EBRD standards, where a transaction is considered green if NLB Group Annual Report 2024.

Overview

Group has committed a total of EUR 1.9 billion in transition financing by 2030, with the pledge divided between Retail Banking and Corporate and Investment Banking Green Transit efficiency projects. In addition, NLB d.d. has committed to financing at least 30% of new production in the most energy-efficient commercial buildings (<50 kg CO₂/m²) and at least 1.

The Group monitors progress against financial targets quarterly, with planned annual public disclosures against set commitments, which is presented in the table. By the end of 2024, NLB G in green financing by 2030. This includes EUR 701 million (51%) of the EUR 1.37 billion target for Corporate and Investment Banking and EUR 327 million (62%) of the EUR 528 m efficient buildings. As 85% of newly approved loans were allocated to the most energy-efficient commercial buildings (<50 kg CO₂/m²), surpassing the 30% annual commitment. At th performance certificates) in Slovenia, exceeding the 15% annual commitment.

Table 10: Green Financing Commitments and Progress (outstanding stock volume) in EUR thousands

Segment	Investment Banking Green Transition Financing	Renewable Energy Projects	Solar, wind, hydro, geothermal, bioenergy, and related infrastructure	1,370,000	NLB Group	700,999	51%
Green Building	Manufacturing of batteries, electric heat pumps, and other energy-efficient technologies	Clean Transportation Projects	Rail and low-carbon transport infrastructure	Pollution Prevention and Water Management	Projects focused on sustainable water and wastewater management	Retail Banking Green Transition Financing	Renewable Energy Financing
Solar power plants	528,000	NLB Group	where available	Target: 15% of new production in A\&B EPC class by 2030	Energy Efficiency Financing	Energy renovations and installation of energy-efficient equipment (e.g. heat pumps, light commercial vehicles)	Total NLB Group Green Transition Financing
1,900,000	NLB Group	1,028,142	54%	Commitment to Finance Energy-Efficient Commercial buildings	Financing at least	Slovenia by 2030	30%
NLB	85%	283%	Commitment to Finance Energy-Efficient Mortgages	Financing at least 15% of new production in top-rated mortgages (A & B EPC class) in Slovenia by

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Taxonomy Regulation

NLB Group has developed a structured approach to monitor and progressively increase its share of taxonomy-aligned revenues in line with its sustainability commitments. The system is designed to determine the environmental sustainability of economic activities within the European Union. For banks, it serves as a crucial framework for evaluating and disclosing taxonomy, allowing banks to identify and prioritize investments that contribute to environmental objectives, such as climate change mitigation and adaptation. This taxonomy provides clear criteria to achieve goals, mitigate risks associated with environmentally harmful activities, and support the transition to a more sustainable economy.

Compliance with the EU Taxonomy is mandated under the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, amending Regulation (EU) 2019/2088. This legislation establishes the criteria for determining the EU Taxonomy's implementation across various sectors, including banking and finance. In line with regulation, NLB discloses in this Sustainability Statement for the first time information on:

1. Climate change mitigation
2. Climate change adaptation
3. Sustainable use and protection of water and marine resources
4. Transition to a circular economy
5. Pollution prevention and control

The Green Asset Ratio (GAR) within the framework of the EU Taxonomy measures the proportion of a bank's assets that meet the criteria for environmentally sustainable economic activities. The GAR supports environmental sustainability objectives. Banks are required to report their GAR as part of their sustainability reporting obligations, ensuring transparency and accountability in the process.

However, GAR does not fully capture the transition efforts of banks. A substantial portion of the Group’s portfolio is excluded—for example, loans to smaller companies and international non-EU business counterparties for data. Since many of these entities are at the early stages of their green transformation, they may struggle to evaluate their own sustainability. Therefore, GAR should reflect the Group’s efforts to finance the transition.

In the Pillar III report, GAR is disclosed only for the first two climate objectives. Therefore, there is a methodological difference between the calculation of environmentally sustainable exposures from the last four climate objectives. The GAR flow is influenced by the Draft Commission notice issued on 21 December 2023, which aims to provide clarity and improve disclosures by including all newly acquired exposures throughout the year, rather than only net changes.

As of 31 December 2024, the NLB Group’s GAR stands at 1.34% of total covered assets. Complete reporting templates, covering disclosure requirements, are presented in the Appendix 1 EU Taxonomy Regulatory Disclosures. These templates are part of the Sustainability Statement.

NLB Group Annual Report 2024

Overview

Transition plan

Effective governance, strategic oversight, and regular monitoring of NLB Group’s net-zero decarbonization plans are entrusted to the highest executives. A robust governance structure ensures that the net-zero decarbonization plans and sustainable financing are guided by top-level executives and implemented effectively across all sectors.

Please refer to the chapter focusing on financed emissions from NLB Group’s portfolio and incorporating the end-of-year 2024 figures, which was approved by the Climate Change Committee and the NLB Management Board.

Internal risk functions are approved at the executive level, in line with NZBA guidelines. The Net-Zero strategy is regularly reported at the Management Board of NLB d.d. as well as at regular sessions of the Sustainability Committee. The Operational Emissions Net-Zero Strategy, which focuses on reducing emissions from NLB Group, is updated regularly and presented at sessions of the Supervisory Board’s Audit Committee.

In alignment with NLB Group’s sustainability governance structure, the operational carbon footprint is discussed at sessions of the Sustainability Committee. Annual results and corresponding action plans are reviewed and approved by the NLB Management Board. Transition plan implementation progress focuses on both the Operational Emissions Net-Zero Strategy and the Net-Zero Portfolio Strategy.

Following the publication of NLB Group’s first sector targets in December 2023, the following advancements were made in 2024:

• Governance structures have been strengthened through two Climate Change Committee sessions, which track portfolio performance.
• The strategy approved by the Management Board has reinforced the integration of sustainability considerations, including climate-related ones, into business processes and risk management.
• Key policies incorporating targets for emissions-intensive sectors guide lending, investment, and risk management decisions, aligning operations with decarbonization goals.
• NLB supports climate change mitigation. By the end of 2024, NLB Group had achieved 54% of its EUR 1.9 billion green financing commitment by 2030, with progress in both Corporate and Institutional sectors.

NLB Group developed and approved its Operational Emissions Net-Zero Strategy, marking a significant step towards reducing its operational emissions. Operational emissions interim reports are scheduled for preparation in 2025. In terms of reducing emissions from our own operations to achieve net-zero by 2050, the Bank has continued to follow the NLB Group Carbon Footprint and reporting of NLB Group’s operational performance in terms of CO2 emissions.

To support the reduction of GHG emissions from our own operations, NLB Group has in place the necessary measures.

reducing CO2 emissions by implementing climate change mitigation measures, mostly focused on energy efficiency and zero-carbon electricity procurement (where possible).

2. The NLB

the use of cleaner fuels and technologies by transforming the whole car fleet.

1. Since employee commute is one of the categories where the expected share of residual emissions is to be significant, conditions, health and safety regulations, and data protection to raise the share of employees working from home.

›› For details, please see the chapter Climate change mitigation and adaptation.

NLB Group Annual Report 2024

217 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

In accordance with the Methodology for the Assessment of Environmental Risks in NLB Group, NLB Group classifies climate and environmental risks into three categories: transition risk, physical risk, and other environmental risk.

NLB Group has addressed many risk drivers within each category; however, only risk drivers typical for the region where NLB Group operates are presented in the table below.

Environmental Risk	Climate Risk	Materiality
Transition Risk	• Climate policy changes • Technological changes • Behavioural changes (investor and consumer sentiment)	All categories of transition policy changes are the most significant risk driver within transition risk.
Physical Risk	Acute physical risk: • Floods • Drought • Heat waves • Windstorms • Wildfires • Hailstorms • Freezing rain	Horizons, other hazards are assessed as immaterial.
	Chronic physical risk: • temperature changes • Reduced water availability • Biodiversity loss	Chronic risk is assessed as immaterial over the short term.
Depletion of resources	• Ecosystem service disruption • Biodiversity loss • Climate change impact	Ecosystem impact risk: • Pollution • Land use • Habitat degradation
Other environmental risk	ecosystem impact risk is assessed as material and ecosystem dependency risk as non-material.	SBM-3 Material climate-related IROs and their interaction with strategy and business model

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Resilience analysis

The uniform stress-testing programme, which includes internally developed models, stress scenarios, and sensitivity analysis, is regularly revised and complemented. The financial vulnerabilities stemming from climate risk, which is constantly further enhanced by considering available ESG-related data. The stress testing considers three NGFS II long-term other climate & environmental risks associated with each scenario. The combined stress test incorporates both transition and physical risks until 2050. This entails a permanent impact from effects of the combined stress materialize after 2030. Nevertheless, the results of the climate stress tests showed no material impacts on the Group’s capital and liquidity position.

As a system test exercise, consisting of three modules. The exercise was conducted in the first half of 2022 and aggregate results were published in July 2022. By performing this exercise the ECB assesses from climate risk. The Group’s overall results were within the range of average peer results.

IRO-1 Identification and assessment of material climate-related IROs

NLB Group has established opportunities. The Group employs a comprehensive approach that includes a risk assessment framework integrating climate-related risks into our overall risk management processes (ident level, transaction and client due diligence, credit approval process, alignment with climate targets, green finance), stakeholder engagement to understand concerns and expectations, and scenario operations and financial performance. Additionally, the Group’s sustainability governance structure includes dedicated committees and roles responsible for overseeing climate-related risk making processes at all levels of the organization. These processes enable NLB Group to proactively manage climate-related risks and leverage opportunities, contributing to our overall sustainability assessment, among other sustainability topics.

The material topics for NLB Group are Climate Change, Energy, and Sustainable Finance. As part of the DMA, the financial materiality assessment, which NLB Group performs annually within its broader risk management process. Climate-related topics are also predominant in ESG risk management, which was section ESG Risk Management.

C&E Risk Scenarios

Transition Risk	Physical Risk	Other C\&E Risk
Orderly
Disorderly
Hot House

Figure 7: NLB Group's internal ESG stress-testing concept

---

NLB Group Annual Report 2024

12: Climate – related impacts, risks, and opportunities (Climate change adaptation and mitigation)

Material Sustainability Topic	Name of IRO	Description of IRO	Type of IRO	Location in the value chain
Risk	Downstream	As extreme weather events, can lead to loan defaults, asset devaluation, and increased insurance claims, thereby undermining a bank’s financial stability and risk exposure.	Short Term
Opportunity	Reducing financed emissions (towards net-zero) as part of Climate (Net-Zero) Strategy	Reducing financed emissions as part of a Climate (Net-Zero) Strategy enhances asset value, mitigates initial costs. This approach aligns investment with long-term sustainability goals, positively impacting ROI and shareholder value while building a strong reputation and competitive edge.
Impact - Actual	Negative impact	Own operations	Short-term	Operational scope 2 emissions from purchased electricity and heat and fuel for own vehicles
Impact - Actual	Negative impact	NLB Group's downstream GHG emissions contribute to a rise in the GHG concentration in the atmosphere. This leads to changing climate patterns, including droughts, flooding and heatwaves, increase in average temperature and sea level rise.
Impact - Actual	Negative impact	Own operations	Short-term	Operational scope 3 emissions from bought goods and services (supply chain)
Impact - Actual	Negative impact	NLB Group's indirect emissions related to employee travel to and from work, and to business travels, contribute to a rise in the GHG concentration in the atmosphere. This leads to changing climate patterns, including droughts, flooding and heatwaves, increase in average temperature and sea level rise.
Impact - Actual	Negative impact	Financed emissions related to lending to retail clients, governments and corporates contribute to a rise in the GHG concentration in the atmosphere, and form the largest share of NLB Group's total GHG emissions.	Downstream	Short-term
Impact - Actual	Negative impact	Financed emissions of asset and wealth management operations contribute to a rise in the GHG concentration in the atmosphere. This leads to changing climate patterns, including droughts, flooding and heatwaves, increase in average temperature and sea level rise.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

13: Climate – related impacts, risks, and opportunities (Energy)

Material Sustainability Topic	Name of IRO	Description of IRO	Type of IRO	Location in the value chain	Time horizon
Energy operations	Reduces direct environmental impact	Aligns with sustainability goals, while also mitigating risks like future carbon taxes and energy cost fluctuations.	Opportunity	Own operations	Short, Medium, Long-Term
Green investments in renewables	Drive decarbonization	Reduce risks through clean energy innovations, meet regulatory demands, and align with increasing investor preferences for sustainable, environmentally conscious projects.	Opportunity	Downstream	Short, Medium
Investments in house renovations and energy-efficient buildings	Lower energy consumption	Reduce emissions and increase property value. They support climate targets, meet evolving regulations and enhance energy resilience.	Opportunity	Downstream	Short, Medium, Long-Term
Operational use of zero-carbon own vehicles	Utilizing zero-carbon vehicles for operations	Reduces emissions, improves brand reputation, meets regulatory standards, and aligns with the growing consumer preference for environmentally friendly practices, ultimately contributing to a more resilient and responsible.	Opportunity	Own operations	Short-term
Energy use for heating and electricity in own real estate	By using energy from non-renewable sources	The company is contributing to environmental degradation (air pollution due to emission of air pollutants).	Impact - Actual Negative impact	Own operations	Short-term
Operational use of energy from zero-carbon sources	NLB Group is already purchasing over half of its energy from zero-carbon sources	Thus reducing the negative pollutant emissions.	Impact - Potential Positive impact	Own operations	Medium-term
Financing and leasing of conventional vehicles	By financing loans and leases of personal vehicles	Internal pollution due to emission of air pollutants from fossil fuel combustion.	Impact - Actual Negative impact	Downstream	Short-term

---

NLB Group Annual Report 2024

14: Climate – related impacts, risks, and opportunities (Sustainable finance)

Material Sustainability Topic	Name of IRO	Description of IRO	Type of IRO	Location in the value chain	Time horizon
Products for retail banking	Promote eco-friendly practices	By offering favorable terms for environmentally responsible projects, such as energy-efficient home renovations or electric vehicle purchases.	Opportunity	Downstream	Short, Medium, Long-Term
	Sustainable projects	Such as renewable energy initiatives and energy-efficient upgrades. This approach mitigates climate risk, aligns with regulatory demands, and enhances corporate reputation.	Opportunity	Downstream	Short, Medium, Long-Term
Green lending to corporates	NLB Group is providing green lending to corporates	Aiming to significantly increase financed emissions through financing of sustainable activities of corporate clients.	Impact - Actual	Own operations	Short-term
Green leasing	Green leasing structures	Lease agreements that support eco-friendly initiatives and attract conscious tenants. This approach enhances asset value, improves tenant satisfaction, and demonstrates a commitment to sustainability.	Opportunity	Downstream	Short, Medium, Long-Term
Sub-funds in investment banking and asset management	Sub-funds which promote environmental and social characteristics	Targeting companies and projects that enhance portfolio resilience against climate risks, and align with regulatory demands.	Opportunity	Downstream	Short-term
	Sustainable lending products for retail banking	NLB Group is providing green lending to private individuals and micro companies. Green lending is a means to reduce the impact on the environment.	Impact - Actual	Downstream	Short-term
Issuing of green bonds	NLB Group has issued a green bond	Raising several hundred million euros for financing sustainable projects. The issuing of the green bond will have a positive signaling effect on other banks and companies in the region.	Impact - Actual	Own operations	Short-term

---

Opportunity

Downstream Short, Medium, Long-Term Financing of Energy Efficient Buildings

NLB Group is providing finance for energy efficient buildings and has committed to significantly increase its support for projects that ensure buildings require less energy, thus contributing to lower need for energy, and to lower GHG emissions.

Impact - Actual Positive Impact

Downstream Short-term

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

1 Identification and Assessment of Climate-Related Risks

NLB Group conducts a materiality assessment as part of its overall risk identification process to determine the level of transition and climate and environmental data and studies available for its region (namely those provided by different relevant state institutions) to determine the level of environmental risk to which NLB Group is exposed.

Transmission channels, and their materiality and impact on the Group’s financial performance in the short-, medium- and long-term period are assessed. NLB Group performs the materiality assessment to identify environmental risk drivers relevant for Slovenia and other countries where NLB Group is present. Besides physical and transition risk, NLB Group also considers exposure to biodiversity risk.

In the next step, NLB Group defines the transmission channels to better understand how the climate and environmental risk drivers translate into traditional financial risks. For each identified risk driver, using internal and external sources and methodologies, the assessment considers the geographic location and industry (segment) of the counterparty.

Furthermore, the probability or the size of the impact, so-called amplifiers, mitigants, and geographical heterogeneity, impact its operations. In the final step, the materiality of the impact is assessed and assigned to each exposure. A heatmap tool is used for representation of vulnerability to each climate and environmental risk driver.

In line with the internal risk management rules and processes, transition risk drivers and other environmental risk drivers are categorized as follows:

• 1 Low
• 2 Moderately Low
• 3 Moderate
• 4 Moderately High
• 5 High

A detailed assessment of each category is performed separately. An assessment of physical and transition risk was performed during 2023 and updated in 2024. The methodology for assessment of other environmental risks was changed in 2024, hence the new assessment for 2024.

Real estate plays an important role in the debate on the transition to a carbon-neutral economy. NLB Group’s evaluation process for ESG risk management in collateral is focused on ESG risks for real estate in collateral, which is assessed through NLB Group’s methodology for environmental risks.

Climate transition and physical risks are measured through real estate energy performance. The risk drivers (presented in the previous chapter) are assessed from a probability (likelihood) and impact perspective. The assessment is performed in line with internally developed methodologies, companies’ loss statistics, vulnerability and climate studies available for the region (provided by different relevant state institutions), and expert judgement.

While the probability of a severe event relies more on the industry (segment) of the counterparty, the impact of such an event is also significant. Probability and impact scores are then combined into a vulnerability score.

For Residential...

The flood risk level is determined based on the micro location (exact geospatial coordinates) of the real estate. Climate scenarios assessment was performed for the short-term, medium-term, and long-term change until 2100. Climate change is a slow and gradual process; the Group has defined the time horizons for assessment of physical risks as follows:

• Short term: until 2030
• Mid-term: until 2050
• Long-term: until 2100

The stress test process is based on the defined time parameter and maturity of the exposure. In relation to physical risk, the Group considers two different climate scenarios in the long-term period. For these two scenarios, impact assessments were performed for different physical risks and were used in the materiality assessment.

NLB Group Annual Report 2024

Representative Concentration Pathway (RCP) is a greenhouse gas concentration (not emissions) trajectory adopted by the IPCC. Four pathways were used for climate modelling and research on climate change scenarios, all of which are considered possible depending on the amount of greenhouse gases (GHG) emitted in the years to come. The RCPs—originally RCP 2.6, RCP 4.5, RCP 6, and RCP 8.5—represent different levels of radiative forcing by the year 2100 (2.6, 4.5, 6, and 8.5 W/m², respectively). The Group decided to use the RCP 2.6 scenario, which is a "very stringent" pathway scenario, and the RCP 8.5 scenario which assumes emissions at a higher level.

The assessment of different climate scenarios for physical risk was assessed as not material and therefore not considered. The long-term assessment of physical risk, considering both scenarios, is based on studies performed by the EU Joint Research Centre (JRC) where different climate scenarios were considered. Findings of the materiality assessment of physical risk include:

• Key findings on the level of physical risk are as follows:

From the materiality perspective, chronic risk is also not determined as a driver in certain industries and regions. Other events are not material from a financial perspective, though they cannot be completely neglected. Vulnerability to physical risk exposure, mostly in the Agriculture sector in some countries, is materially exposed to physical risk (high and moderately high level of drought) in the mid-term horizon. No exposure is allocated to the high-risk bucket. Considering the long-term horizon, 7% of the corporate portfolio is allocated to the high-risk bucket under the RCP 2.6 scenario and 17% under the RCP 8.5 scenario.

The impact of climate change on physical risk exposure of NLB Group’s credit portfolio and business model (sensitivity) indicates that the most relevant natural disasters are drought and floods, while hail and wind events are also considered. The risk is expected to increase in the long run if no adequate policy changes are implemented in a timely manner. Other events are not material for the region and the Group’s business model.

A model for assessing risk is based on the actual location of the real estate collateral; a model for other countries, where NLB Group is present, is in development. For all collaterals in our portfolio, flood risk based on micro location is determined. Based on the analysed data, floods and drought do cause material losses, but they do not have a material effect on the Group’s portfolio. Chronic physical risks in Slovenia are observed in public infrastructure and agriculture, but such losses were mostly reimbursed by the government (impact on sovereign debt). Further on, as supported by insurance statistics, the impact of these risks is being monitored.

NLB Group Annual Report 2024

Overview

Impact of these risks on the Bank’s performance. The Group’s credit portfolio is well diversified (from the industry and location perspectives) which reduces the impact of such events. Str risk, though with no significant impact on the Group’s performance. The impacts of climate change on physical risk exposure of collateral and real estate. These impacts could arise from b warming (chronic impacts).

Risk Assessment

A model for assessing acute flood risk based on national (Slovenian) flood risk zones and EU flood risk zones (NLB Group members) was developed – determining Slovenian portfolio, flood risk (high, moderately high, moderate, moderately low, low) was determined; flood risk assessment on the micro location of real estate for NLB Group members is risks are assessed through NLB Group methodology for environmental risks as not material to the Bank’s collateral exposure. NLB is in the process of obtaining flood and other physical risk climate physical risk of collateral are part of the credit approval process.

Transition Risk

The assessment of transition risk is focused on the mid-time horizon. It is based on the assumption that will peak in the mid-term horizon (2030–2050) as defined by the Group. Afterwards the level of transition risk is expected to decrease. The assessment of transition risk factors is based on the methodology combined with actual emission data of a counterparty or proxy emissions data. For Residential Mortgages, the Group assesses transition risk by using energy performance information derived from the EPC. The methodology assumes full implementation of the Net-Zero 2050 scenario. Other less optimistic scenarios (slower transition) are not considered in the cases. However, the Group uses different scenarios in the climate stress test, which is described within the resilience analysis.

Findings of the Materiality Assessment of Transition Risk

Key findings on the latest assessment as of 31 December 2024:

• Transition risk is already recognized as a material risk driver and the level of transition risk is assessed as moderately low.
• Over the mid-term horizon, the level of transition risk will increase to moderate level.
• Over the long-term horizon, the level over the long-term horizon is less material, therefore the focus of the materiality assessment is the mid-term horizon.
• Using UNEP-FI methodology for classification of transition risk, moderately high risk bucket. 40% of the portfolio is allocated to the low or moderately low risk bucket and the remaining part is allocated to the moderate-risk bucket.
• From the industry trade, and the construction and electricity production sectors in Slovenia and Serbia. Such exposures are less material in Kosovo and other countries.
• For these sectors, direct and indirect industries will also be heavily impacted by capital expenditure needs (higher, above average, CAPEX risk score).
• Country-wise, the overall transition risk is the lowest in Slovenia and h countries other than Slovenia (the rest of NLB Group), we expect delayed transition. This means lower short-term risk and faster transition in the mid-term period and hence higher risk.

Group’s Credit Portfolio and Business Model

Transition risks already arise in the short term due to the EU’s determination to reduce carbon emissions in accordance with its ambitious targets. In 2023 it is expected that the impacts of transition risks will gradually diminish in the long run. Nevertheless, the Group assessed transition risk as more of a material than a physical risk. Industries which are directly or indirectly related to fossil fuels and such industries are considered riskier. The level of transition risk does not depend only on the industry itself but also on there is less regulation.

On the portfolio level, the Group does not face any large concentration of specific NACE industrial sectors exposed to climate risk, whereby the role of transitional emissions, the Group has relatively low exposure to emissions-intensive sectors in its corporate clients’ business. There is some exposure in more emissions-intensive industries, such as energy emissions is rather limited. As part of its strategy, NLB Group does not finance companies that extract fossil fuels or operate coal-fired power plants.

In Residential Mortgages, the most important initial round of NZBA targets, NLB Group has focused on fossil-fuel-based and highly energy-intensive sectors, such as Power Generation and Iron and Steel, and other sectors where the B Residential Mortgages and Commercial Real Estate. Defined net-zero targets are regularly followed. Activities are underway for setting the second round of NZBA targets for sectors such.

Collateral and Real Estate

NLB Group's Net-Zero Disclosure Report outlines the Group’s commitments regarding real estate, specifically Residential Real Estate (RRE) and Commercial Real Estate (CRE). The Group is dedicated to reducing financed emissions in these sectors as part of its broader goal to achieve net-zero emissions and through that reduce exposure to climate transition risk. This includes both RRE and CRE. The Group is committed to integrating sustainability criteria into its lending and investment decisions. This approach ensures that the Group’s real estate financing aligns with its sustainability goals.

Energy performance certificates provide banks with relevant information on the energy efficiency of buildings in collateral and exposure to climate transition risk, so an EPC data collection on EPC of the real estate in collateral is essential as the Group is present in EU and non-EU markets. On the Slovenian market, there is a publicly available EPC database from the Ministry of the Environment. NLB’s real estate in collateral; proxy EPCs were also developed for collateral stock based on the national database. For new production, information on EPCs is also collected from the borrowers. EPCs are mandatory for new residential mortgage loans for private individuals since the end of 2023 (before that only in cases when EPC was mandatory according to Slovenian law), which will, in some countries, be discovered during the EPC data collection initiative. In some countries, EPCs are not established in the local legislation (e.g., Kosovo), while in others, EPCs do exist but are not enforced. Calculations of EPC and other energy performance documents are obtained where possible. All missing EPCs in the NLB and NLB Group portfolio are periodically modeled based on available data. Measures are in development to increase the share of official EPC data on all markets.

NLB Group Annual Report 2024

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Overview of Vulnerability to Physical and Transition Risk by Country and by Industry

The results of the materiality assessment of transition and physical risk over the medium-term horizon, as explained, show the exposure of the corporate portfolio to physical and transition risk by country, and the second by industry. Other environmental risk assessments are also included at the level. Besides EBRD methodology, the Bank also uses the ENCORE knowledge database, which provides assessment of other environmental risks from the dependency (depletion of resources) perspective (pollution, land use, and habitat degradation). The ENCORE knowledge database provides a mapping tool to link specific economic sectors to their natural capital dependencies, severity, and likelihood. Using the ENCORE database, we have linked the environmental risks to our credit portfolio to determine the vulnerabilities. For economic activities where ENCORE is applied, it does not provide the assessment over the different time horizons and does not consider different climate scenarios. Therefore, the assessment of other environmental risks is necessary. However, other sources like the Aqueduct Water Risk Atlas can be used to surpass this deficiency and to address each specific risk. Combining ENCORE and the Aqueduct Water Risk Atlas has been performed.

3.2	3.0	2.8	2.6	2.4	2.4	2.0
1	1.5	2	2.5	3	3.5	4.0
Slovenia	Serbia	North Macedonia	Montenegro	Kosovo	Bosnia and Herzegovina	Other

Physical Risk

Figure 8: NLB Group physical and transition risk by country (as of 31 December 2024)

Figure 9: NLB Group physical and transition risk by industry (as of 31 December 2024)

Mining and Quarrying	C Manufacturing	D Electricity, gas, steam and air conditioning supply	E Water supply, sewerage, waste management and remediation activities	F Construction	G Accommodation and food service activities	K Financial and insurance activities	L Real estate activities	Other: J, M-S

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Findings of the materiality assessment of other environmental risk:

• Other environmental risk is not material; however, it is expected to gradually increase and will reach its peak in the mid-term horizon.
• Over the medium-term horizon, the level of other environmental risk is not expected to decrease in the long-term.
• ENCORE methodology (combined with EBRD methodology) was applied to the corporate portfolio. 17% of the portfolio is in the high-risk bucket. 26% of exposure is allocated to the moderate risk level and the remaining 57% is allocated to the low or moderately low risk bucket.
• The impacts of climate change on other economic activities that cause harm to the environment will be subject to increased regulatory scrutiny.
• In the long-term horizon, dependency perspective should also be considered due to possible materiality perspectives, mainly Agriculture is significantly vulnerable to other environmental risks.
• Other industries are less affected, although there are some specific industries which are subject to greater regulatory scrutiny.
• The main exposure in the Agriculture sector is in Serbia; therefore, Serbia is more vulnerable to other environmental risks than other countries.

Materiality of Other Environmental Risk

Only exposures where impact and dependency assessment is available in the ENCORE database are considered.

Figure 10: NLB Group dependency and impact risk by country (as of 31 December 2024)

Country	Impact	Dependency
Macedonia	A Agriculture, Forestry and Fishing	D Electricity, gas, steam and air conditioning supply
Kosovo	C Transportation and storage	J Other
Bosnia and Herzegovina	F Financial and insurance activities	G Accommodation and food service activities

Figure 11: NLB Group

Country	Sector
Montenegro	A Agriculture, Forestry and Fishing
North Macedonia	B Mining and Quarrying
Serbia	C Manufacturing
Slovenia	D Electricity, gas, steam and air conditioning supply
Other	J, M-S

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Policies related to climate change mitigation and adaptation

NLB Group’s transition plan to achieve net-zero emissions by 2050 is underpinned by a comprehensive set of policies that mandate the adoption of policies and internal acts that integrate climate mitigation and adaptation into core financing operations, such as loan origination, underwriting, risk management, and its own decision-making processes, guiding the approval of loans and investments in alignment with the Group’s Net-Zero targets. They focus on the phase-out of GHG-intensive assets by:

• Reducing related lending and investment by integrating climate-related criteria to ensure financed projects contribute to emissions reduction.
• Portfolio engagement by supporting clients’ transitions.
• Safeguards against adverse impacts by ensuring all transactions and investments adhere to environmental and social governance standards to minimize negative environmental consequences.
• Enhancing energy efficiency in own operations.

Climate-related risk management policies

The risk management function defines rules about risk appetite, risk strategy, credit risk, and other management, restructuring, and others have to adhere to rules and procedures. The policies are available to employees in the register of internal acts, while affected clients are informed about agreements.

Risk Appetite and Lending Policy

Content and purpose: Integrates sustainable finance and ESG risks into the business strategy, with a focus on phasing out coal industry financing.

Content and purpose: Identifies sectors and risky investments such as coal, oil, and deforestation for exclusion from NLB’s financing portfolio.

GHG Emissions Data Collection

Significant exposure, tracking carbon intensity and ensuring progress toward sector-specific emissions reduction targets.

Criteria and Procedures for Granting Transactions to Legal and Private Entities

Criteria, emphasizing risk assessment, client cooperation, and operational standardization. It applies to legal and private entities but excludes private individuals and treasury transactions.

Diligence frameworks, and EBRD/MIGA standards. Collaboration with clients, regulators, and internal teams ensures compliance.

Environmental and Social Transaction Categorization

Manages environmental and social risks in transactions, promoting responsible practices among corporate clients of NLB and other banking members, excluding retail financing but considering resource sustainability, circular economy transition, pollution prevention, and biodiversity protection while identifying and managing associated risks. Monitoring includes exclusion list screening.

NLB and NLB Group Lending Policy for Non-Financial Companies

Content and purpose: The policy defines transaction approval principles based on client creditworthiness and the Group’s risk appetite. It aims to generate value while avoiding speculative transactions. Monitoring includes creditworthiness assessment, ESG compliance, collateral requirements, and ongoing governance.

Lending Policy for Specific Client Segments in NLB and NLB Group

Content and purpose: The policy defines reference frameworks and principles for approving transactions for international corporates, project finance, and farmers. It complements the Lending Policy for Non-Financial Companies by specifying rules for these segments. It addresses risks related to value generation while avoiding speculation. Monitoring includes credit assessments, ESG compliance, collateral requirements, and ongoing oversight. The policy guides employees on governance.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

General Methodology for Credit Rating Classification in NLB and NLB Group

Content and purpose: The methodology defines credit rating classification of legal entities and entrepreneurs based on qualitative indicators, risk assessment, and creditworthiness evaluation, integrating ESG factors. Monitoring includes regular rating updates, qualitative assessments, and ESG risk adjustments.

NLB Group Carbon Footprint Measurement and Reporting Policy

Content and purpose: The policy defines the measurement, management, and reporting of carbon emissions (Scope 1, 2, and limited Scope 3). The policy follows the Greenhouse Gas Protocol Standard, specifically the Corporate Accounting and Reporting Standard, prepared by the World Resources Institute. The carbon footprint report was done by the Jozef Stefan Institute, and the calculations verification protocol was ISO 14064-3:2019: Greenhouse gases - Part 3: Specification with guidance.

The goals are the following:

1. To reduce CO2 emissions footprint from own operations and hence contribute to the fight against global warming.
2. To comply with regulatory demands.
3. To set climate targets for cost-effective reduction.
4. To achieve the ultimate goal of being carbon neutral by no later than 2050.
5. To meet the needs of external and internal stakeholders.
6. To improve corporate sustainability.

Estate Strategy

Content and purpose: The strategy refers to the entire portfolio of NLB Group real estates (RE) and is divided into three main pillars: in-use RE, run-off RE, and development. It focuses on efficient sources, using energy from renewable sources, and decreasing the amount of waste to reduce the operational carbon footprint. A special sustainability team within the real estate area is responsible for upgrading the RE databases with environmental KPIs and predicting measures to reach set targets based on already executed measurements.

Remote work possibilities and space demands are also incorporated, with all eventual excess space in premises and non-business-related premises to be monetized or used as part of local sustainability efforts.

Sustainable Car Fleet Management and Company Car Policy

Content and purpose: The policy responds to the NLB Operational Emissions Net Zero footprint. It defines the assumptions and emission model for achieving the NLB Group's operational net-zero emissions by 2050. The policy’s main goals are oriented towards using cleaner energy sources, while addressing limitations of the electric car park (efficient charging infrastructure and range). It further sets the foundation for cooperation with external and contracted suppliers. The policy is adopted as a steering function, with each NLB Group member responsible for the adoption and implementation of the policy in its local entity.

Regulation on Work from Home

Content and purpose: The regulation outlines the framework for remote work arrangements within the NLB Group.

locations (home or abroad). It specifically addresses the relevance, procedures to gain this right, detailed health and safety regulations, data protection, and information infrastructure specif

NLB whose nature of work allows for work from home.

For more than a decade, the NLB Youth Sports project has been supporting dozens of sports clubs in many disciplines, taking more than 10,000 young people to sports fields every year, promoting fa

values such as discipline, responsibility and cooperation.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Zero Portfolio Strategy

Establishing an emissions baseline for target setting and lever identification NLB Group’s net-zero journey aligns with the NZBA7 Guidelines for Climate Target Setting emissions baseline. In establishing the baseline for defining key sectors and levers for the management of portfolio financed emissions, NLB Group aligns its reporting and target-setting publicly follow the Pillar III Basel framework, as defined by the European Banking Authority (EBA), focusing primarily on non-financial corporations and exposures in the banking book.

In the establishment of an emissions baseline, NLB Group refers to the broader perimeter of the Net-Zero Banking Alliance (NZBA) guidelines, which extend to a wider range of counterparties, including corporations, and households. For the 2021 baseline established in the 2023 target setting exercise, the total financed emissions, under the NZBA framework, of NLB Group amount to 2,516 ktCO2, including emissions from the Bank’s lending portfolio, as well as financed emissions from the Bank’s investment portfolio, encompassing both debt and equity investments. The implementation of the CSRD mandates a significant progress in progressively incorporating the Scope 3 emissions of its clients into its financed emissions baseline. NLB Group remains committed to evolving its methodologies and refining its commitments.

Breakdown by Asset Class

Nearly 50% of baseline emissions are linked to sovereign bond exposure. However, significant concern arises from the methodological double-counting in financed loans, which are included redundantly when aggregating at a national level within sovereign bond emissions. For the sovereign bond portfolio, GHG emissions for 2020 were applied, with Scope methods for calculating country-level emissions presenting challenges, particularly in deciding whether to include governmental, territorial, production, or consumption emissions, and whether to include governmental, territorial, production, or consumption emissions.

As a result, the decarbonization process is expected to unfold indirectly, with limited practical approaches currently available. Emissions are concentrated in Slovenia and Serbia, which together represent significant exposure rather than carbon intensity.

Figure 12: NLB Group Baseline 2021, Split by Asset Class and Entity

Total	2,516 ktCO2
49%	Sovereign bonds
46%	Corporate loans
5%	Mortgages
3%	NLB Banka, Banja Luka
5%	NLB Banka, Sarajevo
2%	NLB Banka, Prishtina
0%	NLB Banka, Podgorica
	Lease & Go

Actions and resources related to climate change mitigation and ktCO2.

7 Guidelines for Climate Target Setting for Banks

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Figure 14: Split of NLB Group financed emissions by 10 NZBA priority sectors (ktCO2)

NLB Group	Power	Commercial Real Estate	Iron & Steel	Residential Real Estate	Agriculture
564	251
18%	19%	8%	9%	41%	42%

Key identified levers Among the 10 carbon-intensive priority sectors eligible under NZBA, approximately 95% of financed emissions are concentrated within six sectors: Freight Transport, Iron & Steel, and Power Generation. In the agricultural sector, there is currently no well-established net-zero pathway. Moreover, the sector exhibits significant heterogeneity.

Obtaining client-level data proves challenging due to its limited availability, primarily because a substantial portion of the portfolio is concentrated among smaller companies. In agriculture, there are no anticipated short-term technological advances in the near future. The progress in these two sectors will be monitored, with specific targets for each sector.

Coal and Aluminium sectors were excluded from the first round of target setting due to their non-material exposure, both in terms of emissions and financial impact within NLB Group's portfolio. The four sectors considered most significant in terms of emissions, along with the financial exposure to these sectors, collectively contribute to approximately 50% of financed emissions.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Actions

Building on the established baseline, NLB Group's decarbonization strategy targets the most carbon-intensive sectors identified in the first round of target setting, namely Power Generation, the focus is on reducing emissions in these sectors, which represent a significant share of the Group’s financed emissions.

• Data Collection – Enhancement of data collection processes (Scope 1, Scope 2, and Scope 3).
• Methodology Improvements – Continuous refinement of calculation and monitoring processes to ensure alignment with evolving regulatory frameworks.
• Monitoring for emissions intensity to track progress and ensure effective steering of commitments in carbon-intensive sectors.
• Client Engagement – Engagement with clients across Group's targets and facilitating the transition to low-carbon alternatives.
• Portfolio Steering and Capital Allocation – Focused financing activities in key sectors based on set targets, with a view to 2030.

Robust data collection is essential for tracking progress across the portfolio and enabling effective action where reliable data is available to drive measurable impact. Specific actions include:

• In Power Generation, the focus is on supporting clients' transition through renewable energy projects and plant upgrades.
• In Iron & Steel, NLB Group will facilitate the adoption of low-emission technologies.
• In Real Estate, NLB prioritizes the financing of energy-efficient new builds and promoting the retrofitting of existing properties.
• In Residential Real Estate, NLB d.d. aims to support energy-efficient homes.

GHG reductions for the transition plan implementation are further elaborated under Disclosure E1-4, alongside sector-specific targets and disclosures. Operational emissions are aligned with the Paris Agreement (1.5 °C temperature increase) trajectory.

Methodologically, the Operational Strategy is built on the Greenhouse Gas Protocol and it incorporates the Bank's commitment to be relevant to EU legislation with an impact to reduce the potential of GHG emissions. This has been transferred into principles and assumptions of the NLB Group operational emission model.

The Group started to report its operational carbon footprint already in 2021 for the period 2019–2021. The Operational Emissions Net-zero Strategy has been harmonized with the Portfolio Net-zero Strategy, following the internationally recognized carbon footprint corporate reporting standard, the Greenhouse Gas Protocol.

For the purpose of calculation of NLB Group’s carbon footprint, the Corporate (Scope 3) Accounting and Reporting Standard were used. In setting the approach for consolidating GHG emissions, NLB Group followed the accounting principles and hence used the fundamental principles as introduced by the GHG Protocol: relevance, completeness, consistency, transparency, and accuracy.

NLB Group Annual Report 2024

Overview

Gathered and calculated on the individual group member level and reported to the corporate level, where the total NLB Group GHG emissions were calculated. The Operational Emissions:

• Category 1 (Purchased Goods and Services): use of paper and water supply
• Category 3 (Fuel- and energy-related activities): Fuel- and energy-related activities not included in scope
• Category 5 (Waste Generated in Operations)
• Category 6 (Business Travel)
• Category 7 (Employee Commuting) of GHG Protocol Scope 3

For details on the exclusion list with the efficiency Directive, National Energy and Climate Plan, NLB Group operational emissions measurements for 2021 do not yet include the Scope 3 categories water, waste, and business travel.

Operational Emissions Model

NLB Group’s operational emissions model has been prepared based on the Paris Agreement 1.5°C trajectory, the EU’s climate change mitigation obligations, in source, and various already planned emissions reduction activities. The model provides a tool to explore potential changes in net-zero and intermediate targets using potentially stricter emissions reduction measures.

Account for 35,804 t CO2 eq in 2021 for all reported scopes (considering the number of NLB Group members at the time). Projected possible reductions have been determined to guide the relevant assumptions, along with planned activities and legislative measures, significant reductions in emissions are anticipated by 2050 and 2030 compared to the baseline year 2021.

The goal is to reduce emissions by 55% by 2030 and 90% by 2040 (EU target proposal). The highest emissions reduction is to be achieved in Scope 2.1, electricity usage. NLB Group recognizes the importance of intermediate targets and starts implementing the NLB Group Operational Emissions Net-Zero Strategy.

Emission Models

• Scope 3.6 Transport model
• Scope 2.1 Electricity model
• Scope 1.3 Refrigerants model
• Scope 2.1 Electricity - Electric vehicles
• Scope 2.2 District heating
• Scope 3.1 Paper/Water

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Key energy efficiency and emission reduction measures

File of operation

Measure category

Activities in 2024 in NLB Group

Electricity supply	Zero-carbon electricity procurement	Continued
Macedonia	Renewable electricity self-sufficient supply	Review of PPA possibilities in the Region
Installation of solar power plants	where possible according to technical capabilities of the facilities
Efficiency	Start of preparations for energy audit visits to all high-consumption locations (Serbia)	Energy certification of all RE and adapting renovations according to energy class (Sarajevo)
Renovating facilities	and motion sensors for lights	Full or partial switching-off of night lighting and illuminated signs at night
Adjusting the lighting intensity	depending on the number of employees
Possible	(maximum heating during winter is 21°C, during summer maximum cooling is 25°C)	Installation of BMS / CNS systems where possible and economically justifiable
Replacing fossil fuels	in facilities and, where technically possible, an increase of the percentage of waste air recovery
Resources use	Water	Reduced water consumption by installation of water pipes with sensors
Waste	Separation and start of activities (in some cases together with utility companies)	to provide more exact waste consumption volumes
Waste & Water	Raising awareness among employees on sustainable living	Celebrating Earth Day
Sustainability Festival	with a special emphasis on workshops on Digital Waste Cleaning and Sustainable Mobility
Real estate use	De-investment of inefficient facilities	Sale of facilities not needed for operations
Renovation	Renovation of buildings and implementation of energy-efficient materials/devices
Sustainable mobility	Fleet replacement	Energy consumption and energy efficiency
In accordance with the accepted Operational Emissions Net-Zero Strategy	the necessary action plan for individual NLB Group members
Electricity consumption	represents over 30% of the contribution to the operational CO2 footprint	when adding heating and cooling, this is over 50% of all NLB Group CO2 operational emissions
Consumption and ensuring that electricity is purchased from zero-emission sources	where this is possible and in accordance with local energy legislation	and the availability of CO2-free sources
Buildings that represent the largest consumption of energy	and/or are the least energy efficient is being conducted
In addition, a detailed real estate database has been established (iNep)	for calculation of CO2e, are visible
Such an approach provides additional information	on facilities that need increased attention to energy efficiency
Waste	In NLB Group, we strive to separate	glass, which are removed by local utility companies
Hazardous waste	construction waste, and waste electronics are also sorted	and disposed of into the appropriate containers or to an appropriate facility

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Sustainable Mobility

Preventing and mitigating the negative impacts of climate change is vital for NLB Group. In 2022, the entire NLB Group adopted the umbrella NLB Group Sustainability Strategy in all member countries to achieve the replacement of fossil-powered fleet vehicles with alternative-powered vehicles, according to the plan and in alignment with the possibilities and plan.

Status	Plan 2023	2024	2025
Plug-in hybrid (PHEV)	2%	15%	16%
Hybrid (HEV)	19%	37%	58%
Battery electric vehicle (BEV)	15%	23%	26%
Internal combustion engine vehicle (ICE)	64%	25%

NLB Group’s Operational Emissions Net-Zero Strategy assumes that the NLB Group's replacement of fossil-powered fleet vehicles with alternative-powered vehicles will continue to take place. This process starts in 2025 and will last until 2029. The first important milestone for the NLB Group Fleet will be achieved in 2025 as all vehicles with internal combustion engines (ICE) will be replaced by a vehicle fleet modernization with a strong increase in the share of battery electric vehicles (BEV).

Key Activities in the Electrification of the Fleet:

• Use of cleaner fuels and technologies.
• Respect for the speed limits.
• Careful fleet company car selection between BEV, PHEV, and HEV based on Total Rental Costs (TRC).
• Usage comparison, and based on operational requirements and mindset of company car users.
• The FMO (Fleet Management Office) will follow new technologies and organize presentations and training, if needed, to ensure a smooth transition.
• Company car charging network.
• Limitation of the electric car range risk (selection of cars based on demand and real range).
• Efficient charging infrastructure (higher capacity batteries).

Paper Use – Paperless Project

NLB Group is actively encouraging the reduction of paper use while enhancing the digitalization of its operations, including digitizing services and client documents. The goal is to improve user experience, boost operational efficiency, improve employee and operational efficiency, and minimize environmental impact. The Paperless Collaboration project aims to achieve a 50% reduction in paper prints by 2025 (compared to 2019) through the elimination of paper use wherever possible, supported by optimization.

In 2023, the goal is to reduce prints by 18% (by 2.2 million pages compared to 2023). Among all banks in the Group, NLB KB Belgrade has the largest share in paper usage (47%) and the biggest environmental impact. Other members had a reduced paper consumption due to anti-money-laundering requirements, high sales growth, and limited possibility of usage of electronic signature.

Year	Paper Consumption (in thousands)
2021	130,685
2022	119,272
2023	108,4

48% -7% 44%

Figure 16: Paper consumption in NLB Group: number of prints (in thousands)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Development of GHG reduction targets

Financed emissions, falling under GHG Protocol Scope 3 Category 15, account for 99.9% of total emissions within NLB Group, making them the primary focus. A strategy is in place, operational emissions targets will be defined and implemented in 2025. This approach highlights the pivotal role of portfolio emissions in achieving NLB Group's long-term goals.

NLB Group is committed to meeting its 2030 sector targets without reliance on offsets. Instead, the Group focuses on monitoring industry standards for offsets as they evolve. Targets, defined by guidelines, will be reviewed every five years to remain consistent with international agreements or national goals. NLB Group’s Net-Zero Portfolio Strategy, which covers financed emissions and Scope 2 emissions, is a key component of this commitment.

Initial emissions reduction targets were set within 18 months of joining the NZBA, focusing on the identified priority sectors under the established baseline, including housing. Decarbonization Actions and Levers, where prioritization is explained, are part of this strategy. The second round of target setting, encompassing additional relevant sectors, is scheduled for public disclosure in Q.

Significant gaps remain in Scope 3 data quality, particularly for small and medium-sized enterprises in the SEE region. NLB is committed to:

• Encouraging client participation in GHG assessments in collaboration with leading data providers.
• Continuously refining target-setting approaches to align with international best practices.
• Including facilitated emissions from capital markets into target setting and the overall target structure by 2026.

Targets related to climate change mitigation and adaptation

Target	Coverage	Scope(s) included	Scenario used	Unit of measurement	Baseline year	Baseline	2023	2023 relative to baseline	2030 Target	Relative to baseline
Power Generation	1 and 2	IEA NZE	t CO2	/t	2021	0.600	0.839	40%	1.070
NLB Group Commercial Real Estate	1 and 2	IEA NZE	kg CO2	/m²	2021	120	57	-53%	39	-68%
NLB Residential Real Estate	1 and 2	IEA NZE	kg CO2

Exclusion introduced in 2021, with the existing exposure to be phased out. The majority of exposure is covered by clients’ decarbonization plans. The increase in intensity stems from maintaining alignment with decarbonization goals. National Energy and Climate Plans do not exist outside the EU, and there are inconsistencies in Energy Performance Certificates.

NLB is financing at least 30% of new production in the most energy-efficient commercial buildings (<50 kg CO₂/m²) and at least 15% of new production in top-rated mortgages (A & B EPC class). A based approach is used for portfolio monitoring, ensuring transparency and consistency in tracking progress. Compared to the market-based method, which reflects emissions from electricity.

NLB Group Annual Report 2024

Overview

Average emissions intensity of the grid where consumption occurs. (v) NLB intends to forgo the utilisation of offsets to achieve its 2030 NZBA sector targets. Instead, the bank will monitor and will also engage with its clients to encourage them to formulate their own net-zero strategies, which may involve utilising carbon credits to offset residual emissions in accordance with scientific guidelines.

Key Highlights

NLB Group reports on progress for the first time since the disclosure of targets. Due to the reliance on publicly reported emissions data from clients, required for the calculation of sector emission intensity, effective data collection and stakeholder engagement are essential for setting emission intensity targets and monitoring progress. Data gathering plays a crucial role in this process.

Performance Overview

Scope 1 and 2 emissions data were collected from various sources, including annual disclosures, publicly available information, and direct communication with relevant stakeholders in the Residential Real Estate (RRE) and Commercial Real Estate (CRE) sectors. This comprehensive data collection process ensures that the targets reflect an accurate and thorough understanding of emissions.

Segment Analysis

The Group is enhancing internal systems for target monitoring and tracking. Individual sectoral specifics, such as scenario selection and specific decarbonization levers, are further detailed in the reductions within each sector.

Power Generation Target

NLB Group has set the target for its Power Generation portfolio on the Group level, guided by the IEA NZE WEO 22 pathway. In the NZ scenario, the global economy aims to meet its 2050 target. The scenario envisions an average energy efficiency of -0.005 tCO2/MWh across our power generation portfolio by 2050 and an interim target of 0.16 tCO2/MWh.

In 2023, NLB Group achieved a 13% reduction in emissions intensity for Power Generation, lowering it from 0.232 tCO2/MWh to 0.201 tCO2/MWh. The Group is financing renewable energy sources at the Group level, with key challenges including the need for unified data collection across the Group and the integration of Scope 1 and 2 emissions from engagement, incentivizing the development and implementation of decarbonization plans, including expanding renewable energy capacity and decommissioning fossil-based power production.

Despite NLB Group's significant exposure to renewable energy, progress will be contingent on these external incentives. Target science-based alignment, methodology, and decarbonization pathways are crucial for achieving these goals.

Year	Baseline	2030 Target	EoY 2023 Status
2020	0.295	0.195
2025	0.095
2030	-0.005	0.232	0.165
2035	0.201
2040
2045

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Iron & Steel Target

NLB Group’s target scenario for its Iron & Steel portfolio follows the IEA NZE 1.5°C pathway, aligned with global net-zero data from IEA scenarios. This scenario aims for an tCO2/t steel by 2030, set at the Group level. NLB Group’s 2021 baseline stands at 0.600 tCO2/t steel, already significantly below the 2030 target.

The steel industry can achieve net-zero through existing decarbonization plans. Key actions include supporting clients using low-emission technologies (e.g., electric arc furnaces) and ensuring clients with decarbonization commitments. Establishing carbon capture and storage networks will be essential for enabling steel producers to meet net-zero targets.

In FY 2023, NLB Group observed an increase in emissions from the baseline, primarily due to the unavailability of some client Scope 2 emissions data at the time of baseline calculation. Additionally, the portfolio's limited exposure to a small number of clients can lead to challenges, largely with clients already progressing in their decarbonization efforts.

The majority of our existing clients produce steel via the electric arc furnace (EAF) route using scrap steel, resulting in lower integrated steel production, as reported in the JRC Technical Report on Greenhouse Gas Intensities of the EU Steel Industry.

For less advanced clients, NLB Group aims to understand their needs as a strategic partner. Moving forward, NLB Group aims to facilitate the transition of integrated steel producers to the scrap route based on credible client transition plans. While this may lead to an increased environmental impact, it contributes to the decarbonization of production processes.

Commercial Real Estate Commitment

The commitment set for the Commercial Real Estate sector is guided by net-zero scenarios. This scenario envisions an average energy efficiency of 0.4 kg CO2/m2 across our CRE portfolio by 2050. This science-based trajectory is established for NLB d.d. in Slovenia, and national green transition targets in Slovenia, supported by legislation, further reinforce this objective.

To meet the benchmark, NLB will focus on financing the construction of commercial buildings and renovating existing commercial properties to enhance energy efficiency, including the installation of heat pumps. In FY 2023, the Commercial Real Estate sector saw a significant reduction to kg CO2/m2. This progress was supported by key activities, including the recalculation of the current emissions intensity, factoring in actual EPC data. However, challenges arose due to the...

Repository - Greenhouse Gas Intensities of the EU Steel Industry and its Trading Partners

Year	Emissions (tCO2/t steel)
	2020	2025	2030	2035	2040	2045	2050
0.839	-	-	-	-	-	-

---

NLB Group EoY2023 status Decarbonization Pathway IEA NZE 1.5 0C

NLB Group Progress

150	-	125	-	100	-	75	-	50	-	25	-	0
120	2020	2025	2030	2035	2040	2045	2050

Progress Reduction according to SBTi 1.5 0C

Figure 19: Commercial real estate Emission Intensity in kg CO2/m2
-68% Emission Intensity +40% 2021-2023 Emission Intensity -53%

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

The small portfolio size means that a single transaction can significantly impact the overall portfolio intensity. Additionally, the 10-year validity of EPCs in Slovenia does not reflect passive decarbonization.

Calculated to metered EPCs for commercial premises could also pose challenges, as metered EPCs account for full consumption at metering points, whereas calculated EPCs only account for...

The market only moderate demand for the best energy-efficient buildings, as they have substantially higher construction costs which are not always passed on to tenants. However, NLB d.d. of new production volumes in Slovenia is directed toward highly energy-efficient buildings (<50 kg CO2/m2) by 2030.

In FY 2024, this commitment was exceeded, with 85% of new NLB C reflecting strong progress toward the set commitment.

Residential real estate commitment

The benchmark scenario for Residential Real Estate is guided by the SBTi 1.5 °C pathway and data from 0.4 kg CO2/m2 across the mortgage portfolio by 2050, with an interim benchmark of 19.0 kg CO2/m2 by 2030.

As with Commercial Real Estate, the interim science-based benchmark is set to establish a robust baseline. Additionally, as part of the EU, Slovenia has national green transition targets supported by legislation.

In FY2023, NLB achieved an emissions intensity of 37 kg, continuing efforts to improve the energy efficiency of the mortgage portfolio.

Key activities during the reporting year included the recalculation of portfolio emissions intensity and despite these advancements, several challenges affected portfolio assessment, including the impact of the new EPC methodology and regulatory changes under the Regulation on the Efficiency...

Account for passive decarbonization or homeowner-initiated energy efficiency improvements. For properties without EPCs, emissions intensity was modeled using available real estate characteristics.

NLB set a commitment of at least 15% of new mortgage production in Slovenia to be in EPC classes A and B, with plans to increase this share over time. In FY2024, NLB exceeded this target, and the share of new mortgage production in NLB with official EPC data is steadily increasing, with the figure expected to rise further due to the mandatory EPC requirement for new retail mortgages.

Achieving net-zero carbon emissions in the real estate sector requires collaboration among all stakeholders – banks, governments, industry players, energy providers, and homeowners.

NLB efficiency new homes (EPC A & B) and expanding green loan offerings for retrofits, renovations, and heat pump installations. However, systemic change is essential, including stronger government...

NLB continues to develop innovative financial solutions to support modernization; achieving climate goals ultimately depends on grid decarbonization, regulatory action, and active homeowner participation.

financing is accessible to all homeowners, regardless of their property's current energy label. The Bank’s objective is to empower homeowners to make the necessary improvements and will

Figure 20: Residential real estate Emission Intensity in kg CO2/m2

NLB Group baseline 2030 target NLB G SBTi 1.5 0C Emission Intensity-14% 2021-2023

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

The data is not validated by any external source other than the limited assurance provider (for 2024). Share of renewable energy production in NLB Group in 2024 equals the consumption of s share of fossil fuels used dropped, while the share of renewable sources in total energy consumption was increased. This gives a clear sign that the measures which NLB Group has taken related to energy consumption and mix, please see the chapter Key actions - Operational emissions Net-Zero strategy.

E1-5 Energy consumption and mix

1	Consumption from coal and coal products [MWh]	-	-
2	Fuel consumption from crude oil and petroleum products [MWh]	7,013	7,156
3	Fuel consumption from natural gas [MWh]	3,368	2,980
4	Electricity, heat, steam, or cooling from fossil sources [MWh]	24,474	21,379
5	Total fossil energy consumption (calculated as the sum of lines 1 to 5) [MWh]	34,855	31,515
6	Share of fossil sources	10,408	9,917
7	Share of consumption from nuclear sources in total energy consumption [%]	20%	20%
8	Fuel consumption for renewable sources, including biomass (also comprising industrial and	-	-
9	Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources [MWh]	6,967	8,236
10	The consumption of self-generated non-fuel renewable energy [MWh]	7,021	8,279
11	Share of renewable sources in total energy consumption [%]	13%	17%
12	Total energy consumption (calculated as the sum of lines 6, 7 and 11) [MWh]	52,284	49,711

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Gross Scopes 1, 2, 3 and total GHG emissions

The table presents NLB Group’s gross emissions, encompassing both operational emissions and those arising from financing and investment. The methodology to calculate and disclose these emissions are detailed in the following sections, providing transparency and consistency in the NLB Group emissions reporting approach.

N/N-1	2021	2023	2024
Scope 1 GHG emissions	Gross Scope 1 GHG emissions	3,703	3,418	3,029	-11.4%
Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%)	-	-	17,127	-15.7%
Gross market-based Scope 2 GHG emissions	28,570	11,822	10,718	-9.3%
	Significant Scope 3 GHG emissions	Total gross indirect (Scope 3) GHG emissions	3,531	11,003	3,756	11,
Energy-related Activities (not included in Scope 1 or Scope 2)	0	0	1,573	-
	Upstream transportation and distribution	-	-	-	-
		Waste generated in operations	0	209	-54.8%
		Business traveling	0	326	446
Downstream transportation	-	-	-	-
Processing of sold products	-	-	-	-
	Use of sold products	-	-	-	-
	End-of-life treatment of sold products	-	-	-	-
		Downstream leased assets	-	-	-	-
		Franchises	-	-	-	-
Inves based	40,186	11,027	494	11,189,253	1.5%
Total GHG emissions (market-based)	35,804	11,018	996	11,182,844	1.5%

Note: The measurements are not validated by an external body other than a l

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

20: Operational Carbon footprint of NLB Group (excluding Financed emissions Category 3.15 and including new Category 3.3 in 2024)

Name	Year	Description	Unit	2019 Total	2020 Total
Scope 1-2	Emissions from Scopes 1 and 2	[tCO2 eq]	36,935	37,789	35,804
		Scope 1	Total Scope 1 emissions	[tCO2 eq]	31,922	33,948	32,273
		Scope 1.2	Vehicle fleet	[tCO2 eq]	3,680	818	704
Scope 1.3	Refrigerant	[tCO2 eq]	1,882	1,447	1,720
Scope 2	Total Scope 2 emissions	[tCO2 eq]	28,247	7,542	7,243
	Scope 2.2	District heating and cooling	[tCO2 eq]	6,250	6,188	6,666
Scope 3	Total Scope 3 emissions	[tCO2 eq]	5,013	3,842	3,531
	Scope 3.5	Waste	[tCO2 eq]	-	-	1,573
	Scope 3.6	Business travel	[tCO2 eq]	185	326	446
Scope 3.7	Employee (work)	[tCO2 eq]	-	-	-

NLB Group continues to reduce its environmental footprint on Scopes 1 and 2, where the substantial amount of operational emissions is due to the introduction of the new category (3.3), as well as a moderate increase in business travel and employees commuting (due to the rise in the number of employees).

Significant changes affecting year-to-year comparability in the GHG emission report for the year 2024, the main changes to pre-2024 reporting include the reporting of Scope 3, Category 15 financed emissions in 2022, but without inclusion of Scope 3 client emissions, increasing the reported value, as they represent the majority of total financed emissions.

The 2024 report marks the first year where year-to-year comparability is possible, as the figure is based on both proxies and actual client data, meaning that changes in the reported emissions may result from updates to client data or adjustments in proxies. Changes in reported emissions may also reflect the perspective of lending activity and new business.

This approach ensures alignment with regulatory requirements, enhances transparency, and supports risk management under the Pillar III framework.

(3.3 Fuel—and energy-related activities not included in Scope 1 (well to tank—WTT) or Scope 2 (transmission and distribution losses—T&D)) was added for the year 2024, which has been adapted to entail the greenhouse-gas principle, which results in less than 0.5% of the total tCO2 eq difference.

Table 21: GHG Intensity based on net revenue 2024 Total GHG emissions

---

NLB Group Annual Report 2024

Overview

11,189,253 Net revenue (EUR thousands) 1,244,810 GHG Intensity-based per net revenue (market-based) (tCO2 eq/EUR thousands) 8.984 GHG Intensity-based per net revenue (location-based) 1,244,810 thousands) is reconciliated with the financial statements notes.

Methodologies, assumptions, and emissions factors

Aiming to report GHG emissions according to internationally recognised and neutral standards, the NLB Group's calculations follow the G are used:

• Corporate standard (Corporate Accounting and Reporting Standard)
• Corporate Value Chain (Scope 3) Accounting and Reporting Standard

We used the centralized approach reported to the corporate level, where GHG emissions were calculated. In terms of setting organisational boundaries, NLB Group used the financial control approach on a consolidated basis that the Sustainability Statement includes the parent bank NLB and all subsidiaries from when NLB obtains direct or indirect control over the financial and operational management and rece from 1 January to 31 December 2024. However, there are certain specifics, namely:

• Summit Leasing Slovenija and Mobil Leasing, Zagreb were acquired on 11 September 2024; hence established on 21 October 2024. Hence, the reporting period is from 21 October to 31 December 2024.
• NLB Fondovi Skopje (previously Generali Investments AD Skopje) was acquired.

The subsidiaries in own operations are NLB as a parent bank and other financial core members: i) banks, ii) leasing companies and iii) asset management companies. The calculation of GHG emissions is based on individuals as per the following Scopes (operational boundaries):

• Scope 1 – direct emissions
• Combustion of fuels
• Company-owned vehicle fleet (internal combustion engine)
• Scope 2 – indirect emissions from purchased energy
• Electricity consumption (both location and market-based)
• Owned vehicle fleet – electric vehicles and PHEV (included in electric categories; for more details, please see exclusion list)
• Scope 3 – other indirect emissions
• 3.1 Purchased Goods and Services: use of paper and water supply
• 3.3 Fuel- and energy-related activities not included in Scope
• Waste Generated in Operations
• 3.6 Business Travel
• 3.7 Employee Commuting

Because some NLB Group entities are located at the premises of another Group member, the reporting follows a locally consolidated approach. For more details on operational boundaries, please see the table below and the chapter Exclusions. Even though NLB Group started reporting its operations, it has been harmonized with the Portfolio Net-Zero Strategy and ESRS demand and reset its baseline year to 2021. Scope 3 category 15 – Investments NLB Group calculates its portfolio (financed emissions).

However, disclosures of financed emissions are aligned with the requirements of the Pillar III disclosure framework, ensuring banking sector comparability, regulatory compliance, and year assessment of financed emissions across sectors, supporting risk management and alignment with industry benchmarks. By maintaining methodological consistency, the Group enhances the...

regulatory requirements. Application of the Partnership for Carbon Accounting Financials (PCAF) Standard ensures consistency with industry best practices and regulatory expectations. T institutions, transparency, and alignment with international reporting frameworks such as the Greenhouse Gas Protocol (GHG Protocol) and the Task Force on Climate-related Financial Dis assessment of financed emissions across asset classes. The Group has recognised greenhouse gas (GHG) emissions data as the primary and crucial factor when assessing the level of transition.

the data obtained directly from the clients. While operating in a region where such information is not commonly available, the Group supports the clients with the know-how and motivates NLB Group Annual Report 2024 244 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N to data limitations, particularly in sectors with scarce primary disclosures, the Group applies proxy data and sectoral benchmarks where necessary. The calculation is based on the following perimeter defined under Pillar III rules, encompassing exposures in the banking book. This includes the Gross Carrying Amount of loans and advances, debt securities, and equity instruments.

financed emissions assessment specifically focuses on non-financial corporations, considering direct and indirect emissions from financial activities such as lending, investing, and financing from the calculation while not materially contributing to direct emissions. Emissions related to the retail portfolio (mortgages, vehicle loans) are not subject to Pillar III disclosures.

• financed emissions. The data is provided by the clients using questionnaires.
• Whenever client Scope 1 and Scope 2 emission data are not available, the Group uses proxies provided by with a proven background. Proxies are calculated at the lowest possible granularity level, considering the available data for each country where NLB Group operates. However, granularity proxies delivered by IJS express the average economic intensity of each industry and are primarily used for portfolio emissions calculations, as well as for target setting and decision-making.
• Scope 1 and Scope 2 emissions of each client by multiplying the value of a specific proxy with the revenues of a client.
• When client Scope 3 emission data is unavailable, NLB uses proxies.

the ICE's dataset was also used in the ECB’s economy-wide climate stress test. ICE collects data from public sources, which undergoes statistical treatment and rigorous checks, with v statistically treated, with transparency on the source. Based on the client’s industry code and revenues, the Group calculates the Scope 3 emissions of each client by multiplying the value Scope 2 calculations.

Attribution methodology follows the PCAF’s financial exposure-based attribution model, allocating emissions based on a loan or investment’s proportional contribution to balance-sheet data as Gross Carrying Amount / (Short-term Financial Debt + Long-term Financial Debt + Equity). Finally, financed emissions are calculated by multiplying the attributed emissions obtained from the client or calculated using proxies.

Scopes, metrics, emission definitions, emission and conversion factors for operational emissions are detailed in Appendix 2-Method.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

22: List of exclusions

Scope 1	Exclusion	Fuel combustion - Vehicle fleet (ICE)	Refrigerant
Included only in following organizations: NLB, NLB Komercijalna Banka, NLB Banka Skopje
Scope 2	Electricity (market-based)	District heating and cooling	Vehicle fleet (Electric, PHEV, Hybrid)
Scope 3	Purchased goods and services	Included use of paper and water.

Emissions of Scope 3 represented by paper and water emissions only, do not reflect actual emissions of these two categories. The cost for these two reported categories reached 115 MEUR in 2023. Paper and water are introduced in carbon footprint reporting in the future to be able to cover a substantial part of Scope 3 operational emissions. Based on 2023 figures non-included Scope 3 category 1 and 2 emissions of Bank Holding Companies – 130 t CO2 eq/MUSD. The reason for the non-inclusion of these Scope 3 categories is also reflected in the lack of reliable emission factors for emission sources to stimulate its suppliers to report their product emissions.

Capital goods Not included. Emissions of Scope 3 categories "3.1 – Purchased goods and services" and "3.2 – Capital goods (assets)", reported categories reached 115 MEUR in 2023. Asset emissions category will have to be introduced in carbon footprint reporting in the future, to be able to cover Scope 1 and 2 emissions account for 14,300 t CO2 eq (using US EPA Supply Chain GHG Emission Factors, Offices of Bank Holding Companies – 130 t CO2 eq/MUSD). Reason for non-inclusion of emission sources (goods, services and assets). Also, NLB Group has not yet used supplier engagement approach to stimulate its suppliers to report their product emissions.

Fuel- and energy-related Business travel - Employee commuting - Upstream leased assets Included in Scope 1 and 2 report. Downstream transport and distribution Not relevant. Processing of sold products Use of sold products has been included in the Group's gross emissions reporting for the year 2024. The transport segment, including leasing, along with the corresponding methodology for calculating financed emissions, reporting. This delay is due to data challenges related to vehicle-specific information, which are being addressed as part of the Group's ongoing efforts to refine and enhance its emissions data collection.

Portfolio (financed) emissions are calculated using the Partnership for Carbon Accounting Financials (PCAF) Standard; however, disclosures of financed emissions are aligned with the requirements for compliance, and year-to-year consistency in reported data. This approach enables transparent and consistent assessment of financed emissions across sectors, supporting risk management and alignment enhances the reliability of its disclosures, ensuring comparability over time while adhering to regulatory requirements.

Exclusions

---

NLB Group Annual Report 2024

Overview

Sustainable finance, including transition finance, has a high impact on the environment and society and is recognized as a strategic opportunity for NLB Group. It is firmly embedded in the related to sustainable finance are managed through ESG risk management in lending and investing. NLB Group offers its clients a diverse range of financing products and solutions to support leasing, sub-funds aligned with EU regulations promoting environmental and social characteristics, issuing green bonds, and investing in ESG-labelled bonds. This chapter outlines NLB Group's solutions to its clients. The organizational units responsible for each product regularly monitor progress against internally set KPIs. They report at least monthly to the management boards.

Accountancy note and reconciliation: Unless stated otherwise, reported data in the Sustainable Finance section refers to the financial statements note 5.6. Financial assets measured at amortized cost related to change-related adaptation and mitigation activities, NLB Group provides financing to various sustainable economic activities that meet the financial and sustainability eligibility criteria of the Framework (following ICMA Green Bond Standards). Financing Rules, and procedures stipulated in lending and ESG risk management policies.

Sustainable Finance Metrics and Progress

In 2024, total green financing for corporate and retail clients experienced a significant growth, with a 153% increase in new production. 2024 represents 54% of the 2030 target.

Table 23: NLB Group green financing in EUR thousands
(i) Green financing (in EUR millions)		31 Dec 2024	31 Dec 2023	Target 2030
Corporate New production volume	130,064	89,293
Retail New production volume	327,143	229,421	528,000
Total (corporate and retail) New production volume		438,646	287,496
	Outstanding stock volume

Green lending classification refers to the internal methodology of NLB Group, which refers to EBRD, MIGA, Green Bond and EU Taxonomy frameworks. If a loan is mapped to either, it is considered a green loan. To ensure a robust and standardized overview of green lending, this methodology will be fully aligned with CSRD, ESRS and EU Taxonomy within the regulatory framework. The discrepancy in the total sum reflects rounding in the budgeting of sub-categories. (iii) Targets were set only for outstanding stock volume.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Renewable Energy

• Electricity generation using solar phot
• Electricity generation using concentrated solar power
• Electricity generation from wind power
• Electricity generation from geothermal energy

Green Building

Energy Efficiency

Clean Transportation

• Interurban rail transport
• Suburban transport, road passenger transport
• Infrastructure enabling low-carbon road transport and public transport
• Electricity generation by motorbikes, passenger cars and light commercial vehicles

Pollution Prevention & Control

Sustainable Water and Wastewater Management

• Construction, extension and operation of water collection, treatment and supply systems
• Renewal of water collection, treatment and supply systems
• Collection and transport of non-hazardous waste in source segregated fractions
• Construction, extension and operation of wastewater collection and treatment
• Renewal of wastewater collection and treatment

Table 24: NLB Group sustainable financing and refinancing areas (non-exhaustive)

Areas that serve as a guide for NLB Group sustainable financing or refinancing, while eligible projects are defined in detail in the aforementioned frameworks and specified in NLB Group classifications of sustainability criteria, stakeholders’ needs and expectations, and regulatory requirements.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Leasing

Leasing companies in NLB Group integrate sustainability matters and IRO management ESG into its leasing operations, positioning these elements as important components of the purpose: The policy sets out a general framework for sustainability-related activities, being a harmonized version of the NLB Group Sustainability Policy and Standard, adapted to leasing principles as the parent bank.

Scope

All leasing companies. Summit Leasing Slovenija and Mobil Leasing, Zagreb, which were acquired in September 2024, will harmonize the Policy and Directors and Risk department (Coordinator for sustainable development) in leasing companies.

Availability

Register of Internal Acts. Domain-specific policies related to sustainability Co process of financing is covered by the Risk department. Several internal acts in NLB Lease&Go frame the process of financing ESG items for legal entities, such as: Lending Policy for NLB and NLB Group, Methodological Framework for Environmental and Social Categorization of Investments in NLB d.d. and NLB Group, Environmental and Social Categorization by for Non-Financial Companies in NLB d.d. and NLB Group, sets out the full list of cross-sectoral and sector-specific prohibited (exclusion list), restricted, and normal activities from the ES financing decisions and process.

Key activities

In 2024, Leasing companies in NLB Group financed sustainable vehicles in Slovenia, Serbia, sustainable projects in the field of renewable energy production, in particular solar power plants. Leasing companies in NLB Group was also actively involved in developing NLB Group’s aims to achieve the net-zero emission vehicle mix by replacing its fossil-powered fleet.

In line with the NLB Group Sustainable Car Fleet Management and Company Car Policy, NLB Leasing companies in NLB Group will actively participate in NZBA target setting for the Transport sector; finance green items for the purpose of Clean Transportation and Renewable Energy.

Group green financing at the end of 2023 and 2024 (in EUR thousands)

Year (EOY)	New production	Outstanding stock
2023	9,763	11,343
Leasing companies in NLB Group green financing

Classification refers to the internal methodology of NLB Group, which refers to EBRD, MIGA, Green Bond and EU Taxonomy frameworks. If a loan or financing is mapped to either of the standardized overview of green lending or financing, this methodology will be fully aligned with CSRD, ESRS and EU Taxonomy within the regulatory timeframes. (ii) Data refers to NLB.

NLB Group Annual Report 2024

Overview

d.o.o. Beograd. Data do not include the leasing companies Summit Leasing Slovenija and Mobil Leasing, Zagreb (acquired in September 2024) as they will perform classification of green onwards.

Metrics and Progress

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Management Policies

NLB Funds, Asset Management, Ltd. (hereinafter: NLB Funds) offers three asset management services:

1. portfolio management
2. mutual investment fund management

NLB Funds has adopted service-specific internal acts that determine how each service will be performed and how funds will be managed. While portfolio management services are performed in accordance with sustainability considerations, NLB Funds has established two sub-funds which promote environmental and social characteristics and related internal acts.

Sub-funds

The prospectus of the NLB Skladi umbrella sub-fund NLB Funds – Equity Socially Responsible Global Advanced Markets promotes environmental and social characteristics, and the sub-fund NLB Funds – Equity Environmental promotes environmental and social characteristics. The activities that are excluded for these two sub-funds are explained below in the section "Key activities".

Risk Management

This act also determines that the company manages risks in relation to mutual investment funds. To manage these risks, NLB adopted the Rulebook on Due Diligence of Investments and Tab Keeping and the Mutual Funds Risk Management Plan.

Most senior level accountable: Head of the Risk Management department.

Tender Document

Tender document including the Fund Management Rules NLB Funds – Green Transition I, Specialized Investment characteristics (for details see the section "Key activities").

Sustainability Risks

NLB Funds manages sustainability risks that are required by national and EU law in relation to alternative investment funds. The Alternative Investment Funds Risk Management Plan is in place.

Scope: NLB Skladi. Most senior level accountable: Risk Management department and the ESG coordinator.

Sustainability Policy

The Sustainability policy determines how NLB Funds will conduct its business operations sustainably. It defines business operations and that NLB Funds will adhere to the NLB Group exclusion list published on the NLB web page.

Scope: NLB Skladi; NLB Fondovi, Beograd; and NLB Fondovi, Skopje. The coordinator regularly (half yearly) reports. Availability: publicly available at: NLB Skladi web page.

Key Activities

NLB Funds offers two sub-funds which promote environmental and social characteristics. NLB Funds Beograd and Skopje currently do not have any such funds in their offer. The sub-fund NLB Funds – Equity Socially Responsible Global Advanced Markets (introduced in 201...) focuses on sustainable investments. Therefore, this sub-fund invests in issuers with above-average environmental and social awareness in their operations, provided that they respect good governance.

NLB Group Annual Report 2024

Overview

Characteristics promoted by this sub-fund has been determined as the required minimum allowable weighted average score of the environmental, social, and governance characteristics of a

Characteristics in such a way that it eliminates individual activities or sub-activities that it considers controversial. Such controversial activities or sub-activities in which the sub-fund will

Producers, energy, metals and mining, paper and forest-based industry, and road transport. The sub-fund NLB Funds – Equity Environmental (introduced in 2018) promotes a combination

Practices but does not invest in sustainable investments. Therefore, this sub-fund invests in issuers with above-average environmental awareness in their operations, provided that they respect

Environmental characteristics promoted by this sub-fund has been determined as the required minimum allowable weighted average score of the environmental and governance characteristics.

Key Highlights

In 2024, NLB Funds additionally launched an alternative investment fund named the Green Transition I, Specialized Investment Fund. This fund also promotes environmental characteristics

Renewable energy sources and any other projects related to the energy transition, provided that good governance practices are observed. As such this fund also adheres to Article 8 of Regul

Funds will be required to implement ESMAGuidelines on funds' names using ESG or sustainability-related terms as two sub-funds and the alternative investment fund have such terms in

Metrics and Progress

In 2024, compared to 2023, the total net asset value of these sub-funds has increased by 62%. Green Bond Policy NLB Green Bond Framework Content and purpose

Issuance(s) and key activities to meet commitments. The most relevant are (i) criteria for selection of the eligible portfolio (use of proceeds), (ii) how the portfolio is managed, and (iii) res

International Capital Market Association (ICMA) Green Bond Principles

With the following focus areas: renewable energy, energy efficiency, green buildings, clean transportation, sustainable

The GBF NLB can only issue any debt security to finance or refinance loans, assets, and projects with positive environmental benefits. The eligible loans, assets, and projects to satisfy the

Companies providing ancillary services (including asset management, real estate management, leasing, etc.). Most senior level accountable: While a Green Bond Working Group was established

With the NLB Management Board who confirm the GBF as well as the eligible portfolio and reports. Availability: The GBF is publicly available on NLB website: NLB Green Bond Frame

Green Bond Issuance

Inaugural green bond in a benchmark size of EUR 500 million in June 2023. The eligibility criteria, as outlined in the use of proceeds section of the NLB Green Bond Framework, take into

The intention to apply them on a best-efforts basis. In that respect, the Group will focus on compliance with technical screening criteria for determining substantial contribution to climate c

Marine resources, as well as pollution prevention and control. Key activities in 2024 were focused on building up the green bond eligible assets portfolio. This focus will continue to be a p

Committed to strive to allocate the full amount of the green bond (EUR 500 million) within 36 months after issuance (target amount), i.e. by 26 June 2026. The target amount was set on th

CIB stream) and Customer, Product Management and Digital Services (for retail stream) before green bond issuance. Based on the projections, it was concluded that the target is within rea

Meeting the allocation targets is followed monthly/quarterly, while progress is regularly reported on at the Sustainability Committee.

Table 26: Net Asset Value at the end of 2023 in EUR tho

Fund	NLB Funds– Equity	Environmental	Total Net Asset Value
2023	81,737	11,287	93,024
2024	128,539	22,519	151,058

Accountancy policy and reconciliation: The value in operations)

NLB Group Annual Report 2024

Externally, progress is reported with the publication of the NLB Green Bond Allocation and Impact Report. Based on the NLB Green Bond Framework, such report has to be prepared annually.

June 2024 on data as of 31 March 2024. The report reveals that the portfolio of eligible assets amounted to EUR 341 million, with 943 loans granted. The report underwent a limited assurance.

Report will be published in June 2025 and will be accessible on the NLB website. For 2024 disclosures, please refer to NLB Green Bond, June 2024 (English version only) on the NLB.

Table 27: Eligible portfolio - allocation by categories as at 31 March 2024 in EUR thousands

Allocated proceeds	Unallocated proceeds	CMA Green Projects Categories	Total amount of proceeds
206,499	158,890	Green Building	77,423
238	0.282	77,141	Clean Transportation
15,083	4088,119	6,964	Energy Efficiency
10,134	1	-	10,134
Total	341,110	943	40,372
-	-	300,730	ESG bonds in the

Strategy Content and purpose: When managing banking book debt securities, the portfolio reflects different characteristics in order to diminish the risk derived from within. This is described in the Monitoring and the Trading and Treasury Framework for Managing Debt Securities. While the former only sets the ESG as a component in the portfolio overview, the latter document includes...

Based on the 2021 Social Bond Principles (SBP), the 2021 Green Bond Principles (GBP), and the 2021 Sustainability Bond Guidelines (SBG) published by the International Capital Markets, the document for managing banking book debt securities and all banking members are obliged to comply. Most senior level accountable: Each banking member has its own debt securities portfolio (ALCO). Every quarter an overview of portfolios is reported to the Group ALCO. Availability: Register of Internal Acts.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

In 2024, the Group was actively present on the ESG-labelled debt securities issuances, whether primary or secondary, following the policy and the target related to the banking book of the Group’s ESG awareness in the debt securities portfolio is ensured.

Target and progress

The Group’s strategy is to invest at least the share of issued ESG debt securities on the primary basis. At the end of 2024, NLB Group had EUR 670 million invested in ESG-labelled bonds which represents 10.8% of the Group’s banking book debt securities portfolio and marked a 6% increase.

In 2024, EUR 373 million of ESG-labelled bonds were added into the debt securities portfolio which is 13% of the Group portfolio as of 31 December 2024 (in EUR thousands).

Green financing (in EUR millions)	Banks & corporate	Government and multilat. banks	Total	Purchased YtD in 2024
94,532	94,532	47,758	Total ESG	261,645
408,529	670,174	373,424	Total portfolio	1,007,434
	5,185,686	6,193,120	2,865,601

% of ESG

25.97%	7.9%	10.8%	13.0%

Accountancy policy and recognition portfolio refers to the financial statements notes 5.3. Non-trading financial instruments measured at fair value through profit or loss, 5.4. Financial assets measured at fair value through.

Distribution of ESG debt securities

1%	1%	26%	32%
Multilateral bank bonds & GGB's	Bank senior unsecured bonds	Government bonds	Covered bonds
Subordinated debt	Corporate bonds

---

Social Information

In this section, we report on three material standards: Own Workforce, Affected Communities, and Consumers and End-users. Our employee-related disclosures cover Work development, and Health and Safety, showcasing our commitment to a thriving workforce. We highlight our community impact through financing, regional development, sponsorships, and donations, quality, customer satisfaction, and cybersecurity, emphasizing our management of social IROs.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

GROWING PEOPLE

ENCOURAGE ENTREPRENEURSHIP

IMPROVING LIVES

We are ambitious, curious people who want to learn continuously. We are skilled professionals and share knowledge.

We are persistent in striving for continuous improvement. We support each other to learn and improve. We act together towards a common purpose.

We understand and embrace the changes. We are looking at everything through digital eyes. We are always going one step further. We are respecting our agreements and promises. We are proposing responsibility.

We are changing ourselves to improve the quality of life in our home region. We are advocating and applying sustainable practices. We show interest and understanding of the environment. We look for opportunity in every challenge.

S-1 SBM3 material

IROs and their interaction with strategy and the business model. At NLB Group, sustainable practices and human rights are the Group’s values which are key drivers of organizational culture.

Sustainability is also one of the core foundations of NLB's new 2025–2030 Human Resources Strategy, adopted in December, which supports Business Strategy 2030 (People and Culture pillar), focusing on the following key goals:

• Ensuring adequate skills and capacity across the business initiatives and across modern people management and development.
• Strengthening and streamlining HR processes.

The conducted double materiality assessment identified 4 material sustainability topics:

• Human rights of employees
• Employee attraction and development
• Diversity, equity and inclusion
• Cybersecurity

The Group continuously embeds sustainable principles into human resources internal documents, rules and procedures, initiatives, and practices which:

• Respect the human rights and labour rights enshrined in both domestic and international law.
• Ensure efficient addressing of diversity, in particular gender equality, in the highest governance bodies.
• Promote and ensure the safety, health, work-life balance, and well-being of employees.
• Attract and manage talents in order to drive local and international career development.
• Measure employee satisfaction through regular organizational culture and engagement surveys.
• Maintain high standards of labour management relations and social dialogue.
• Promote and implement training, awareness, and engagement.
• Build and promote a sustainability culture which is an important driver for successfully steering the sustainability and ESG agenda in NLB Group.

Table of NLB Group

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

29: Own workforce related impacts, risks, and opportunities (Working Conditions)

			Name of IRO	Description of IRO	Type of IRO	Location in the value chain	Time
Some employees	Office work results in long-term health impact, such as back pain, damaged eyesight and related issues, thus reducing their life quality.	Impact - Actual Negative impact	Own operations	Short-term
	Imparting knowledge about healthy habits, mental health, employee assistance support programs, and advocates activities that contribute to employees’ well-being and satisfaction. It fosters a healthy dynamic.	Impact - Actual Positive impact	Own operations	Short-term
	NLB Group has implemented numerous health-related initiatives aiming to have a positive impact on employee health. Health and safety measures are implemented to prevent accidents. No high-risk workplaces were identified during a workplace risk assessment in 2023.	Impact - Actual Positive impact	Own operations	Short-term
	NLB Group implements policies to ensure fair remuneration, adequate working conditions, and social dialogue to promote employee satisfaction and retention. This includes maintaining open communication with employees.	Impact - Actual Positive impact	Own operations	Short-term
	Through remuneration policies, NLB Group is ensuring equity.	Impact - Actual Positive impact	Own operations	Short-term
	NLB Group members are committed to establishing constructive relations among employees and management. This also includes open communication on relevant topics and informing employees and their representatives prior to the implementation of significant operational changes that could substantially affect them.	Impact - Potential Positive impact	Own operations
		Employees are covered by a Collective Agreement, which allows for stronger representation and better bargaining position.	Impact - Potential Positive impact	Own operations
(Employee Attraction and Development, DEI, Cybersecurity)	Employee attraction and development enabling trainings and skills development. NLB Group is continuously committed to leverage investing in training raises career prospects for employees and improved workplace satisfaction.	Impact - Actual Positive impact	Own operations	Short-term
	By investing in continuous learning opportunities, banks can improve employee performance, adapt to industry changes, and strengthen workforce engagement, ultimately.	Opportunity	Own operations	Short-term
	Enabling talent management and retention of talent ensures that the organization can maintain a skilled workforce.	Own operations	Short-term
	Effective talent management and retention strategies are essential for banks to maintain a competitive edge and drive organizational success.	Own operations	Short-term

---

Workplace Culture

Banks can attract top talent, reduce turnover, and ensure a skilled workforce that is committed to achieving long-term goals and enhancing service quality.

Opportunity

NLB Group has committed to reduce the gender pay gap, which in NLB in 2023. Gender pay gap may negatively impact work satisfaction of female employees and damage the company's reputation.

Employee Personal Data

Protection of employee personal data ensures privacy and fosters trust among employees, contributing positively to their sense of security and overall morale.

Impact

Regarding the protection of employee and customer data, it can significantly impact a bank's financial performance through potential data breaches that lead to costly remediation efforts, regulatory penalties, ultimately resulting in loss of business and diminished market value.

Risk

Downstream Short, Medium, Long-Term

NLB Group Annual Report 2024

Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Employee Classification in NLB Group

The conducted DMA and disclosures in this Social Information chapter relate to all employees who are and could be materially impacted by the Group.

• Employees: Individuals engaged by a contract with any NLB Group member, either full-time or part-time, and identified by an ID number.
• Non-Employees: Individual contractors signed contracts, and workers provided by third-party providers (NACE Code N78), such as HR agencies, institutions, and students.

As stipulated in the ESRS requirements, information will be reported on this employee type in the future, in line with the regulation at the time.

Identified IROs

Identified IROs, presented in tables on previous employees. For example, while the impact of office work on employee health is widespread in all countries where NLB Group operates, the Group acknowledges that at the same time, some employees (such as front-facing employees and security drivers) may be more exposed to work-related illnesses.

Material Negative Impacts

The identified actual material negative impact of office work on employee health is widespread in all countries. Specific groups of employees (branch staff, employees in vault, money transporters, etc.) may be more exposed to security issues.

NLB Group on Employees

NLB Group spans across material sustainability topics, which are described in the table of material IROs above. As a parent bank, NLB strives to harmonize related policies so that all NLB Group employees are or could be equally positively affected. These efforts have some limitations due to different legislations and socio-economic environments.

Opportunities Arising from Impacts and Dependencies

NLB Group relies on a skilled workforce to achieve strategic objectives and deliver complex financial services. Talent development is a key aspect of the Group’s strategy. The DMA reveals several material opportunities arising from impacts and dependencies as presented in the table above.

Impact on Employees from Transition Plans

The implementation of transition plans may have a positive impact and provide opportunities for new job creation, reskilling, and upskilling. These impacts will be adequately addressed in the further development and implementation of policies.

has established a strong policy on human rights, which prohibits any kind of forced, compulsory, or child labour and no minors under 18 years of age are employed in any of NLB Group members. The Group has also implemented due diligence mechanisms to monitor, identify, and act upon any deviations and incidents which may occur.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Accounting methodology and reconciliation:

For employee characteristic calculation in this chapter, the head count methodology was used as at December 2024. The number of employees at the end of 2024 in NLB Group members increased by 340 to a total of 8,322 employees. The increase was mainly due to the acquisition of Sum.

Table 33: Number of NLB Group employees by gender and countries (headcount)

Country	31 Dec 2024	Women	Men	31 Dec 2023	Women	Men
Germany	0	0%	0%	0	0%	0%
Kosovo	478	59%	41%	468	59%	41%
Montenegro	410	67%	33%	390	66%	34%
North Macedonia	995	65%	35%	962	65%	35%
Serbia	2,515	71%	29%	2,480	71%	29%
Total	7,982	69%	31%	7,982	69%	31%

Note: The measurement of metrics on this page was not validated by an external body other than the assurance provider (for 2024).

S1-6 Employee characteristic

Country	31 Dec 2024	31 Dec 2023
Bosnia and Herzegovina	1,025	990
Kosovo	478	468
Montenegro	410	390
North Macedonia	995	962
Serbia	2,515	2,480

Gender

31 Dec 2024	31 Dec 2023
Men	2,597	2,503
Women	5,725	5,479
Other	0	0
Not reported	0	0
	Total	8,322	7,982

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

34: Number of NLB Group’s permanent, temporary and non-guaranteed hours employees by gender and by country (headcount)

	31 Dec 2024	31 Dec 2023
Women	5,324	5,190
Men	2,456	2,386
Other	0	0
Not reported	0	0
Permanent employees	5,324	5,190
Temporary employees	401	289
Non-guaranteed hours employees	0	0

Table 35: Number of NLB Group’s permanent, temporary and non-guaranteed hours employees by country (headcount) - 2024

Country	Total number of employees
Bosnia and Herzegovina	1,025
Croatia	41
Kosovo	478
Montenegro	410
North Macedonia	995
Serbia	2,515
Slovenia	2,856
Switzerland	2
Total	8,322

Table 36: Number of NLB Group’s permanent, temporary and non-guaranteed hours employees by country (headcount) - 2023

Country	Total number of employees
Slovenia	990
Switzerland	1
Kosovo	468
Montenegro	390
North Macedonia	962
Total	7,982

Permanent employees: 909

Temporary employees: 81

metrics on this page was not validated by an external body other than the assurance provider (for 2024).

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Employee Turnover

Total number of employees who have left NLB Group banking members (headcount)

Entity	2024	Women	Men	2023	Women	Men
NLB, Ljubljana	256	180	76	221	155	66
NLB Banka, Prishtina	42	24	18	26	12	14
NLB Banka, Sarajevo	75	54	21	117	86	31
NLB Banka, Skopje	106	71	35	68	50	18
NLB Komercijalna banka, Beograd	326	219	107	507	382	125
Total	925	632

Gender Distribution of Employees Leaving NLB Group

Entity	2024	Women	Men	2023	Women	Men
NLB, Ljubljana	10%	70%	30%	8%	70%	30%
NLB Banka, Banja Luka	15%	72%	28%	14%	76%	24%
NLB Banka, Podgorica	10%
NLB Banka, Sarajevo	15%	72%	28%	23%	74%	26%
NLB Banka, Skopje	11%	67%	33%	7%	74%	26%
NLB Komercijalna banka, Beograd	14%	67%	33%	19%	75%	25%
Total	12%	68%	32%	14%	73%	27%

for 93% (7,725) of the total NLB Group employee headcount (8,322). Data from other NLB Group members were not available for 2024. (ii) The measurement of metrics on this page was

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Group, strong working conditions and human rights commitments are intertwined. The Group manages them through several policies and procedures, and pays a special attention to ensuring a safe and healthy working environment, work-life balance, enabling social dialogue, equal opportunities for all employees, ensuring cybersecurity (data and privacy), and enabling development.

The Bank’s own employees are set out in the Code of Conduct (described in the chapter Governance information). In addition to the Code of Conduct and Policy on Respecting Human Rights, several procedures are in place. The purpose, content, and availability are described for each relevant policy, while scope and accountability are common to all policies as follows unless stated otherwise in each.

Processes harmonization in all NLB Group members is in line with the Guidelines for the adoption of NLB Group documents (policies, strategies, methodologies, criteria, procedures, etc.), competence line and adopted by the competent body in NLB as the parent bank. As a rule, sustainability-related policies and other internal documents are adopted first in the parent bank NLB, and their operations are conducted according to the guidelines of the parent bank and local legislation.

Accordingly, the competence line defines the level of obligation: whether the NLB Group document is applicable to all NLB Group members. Most senior function accountable: The policies related to employees are in the custody of different departments, mainly human resource departments. The Policy on protecting personal data is in the custody of legal, the general affairs department, compliance, or IT. Departments are responsible for policy preparation, updates, and first-level implementation.

The Management Board or director of each NLB Group member is accountable for oversight of policies, while directors of designated departments are responsible for their operational implementation. Policies are published on the intranet site, making them accessible to all its employees. Description of actions, targets, and metrics related to material IROs and sustainability topics are included in the processes for executing activities to achieve the targets and further develop meaningful strategies related to employees.

Progress towards achieving targets and the effectiveness of activities are tracked regularly through internal reporting to the management bodies of each NLB Group member. Employees or their representatives are included in target setting where applicable, and sub-committees work with workers’ representatives, trade unions, and employees’ immediate superiors.

Human Rights Commitments

Human rights policy NLB Group members ensure fair treatment and protect the workforce effectively in accordance with local labour laws. To this end, the principles and provisions related to human rights are included in employment contracts, which are signed by each employee.

Human Rights in NLB d.d. and NLB Group

Content and Purpose

The purpose of the policy, adopted in 2023, is to set NLB Group’s commitment to respect human rights in accordance with Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the Environmental and Social Policy, and the OECD Guidelines. In addition to these, NLB follows the National Action Plan of the Republic of Slovenia for the Respect of Human Rights in Business.

The policy lays down principles and commitments related to NLB Group’s own operations, financing and investing, or relationships with other stakeholders. It also outlines diligence mechanisms throughout the value chain.

Scope

NLB Group employees.

Most Senior Function Accountable

The policy is in the custody of the Sustainability Department (or sustainability coordinators or legal and general functions), while the highest responsibility lies with the management boards of each NLB Group member. In addition, to steer the human rights policy, NLB has appointed a Human Rights Officer to oversee training and coordinate the development of due diligence mechanisms.

Availability

The policy is available to all employees in the register of internal acts and publicly on the NLB website.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Policy Principles and Commitments

• Employees have the right to a suitable and safe working environment.
• Employees are encouraged to pursue personal and professional development, with a focus on under-represented gender in management positions.
• Zero tolerance and prohibition of any form of harassment to ensure the dignity of employees and a work environment free from intimidation.
• Establishment of a complaint mechanism to express their opinions, complaints, and observations in confidence.
• Ensuring equal opportunities for women and men, i.e., equal treatment irrespective of gender.
• Adjustments to workplaces and work environments, in accordance with local regulations.
• Recognizing the fundamental rights of employees to form and join trade unions or other forms of representatives recognized in accordance with labour law.
• Considering the safety and health of employees to be of fundamental importance and giving priority to the continuous improvement of working conditions.
• Prohibition of forced and child and adolescent labour, human trafficking, and does not employ minors (under 18 years of age).

Rules on the Prevention of Harassment and Mobbing at Work

Content and Mobbing at Work or included these principles in corresponding instructions, training and other measures. The aim of this policy is to protect employees in the event of mistreatment and harassment and create a working environment in which no employee is exposed to mistreatment or sexual or other means of harassment by subordinates or superiors, colleagues, or anyone else who performs work for the Bank. All employees are made aware of the importance of the prohibition of ill-treatment and harassment, which they all consistently respect in their relations with all stakeholders of the Bank.

Key Activities

In 2024, NLB Group focused on the following activities related to the overall employee human rights approach:

• The NLB Group conducted an analysis of its operations regarding respecting human rights. The findings from this analysis started to be implemented in 2024 and will continue to be integrated into the development of the human rights due diligence mechanism and risk assessment.
• Additionally, NLB conducted an employee survey to evaluate the likelihood and severity of specific human rights issues. The survey identified the three most important rights: (1) working conditions, (2) the right to rest and leisure.
• These rights were included in the Disclosure Management Assessment (DMA) and are reflected in the identified material IROs and sustainability and inclusion.
• Other human rights, such as child labour, slavery, and forced labour, were not deemed significant due to high awareness and existing legislation in all NLB Group countries.
• The survey was completed in all NLB Group core members, contributing to enhancing employee awareness about human rights.
• Several grievance mechanisms are in place for all stakeholders.

---

Further addressed according to the severity of the breach. For details, see chapter S1-3.

To ensure realization of principles and commitments related to human rights NLB Group cond in respective sub-chapters in the remaining of Own workforce chapter: Working conditions, Employee attraction and talent development, Diversity, equity and inclusion, Cybersecurity rights incidents, complaints, and severe human rights impacts related to employees.

(i)	2024	2023
Total number of confirmed incidents of discrimination, including harassment	0	0
Number of complaints, fines, penalties, and compensation for damages as a result of the incidents and complaints	0	0
Total number of severe incidents (forced labour, human trafficking or child labour)	0	0
Total number

(i) Data refers to NLB Group banking members. Data from other NLB Group members were not available for 2024. The reports have been processed in accordance with the internal regulations and concluded with a preliminary report and no further investigation was opened because there were no indications of harmful behaviour. For others, the investigation did not identify any harmful behaviour. Measurement of metrics was not validated by an external body other than the assurance provider (for 2024).

We are aware that only a satisfied employee, one who feels the firm’s trust and care for his or her work/life balance and potential, will help us address the opportunities that await us. To nurture an management and family-friendly benefits with activities such as sports games, healthy lifestyle workshops, stress management, specialised medical examinations, additional days off, etc.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Working conditions

As resulting from the DMA, seven material impacts relate to working conditions and human rights and cover three main aspects:

• secure employment: enabling a low turnover
• healthy and safe working environment, prevention of work-related negative health effects, enabling a healthy work-life balance, raising awareness
• labour-management relations: enabling remuneration

Policy

Collective agreements Content and purpose: The general framework for secure employment is set by collective agreements or corresponding internal acts, adopted in line with agreements, see chapter Enabling social dialogue and collective bargaining.

Remuneration Policy of employees in NLB d.d. and in NLB Group

Content and purpose: This policy provides guidelines for members, and aligns the performance management system and remuneration across NLB Group. For core financial members, the policy aligns with the principles used by NLB and incorporates members, the principles of the remuneration policies are implemented through the employment contract. The policy defines fixed and variable pay, goal-setting, and performance criteria (KPIs) to EBA and ESMA guidelines, considering proportionality, NLB Group assets, and local labour laws. It ensures equal pay for equal work, regardless of gender, making it gender-neutral.

Key activities

Secure employment

All NLB Group members are committed to providing their employees with long-term employment security by offering indefinite contracts. However, fixed-term contracts may be issued. In Kosovo, labour law stipulates that an indefinite contract is automatically granted after 10 years of continuous employment with the bank. Adequate wage setting salaries above the market minimum, so no employee receives less than an adequate wage. For example, NLB conducts annual salary adjustments in accordance with the minimum wage assessment.

Employee performance assessment

Employee performance assessment is essential for ensuring fair remuneration. The foundation of performance evaluation is goal setting, which aligns with NLB Group’s business objectives followed by performance reviews goal setting meetings between the employee and their manager, who discuss:

• key employee goals for achieving the Bank’s business objectives
• goals (what, how much) and competencies (how, in what way)

Annual, semi-annual, or quarterly goal planning and key competency definition form the basis for performance appraisals, depending on the tasks performed by employees in the organizational unit. Other ongoing activities related to collective agreements include following the legislation, maintaining a dialogue, written contracts at the beginning of the working relationship, and enabling social protections coverage in case of major life events related to the employment (such as sickness, parental leave).

NLB Group Annual Report 2024

Performance review metrics

In 2024, it is estimated that 99%-100% of NLB Group eligible employees had a performance review, excluding long-term absentees (longer than half of the evaluation period), such as employees on parental leave or long-term sick leave, and conducting a performance and career development review.

Percentage of eligible employees with performance and career development reviews	99%-100% (69% women, 31% men)

Notes:

1. Data refers to all NLB Group members and includes all eligible employees, taking into account a general gender breakdown in NLB Group.
2. The measurement of the metric was not validated by an external body other than the assurance provider.

Adequate wages metrics

The general objective related to secure employment and fair remuneration is to increase the number of employees with long-term or permanent contracts (where applicable), taking into account job context, market conditions, local legislation, and employee satisfaction.

Percentage of employees paid an adequate wage	100%

Note: Data validated by an external body other than the assurance provider.

Safe and healthy working environment Policy

Occupational health and safety management system (OHS) content and purpose are based on the laws and regulations on health and safety at work applicable in each member state. On this foundation, NLB Group members have established internal documents, such as the Statement of the rights, obligations, and responsibilities of employers and employees in connection with the implementation and improvement of safety and health protection of employees at work.

The application of which achieves the prevention of injuries at work, occupational diseases, and other diseases related to work, as well as protection of the working environment. Protection is prescribed in order to preserve the mental and physical development of young people, to protect women from risks that could endanger the realization of motherhood, to protect health and reducing their working capacity, and to preserve the working capacity of older employees within the limits appropriate to their life age.

The statement also includes a risk and health management system based on legal requirements. Most senior function accountable: The Management Board of each NLB Group member. In addition, they employ professional workers for health and safety at work, who, together with the help of managers, take care of the implementation of measures to ensure safety and health at work.

Key activities

Ongoing activities to ensure a safe and healthy environment include:

• Risk assessment and incident investigation
• Health and safety training
• Work organizational units in charge of these activities

Occupational health risk assessments (technical and health risk) are conducted according to specific methodologies and on-site inspections. Emissions, regular safety training, and provision of personal protective equipment are implemented. Injuries are recorded, investigated, and measures are adopted to prevent recurrence.

Employees must report any workplace risks or incidents to their supervisor. If a danger is identified, they must stop working and inform their superior, who will act in line with internal procedures. Employees take part in regular obligatory (theoretical and practical) training on health and safety, fire protection, first aid, and evacuation. Employees who work in a higher risk position are provided with additional training.

NLB Group Annual Report 2024

Overview

Health and Safety Metrics

The general objective related to health and safety is to ensure working conditions for preventing work-related illness, injuries, excessive stress, and deterioration of health.

Health and Safety NLB Group Management System	100%
Number of Recordable Work-related Accidents (i)	29
Number of Recordable Work-related Ill Health	0
Number of Days Lost to Work-related Fatalities	0

(i) Work-related accidents relate to employees (non-employees excluded) and were recorded only in NLB Group banking members, with share ranging from 0.26% to 0.7% accounts for 93% (7,725) of the total NLB Group employee headcount (8,322). Data from other NLB Group members were not available for 2024.

(iii) The measurement of metrics was not consistently prioritized.

The Group consistently prioritizes imparting knowledge about healthy habits and advocates activities that contribute to employees’ well-being and satisfaction. It fosters a healthy work environment.

Policy

Family-friendly measures, regulation on remote work, and the right to disconnect. Content and purpose: The general framework for enhancing awareness and implementing the Policy on Respecting Human Rights, and the Sustainability Policy.

Some NLB Group members have adopted special regulations and instructions related to work from home (hybrid, remote) implemented in other acts defining the employment relationship. Also, some Group members have internal acts defining measures and processes on creating a family-friendly company.

Operating in Slovenia adopted the Policy of the Right to Disconnect, transposing the EU directive, which ensures that employees have the right to disengage from work-related electronic communications, protecting their health and well-being.

Most senior function accountable: Directors of HR departments or similar functions in each NLB Group member.

Key Activities

Family-friendly measures for work-life balance. These measures are continuously implemented and developed across all NLB Group members, with NLB and NLB KB holding national certifications from Ekvilib Institute.

Representatives monitor progress, provide reports, and discuss improvements.

• In NLB, 27 measures are in place, out of which 11 measures are related to family benefits.
• See the full list: team for coordinating work-life balance; external/internal communication; work-life balance training for leaders; work-life balance survey; scholarships for employees' children; financial panel discussions on work-life balance; family day.

In October 2024, NLB Banka Banja Luka signed a Memorandum of Understanding with the United Nations programme to promote...

Countries without a family-friendly certificate, NLB Group members adopt individual measures to support working parents and provide family-related leaves in accordance with the law, significant life events, and limited overtime. Parental leave is enabled for female and male employees in all countries. In addition, banking members allow both genders additional family-related leave.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Enabling Social Dialogue and Collective Bargaining

NLB Group members are committed to establishing constructive relations between employees and management, maintaining high standards of communication on relevant topics and informing employees and their representatives prior to the implementation of significant operational changes that could substantially affect them. The outcome of social dialogue between employees’ representatives is a general framework stipulating the rights and obligations of the employer and employees in relation to the employment law in the countries of their operations and are respected by all NLB Group members.

The Collective Agreement regulates all matters of importance for the employment relationship, rights, obligations, duration, working hours, health and safety at work, professional training, protection against discrimination and abuse at work, and the right to freedom of association. In addition, where applicable, representatives; for example, in NLB the Workers and Management Act and the Agreement on Cooperation between the Workers’ Council and Employer have been established.

Scope: All NLB Banka Banja Luka, NLB Lease&Go Srbija and NLB Fondovi Srbija have established collective agreements. In countries where the collective agreements are not adopted, NLB Group members are respected. Most senior functions accountable: The Management Board and in some entities also the Supervisory Board.

Key Activities

In NLB Group members with established collective dialogue was conducted with established trade unions across all NLB Group members, resulting in renewed collective bargaining agreements:

• NLB: Valid for 2 years, from January 2023 to April 2026.
• NLB Banka Skopje: Valid indefinitely from October 2024.
• NLB Banka Podgorica: Valid for 5 years, starting December 2023.

NLB Banka Banja Luka, NLB Banka and Kosovo there is no general collective agreement or collective agreement for the financial sector, hence workers' rights are regulated by the Labor Law and by-laws. Therefore, these three follow the NLB Collective agreement as a best practice. NLB Banka Prishtina does not have a representative trade union, while in NLB Banka Sarajevo and NLB Banka Banja Luka those are established.

Please refer to the chapter S1-2.

S1-8 Collective Bargaining Coverage and Social Dialogue

The general objectives related to social dialogue and collective bargaining are to promptly discuss relevant opinions or consensus.

Table 43: Social Dialogue	31 Dec 2024
The percentage of employees covered by collective agreements	94%
Notes:	The measurement of the metric was not validated by

Social Dialogue Coverage

Collective Bargaining Coverage	Social Dialogue Coverage Rate	Employees EEA	Employees non-EEA	Workplace Representation (EEA only)
0-19%
20-39%
40-59%
60-79%
80-100%

---

NLB Group Annual Report 2024

Overview

Employee attraction and talent development Policies

Human Resources and Organization Development Strategy for NLB Group

Content and purpose: A general framework for employee development and long-term business success. The Policy is complemented with the Standards for the Human Resources Business Line in NLB Group, the aim of which is to set up the standards for NLB Group employees.

Key Employees Management Policy in NLB

Content and purpose: Key employees are those whose departure from the NLB Group would mean a significant loss, for example, to define all significant factors and measures that contribute to increased and more successful commitment of key employees with the aim of improving their loyalty, efficiency, motivation, retention, and engagement.

Investing in key employees is a long-term process aimed at retaining the best employees, since this contributes to maintaining their high performance, engagement, and efficiency in the long labour market and will thus be profitable in the long run.

Policy on mobility within the NLB Group

Content and purpose: The Policy defines the frameworks for mobility within NLB Group and ensures compliance with the targets, values, culture, and strategy of NLB Group. Its purpose is to enhance agility and development of all employees within assuming complex assignments or positions (in particular managers, talents, key employees, successors) or for reassignment within NLB Group.

As the Group is present in different countries, it acknowledges different forms of employment and cooperation as the basic source of competitive advantage and business results of NLB Group.

Key activities

NLB Group makes the development of its employees its core value. By establishing a broad-based approach to training, NLB Group ensures that the team remains agile and well-versed in both traditional and modern practices, creating an inclusive environment where every employee has equal access to learning opportunities.

By removing barriers to education and development, mostly with the help of digital channels, the Group organization. In 2024, activities in the following areas were conducted in NLB Group members:

• NLB received the Top Employer certificate for the 9th consecutive year, and NLB Komercijalna Banka activities provided by the NLB Education Centre.
• Located in Slovenia, the centre follows trends in the market to predict vital skills and competencies that will have an impact on the Group.
• Through the Udemy platform, which offers over 7,000 training courses, available to all employees as self-paced learning.
• Some Bank members have internal coaches and internal trainers.

Notes:

(i) Data refers to NLB Group banking members (in EEA and non-EEA), which accounts for 93% (7,725) of the total NLB Group employee headcount (8,322). Adequate data from does not have collective agreement.

(ii) The measurement of metrics was not validated by an external body other than the assurance provider.

conducted mandatory e-training sessions based on legislation and financial industry specifics (in particular code of conduct, compliance, AML, anti-bribery and corruption, IT security, etc and topics, such as leadership, coaching, and an executive monitoring programme, innovation, sustainability and ESG, and diversity and inclusion. • NLB Group banking members conduct the successor programme.›› Please refer to the business report, section: Human Resources for additional descriptions of activities for the Bank’s own workforce.

Targets and metrics

In 202 (core financial members and NLB Digit), confirming a high employee engagement score (improved by 4 p.p. compared to 2023) and high net-promoter score. NLB Group banking members showing YoY improvement by 0.5 days, and exceeding 2030 target by 40%. The average sustainability-related training days per employee stood at 0.3 days, showing improvement by 0.13.

Employee engagement(i)	54%	50%	>50%
Employee net promoter score (i)	2623	>50
Average training hours per employee (ii)	46.2	43.2	33
Average training days per employee (ii)	7.7	7.2	5.5

(i Lease&Go, NLB Skladi) which are included in the regular annual survey. The survey sample included 7,709 employees or 92.6% of the total headcount of NLB Group (8,322). (ii) In line with Group banking members, which accounts for 93% (7,725) of the total NLB Group employee headcount (8,322). Adequate data from other NLB Group members were not available for 2024 assurance provider (for 2024).

Diversity, equity, and inclusion Policies

HR Strategy, Sustainability Policy Content and purpose: The general framework for diversity, equity and inclusion in the workplace is set out in the opportunities, and non-discrimination for reasons of gender, ethnicity, age, or any other circumstance, and to ensure efficient addressing of diversity, in particular gender equality, in the hi one of the main strategic directions of the new NLB Group HR Strategy 2025. The Strategy outlines the principles of embedding diversity, equity, and inclusion (DEI) in all elements of key members, taking into account their local specific and legislation.

Scope: NLB Group employees. Most senior function accountable: Management Board and HR directors or similar function activities in 2024 were as follows: • The HR department and Sustainability Team raised awareness on DEI group-wide with online sessions on topics related to DEI, reporting on the S. The Diversity Policy for the Management Board and Supervisory Board was revised. • To enhance the importance of diverse recruitment, this commitment was communicated transparently to diverse candidates but also signals to current employees that their unique contributions are valued and integral to the organization’s success.

• The gender pay gap analysis was conducted gaps and differences due to different structures and job positions in NLB Group members. The outcomes will serve as a foundation to prepare measures to reduce gaps.

Diversity m	NLB Group (all members) – number	226120	106
NLB Group (all members) – percentage	100%	53%	47%

Note: In line with internal methodology, which is harmonized among NLB Group members, the measurement of metrics was not validated by an external body other than the assurance provider.

Table 47: Age distribution as at 31 Dec 2024

Group (all members) – percentage	100%	10%	64%	26%

Notes: (i) Age distribution for all NLB Group members is estimated. Actual age distribution data included 8,174 employees, of which NLB were available (449 employees). For NLB Lease&Go Ljubljana, Skopje, Belgrade, Car and Go, NLB Muza, NLB Fondovi Skopje, Real estate Podgorica, NLB Interfinanz, OL Nekretnine, NLB S applying the same percentage breakdown derived from the available data and proportionally adding them to the respective categories. (ii) The measurement of the metric was not validated by an external body.

NLB group, we acknowledge that monitoring the gender pay gap and addressing related issues is important for providing an equitable and inclusive workplace. The unadjusted pay gap ref paying roles. As unadjusted pay gap compares the total salaries for men and women respectively, and it may be skewed due to outliers and different circumstances. These may include unde

overrepresentation of women in other, lower-paid positions. For this reasons, NLB Group has reported in previous reports on the adjusted gender pay gap, which measures differences in earnings.

It should be pointed out that gender pay is not the same as equal pay. Gender pay looks at the difference in the average pay between all men and all women employees; there is no direct or indirect pay discrimination on grounds of sex. This means that men and women should receive equal pay for the same work or work of equal value. The assessment of compensation is applied in an objective and gender-neutral manner.

NLB Group is actively preparing for the new EU "Directive of the European Parliament to strengthen the application of the principle of equal pay, transparency and enforcement mechanisms", which states that member states must implement the laws and other regulations necessary to comply with this directive by June 2026 and first report on requirements. The Group will strengthen its efforts to apply this vision. Current activities are focused on monitoring the data and systems to ensure adequate introduction of those requirements.

Gender Pay Gap

gender pay gap of all employees in NLB Group banking members (ii) 27% Annual total remuneration in NLB Group banking members (iii) 1:26 (i) Data refers only to NLB Group banking members were not available for 2024. (ii) The average unadjusted gender pay gap is calculated per employee as of 31 December 2024 and includes basic salary with seniority bonus. It is calculated as the difference between average gross basic earnings of male employees. (iii) The total annual remuneration ratio is based on remuneration data of all employees who were employed in each in power parity in the particular country for 2024. The annual total remuneration is calculated as a ratio between the annual total remuneration for the NLB Group banking member’s highest-paid individual. (iv) The measurement of the metric was not validated by an external body other than the assurance provider.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N

Cybersecurity

NLB Group pays special attention to assuring the confidentiality, integrity and availability of data, information, and IT systems that support internal processes used by employees in cybersecurity, which includes the protection of internet-connected systems from cyber threats. In 2024, information security governance was enhanced by establishing Group IT Security operations (New Horizons) and the conclusion of the current IT Strategy, work on the new IT Strategy for the period 2025–2030 is underway, which will address, among other topics, the cybersecurity on NLB Group level related to information security are presented.

Policies IROs related to cybersecurity are managed through various policies, guidelines, and instructions. The most overarching policies apply to all NLB Group members, taking into account the provisions of local legislation governing the protection of information, persons, and property. The most senior function accountable for implementation is available for employees in the Register of Internal Acts. In addition, the key contents are included in the mandatory annual training on information security.

NLB Group Information Security governance framework, adhering to the three lines of defence model. The aim of this is to ensure robust management and oversight of information security risks across function, CISO, and internal audit. The Policy emphasizes the importance of integrating information security into everyday operations, aligning with organizational requirements and internal safeguards to protect the confidentiality, integrity, availability, and authenticity of data, information assets, and ICT assets, thus enhancing the overall digital operational resilience.

The Bank provides Protection Act, the Companies Act, the Business Secrets Act, other regulations, and the principles of good practice defined in the ISO/IEC 27001:2013 and ISO/IEC 27002:2013 standard. The Policy is to ensure the continuity of critical business processes and to minimize IT security-related risks and damages by preventing and/or minimizing potential malicious events – IT security Group and responsibility allocation. It places IT security as a skilled specialized organizational unit (hereinafter: IT Security Function) within the Group.

The Group IT Security function is located within the local IT department but has a high level of independence within the local subsidiary. NLB Group IT Security End-User/Employee Protection Content for maintaining the overall security of information systems. The objective of this guideline is to establish comprehensive security practices applicable to all users within the organization.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Processes for Engaging with Employees and Workers’ Representatives about IROs

NLB Group members have established a general process for engaging with their employees. The Group is committed to maintaining high standards of social dialogue, and ensuring timely communication on various topics, including impacts, risks, and opportunities. Following the conducted DMA, NLB Group strives for a high level of consistency by using NLB practice as a guideline and adhering to local legislation.

NLB supports workers to form trade (or labour) unions and to freely associate through them. NLB has two workers’ representative bodies: a representative trade union and a workers’ council. In other NLB Group members, such as leasing companies, asset management, and others, trade unions have not been established. Therefore, the management boards of companies conduct meetings, management sessions, and meetings of organizational units, etc.

Processes for information, communication, negotiation, and complaints to or with representatives are defined in detail and established in local labour law legislation. For example, in NLB, the cooperation with the labour unions and the Workers’ Council is stipulated by collective agreements, the Act of Work, and the Employer.

Representatives in trade or labour unions collect information and questions from employees and take initiatives related to material impacts, such as collective bargaining, occupational health and safety matters, matters regarding employees with disabilities, and other work-related issues. In other NLB Group members, employees’ initiatives and requests are communicated through established channels or in person.

The engagement with workers’ representatives takes place frequently, regularly, at all relevant business decisions, and with established monitoring and representative trade union. Monthly meetings are held with the trade union on open topics. If open negotiation occurs, then meetings are in line with the negotiation process. The main topics of interest are related to working conditions.

Two representatives on the NLB Supervisory Board (at the time of the report) participate in discussions, and there is a designated individual assigned to cooperate in labour relations who coordinates and monitors the effectiveness of engagement with the trade unions and the Workers’ Council. In the case of business decisions, representatives' bodies are promptly informed or sought for opinion. These include decisions such as:

• dismissals of employees due to redundancies (economic, technical, organizational)
• regulations (internal acts)
• dismissal of employees who have committed a serious breach of work obligation

Deadlines for informing employees and their representatives prior to these decisions are established.

NLB Group Annual Report 2024

Overview

Range from 8 to 30 days, subject to the nature of the operational change. Operational responsibility for ensuring that social dialogue happens lies with senior managers or directors who are in on-going communication with management boards. This ensures that engagement results and other topics are promptly addressed and that decisions are made.

Key Highlights

Policies on respecting human rights and principles for diversity, equity and inclusion, NLB Group members include in their engagement processes all employees, regardless of their sex, race, or disabilities.

Business Report

NLB Group has a process and grievance mechanisms in place to remediate negative impacts and has established channels for its employees to raise concerns and complaints. In all NLB Group report (even anonymously) any non-ethical, inappropriate business practices or any potential or actual negative impacts on employees or the company, including any employee-related matters.

Grievance Mechanisms

NLB Group members themselves and do not involve third-party mechanisms. NLB Group employees can raise concerns through established grievance mechanisms. Employees may report:

• Dedicated e-mail address
• In person or by telephone to authorized persons for reporting and confidants under the local whistleblower protection acts
• Through other channels in place, department, authorized representatives in trade unions, etc.

NLB Group core financial members support the availability of these channels and increase trust in these channels and mechanisms through:

• Intranet sites
• Including a description of how to raise concerns in each specific internal policy
• Conducting training which raises awareness on speak-up culture

The channels are effective, and there have been no complaints or breaches of data identified or reported. All reports are examined in line with internal procedures, which are applied in a harmonized manner to all NLB Group members, i.e., number of reported and remediated cases, and takes appropriate remediation measures.

For details on grievance mechanisms please refer to the Chapter Whistleblower protection.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Group, as a financial institution, fulfills four main roles: employer, lender and investment service provider, procurer of goods and services, and facilitator of financial support and mentorship in the lives of many people, specific groups, and various communities in the region, including their economic, social, cultural, and other components of human rights. In addition, understanding research informs and contributes to the NLB Group's daily business activities, strategy, and business model. As the Group’s operations are centered around financial transactions and services through production, logistics, or distribution, it would represent material dependencies. Hence, the Group considers its indirect impacts on communities and related risks through its environmental, social, and governance (ESG) framework by identifying and evaluating the impacts and risks of the potential or actual client’s operations on the communities and by providing clients with green and transition financing.

The DMA considers its financing activities which are at the core of NLB Group’s business model. These impacts stem from green lending and investment, which are presented in detail in the chapter on Sustainability Policy. The Group also has an important social impact that goes beyond lending and investing. We actively support communities through sponsorships and donations. Through this, various segments of local communities are positively affected, either directly or indirectly. Material impacts and opportunities are embedded in the NLB Group’s Sustainability Policy.

SBM-3 Material impacts, risks, and opportunities, and their interaction with strategy and business model

Description of IRO	Type of IRO	Location in the value chain	Time horizon
Financing community and economic development	Supporting housing development in the region	By financing private organizations to meet a key social need.	Impact – Actual Positive impact
Supporting systemic financial stability	NLB Group is a key player in the regional monetary system; with prudent risk management.	Impact – Actual Positive impact	Downstream Short-term
Supporting regional economic development	Supporting regional economic development allows banks to strengthen local economies, create sustainable initiatives, and enhance their reputation as community partners while driving long-term growth and stability, ultimately benefiting both the region and the Group.	Impact – Actual Positive impact	Downstream Short-term
Supporting environmental and social initiatives	Group is supporting environmental and social initiatives through sponsorship and donations programmes.	Impact – Actual Positive impact	Downstream Short-term
			Impact – Actual Positive impact

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Policies related to affected communities

Managing NLB Group’s impacts, risks, and opportunities related to communities is included in the Group’s policies on financing, sponsorships, and donations programmes are stipulated in the Policy on Respect for Human Rights in NLB d.d. and NLB Group (presented generally in the chapter Overview section Key policies.

NLB Group is committed to respecting and preventing violations of human rights in its own operations and its value chain as well as acting on any detected violations established as a financing provider and contributor to society. The human rights commitment and policies do not particularly address impacts on indigenous people, as such groups are not to considering all ethnic groups equally and in line with its internal acts.

For additional information on respecting human rights in employee relations and procurement, please see the chapter financing community and economic development.

Content and purpose:

The key internal documents related to communities affected by the Group’s financing are the NLB Group Lending Group. As described in detail in the chapter E1 - Climate Change, the Environmental and Social Transaction Policy Framework sets out the ESMS (Environmental and Social Factors/Risk and impacts associated with transactions, i.e. financing NLB Group clients.

By this, NLB Group identifies and assesses environmental, social, including human rights, matters connected with Group banking members. Most senior level accountable: Directors of risk and sales departments in each NLB Group member. Availability: For employees in the Internal Acts Register, which is available on the NLB website.

NLB Group’s approach to human rights as financing provider

As stipulated in the Policy on respect for human rights and followed in daily operations, NLB Group indirectly engages in activities that are known to contain elements of human rights abuses and/or where such abuses exist. However, if human rights abuses are identified in existing clients' operations, NLB Group will act to prevent further abuses in the future.

NLB Group expects its clients to comply with all applicable human rights laws and standards and strive to uphold them as set out in the Universal minimum:

• identify and manage human rights risks.
• review potential human rights impacts.
• avoid causing or contributing to human rights violations.
• assess potential human rights risks with suppliers and clients.
• engage with their stakeholders and provide access to remedy where necessary.

To this end, respect for human rights is part of the due diligence process before signing ESMS system and ESG questionnaires that serve as a data-gathering and assessment tool for clients with larger and high environmental or social risk. Beside environmental and governance.

Client has put in place policies and measures relating to the social aspects of operations in the areas of human rights, equal opportunities / non-discriminatory practice, encouragement of prevention, ethical business conduct, employer relations / labour standards, whistle-blowing mechanisms, the company’s impact on the community/ society, programmes to support local social and human rights risks, etc. In addition, NLB Group in the document Manual Environmental & Social Industry Categorization by NACE and SKD Codes in NLB d.d. and NLB Group considers consumer rights as one of important components of human rights, which is intertwined with responsible client relations. For details on that please refer to the S4 – En NLB Group.

NLB Group Content and Purpose

This Policy defines the framework for sponsorships and donations in NLB Group members. Its purpose is to ensure that all activities in this area are aligned with the aim of this Policy to promote positive changes in the community and to strengthen the Group’s reputation. It defines rules and procedures for managing sponsorships, donations, and related mentoring; Environmental responsibility; Sustainable entrepreneurship; Supporting professional, youth, and para sports; Humanitarian activities; Culture and protection of cultural heritage marketing, brand, and communication departments in each NLB Group member.

Availability: For employees in the Internal Acts Register, while financing principles are included in the Sustainability Pillars (ESG) and the UN Sustainable Development Goals (UNSDG). Sponsorship applications are managed by the Social Responsibility and Corporate Governance Committee and forwarded to the Sponsorship Committee for a final decision. In contract negotiations, the Group strives to adapt to the needs of its stakeholders, actively listening and working together to ensure that their needs are met.

In 2025, NLB Group will enhance its formal due diligence process, incorporating human rights compliance checks to assess the suitability of donation and sponsorship recipients affected in respect of human rights by its financing and sponsorships. The Group provides the open door and speak up policy through various communication channels, and grievance mechanisms for concerns, which are described in detail in the chapter Governance. The Group also strives to increase the understanding of human rights topics in employee training and promote them in relevant discussions.

Through due diligence mechanisms, the Group monitors human-rights-related impacts, risks, and opportunities that could stem from financing, sponsorships, and donations in public debates and in the community to address them appropriately. In 2024, NLB Group identified one potential human rights violation related to working conditions among its stakeholders through sponsorships and donations. NLB Group engages with all stakeholders and offers access to remedies for potential negative human rights impacts: these processes will be further detailed in this chapter. NLB Group identifies human rights incidents through due diligence on corporate clients during procurement and, to some extent, among recipients of sponsorships and donations.

NLB Group Annual Report 2024

Overview

(ESMS), NLB Group has implemented an Early Warning System (EWS), managed by Credit Risk, to detect environmental or social incidents, including human rights violations such as

Group did not detect any severe human rights issues or incidents involving affected communities, employees, or procurement activities.

Human rights incidents detected – applicants/sponsorships and donations	0	0
Human rights violations confirmed	0	0

Processes for engaging with affected communities about impacts

NLB Group engages with affected communities on multiple levels. When financing local communities, such as municipalities, for other financing, especially projects that impact the community and are classified as Type A or D (based on environmental and social impact according to EBRD classification), additional financing undergoes a thorough due diligence process to ensure that environmental and social criteria are fully met. These criteria must be satisfied by all candidates seeking funding.

The most senior roles responsible for ensuring this engagement are the heads and directors of sales departments within NLB Group members. In sponsorships and donations, recipients of such financing cooperate regularly, with some interactions happening daily and at least monthly. The most senior role responsible for ensuring this engagement on the results, we determine further actions. At the same time, the Group listens to all partners and tries to assist in implementing their activities, if possible. Significant examples include:

• Sport for Youth across the region and all clubs in Slovenia under disciplines supported by NLB at the national level.
• Providing free NLB premises for press conferences or internal needs.

NLB Group is committed to respecting human rights and treating all its clients and communities equally, in accordance with internal policies and generally accepted standards. However, it pays special attention to ensuring that the needs of the most vulnerable within the community are not overlooked. For example, NLB Group has designed services for people with disabilities.

NLB Group strives for active engagement and dialogue with communities that are indirectly affected either by its financing or sponsorships and donations. This includes assessing the social situation and conducting occasional meetings with clients, local governments and municipalities, and organizations and institutions in local communities to discuss the needs, impacts, and to continue and improve the dialogue and collaboration practices, and consider upgrading and formalizing the engagement processes in the future.

S3-3 Processes to remediate negative impact

NLB Group acknowledges that some financed activities may pose environmental, social, and governance risks. Similarly, stakeholders or the wider community may still have concerns. To this end, NLB Group banking members have established several channels for all stakeholders, including affected communities, mechanisms for identifying and investigating, as described in the chapter G1-Business Conduct. In 2024, the Group did not record any complaints regarding negative impacts on the community.

Sustainability Matters

through the grievance mechanism or any other channels.

Key actions and targets

The DMA did not identify any material negative impacts stemming from the Group’s due diligence approach and mechanisms to address potential and actual risks, negative impacts, and provide remedies are described in previous sections of this chapter. On the other hand, actions, initiatives, and related targets that NLB Group has developed and implemented to provide and enhance its positive impacts are summarized below. NLB Group members are setting targets, tracking performance, or identifying lessons or improvements as a result of the Group’s financing, sponsorships, and donations. This engagement is performed indirectly through collaborations. The effectiveness of actions regarding financing community and economic activities is tracked regularly and reported monthly to the Management Board and quarterly to monitored, and for all key implemented sponsorships and donations, reports and project evaluations are prepared in the marketing or communication departments.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N Financing community and economic development

The general objective is to provide financing for the community and economic development in line with annual plans and opportunities. In 2024, significant projects exceeding EUR 5 million amounted to EUR 138,350 million, including green financing. For example, such projects include financing electric electrodistribution grids.

Sponsorships and Donations

In relation to sponsorships and donations, NLB Group has set the following general objectives:

• To provide financial contributions in accordance with the sponsorships and donations policy.
• To ensure that annually each CSR activity contributes to at least one UN Sustainable Development Goal.
• To leverage the indirect positive impact by including a clause that will require specific and mutually agreed actions of applicants to enhance their positive impact on society and the environment.

At the end of 2024, the majority of all sponsorships and donations are typically received by communities facing a crisis (for example, the floods in Bosnia and Herzegovina in 2024) or institutions addressing a significant, possibly long-term, social issue (e.g., Red Cross Slovenia) and cultural heritage (Institute for Cultural Heritage – MUZA). Sponsorships are directed toward communities where we can promote growth and development across various frames, health – Supporting Healthy Recreation – self-service bicycles rental, education – AmCham Hero) and targeting specific groups, for example youth.

Table 51: General Objectives and Progress Related to Sponsorships and Donations

Year	2024	2023
Donations (in EUR thousands)	2,187	12,008

In 2023 several donations were made of projects 436300 Increasing financial literacy and mentoring, Environmental responsibility, Sustainable entrepreneurship, Supporting professional, youth and para sports, Humanitarian activities SDG 99.7% 97% Notes: (i) Data refers to all NLB Group members. (ii) Accountancy policy and reconciliation: Reported values for donations refer to the financial statements notes 4.8 Other Group banking members – breakdown by contribution to UN SDGs, N= 436.

UN SDG Share of Projects Contributing to the Particular 1 UN SDG

UN SDG	Share of Projects
3 GOOD HEALTH AND WELL-BEING	11.49%
13 CLIMATE ACTION	6.52%
17 PARTNERSHIP FOR THE GOALS	5.73%
4 QUALITY EDUCATION
10 REDUCED INEQUALITIES	1.46%
8 DECENT WORK AND ECONOMIC GROWTH	1.36%
5 GENDER EQUALITY	0.92%

---

JUSTICE AND STRONG INSTITUTIONS

Peace, justice, and strong institutions 0.31%

1 NO POVERTY No poverty 0.25%

6 CLEAN WATER AND SANITATION Clean water and sanitation

14 LIFE BELOW WATER Life below water 0.12%

Total 100%

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Environmental Responsibility

We continue to create and support a variety of initiatives that aim to reduce carbon footprint, combat climate change, and increase positive impacts on the environment.

Goal 13 – Climate action

Goal 15 – Life on land

NLB, Ljubljana • The Bank continued the partnership as a Green Partner of the GLWF (Green Light World Flight) project, led by Slovenia.

Thus, we support and enable measurements of black carbon, in addition to carbon dioxide. The combined measurements serve as input and validation data for regional models of climate change.

The highest mountain in Slovenia. Complete renovation of the solar power plant in 2023 was followed by the energy renovation of the roof in 2024.

• The Bank continued the long-lasting partnership network to 230 city bikes.

• The Bank supports the Beekeeping Association with general sponsorship and with a significant donation towards the revival of the Anton Janša Beekeeping School.

Banka, Banja Luka • The bank supported the Balkan Solar Summit, which is dedicated to the promotion and development of renewable energy in the region.

NLB Banka, Sarajevo • The Bank supported parents at the Festival.

NLB Komercijalna banka, Beograd • Forests of Food – The Bank financed the planting of three permaculture orchards in agriculture schools in Serbia where significant sponsorships and donations by type.

CLIMATE ACTION

LIFE ON LAND

Increasing financial literacy and mentoring

At NLB Group, we are dedicated to counselling in the education.

Goal 4 – Quality education

Goal 10 – Reducing inequalities

NLB, Ljubljana • NLB Muza, the banking museum of Slovenia, which is also a financial literacy centre, had 8,131 visitors.

Visitors can play digital games and take quizzes, and learn or check their financial literacy in a fun way. The centre is widely accepted and enjoyed by school groups (2,688 pupils have visited it).

Crime throughout history, with an emphasis on how to protect oneself from cybercrime. The exhibition was viewed by 2,000 visitors.

• The Bank continued the Minicity initiative, which has made in finance in which 80,000 children participated, the Bank empowered prenatal families with crucial financial knowledge at three special education events.

• Partnering with Simbioza, NLB they navigate the financial landscape with confidence.

NLB Banka, Podgorica • The Bank educated 100 children from clubs that are supported through the NLB Sports for Youth project about financial literacy workshops, which were attended by about 500 children.

NLB Banka, Skopje • The Bank donated funds for refurbishing a reading room within the library in National and University.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Sustainable entrepreneurship

We create and support several initiatives that promote entrepreneurship, innovative thinking, economic growth, and inclusiveness.

Goal 10 – Reduced inequalities

In the Republic of Srpska, the Bank enabled the purchase of equipment that will enable blind, visually impaired, and hearing-impaired citizens to watch certain performances in the theatre repertoire.

Includes six months of education for young people (school of business skills, school of personal development, peer education for high school students, recycling for young people and/or the tour to indicate their position in society in an inclusive and positive way. It directly affected.

NLB supported the creation of a cafe (Zvuci srca cafe) in Pančevo, a place where people with developmental disabilities provided jobs for 10 people. Additionally, an estimated 100,000 citizens can visit the cafe, interact with its workers, and learn more about the pressing issues people face.

Sports

We promote positive values of sport, through support of various sports associations, clubs, and young athletes, whose talent and sportsmanship are an inspiration for all of society.

Goal 10 – Reduced inequalities

NLB, Ljubljana • In the 2024/2025 season the Bank is supporting 69 sport clubs within the NLB Sport for Youth programme. More than 11,000 participants are involved.

As part of the NLB Academy project, the Bank carried out 4 academies with more than 100 participants from Sport for Youth club representatives.

As part of the NLB Wheel project, the Bank donated two sports wheelchairs to support various sports activities via sports clubs.

The Bank sponsored a basketball camp, which promoted healthy living, transferring the knowledge of professionals to young generations.

Activities project (over 1000 children), and implemented the Special Olympics Macedonia "Young Athletes" programme for the cities of Kumanovo and Makedonski Brod. The programme is intended to improve children’s motor and social skills through sport and sports activities. The Bank also sponsored the Macedonian delegation in this competition.

NLB Komercijalna banka, Beograd

The bank supported different sport clubs around Kosovo. The largest initiatives are sponsorship of Handball Federation of Kosovo, the women’s league with 61 teams, and of the country’s most successful.

"Prava priča" and celebrated Pink October – 111 female colleagues underwent a preventive breast examination.

Goals

3 GOOD HEALTH AND WELL-BEING

5 GENDER EQUALITY

10 REDUCE INEQUALITIES

Charity and volunteerism. These initiatives are particularly aimed at socially disadvantaged groups of citizens or people in need due to various reasons and circumstances.

Goal 3 – Good health and well-being

---

NLB Group Donations

Donations with a total value of EUR 1 million in all markets of our operations in the home region. Our donation helped with flood relief in Bosnia.

NLB, Ljubljana

Donation and assistance in training young promoters of blood donation.

NLB Banka, Banja Luka

The Bank supported the Brave Hearts with Love organization, which helps people suffering from various support for children who need medical treatment abroad.

NLB Banka, Prishtina

The Bank continued to cover the costs of education and summer camp for vulnerable children, including children supported the humanitarian event Let's Dance for more than 130 mothers and children. The mission of this initiative is to help mothers and children who need support, and ensuring access to quality.

To the procurement of a medical device for an interclinic transport system for respiratory therapy for newborns for PHI University Clinic for Gynaecology and Obstetrics.

CLIMATE ACTION

INEQUALITIES

REDUCED INEQUALITIES

ZERO HUNGER

Through digitalisation and innovation, clients can access our products and services anytime and anywhere, with the added benefit of 24/7 personal support from our experts in the NLB Contact Center.

First in every way.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Relationship with clients and maintaining their trust is at the heart of NLB Group's business model. With more than 2.9 million clients, NLB Group is one of the leading financial groups, offering quality financial products and services, enhancing customer experience, efficient delivery, and regulatory compliance. Regulatory adherence fosters trust, safeguards the financial system, and the Group’s relations with clients are underlined with the following:

• Offer products adapted to clients’ needs, with marketing policies reviewed by specific committees, i.e. the committee for members.
• Ensure that the marketing and sale of products and related communications are performed regularly, in compliance with all applicable regulations, standards, and best practices.
• Reliably promote excellence in service quality, optimizing the client experience, measured by NPS (Net Promoter Score).
• Improve client experience and business performance by enhancing the experience process.
• Protect the confidentiality and privacy of client data and use them in a responsible manner.
• Provide information to clients in compliance with regulations so that they receive a timely and qualitative response.
• Provide client education on sustainability matters.
• Implement digital products and channels which enable better access to banking services and promote financial inclusion.
• Improve physical and digital communication channels to clients, focusing on people with disabilities.
• Uphold the highest standards of cyber- and physical security and therefore promote practices that maximize the security of its products and services.

The overarching internal acts defining the general framework and main principles for managing sustainability topics are established. In addition, the Group has established specific policies, processes, and actions that address material IROs and related sustainability topics, which are presented in the following chapters. The Group processes and actions within departments that are responsible for particular sustainability topics or IRO report to the management boards of NLB Group members at least once a year during the Sustainability Committee session.

Disclosures and underlying DMA span across five sustainability topics (see the detailed overview of IROs in the table on the next page). Unless specified, large corporate clients using the Group’s financing and investments products have several material positive (actual and potential) impacts identified across the downstream value chain and where inadequate or inaccurate information might be provided to a client, regardless of the client group. Actual and potential cyberattacks represent a significant risk in the whole financial sector.

The Group has set specific targets (where applicable) and KPIs, which are used for internal monitoring purposes. Clients are included in target setting indirectly, through expressing their general opinions.

NLB Group Annual Report 2024

Overview

Business strategy alongside inputs from market and other relevant research. Human rights commitments related to clients NLB Group policies regarding clients are embedded in the overarching Declaration of Human Rights and other internationally recognized frameworks (see the policy description in the S1 chapter as it refers also to clients). As stipulated in the policy, NLB Group ensures human rights through due diligence assessment and monitoring process in the Group’s lending policy and throughout the product life-cycle or during the timeframe of a client relationship.

We follow human rights commitments in client relationships. For example, we consider that the client’s right for inclusion and access to financial services, non-discrimination, and privacy are strongly connected with client’s human rights. In 2024, no cases of non-compliance with the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work, or human rights incidents related to clients were reported.

S4 Consumers and End-users

SBM3 Material impacts, risks, and opportunities, and their interaction with strategy and customers.

NLB Group’s material actual and potential impacts on its communities mapped to material sustainability topics

Name of IRO	Description of IRO	Type of IRO
Solutions enabling sustainable consumer behaviour	Introducing new products and services that allow for monitoring of financial data, sustainable finance options, tracking personal carbon footprint.	Opportunity
Solutions for easier access to banking services	Digital solutions for easier access to banking services enhance customer convenience and streamline transactions. By implementing online platforms, we reach a broader audience, ultimately driving customer engagement and satisfaction while adapting to evolving consumer preferences.	Opportunity
Protection of client data	Protection of client data is essential for maintaining the privacy and trust of customers, which could lead to financial loss.	Risk
Financial health and inclusion	Contributing to financial health of customers through the provision of necessary tools and support to manage their finances effectively.	Impact – Actual Positive impact
Service quality and customer satisfaction	Ensuring quality of services and client satisfaction leads to positive outcomes by enhancing customer experience.	Impact – Actual Positive impact
Responsible marketing and communication	Promoting financial literacy enhances customers' financial understanding and decision-making.	Impact – Actual Positive impact
Provision of quality information to clients	Ensures that they have access to accurate, timely, and useful information, leading to better financial decisions.	Impact – Actual Positive impact
Providing inadequate or inaccurate information to clients	Can lead to misunderstandings and poor financial decisions.	Risk

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Digitalization and Innovation

Digitalization is a key strategic priority for NLB Group, driving growth by streamlining processes, enhancing scalability, and boosting efficiency. In recent years, advanced digital services and channels have been introduced, including 24/7 opening of personal accounts and the full digital signing of documents in the digital bank, videocall functionalities with multichannel cards via SMS, implementing Flik P2M (Person to Merchant) at all POS (Point of Sale), and the NLB Smart POS solution on mobile phones to merchants, card management functionalities.

NLB Group prioritizes digital innovation by enhancing its technological infrastructure to deliver excellent client experience and maintain a competitive edge. By rapidly expanding digital channels across the organization, it aims to improve client satisfaction, streamline internal processes, and support paper usage reduction. Therefore, NLB Group is committed to growth by leveraging digital marketing channels and enhancing connections with clients.

In addition to banks, digital channels are integrated into the operations of asset management companies (within the NLB Klik application) and leasing companies (almost 80% of operations). Digital transition is firmly embedded in the new NLB Group Horizon 2030 Strategy. The strategy focuses on growth across three pillars: Retail, Corporate and Investment Banking, and Payment Services.

The digital business model is a key focus, including offering users advanced digital solutions (Klik, NLB Pay), modernizing digital processes in the Bank, and setting up a central IT hub. The policies for development and cybersecurity are described in detail in respective chapters. In addition, specific instructions and guidelines have been established for each digital channel.

Key Activities and Progress

In 2024, NLB Group banking members saw the following improvements:

• Launched in 2023, NLB’s new digital banking platform (NLB Klik) was recognized by an agency. Its implementation across all NLB Group markets is underway and will be concluded in the coming years.
• New digital bank launch in NLB Banka Sarajevo, NLB Banka Banja Luka (deposits, account overdraft, credit card limit, ordering a new credit card); NLB Banka Prishtina (consumer loan), NLB Banka Skopje (consumer loan).
• Strong focus on digitalizing clients to enhance digital penetration and channel utilization.
• Several awareness-raising activities among clients in under-digitalized segments, in particular the elderly.
• Electronic confirmation of invoices and application for online monitoring of the realization of daily activities in an individual process (according to delimitations and carriers) - the overview extended within the NLB Klik application (including umbrella fund investors and clients engaged in portfolio management).
• In leasing companies: NLB Lease&Go continued its journey.

---

more a customer-centric and service-driven focus around mobility. The most important milestone was acquiring the platform doberavto.si portal. The acquisition is in line with NLB's car market. The platform integrates value-added services such as financing options, vehicle insurance, and inspection services, offering users a one-stop platform for all their automotive processes and clients, and further enhance digital accessibility solutions. Additionally, the Group will prioritize digital security and fraud prevention by implementing advanced security measures.

Targets and metrics

In alignment with its strategic objectives and the UNEP FI Principles for Responsible Banking, NLB Group set a digital penetration target in 2021 to achieve 55% active by 2030. The 2025 target was surpassed in 2024 by 1.4 percentage points. In 2024, the Group increased the previously set digital penetration target from 70% to 80% and the additional goals target setting relied on market and client research and was embedded in the process of the development of NLB Group New Horizons 2030 strategy.

Cybersecurity and personal data protection regarding the protection of customer personal data can significantly impact the Group's financial performance through potential data breaches that may lead to costly remediation efforts, resulting in loss of confidence, ultimately resulting in loss of business and diminished market value. Protection of client data is therefore essential for maintaining the privacy and trust of clients. NLB Group ensures client data is secure by preventing unauthorized access and potential misuse, which could lead to financial loss. Moreover, collecting and processing some personal data allows the Group to adapt.

While information and cybersecurity policies are presented in the chapter S1-Own workforce, this chapter focuses on the data protection policy. Policies Rules on the Protection of Personal Data define the organizational structure and allocation of tasks and the basic rules of personal data. The purpose of the Rules is to define the fundamental principles and rules in relation to the processing of personal data in accordance with legislation applicable in the area of personal data protection. These include European legislation on the General Data Protection Regulation (GDPR) and the Slovenian legislation applicable in the area.

In the Data Protection Policy, the provisions are integrated into the Group’s processes and systems, including those related to client data. Scope: NLB and other NLB Group members who are subject to the GDPR and Management Board and appointed Data Protection Officer who professionally and independently assists the management in ensuring that the processing of personal data complies with the Rules.

Information is available for external stakeholders in branches and on the websites, for example: General Information on Personal Data Protection Informacija o vastvu osebnih podatkov - NLB focused on implementing measures to increase the Group’s cyber resilience and strengthen its digital capabilities. In 2024, key activities included enhancing cyber threat intelligence, improving the security of information systems. The Group also adheres to GDPR requirements in its daily operations. In line with the Data Protection Policy, several ongoing measures and activities are in place and GDPR legislation and carrying out regular risk assessments to identify and minimize personal data breaches and compliance risk. The DPO reports to the Operational Risk Committee.

and procedures for personal data and information protection (e.g. business secrets) are used in the Group’s everyday operations in the area of data protection. Thus, the Group ensures compliance from one country to another.

• Preventive measures and thorough control within the Group and in relation to outsourced providers and suppliers help prevent the loss or abuse of data and the violation of protecting client privacy was provided on the Bank’s website. The information includes reasons for collecting the data and their usage, clients’ rights and how to enforce them, contact information.

Personal data protection was conducted for all employees (it constitutes a work obligation). For a detailed description of activities and progress, please see the Business Report, chapter security and personal data protection.

Table 54: Digital banking usage in NLB Group banking members

Year	2021 Baseline	2023	2024 Target	2025 Target	2030 Target
Digital penetration (i)	29.5%	50.4%	5

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Financial health and inclusion Policies

On a high level, the principles of financial health and inclusion are included in the Sustainability Policy, and indirectly in all policies and other internal documents. Financial inclusion is about ensuring access to financial products and services and "leaving no-one behind". Although there is no specific policy in place addressing financial health and inclusion explicitly, it aligns with the Group’s core value of improving lives and the central principles of the 2030 Agenda for Sustainable Development, in particular two SDGs:

• 8 – Decent work and economic growth (Strengthening banking, insurance, and financial services for all)
• 10 – Reduce inequality (By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age)

Guided by the UNEP FI Principles for Responsible Banking, NLB Group promotes universal financial inclusion and in particular supports the financial health and inclusion of its private individuals.

Respect for Human Rights

As well as in policies and manuals and procedures that define the sales process. In terms of accessibility to banking services, which was deemed as material impact, the Group continuously enhances both physical and technological accessibility through our extensive branch and ATM network, digital products and channels, catering to individuals with disabilities and promoting financial inclusion and literacy.

The Group also places great importance on managing potential negative impacts, for example due to strategic optimization of physical network. While branches remain central, their role is evolving due to market changes and digitalization, resulting in fewer in-branch transactions. However, direct client contact in branches is still essential.

The document describes the critical role of branches in providing adequate levels of physical accessibility and client experience. It defines the standards and roles of branch offices to ensure a meaningful advisory role of the bank, improve client experience, and support clients in transitioning to digital channels and efficiency.

Scope: Distribution network, product and segment managers, responsible for Customer, Product Management and Digital Services or similar functions in NLB Group members. In addition, the Group has established policies and procedures to ensure employees, clients, and security risks.

Availability: Register of Internal Acts. Key activities and progress NLB Group has implemented several activities to enhance financial health and inclusion, financial literacy, and support for vulnerable groups (e.g., women, older persons, etc.). The most significant activities in 2024 were:

- Hearing loop devices in all NLB branches to enhance communication and facilitate financial services for hearing-impaired clients.

branch – a specially adapted vehicle, NLB Bank&Go, that enables clients access to banking services has been available to clients in smaller Slovenian towns where there have been no locations.

NLB continued its cooperation with the Association of the Blind and Visually Impaired of Slovenia. 58 ATMs throughout Slovenia have been installed to assist blind and visually impaired persons; through headphones, blind and visually impaired persons can withdraw cash or check their account balance.

In North Macedonia, NLB Banka Skopje upgraded the mClick mobile banking application to assist visually impaired clients in managing their mobile phones. In this way, visually impaired clients can have insight into all their accounts, perform all banking transactions, or apply for a mobile loan by using the voice guide.

In Prishtina and in Montenegro, NLB Bank Podgorica runs the Women in Business programme in partnership with the EBRD. The programme offers financial support and financial education.

The NLB Package for Financial Inclusion, in accordance with the Decision on Measures to Strengthen Financial Inclusion and Sustainable Bank Operations adopted by the Agency for Banking.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Various sponsorships and donations programmes to increase financial literacy were held in NLB (financial literacy centre in the banking museum MUZA, Money and Crime exhibition workshops for the elderly), and NLB Banka Skopje (financial literacy workshops for children). See the chapter Affected communities for details.

With the aim of promoting financial literacy, NLB published expert publications, used social media, especially Instagram, and participated in financial education events for youth, organized by the national newspaper Finance.

In 2025, NLB will implement legislation transposing the EU directive on digital accessibility effective June 2025. This will enhance accessibility and user experience in NLB's digital banking channels for people with disabilities.

NLB will be developing additional social/inclusion criteria in loan origination, which will be followed by developing monitoring and KPIs connected to social or inclusion loans. Targets and measures will focus on enhancing target setting and further developing relevant initiatives.

In line with UNEP – FI methodology, NLB, as the parent bank, defined the baseline and set two concrete goals to be achieved in the area of savings and investment plans as a key priority area:

• By 2030, NLB will increase by 15% the percentage of young clients (18–27 years) with products related to long-term savings and/or investment plans.

Targets for other banks in the region will be developed in the future. Also, the NLB Group will gradually develop initiatives.

Table 55: Financial Health and Inclusion for NLB 2024
Baseline	Target 2030
Number of young clients (18–27 years) with products related to long-term savings and/or investment plans	39%
	+15%

Accountancy Policy and reconciliation: The percentage (share) is calculated as the number of clients with at least 1 product related to a long-term savings and/or investment plans. The number of such clients represents a portion of 728,350, which is the total number of NLB clients and represents a segment of the total client base of NLB Group of 2.9 million, crucial for long-term income stability, especially for young clients.

The foundations for developing the targets were mostly the Slovenian government’s 2017 Strategy for a Long-Lived Society. The Strategy underscores the importance of early pension savings to ensure financial security in old age. Slovenia is experiencing significant demographic changes, with the elderly population increasing and a shrinking working-age population, which will strain the national pension system, with expenditures projected to rise from 11.8% to 15.3% of GDP by 2060.

The ratio of contributors to pensioners is concerning, as pensioners receive between EUR 700 and 800, below the poverty risk threshold of EUR 827, indicating financial instability for nearly half of retirees. Therefore, young Slovenians must prepare.

provide sufficient income. Service quality and client satisfaction NLB Group develops and delivers quality financial products and value to clients. Responsible product development, marketing quality and enhances client experience and satisfaction. Responsible product development Policies NLB Group members execute product development, marketing activities, and provide information rights, guidelines, and codes of professional associations. The general framework related to products and services for clients is set at the high level in the Code of Conduct and the Sustainability leasing companies. In addition, various specific policies and guidelines have been established, the most significant being related to product development, data protection (see details in the activities). Other internal acts define specific areas, such as segmentation and appropriate treatment of clients, the format and the frequency of contacting clients, or receiving and processing that create value for our clients and shareholders, and meet the client’s needs. The processes for approving new products comprise a preliminary review required for achieving these goals. NLB Group members must be involved in the process of important that every product is compliant with regulatory requirements, particularly in the areas of consumer protection, personal data protection, and prevention of money laundering and.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Policy for the Introduction of New Products and Substantial Changes to Existing Products

Content and purpose: The Policy describes NLB Group’s general approach to responsible product changes to existing products for private individuals and legal entities and products for financial markets. It is based on Slovenian and European legislation, including the Banking Law, EB applicable national regulations related to client loans, client protection, electronic business and communication, and protection of personal data. The purpose of the policy is to define:

1. the assessment factors for the introduction of new products and significant changes to existing products (before launching new or modified products, NLB Group members analyse financial, n assessments include evaluating ESG risks, defining mitigations, and specifying ESG-related product features).
2. minimum standards of the organization when introducing new products and of the area at the level of NLB Group banks with the aim of taking into account the interests, goals, and characteristics of consumers in order to prevent in advance damage for the bank and of the behaviour and the conduct of the Bank's employees, due to the composition of the product, its marketing, or other procedures related to the product offer, and to prevent a negative impact on employees involved in product development.

Most senior function accountable: The Management Board of each banking member oversees decisions on new and existing products, delegating this Committee reviews new products and marketing policies before offering them, to ensure that clients can have full confidence in them. The highest level of accountability for policy implementation is in each NLB Group banking member. Availability: Register of Internal Acts.

Key activities and progress

In 2024, NLB Group banking members introduced 46 new or substantially have had 12 sessions, additional sessions were held in other NLB Group members. In addition, sales process and front-line staff support was enhanced. ESG application API connection was the core system and transferring to DWH. A comprehensive sales guideline related to green loans for private individuals for front-line workers was introduced. They also participated in green client awareness and engagement for green products. Going forward, NLB Group will focus on refining its offerings, enhancing customer experience, further streamlining internal processes, and providing continuous training for front-line workers.

Responsible communication Policies

NLB Group manages material positive impacts related to the provision of quality information to clients, i.e. provision of quality information to clients on its policies, procedures, and activities as described in this chapter. Instructions for Implementing Marketing Communication Activities of.

marketing and communication process, aiming to standardize procedures and eliminate inconsistencies or legal issues within NLB Group's marketing and communication activities. It is gr marketing communication and public relations. The Instructions emphasize compliance with legislation, particularly the Consumer Protection Act, Code of Advertising Practice, Advertising marketing plans consider their impact on clients. The Instructions also stipulate transparency and fairness and full communication to the client by adhering to this instruction, NLB Group As the parent bank, NLB is a signatory to the commitment to implement sustainability standards in advertising (Slovenian Advertising Chamber) by 2030 or sooner. These standards are gr NLB Group banking members. Most senior function accountable: Directors of Communication or similar functions in each NLB Group banking member, while provisions apply to all emp processes. Availability: Register of Internal Acts.

NLB Group Annual Report 2024

Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N activities and progress NLB Group members execute the following key activities in their daily operations related to mitigating potential negative impacts and to managing actual positive impacts:

• products in accordance with their needs and income profile, and educate them about all of the aspects of a product, including potential negative consequences and risks.
• By using a va transparent, clear, and correct information, including clear and ethical advertising industry.
• Communication complies with regulations related to consumer rights, consumer protection unfair commercial practices, and guidelines and codes in the communication and advertising industry.
• The Group’s direct communication enhances financial literacy. For example, be responsible lending practices, such as keeping monthly obligations manageable and being aware of the risk of variable interest rates.
• In addition, several NLB Group members provide c as how to manage personal finances in various life events, how to improve saving habits or establish a contingency fund, and other aspects of financial literacy.

For additional information, these activities align with our business strategy, informed by market and client research, and client feedback comments, opinions expressed in direct communication in daily operations communication becomes actual, clients can access complaint or grievance mechanisms as detailed in the chapter Processes to remediate negative impacts – complaint management.

Tar annual Net Promoter Score (NPS) survey, which measures brand NPS, a widely used metric for assessing customer loyalty and satisfaction. It reflects the general recommendation of NLB constantly increasing throughout the years as a result of continuous service development, enhancement of the existing and development of the new products and digital solutions. In 2024, since 2019 remains positive. As a key performance indicator and integral part of NLB's strategy, the NPS results were thoroughly analysed, and an action plan was developed to enhance customer satisfaction.

methodology, which gauges customer sentiment and identify areas for improvement. It is calculated based on responses to a single question: "How likely are you to recommend NLB to a friend?" their scores, customers are categorized into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). The NPS is then calculated by subtracting the percentage of Detractors from scores indicating greater customer loyalty and satisfaction.

Table 56: Client satisfaction NPS - NLB Group banking members	2022	2023	2024	Target 2030
Average NPS	31	36	32	>50%

Notes: (dissatisfied (detractors) customers. The result for the NLB group banking members is calculated as a simple mean of individual banking members. The result for a single year is calculated as a mo

conducted in that year and is calculated as a mean of these two measurements. This represents a change in the calculation and reporting before 2024, where only the last measurement in a year was remediate negative impacts – complaint management. All NLB Group members strive to ensure a constructive dialogue with their clients and to resolve any disagreements, misunderstandings regarding the products and services. NLB Group members provide channels which enable them to raise questions, complaints, and concerns and receive a timely and qualitative response. Moreover, processes, and customer relationships. Therefore, the Group embeds complaint management into the overall client experience process and conducts regular employee training to improve the complaints channels, which are communicated and available to clients in branches and on the websites of NLB and other subsidiary banks in line with local legislation. For details on the Managing concerns about unlawful or harmful conducts.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Policies

Instructions for Handling Complaints

Content and purpose: The Instructions set the general framework for complaint management, defines types of complaints, and the two-level institutions responsible for extra-judicial settlement of customer claims (IRPS), and provides clarifications about the methods and procedures to solve complaints. Moreover, the harmonized group-wide include:

• fast, efficient, and professional complaint settlement at all levels of the process, and settlement of satisfactory reimbursement requests in a unified way.
• the formation of proposals for improvements with the purpose of preventing a larger number of complaints.

Employees involved in the complaint management and resolutions. Most senior function accountable: Directors of sales departments and head of branches with direct business relationships and procedures related to complaints are available to clients in branches and on the websites of NLB and other subsidiary banks in line with local legislation.

Key activities and progress

Regular monthly meetings were organized to align the mechanisms and methodology, to monitor and coordinate activities in the group, and to share our practice. NLB Group banking enabling consolidated reporting. Mandatory e-learning was conducted for all employees involved in the complaint process. KPIs were regularly assessed and reported quarterly to the Operations.

To complaints management includes number and share of complaints, average resolution time, and other indicators. The average share of all banking customers who complained annually constitutes the largest share in the total number of complaints, whereas the share of complaints in relation to the total number of card transactions was low, below 0.1%. To mitigate risk of card abuse, measures are in place to detect and prevent card abuse and raising client awareness of the dangers of online commerce and shopping, thereby contributing to risk management in this area.

In the parent bank NLB, 92% of all received complaints in NLB were resolved positively, which is an increase of 2 percentage points compared to 2023.

Table 57: Complaints in NLB Group

complaints	83,259
(i) The percentage (share) is calculated as a number of complaints divided by a total number of all NLB Group clients (active + other) in NLB Group banking members.

At the average remain extremely low, with only 0.0094% of investors submitting a complaint in 2024. The company approaches the potential gap in customers' financial product knowledge with great dissatisfaction. Leasing companies have established general internal procedures related to complaint management, which will be enhanced in the future by monitoring mechanisms.

engagement with corporate and retail clients to maintain their trust and transparency in the relationship with them. Therefore, the Group interacts regularly with clients directly through daily include regular personal communication with their customer relationship officer or branch employees, and contact centres, providing information and assistance via the website, phone, or engagement lies with sales, marketing, or communication directors in each NLB Group member. Daily engagement involves communicating the characteristics and impacts of the Group’s their financial decisions and maintain good relationship with the Group. In addition, clients’ feedback is collected through daily interactions, complaint management system and satisfaction account in decision-making. To manage the positive impacts of its products and services on the financial health of our clients, NLB Group financial members conduct regular desk-top and the Group’s product development and communication strategies. For additional information, please see the chapters Responsible communication and Client satisfaction metrics.

Governance Information

Several topics related to Business Conduct were identified as material, underscoring the critical importance of governance, compliance, and integrity at NLB Group. In governance, whistleblower protection, prevention of corruption and bribery, and prevention of money laundering and financing of terrorism. We also present ESG risk management, tax transparency stability (being thoroughly disclosed in other parts of the business report and in financial statements) are recognized as a material sustainability topic and are essential for effectively managing t

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Business Conduct

GOV-1 Role of administrative, supervisory, and management bodies related to business conduct

All NLB Group employees, including members of the management bodies, are expected to conduct themselves in a fair, responsible, and ethical manner, in adherence with the Bank’s compliance standards. The overarching framework defining NLB Group’s policy on responsible business conduct is the NLB Group Code of Conduct, with other internal acts defining in detail the rules and procedures for specific areas of business conduct. For more details, please refer to the chapter Policies.

Decisions, rules, and procedures regarding business conduct in managing impacts, risks, and opportunities in this area are crucial. Managers at various levels of NLB Group set the tone from the top as follows:

• Discussing the Code with team members to ensure everyone understands it, thus promoting the ethical culture in the NLB Group.
• Striving to achieve the values of the Group in accordance with the set principles and rules of conduct.
• Encouraging open, fair, and honest relationships among employees.
• Addressing issues as outlined by the Code.
• Setting an example through conduct and behaviour that embodies the values and meets the basic principles of NLB Group.
• Reacting swiftly to any perceived violations that would be contrary to legislation, prescribed rules, or the Code.

The management body and senior management members must demonstrate a high level of personal integrity and act in accordance with their actions and responsibilities in preventing and eliminating risks associated with the misuse of authority, functions, or other decision-making powers contrary to the Code of Conduct. The knowledge and expertise of management bodies regarding organizational culture and business conduct are critical components of corporate governance. Accordingly, board members complete annual training on topics related to business conduct, including anti-bribery and corruption, conflicts of interests, ethics, and the code of conduct.

Furthermore, adherence to NLB Group’s standards is a target included in the remuneration criteria for NLB Management Board members. In alignment with the NLB Group Governance Policy, board members across other NLB Group entities engage in processes to identify and assess material impacts, risks, and opportunities.

At NLB Group, we recognize that business conduct and organizational culture are complex and multi-dimensional. This includes incidents, as well as whistleblowing mechanisms derived from the ESRS. They encompass various other aspects critical for responsible business conduct in financial institutions.

NLB Group Annual Report 2024

291 Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

58: Impacts, risks, and opportunities related to Business Conduct (Corporate Culture)

Material Sustainability Topic	Name of IRO	Description of IRO	Type of IRO	Location in the value chain
Corporate Culture	An ethical and transparent corporate culture fosters trust, accountability, and integrity within the Bank.	By promoting open communication, adhering to ethical practices, and encouraging relationships, and build a positive reputation, ultimately contributing to long-term success and sustainability.	Opportunity	Own operations
		High standards of corporate transparency are essential for the BGroup to build trust with stakeholders and ensure accountability in its operations.	Opportunity	Own operations
		Enabling an ethical and transparent corporate culture compliance with regulations, ultimately leading to sustainable business success.	Impact – Actual Positive impact	Own operations
		Ensuring high standards of corporate governance, integrity, transparency enhances corporate reputation, ensures compliance with laws, and builds stakeholder trust.	Impact – Actual Positive impact	Own operations
		Integrating principles of ethical responsibility, improves customer trust, and supports long-term financial stability.	Impact – Actual Positive impact	Own operations
		Ensuring regulatory compliance.	Impact – Actual Positive impact	Own operations

Table 59: Impacts, risks, and opportunities related to Business Conduct (other topics)

Prevention of Corruption and Bribery			Opportunity	Own operations
Prevention of corruption and bribery fosters an ethical and transparent corporate culture.	By implementing robust compliance programmes, conducting regular training, and promoting a culture of transparency, the Group can safeguard its operations, contributing to long-term sustainability and success.		Impact – Actual Positive impact	Own operations
Prevention of Money Laundering and Financing of Terrorism	Preventing money laundering and financing of terrorism.	By implementing robust compliance programmes, conducting regular training, and promoting a culture of transparency, the BGroup can safeguard its operations, build trust with stakeholders, and ensure success.	Opportunity	Own operations
		Prevention of anti-money laundering and financing of terrorism system.	Impact – Actual Positive impact	Own operations
Whistleblower Protection	Enabling the protection of whistleblowers.	Enabling the protection of whistleblowers fosters an organization.

---

Unethical Practices Without Fear of Retaliation

Impact – Actual Positive Impact

Own operations Short-term ESG risk management

Management of ESG Risks

Effective management of ESG risks governance challenges that could impact its operations and reputation. By proactively addressing these risks, the BGroup can enhance resilience, improve decision-making, and attract socially responsible performance.

Opportunity

Own operations Short-, Medium-, Long-Term Adequate management of ESG risks. Adequate management of ESG risks ensures a strategic approach to environmental, social, and governance challenges.

Impact – Actual Positive Impact

Own operations Short-term Tax Transparency. Ensuring regular tax payments demonstrates corporate responsibility, supports public impact.

Own Operations Short-term Participation in Associations and Policy Discussions

Advocating for sustainable development through professional associations enhances its reputation and contributes to broader industry and societal change.

Impact – Actual Positive Impact

Own operations Short-term Financial performance. Ensuring sustainable financial performance of the company supports long-term growth, stability, and shareholder value.

Opportunity

Own operations Short-, Medium-, Long-Term management, ethical practices, and a commitment to long-term value creation.

By supporting regional culture and the arts, we inspire a sense of community that transcends borders. Our NLB MUZA programme combines banking, museum, and educational programmes, as well as...

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Corporate culture, ethical governance and integrity, and regulatory compliance

The Group is committed to ensuring an ethical organizational culture, compliance, and integrity across all NLB Group members. The principles for managing material IROs related to business conduct and to establish, develop, promote, and evaluate the corporate culture are laid down in the NLB Group Code of Conduct. The Code is based on the following conduct:

• acting ethically and responsibly and comply with the rules of the Code
• respecting colleagues and avoiding conflicts of interest
• preventing unacceptable practices
• adhering to the rules and comply with regulation
• prudent and ethical handling of assets and property
• being socially responsible

The Code of Conduct helps employees understand what is expected from each employee and other stakeholders within the NLB Group. Ethical governance, integrity, and compliance are deeply intertwined, especially as the Group operates in sectors that are highly regulated due to the urgency to ensure financial stability and prevent systemic risks. Hence, the Group’s employees are aware that compliance is beyond merely adhering to applicable laws, regulations, and standards. It also encompasses a robust compliance programme.

Compliance is therefore integrated into the Group’s daily operations to manage compliance risks. The NLB Group members are obliged to regularly (at least once a year) carry out training for all employees in the field of the Code. They also regularly and actively provide explanations regarding their use in specific situations faced by the employees. In addition, NLB Group members provide specific training on anti-corruption and anti-money laundering.

Policies such as the Code of Conduct and the Integrity and Compliance Policy are detailed below. The Group has established policies addressing specific topics related to fundamental principles applicable to each financial member, i.e., banks, asset management, and leasing companies. If certain policies need to be aligned with local laws, they are updated at the local level to ensure full compliance within each subsidiary.

They assess, monitor, and evaluate corporate culture through specific indicators and surveys on ethics and integrity. Consistency across all core financial members is essential. The compliance function is integrated into the Group’s daily operations, thereby contributing to a strong internal control environment and ensuring the effective management of compliance risks.

The implementation of the policies is subject to the principle of proportionality, based on the size and the core business of the specific member. Nevertheless, all members are required to adjust their work processes accordingly. Compliance monitors and exercises constant supervision of the meeting of requirements by setting clear communication on the expectations, ensuring regular training, or providing training as needed.

NLB Group Annual Report 2024

Overview

to address any compliance issues. Oversight is performed by the person in charge of Compliance and Integrity and focuses on areas based on the principle of risk. NLB Group Code of Conduct reflects the ethical business conduct that the Group respects and promotes. Operating with integrity and responsibility is key to the Group’s corporate culture. The Code demands that every employee operate with the highest standards of integrity. It also reflects the standards that we expect in our relationship with the rest of our stakeholders. NLB Group expects that all business partners and others share this attitude towards employees.

The summary is publicly available also in the NLB website (not subject to external review). Integrity and Compliance Policy of NLB and NLB Group comprise a comprehensive programme of compliance operations to meet the following goals:

1. Ensure compliance and integrity by meeting requirements, preventing violations, and fostering a compliance culture.
2. Prevent reputational damage.
3. Enhance legal protection for the Group and its responsible persons against liability for violations.
4. Strengthen NLB Group’s brand reputation and meet stakeholder expectations by adhering to high compliance and ethical standards, enhancing corporate culture and employee commitment.

Scope

Both internal documents are binding for all employees in NLB Group across all markets, including the management and supervisory bodies of each NLB Group member. In addition, their required behaviour. Exclusions include activities that are not directly related to NLB Group’s operations or where the Group has limited influence. Most senior level accountable: The Policy are published in the Register of Internal Acts, and each year internal meetings and workshops are held to explain the policy and its implications are organized. A summary of the Policy is communicated through relationships with stakeholders.

Key activities and progress

Respecting the Code of Conduct and the Policy is an ongoing activity. Managing concerns about unlawful or harmful conduct, NLB Group has established procedures to promptly, independently and objectively address issues such as bribery. The procedures include a strong mechanism for identifying, reporting, and investigating suspicions of harmful behaviour to report concerns about unlawful behaviour or behaviour that could incur property or non-property damage for the Bank, or unlawful conduct from the aspect of cogent regulations as well as general principles, or contrary to good practice.

Suspected bribery or any form of corruption must be reported and dealt with. The Group fosters an environment that encourages employees to set questions and discuss them with their managers, lawyers, or HR managers regarding fraud investigations, case handling, and protection of whistleblowers (or similar internal acts). In line with internal rules, the prevention of fraud, abuse, and other harmful conduct is necessary.

The Group’s commitment to the highest standards of corporate culture and the procedure for reporting are communicated through newsletters and other notifications and at mandatory training sessions. Employees have the option to submit a report directly to their supervisor, who then files the report with the Compliance department. Employees can report themselves through various channels, including an application (internal and external stakeholders), via e-mail to the dedicated e-mail address, in person, by regular mail to the dedicated postal address or post box (internal and external stakeholders).

The Group takes necessary steps to prevent all harmful conduct, including that which results from negligence. Upon receiving a report, the process is followed by preliminary testing. If all circumstances of the report are verified, appropriate actions are taken.

Prevention of Corruption and Bribery Policy

At NLB Group, we acknowledge that all employees may encounter situations that constitute or could constitute a conflict of interest. NLB Group practices, deeming them unfair, illegal, and harmful to societies and countries with corrupt practices. We expect the same commitment from our customers, business partners, and third parties.

Rules, guidelines, and procedures are set out in a comprehensive manner regarding bribery and the management of conflicts of interest.

Content and Purpose

The Policy establishes a baseline for behaviour in situations with identified corruption risks. The Policy outlines measures against corruption. The Policy is aligned with the Code of Corporate Governance for listed companies, the Slovenian Banking Act, EBA Guidelines on Internal Governance and the Regulatory Adequacy Assessment Process for Banks and Savings Banks. The Policy adheres to the principles of the United Nations Convention against Corruption (UNCAC) in terms of its core points.

Implementation

The Policy covers various aspects, including engagement with agents and intermediaries, hiring services of (former) civil servants, interactions with high (state) representatives, preventing nepotism, and ensuring that NLB Group members adhere to the policy. The level of implementation is subject to the principle of proportionality, based on the size and the core business of the specific member. Most senior level members may access the policy in the Register of Internal Acts. A summary of the policy is publicly available at: NLB Group anti-corruption and anti-bribery policy.

System and Activities to Prevent Corruption

As part of the fight against corruption and bribery, and in line with internal policies, NLB Group carries out several activities to manage related risks:

• Ensuring specific terms in written agreements and anti-bribery standards as a minimum requirement for investment and purchasing.
• Internal control mechanisms, including accounting controls, are in place for the anti-bribery assessment of risks of conflicts of interest and corruption in the case of external contractors and suppliers and other contractual partners of NLB and NLB Group through due diligence.
• Addressing these risks in day-to-day operations, through obligatory e-training for all employees in core financial members, awareness-raising activities in the field of prevention of corruption and relations with suppliers, including the topic in the monthly newsletter, and classroom and online presentations and discussions.
• All employees are included in yearly training and awareness for reporting suspicions of harmful conduct (internally and publicly available), including suspicion of corrupt conduct.
• All employees are responsible for rejecting any form of corruption.

Investigation Process

Otherwise, further investigation follows, as described in the chapter Managing concerns about unlawful or harmful conduct. The investigation is conducted efficiently, impartially, and the collected data and information ensured at every stage of the process. The investigation must run continuously and without unnecessary delays. Any suspension of the investigation and the subsequent actions may include:

• To confirm or dismiss the suspicion of harmful practices and to protect evidence.
• To establish any potential damage to the Group or the client and determine other individuals allegedly involved in the harmful practices.
• To identify potential risks and weaknesses in individual processes and provide proposals/recommendations for their elimination.

Following the investigation, subsequent actions may include notifying the whistleblower about the closure of the case, informing the HR department and the supervising director, and filing a criminal complaint.

Compliance Functions

Compliance functions (where separately established) check and control the respect of the basic principles in regular internal audit procedures and compliance review procedures as well as random activities to investigate suspected corrupt practices and bribery. Each NLB Group member ensures that accounting and other internal controls are established as part of the internal framework.

Risk Assessment

The Group also regularly assesses conflict of interest and corruption risks in accordance with the applicable methodology for the general assessment.

NLB Group Annual Report 2024

295 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N

misconduct through the established channels for reporting suspected misconduct, proactively disclose any conflict of interests, and adopt measures for the appropriate management of s employees act in accordance andare familiar with the rules of the policies on anti- corruption and bribery, and that these rules are implemented in the scope of their duties and powers.

within the procedures, which are detailed in the chapter Managing concerns about unlawful or harmful conduct. The investigation teams in NLB Group banking members are separate from principles, in NLB Group banking members the investigating function has been established for years and operates within the Compliance department. The organization differs in other mem size and organization of the member. Investigators handling suspicions of harmful actions constitute an independent investigation and provide objective findings, that are verifiable with th up measures. Among other harmful actions, investigators are responsible also for independent investigation of cases of suspected corruption or bribery. In NLB the investigation team hand coordination and support to the Group, and performs other tasks in accordance with the Whistleblower Protection Act.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB, the Director of Compliance and Integrity reports at his discretion (based on the risk assessment) on all measures imposed on perpetrators and on other activities directly to the Mana investigated are reported in regular quarterly reports. In the case of an investigation into members of the Management Board, the Director of Compliance and Integrity directly informs the banking members Compliance directly informs the Bank's Management Board about all measures and activities undertaken as a result of the investigation. The compliance function of a N annually, organizes training on preventing corruption and bribery, which that is mandatory for all employees (including the members of the management body). We consider that all employ 2024, the members of Supervisory Board and Management Board in the majority of core financial members also participated in classroom training; in others such training will be performed members (84.8% of all NLB Group employees) completed anti-corruption training.

Metrics and progress

In relation to harmful actions, NLB Group has established a standard of zero tolerance refers to all intentional actions of employees that represent harmful conduct for the NLB Group member and are as such defined by legal or implementing acts, internal legal acts, good bus applies to actions of employees committed with gross negligence – circumstances when employees should be aware of the possibility that their actions might cause damage to NLB or the 2024, there were no cases of convictions for violation of anti-corruption and anti-bribery laws and no fines issued for these matters in the entire NLB Group.

Table 60: NLB Group Incidents	bribery laws	0
Fines issued for convictions for violation of anti-corruption and anti-bribery laws (EUR thousands)	0

Prevention of AML and financing of terrorism Policy

Anti-Money-Launder NLB Group manages impacts and risks related to AML and CFT. The Policy lays down the key elements of the AML/CFT system, and the content and the scope of the tasks to be establish Policy are: implementation of the legislative requirements of the ZPPDFT-2 and guidelines of the supervisory bodies in the procedures and framework of banking operations and operation NLB Group, efficient implementation of the AML/CFT system, establishing an efficient system of policies, procedures, and internal controls at the level of individual members and the lev implementing the requirements from the Policy and therefore establishing the control environment, members and therefore NLB Group as whole reduce the risks to an acceptable level.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Whistleblower Protection

At NLB Group, we understand the importance of whistleblower protection, which was identified in the DMA as a material sustainability topic. In the Republic of Slovenia, the EU Directive 2019/1937 of the European Parliament and the Council applies. The mechanisms and measures described in this chapter also refer to the Bank’s own workers who are whistleblowers.

Other countries where NLB Group members operate have their own local legal requirements regarding whistleblower protection. All NLB Group members comply with the Whistleblower Protection Act (ZZPri), which transposes the above-mentioned EU directive. Members based outside Slovenia, who are subject to local legal requirements, adhere to their respective laws.

Years ago, the Group established the whistleblowing system for internal and external stakeholders with a strict procedure for whistleblower protection against retaliation measures. An integral part of the system, or one of the reporting channels, is also the Whistler – an application for reporting (suspected) violations, accessible also on the public websites of NLB Group. It enables two-way communication between the whistleblower and the investigator, even in case of anonymity. When receiving, processing, investigating, and archiving individual reports, the whistleblower is strictly protected. All NLB Group banking members use the Whistler in their local languages. Both the Whistler application and other reporting channels are available.

Policies

NLB Group has a long history related to whistleblower protection. NLB has established more reporting channels than required by local whistleblowing protection law, with a more comprehensive protection to the whistleblower. Namely, NLB issued the Commitment to Protect Whistleblowers of Harmful Conduct as early as 2014, several years prior to the implementation of the Whistleblower Protection Act.

Whistleblower protection has been systematically embedded in other NLB core financial members, unless otherwise required by local legislation. The Rules of Procedure – Regulation regarding investigations of harmful conduct by NLB employees or external perpetrators establish the framework for NLB standards. These rules define the tasks of Compliance and Integrity in the investigation procedure, the tasks and authorizations of the head of the investigation and their deputies, and other persons performing investigations.

They also outline methods to report violations, the procedure for investigation of harmful conduct, an action plan, measures to encourage reporting and remunerate informants, and mechanisms to protect internal compliance and integrity while informing the public. The scope includes NLB Group members (adopted in NLB, and transposed to NLB Group members via standards). Most senior level accountable:

Register of Internal Acts

for all stakeholders summarized at: NLB Whistler

Activities

NLB performs the following activities and measures to protect whistleblowers against retaliation:

• The whistleblower is referred to in all documents by a unique identification number (the identity is sealed in a special envelope and stored in a metal case).
• Whistler reporting application is strictly protected (external server) and access is restricted to authorized investigators only.
• In the event the Group initiates further procedures (legal individual’s report).

NLB employees are informed (through newsletters, website, training) about the possibility of submitting reports under the Whistleblower Protection Act (ZZPri) and the training on fraud prevention, which includes presenting cases and channels for submitting reports. This is achieved through training sessions tailored to different target groups of employees.

Members prepare newsletters, competitions, and other engagement activities. Specialized training for internal fraud investigations is not formally required; however, investigators participate in training provided by ACFE, the Commission for the Prevention of Corruption, universities, etc. Additionally, NLB as the parent bank, on average once per quarter, organizes workshops or meetings for investigators in NLB Group. In-person training for investigators in NLB Group is also provided upon request.

NLB Group Annual Report 2024

Overview

• MB Statement
• SB Statement
• Key Highlights
• Business Report
• Strategy
• Risk Factors & Outlook
• Performance Overview
• Segment Analysis

Risk Management

Material impacts, risks, and opportunities related to ESG Risk management. Having in mind NLB Group’s overall operations, we define ESG risks as any actual or potential governance factors related to NLB Group itself or to any of our key stakeholders. In the realm of financing activities (lending and investments), we define as ESG risks the risks of any negative ESG factors on NLB Group’s counterparties or invested assets.

Given the global importance of climate change, NLB Group primarily focuses on developing and implementing a strong approach to sustainable investments. Moreover, in recent years the Group has systematically upgraded the social and governance risk management, which will remain the strategic direction in the future. Integration of ESG risks does not represent a new risk category, but rather one of the risk drivers of the existing type of risks, such as credit, liquidity, market, operational, and reputation risk.

Therefore, the Group is focused on setting out efficient processes to manage ESG risks, sustainable operations, sustainable finance, and contribution to society. ESG risk management follows ECB and EBA guidelines with the tendency of their comprehensive integration into the EU regulatory framework, recommendations, and guidelines, as well as voluntary commitments and initiatives that NLB Group has joined in recent years, such as the UNEP FI PRB and the EBRD and the Contract of Guarantees with MIGA.

All the above-mentioned regulations, recommendations, and guidelines are integrated into the internal regulatory framework of NLB Group in the area of respect for human rights, including the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and OECD Guidelines. NLB Group is committed to further developing processes and policies in order to upgrade mitigating social as well as governance risks.

The risk management function defines the rules about risk appetite, risk strategy, and other risk policies and guidelines. They are established in the risk management framework of the existing Group. Risk monitoring and proactive management in the area of ESG are established. The mandate of the risk management function is to provide an increased focus on holistic risk management across the whole Group.

Definition in the EBA report on management and supervision of ESG risks for credit institutions and investment firms, EBA, 2021.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Risks in Credit Risk Management

NLB Group has implemented tools for the identification, measurement, and management of ESG risks within its overall credit risk management framework.

Evaluation Process

A comprehensive risk assessment and monitoring mechanism in NLB Group is the Environmental and Social Risk Management System (ESMS), whose main objective is to promote their good environmental and social business practices. The system is fully embedded in NLB Group’s loan origination and monitoring processes and is regularly updated with an...

The credit ratings of clients that are materially important to NLB Group and the issuing of credit risk opinions are centralized via the NLB Credit Committee. The process follows the co-decision model where the committee approves their decision, following which the NLB Credit Committee gives its opinion.

ESG data collection is integrated into our KYC (know your client) procedures. We collect different data based on the initial risk of transaction, type of transaction, and value of transaction. ESG data collection is also an integral part of monitoring procedures of transactions and clients and is raising awareness on the exclusion list. A Regulatory Compliance Check is conducted. This check ensures that the client complies with relevant laws, regulations, and standards, including environmental...

For transactions identified as having high environmental or social risk, an enhanced risk assessment is carried out during the annual review of the client, provided the exposure and ESG strategies meet the following conditions:

• New loans are related to project finance with a total project value exceeding EUR 10 million.
• Financing applications pertain to secondary market transactions.
• A new loan exceeds EUR 3 million, has a maturity of at least 36 months, and the client meets the ESG review threshold at the annual review.

Throughout the project's duration, ESG strategies ensure that risks are adequately managed and that any changes or new risks are promptly identified and addressed. If a client fails to comply with the ESG requirements, it may involve exiting the investment or implementing measures to mitigate the risk of non-compliance. We consider potential financial losses, legal consequences, and reputational damage...

ESG Goals

ESMS system is embedded in loan origination and monitoring.

Exclusion List

Engagement of RMs in collecting ESG data.

Regulatory Compliance Check

B ESG Industry C Transaction Characteristics Decision (approving / declining transaction) E ESG Risk monitoring Exiting the Investment F Category A Projects Conduct a Site Visit AD

Figure 22: Key Steps

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Risks in NLB Group’s Own Operations

In addition to ESG risk management in the aforementioned processes, NLB Group has established a framework for comprehensive mitigation of environmental, social, and governance (ESG) risks. ESG risks may occur in all key business areas and operations; therefore, identifying risks in key competence lines’ areas of work and the early warning system are essential steps of the plan.

Key Risk Indicators (KRIs), monitoring procedures, and indicative scenarios for action in case such situations materialize, in accordance with the rules and procedures stipulated in internal operational risk, are addressed in the Group’s business continuity management (BCM) and business continuity plans. These plans are prepared for use in the event of natural disasters, IT disruptions, and other emergencies.

Additionally, ESG risk screening in the supply chain is part of the Group’s supplier selection and regular assessment process.

Tax Transparency

The DMA has confirmed the positive impact of tax responsibility, support for public services, and enhancement of the Group's reputation with stakeholders.

Policies

Tax Policy of NLB Group

Content, purpose, and regulatory framework: The Policy states that NLB Group conducts its tax operations in line with the purpose and the requirements of the relevant legislation and in accordance with the international standards.

NLB Group controls the implementation of the tax function in the Group, while NLB Group members inform NLB about their tax position. Each member is responsible and entirely accountable for their own tax compliance.

Scope: Applicable and mandatory for all NLB Group members. Banks have included the provisions of the Tax Policy in their operations.

Most senior level accountable: Financial Accounting and Administration director in NLB and managers in similar positions in NLB Group banking members.

Availability: to employees in Administration reports to the Chief Financial Officer, with important tax issues discussed and decided by the Management Board. Subsidiary-level tax functions are similarly managed under the same principles.

Income Tax Rates

Income tax rates range from 9% to 32%.

General Principles of the Policy

• NLB Group members conduct their tax operations in line with the purpose and the requirements of the relevant OECD guidelines.
• The attitude of members towards the Financial Administration is respectful, transparent, and professional.
• When determining tax obligations, members comply with the Financial Administration to obtain the relevant explanations and information for the provision of tax bases on a regular basis or wherever possible.
• When establishing tax policies, members are cautious in assuming tax risks. We optimize taxes only in legally permitted ways.
• Members do not use structures for the purpose of tax avoidance or aggressive tax planning.

---

would subordinate its business motives to tax motives. • The reasons for a member’s presence in a certain country are purely business- and not tax-motivated. Members do not do business and jurisdictions with low taxation. • Members do not enable or support tax-motivated arrangements of their clients and act preventively. • Members strive to ensure that the appropriate tax is generated. As a rule, our operations with related persons are carried out at comparable market prices and in the case of any deviations, such fact is considered in the tax reports.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

To assure effective management of tax risk, the control framework, and awareness of the importance of the tax function, a number of processes and ongoing activities are in place managed, and communicated. • Maintaining a strong control environment and tax risk framework to ensure compliance with tax laws. • Tax risks are managed yearly by tax questionnaires prepared for different taxes, together with internal controls which have to be exercised. • Reviewing the tax treatment of every new product or business decision before its implementation with ongoing training. • In-house tax experts of NLB regularly attend yearly tax conferences and education on actual tax topics (for instance at the Slovenian Audit Institute and Slovenian continuous training to enhance tax risk understanding provided by internal tax experts (FATCA/CRS, DA6, Tax - dealing with securities). For the tax topics important to a wide range of the internal tax training (majority of employees in branches, new employees). • Monitoring of updates to changes in tax laws and their impacts on NLB and industry. • Discussing important tax legislation proposals, initiatives for changes of tax legislation, and questions for tax opinions whenever possible or relevant at the local level. Comments, initiatives are prepared for the Group Association, and, where appropriate, take into account the impact on the local community. Execution of the activities stipulated in the Tax Policy in banks is monitored yearly via the bank. In banks and strategic members Internal Audit reviews the tax in accordance with the annual plan based on risk assessment. Financial strategic members can be also reviewed by Compliance on important tax risks through internal controls. The Financial Administration of the Republic of Slovenia has granted NLB a special tax status which is based on cooperation, transparency, and understanding of that status. Other jurisdictions where NLB Group banking members operate so far do not have legislation that would allow them to obtain the special tax status.

Country	Revenues from third-party sales	Revenues from intra-group transactions with other tax jurisdictions	Profit/loss before tax	Tangible assets other than cash and cash equivalents	Corporate income tax paid on a cash basis
North Macedonia	995	105,436	-2,776	77,081	35,838
Serbia	2,515	299,252	3,018	160,113	127,239
Montenegro	410	56,720	-360	33,557	26,376
Kosovo	478	61,800	-2,040	40,785	12,161
Germany	0	29	0	-160	66
Switzerland	2	530	-499	26	877

Notes: (i) The table includes all NLB members in Croatia, Germany, and Switzerland. (ii) Number of employees is the number of employees as at 31 December 2024. (iii) The columns Revenues from third-party sales and Revenues from intra-group transactions with other tax jurisdictions are included.

NLB Group Annual Report 2024

302 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Participation in Associations and Policy Discussion

To strengthen and manifest our commitment to the sustainable, green, and just transition, NLB Group has voluntarily decided over the year to participate in various associations in sustainability-related areas. Furthermore, the Group members in the region frequently take part in local institutions and initiatives as active members, supporters, or participants, actively engaged in strategic discussions about the role and benefits of sustainability. Most importantly, such collaborations strengthen capacities for NLB Group’s green transition, enhance knowledge, and support future activities to achieve local, regional, and global sustainability goals.

Financial Performance

In the conducted DMA, the financial performance (stability) of the NLB Group was identified along with opportunities. Details on financial performance are included in the Financial Report.

G1-5 Political Influence and Lobbying Activities

NLB Group is politically neutral, and giving financial contributions is strictly prohibited in NLB Group as the Sponsorships and Donations Policy stipulates that members shall not pay any political contributions – neither direct nor indirect. NLB and other members avoid any perception that their decisions are influenced by politics. In 2024, no political contributions of any kind (either financial or in-kind) were made in NLB or any of NLB's subsidiaries.

Political contributions (financial)	0
Political contributions (in-kind)	0

Key Memberships and Collaborations

EBRD Women in Business Programme

Greenhouse Gas Protocol

Multilateral Investment Guarantee Agency

Sustainable Finance Working Group

UN Sustainable Development Goals

UNEP FI Principles for Responsible Banking

UNEP FI Net-Zero Banking Alliance

European Banking Association

AmCham Slovenia – Commission for Sustainable Growth

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

In 2024, the banking members of the NLB Group cooperated with a total of 6,098 suppliers from 37 countries. The procurement spend, which is a similar breakdown as in 2023, covered 2,267 suppliers, of which 2,056 were local suppliers with 93% of the procurement spend.

Location of suppliers	Number of suppliers (i) in 2024	Share
Europe (29 countries)	2,237	99.8%
Non-European countries	4	0.2%

Activity	Number of suppliers (i) in 2024	Share
Professional, Scientific and Technical	333	16.31%
Administrative and Support Services	160	9.94%
Wholesale and Retail trade, and Repair of Motor Vehicles	405	9.21%
Financial and Insurance	4

Complementary information related to business conduct Sustainable supply chain This chapter provides complementary information and is not subject to external review.

NLB Group Annual Report 2024

Overview

Procurement management

Management of the procurement process for NLB Group banking members is established by the Standard – Procurement in NLB Group Members and other procurement rules and procedures defined in the NLB Group Code of Conduct. The purpose of the Standard is to ensure a uniform and transparent procurement procedure for goods and services needed for performing business activities.

In a harmonized way, a synergy approach was established, whereby in the majority of cases, NLB, as the parent bank, assesses and integrates the needs of several NLB Group members. The rules and procedures defined in the Standard are fully implemented in NLB Group banking members, while in other members its harmonization is underway. The most senior function is responsible for similar function in each NLB Group member.

The standard applies key principles and guidelines, including fair dealing and good governance. Accordingly, as a rule, NLB Group members ensure equal treatment for all suppliers in procedures. It defines clear terms of cooperation between NLB Group, bidders, suppliers, and external contractors, which must be respected by all parties involved, aiming to ensure appropriate business relationships and suppliers’ understanding and respect of sustainability-related requirements.

The Group is committed to supporting local suppliers whenever this is justified in line with its targets and policies. Local suppliers are defined as those who are registered in the countries where NLB Group operates (Slovenia, Croatia). Partnering with local suppliers also reduces transport costs and contributes to reducing emissions.

The standard requires the procurement process to follow good governance principles, including individuals. For banking members, the standard payment term is 60 days from the invoice date, with shorter terms (45, 30, 15 days) possible if agreed upon. These terms apply to all suppliers' invoices, ensuring payments are made on time. In 2024, there were no legal proceedings related to payment delays.

Sustainability due diligence

In line with procurement standards, all procurement subcontractors must prevent harmful practices, including corruption, bribery, and discrimination, and adhere to NLB Group sustainability-related requirements. The sustainability and related due diligence selection process starts with the request for proposal specification of the services/goods that will be the subject of purchase, which also includes sustainability-related requirements.

Bidders must complete a questionnaire, which is a formal tool for data gathering on environmental, social, and human rights, as well as governance practices of bidders and suppliers. For bidders, including those related to sustainability, they must comply with predefined standards. In addition to questionnaires, procurement officers perform other monitoring activities, such as media checks.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Human Rights

The procurement procedures described above apply also for human-rights related matters, including workers’ rights. NLB Group banking members evaluate whether potential suppliers are compliant with a comprehensive list of required environmental, social, and governance practices, including protecting human rights in its operations and its own supply chain.

In addition, the GPA compliance of the supplier's commitments to the NLB grievance mechanism, whereby NLB ensures discretion and protection of the whistleblower’s identity in accordance with its internal policies, is monitored by respective procurement officers. Suppliers undergo an annual extended assessment of their relationship with the NLB Group member, including their sustainability practices. In 2024, the threshold was set at EUR 100,000.

Comprehensive due diligence is performed every three years, which includes the majority of suppliers with an annual spend above the threshold. Based on the review of the completed questionnaires and due diligence, NLB Group banking members identify if there are any potential or actual regulatory risks. If any measures are agreed upon, the supplier must resolve them within the agreed time frame. If a potential or existing supplier fails to ensure respect for sustainability matters, including human rights, NLB Group may start to collaborate with such companies or terminate the contract, respectively.

NLB Group members expect their suppliers to comply not only with financial but also non-financial and ESG requirements, including energy saving, health, security, safety at work, social security, and respecting labour law (and collective agreements). This includes:

• Prohibition of exploiting child labour
• Prohibition of discrimination
• Prohibition of illegal work
• The right to appropriate payment
• The right to appropriate working hours
• The right to organize and dignity
• The right to health and safety
• The right to diversity

When performing its business activities or business activities of its subcontractors on any market, the suppliers must not use child labour, forced labour or slavery-like working conditions, and not to abuse any human rights in any way. These requirements are included in due diligence questionnaires that ensure, among other ESG requirements, those related to human rights are also met.

In addition, suppliers must confirm that they are acting in accordance with the general terms and conditions of responsible business practices. If these requirements are not met, the bidder is not selected. Due diligence reviews are executed prior to signing a contract and in case of non-compliance with the contract. If the suppliers do not respect human rights or cannot guarantee this for any reason, they cannot collaborate with NLB Group banking members.

In 2025, we began monitoring whether suppliers have implemented effective mechanisms for the anonymous reporting and handling of labour law violations, significant negative impacts on workers in the value chain. Before signing the contract, each potential supplier must provide information on their established mechanisms for anonymous reporting and addressing these issues.

If additional clarification determines that the supplier lacks an adequate reporting channel, a reporting channel managed by a NLB Group member is included in the supplier contract. If this requirement cannot be fulfilled, the potential supplier is disqualified. Suppliers’ employees can also report violations via the internet at NLB Whistler, a channel dedicated to reporting.

Appendices

whistleblowing mechanism, please refer to the chapter Whistleblower protection. Additionally, some banking addresses for reporting irregularities. They regularly review and address such set a goal to have a zero tolerance for suppliers’ harmful practices, including corruption, bribery, and discrimination, and not adhering to the sustainability-related requirements posed by N included most of the Bank’s suppliers with an annual spend above a predetermined threshold (ranging from EUR 10,000 to EUR 35,000, subject to the size of the NLB Group banking mem (212 in 2023) due diligence reviews which represents 56.8% (31% in 2023) of spend based on the procurement process. In 2024, NLB Group regular reviews and due diligence of supplier breaches, or cases of child or forced labour. Consequently, no supplier relationships within NLB Group were terminated.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

EU Taxonomy is a classification system designed to determine the environmental sustainability of economic activities within the European Union. For banks, it serves as a crucial framework for practices. By adhering to the EU Taxonomy, banks can identify and prioritize investments that contribute to environmental objectives, such as climate change mitigation and adaptation. This helps align their portfolios with sustainable goals, mitigate risks associated with environmentally harmful activities, and support the transition to a more sustainable economy.

Compliance with the EU Taxonomy is governed by the Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, amending Regulation (EU) 2019/2088. This legislation is essential for sustainable finance and provides the basis for the EU Taxonomy's implementation across various sectors, including banking and finance.

Green Asset Ratio (GAR)

The Green Asset Ratio (GAR) measures the proportion of a bank's assets that meet the criteria for environmentally sustainable economic activities. This ratio serves as a key metric for stakeholders to assess how much of a bank's portfolio supports environmental sustainability and reporting obligations, ensuring transparency and accountability in their sustainability efforts.

However, while the Green Asset Ratio enhances transparency, it does not fully capture the transition efforts of smaller companies and international non-EU businesses—meaning the actual number of aligned activities is higher. Furthermore, banks rely on counterparties for data, and since many of these entities are still developing their own sustainability frameworks, GAR should be analyzed alongside additional disclosed metrics and other relevant information on banks’ efforts to finance the transition.

Mandatory Disclosures

In the 2024 financial year, banks are required to disclose their environmental objectives. The Draft Commission notice issued on December 21, 2023, aims to provide clarity and improve disclosure requirements. Notably, the disclosures should cover the entire year, rather than only net changes.

Our Calculation Approach

The Green Asset Ratio (GAR) is calculated as identified taxonomy-aligned assets (numerator) divided by total exposures (denominator). Exposures towards central banks, central governments, supranational entities, and the bank’s trading portfolio are excluded from both the numerator and denominator, as they are not covered by the Taxonomy. Additionally, entities where the use of proceeds is unknown are also excluded from both the numerator and denominator.

We have disclosed information related to all six environmental objectives where applicable. For KPIs for non-financial undertakings (NFRD corporates, i.e., corporates subject to non-financial reporting requirements, including taxonomy reporting), we use publicly available information, including turnover and capital expenditure-based (CAPEX) metrics. Explanations of the nature and objectives of Taxonomy-aligned economic activities and the evolution of the Taxonomy-aligned framework are also provided.

NLB Group Annual Report 2024

Overview

distinguishing between business-related and methodological and data-related elements. To determine household eligibility for KPIs, we consider the entire portfolio of mortgage loans, wit we focus on the "Purchase and Ownership of Buildings" category under Delegated Regulation 2021/2139, excluding the "Renovation" category and "Motor vehicles" due to the lack of spe of electric vehicles for households as taxonomy-aligned asset.

Regulatory disclosure requirement in accordance with Article 8 of the EU taxonomy regulation

Appendix 1: EU Taxonomy

Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation

Total environmentally sustainable assets (Turnover) (in 000 EUR)	KPI (Turnover - based) (ii)	numerator of the GAR (Article 7(2) and (3) and Section 1.1.2. of Annex V)	% of assets excluded from the denominator of the GAR (Article 7(1) and Section 1.2.4 of Annex V)
Main KPI G environmentally sustainable activities (Turnover)(in 000 EUR)	KPI (Turnover - based) (ii)	KPI (Capex - based)	% coverage (over total assets)
% of assets excluded from the numerator of the denominator of the GAR (Article 7(1) and Section 1.2.4 of Annex V)	Additional KPIs GAR (flow)	68,481	1.22%
	0.84%	60.79%	28.51%
	39.21%	Trading book	-
Financial guarantees	3,

Notes:

(i) Share (%) of assets covered by the KPI, over total assets. (ii) based on the Turnover KPI of the counterparty (iii) based on the CapEx KPI of the counterparty, except for lending and Fees and commissions income are due for reporting from year 2026.

Criteria for Buildings:

For buildings built before December 31, 2020: The building must have at least an energy performance rating that meets the requirements of the regional building stock in terms of operational primary energy demand, demonstrated by appropriate evidence comparing the asset’s performance to national or regional benchmarks for residential and non-residential buildings.

For buildings constructed after December 31, 2020: The building must meet the criteria set out in Section 7.1 of this Annex, applicable at the time systems, combined space heating and ventilation systems, air-conditioning systems, or combined air-conditioning and ventilation systems above 290 kW), the building must be subject to energy performance requirements.

Regulation (EU) 2020/852

in the financial undertaking’s business strategy, product design processes and engagement with clients and counterparties NLB Group as financial institution, R with clients through different approaches, for example through due diligence of clients as well issuing for example Green Bond. More detailed description can be found in Sustainability Statement.

Qualitative information on the alignment of trading portfolios with Regulation (EU) 2020/852

NLB Group is not required to disclose quantitative information on trading exposures, qualitative information on the alignment of economic activities are described in the Sustainability Statement, chapter E1 – Climate change.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

66:1. Assets for the calculation of GAR (TURNOVER)

Disclosure reference date T (in 000 EUR)	Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use of Proceeds	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which environmentally sustainable (Taxonomy-aligned)	Of which transitional	Of which enabling	Covered assets in both numerator and denominator
7,158,131	4,163,554	252,932	100,151	640	14,495	5,967	5,967	-
Loans and advances, debt securities and equity instruments	5,967	5,967	-	437	-	-	-	-
Financial undertakings	2,208,690	250,162	20,702	-	-	-	-	-
Credit institutions	1,805,874	250,162	20,702	-	-	-	-	-
Loans and advances	450,707	-	-	-	-	-	-	-
Other financial corporations	402,816	-	-	-	-	-	-	-
of which investment firms	-	-	-	-	-	-	-	-
Loans and advances	-	-	-	-	-	-	-	-
of which management companies	10,954	-	-	-	-	-	-	-
Loans and advances	4,433	-	-	-	-	-	-	-
Debt securities, including UoP	-	-	-	-	-	-	-	-
Equity instruments	6	-	-	-	-	-	-	-
and advances	3,490	-	-	-	-	-	-	-
Debt securities, including UoP	7,694	-	-	-	-	-	-	-
Equity instruments	308	-	-	-	-	-	-	-
Non-financial undertakings	841,530	194,094	132	-	640	14,495	5,967	5,967
Debt securities, including UoP	68,675	116	-	-	-	-	-	-
Equity instruments	-	-	-	-	-	-	-	-
Households	3,850,031	3,719,298	100,151	100,151	3,717,814	98,667	98,667	-
of which building renovation loans	-	-	-	-	-	-	-	-
of which motor vehicle loans	132,217	1,484	1,484	1,484	-	-	-	-
Local governments financing	212,231	-	-	-	-	-	-	-
Collateral obtained by taking possession: residential and commercial immovable properties	45,649	-	-	-	-	-	-	-
Assets excluded from the	-	-	-	-	-	-	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources (SST)
Of relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carrying amount
Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional
Of which enabling	Of which Use of Proceeds	Of which enabling
Of which Use of Proceeds	Of which enabling
than SMEs) not subject to NFRD disclosure obligations	2,597,922	35 Loans and advances
2,597,905	36 of which loans collateralised by commercial immovable property	-
37 of which building counterparties not subject to NFRD disclosure obligations	3,478,877	41 Loans and advances
3,467,330	42 Debt securities	9,135
43 Equity instruments	2,412	44 Derivatives
71,418	45 On assets (e.g. Goodwill, commodities etc.)	5,422,224
48 Total GAR assets	19,268,854	4,163,554
252,932	100,151	640
14,495	5,967	5,967
-437	-	-
-	-	49 Assets not covered for GAR calculation
banks exposure	3,577,239	52 Trading book
19,596	53 Total assets	27,864,895
-	-	-
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations	54 Fin	-
-	-	-
56 Of which debt securities	-	-
-	-	-
57 Of which equity instruments	-	-

Table 67:1. Assets for the calculation of GAR (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds
Of which transitional	Of which enabling	GAR - Covered assets in both numerator and denominator
302	75	--
11	-	--
-	4,169,834	258,974
100,151	640	14,932
2 Financial undertakings	-	--
-	--	-250,162
20,702	-	-
3 Credit institutions	--	-
--	-	--
-250,162	20,702	-
6 Equity instruments	--	-
7 Other financial corporations	-	--
-	-	-
8 of which investment firms	--	-
9 Loans and advances	-	--
12 of which management companies	-	--
13 Loans and advances	-	--
14 Debt securities, including UoP	-	-
17 Loans and advances	-	-
18 Debt securities, including UoP	-	-
19 Equity instruments	-	-
20 and advances	302	75
-	11	--
200,258	138,121	-
640	14,932	22 Debt securities, including UoP
-	-	--
-	--	-
26 of which building renovation loans	-	--
27 of which motor vehicle loans	1,484	1,484
1,484	-	-
28 Local governments financing	-	--
31 Collateral obtained by taking possession: residential and commercial immovable properties	-	--
-	-	-
32 Assets excluded from the numerator	-	-

Assets for the calculation of GAR (TURNOVER)_3/8

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds
Of which transitional	Of which enabling

Financial and Non-financial undertakings

SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations	immovable property	of which building renovation loans
Debt securities	Equity instruments	Non-EU country counterparties not subject to NFRD disclosure obligations
Loan interbank loans	Cash and cash-related assets	Other categories of assets (e.g. Goodwill, commodities etc.)
Total GAR assets	302	75
-	11	4,169,834
258,974	100,151	640
14,932

Central banks exposure

Trading book

Total assets

Off-balance sheet exposures

Undertakings subject to NFRD disclosure obligations

Financial guarantees

Of which debt securities

Of which equity instruments

Table 69: 1. Assets for the calculation of GAR (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

70:1. Assets for the calculation of GAR (TURNOVER)

Disclosure reference date T - 1 (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carry environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional	Of which enabling	Of which Covered assets in both numerator and denominator
10,413,876	3,476,162	157,973	84,175	601	14,495
Loans and advances, debt securities and equity instruments not HfT eligible
Financial undertakings	1,474,013	235,243	16,877
Credit institutions	1,274,660	235,243	16,877
Loans and advances	297,166
Debt securities, including UoP
Other financial corporations	199,353
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments	2,557
of which
Debt securities, including UoP
Equity instruments	210
Non-financial undertakings	957,104	72,674	56,921	-	601	14,495
including UoP	78,884	6,094	5,777
Equity instruments
Households	7,672,026	3,168,245	84,175	84,175
of which loans collateralised by residential renovation loans
of which motor vehicle loans
Local governments financing	189,773	-
Housing financing	-
Other local possession: residential and commercial immovable properties	60,480	-
Assets excluded from the numerator for GAR calculation (covered in the denominator)	5,604,18

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T - 1 (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources (SST)
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carrying amount
Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional
Of which enabling	Of which Use of Proceeds	Of which enabling
Of which Use of Proceeds

NFCs (other than SMEs) not subject to NFRD disclosure obligations

2,090,316	35 Loans and advances	2,088,998
36 of which loans collateralised by commercial immovable property	881

Non-EU country counterparties not subject to NFRD disclosure obligations

3,002,036	41 Loans and advances	2,989,817
42 Debt securities	9,807	43 Equity instruments
2,412	44 Derivatives

Other categories of assets (e.g. Goodwill, commodities etc.)

3,529	48 Total GAR assets	15,957,585
3,476,162	157,973	84,175
601	14,495

Assets not covered for GAR calculation

banks exposure	5,763,444	52 Trading book
15,818	53 Total assets	25,732,874

Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations

56 Of which debt securities
57 Of which equity instruments

Table 71:1. Assets for the calculation of GAR (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T - 1 (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems
towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds
Of which transitional	Of which enabling	GAR - Covered assets in both numerator and denominator
3,476,162
157,973	84,175	601
GAR calculation	3,476,162
157,973	84,175	601
14,495	2 Financial undertakings
	235,243	16,877
	3 Credit institutions
	235,243	16,877
6 Equity instruments
7 Other financial corporations
8 of which investment firms
9 Loans and advances
12 of which management companies
13 Loans and advances
14 Debt securities, including UoP
17 Loans and advances
18 Debt securities, including UoP
19 Equity instruments
20 advances		66,580
51,144		-601
14,495	22 Debt securities, including UoP
6,094	5,777
23 Equity instruments
24 Households	3,168
3,168,245	84,175	84,175
	26 of which building renovation loans
	27 of which motor vehicle loans
	28 Local governments financing
	29 Housing
	31 Collateral obtained by taking possession: residential and commercial immovable properties
	32 Assets excluded from the numerator for GAR calculation

GAR (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T - 1 (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems
towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds
Of which transitional	Of which enabling
Financial and Non-financial undertakings	SMEs and NFCs (other than SMEs) not subject to NFR	commercial immovable property
of which building renovation loans	Debt securities	Equity instruments
Non-EU country counterparties not subject to NFRD disclosure obligation	demand interbank loans	Cash and cash-related assets
Other categories of assets (e.g., Goodwill, commodities etc.)	Total GAR assets	3,476,162
157,973	84,175	60
Supranational issuers	Central banks exposure	Trading book
Total assets
Off-balance sheet exposures	Undertakings subject to NFRD disclosure obligation management
Of which debt securities
Of which equity instruments

Table 73: 1. Assets for the calculation of G

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

74:2. GAR sector information (TURNOVER) _1/2 (in 000 EUR)

					Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine
		subject to NFRD Non-Financial corporates (Subject to NFRD)			SMEs and other NFC not subject to NFRD
carrying amount [Gross]	carrying amount [Gross]	carrying amount
Of which environmentally sustainable (CCM)	Of which environmentally sustainable (CCM)	Of which environmentally sustainable (SST)
Of which environmentally sustainable (SST)					Breakdown by sector - NACE 4 digits level (code and label)
						1	02.10 Silviculture and other forestry activities	1
				4	24.42 Aluminium production	4,880	1,124
					5	25.50 Forging and shaping metal and powder metallurgy	33,358	53
							6	33.17 Maintenance and repair of renewable sources
		8		35.12 Transmission of electricity	59,111
				9	35.13 Distribution of electricity	121,597	89,070
						10	35.14 Trade of electricity		-47,063	5,967
				11	35 treatment, and supply	9,491
			13	42.12 Construction of railways and underground railways	77	41
						14	47.30 Retail sale of automotive fuel in specialized stores	69,859	1,355
							16	passenger land transport	6	3
			17	49.50 Pipeline transport	21,129
					18	52.10 Cargo handling
						19	52.21 Supporting service activities in land transport	168,404
							20	52	6,658
	22		53.10 Universal postal service activities	1,305	697
					23	55.10 Hotels and similar accommodation activities	7,673
						24	61.10 Wired telecommunications activities
26	head offices	10,489	45
		27		71.12 Other engineering activities and related technical consultancy	1

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Transition to a Circular Economy (CE)

Pollution Prevention and Control (PC)

Protection and Restoration of Biodiversity and Ecosystems (Ecos)

TOTAL Non-Financial corporate (Subject to NFRD)

SMEs and other NFC not subject to NFRD	Non-Financial corporates (Subject to NFRD)	SMEs and other NFC not subject to NFRD	Non-Financial corporates (Subject to NFRD)	SMEs and other NFC not subject to NFRD	Non-Financial corporates (Subject to NFRD)
carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]
Of which environmentally sustainable (PC)	Of which environmentally sustainable (PC)	Of which environmentally sustainable (Ecos)	Of which environmentally sustainable (Ecos)	Of which environmentally sustainable (PC)

digits level (code and label)	1	02.10 Silviculture and other forestry activities	-	-	-
20.16 Manufacture of plastics in primary forms	-	-	-	10,064	-
21.20 Manufacture of pharmaceuticals	-	-	-	33,358	53
33.17 Maintenance and repair of other transport equipment	-	-	-	1	-
35.11 Production of electricity from	-	-	-	121,597	89,070
35.13 Distribution of electricity	-	-	-	47,063	5,967
35.30 Steam and air conditioning supply	-	-	-	55,716	25,245
36.00 Water collection, treatment and supply	-	-	-	77	41
47.30 Retail sale of automotive fuel in specialized stores	-	-	-	69,859	1,355
49.20 Freight rail transport	-	-	-	26,986	14,437
49.31 Passenger rail transport	-	-	21,129	-	18
52.10 Cargo handling	37,728	75	-	-	37,728
52.21 Supporting service activities in land transport	-	-	-	168,404	-
52.23 Supporting service activities in air transport	-	-	-	1,305	697
55.10 Hotels and similar accommodation activities	-	-	-	7,673	-
61.10 Wired telecommunications activities	-	-	-	74,202	7
64.20 Activities auxiliary to financial services	-	-	-	-	-
71.12 Other engineering activities and related technical consultancy	-	-	-	1	-

Table 75:2. GAR sector information (TURNOVER) _2/2

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

76:3. GAR KPI stock (TURNOVER)

Disclosure reference date	T % (compared to total covered assets in the denominator)	Climate Change Mitigation (CCM)	Climate Change Adaptation
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
Of which transitional	Of which enabling	Of which Use of Proceeds	Of which enabling
Of which enabling	GAR - Covered assets in both numerator and denominator calculation	21.61%	1.31%
0.52%	0.00%	0.08%	0.03%
0.03%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
1.01%	0.69%	0.00%	0.00%
0.08%	0.03%	0.03%	0.00%
0.00%	0.00%	0.00%	0.00%
19.30%	0.52%	0.52%	collateralised by residential immovable property
19.29%	0.51%	0.51%	0.00%
0.00%	0.00%	0.00%	0.00%

---

Local governments financing

Other local government financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Collateral obtained by taking possession: residential and commercial	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Total GAR assets	21.61%	1.31%	0.52%	0.00%	0.08%	0.03%	0.03%	0.00%	0.00%	0.00%	0.00%	0.00%

Disclosure reference date

T % (compared to total covered assets in the denominator)	Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding enabling	Of which Use of Proceeds	Of which enabling GAR - Covered assets in both numerator and denominator
1 Loans and advances, debt securities and equity instruments not HfT eligible	Financial undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
3 Credit institutions	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
4 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
6 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
7 Other financial corporations	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
9 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
11 Equity management companies	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
19 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
21 Loans and advances, securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
23 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
24 Households	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
26 of which building renovation loans	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
27 of which motor vehicle loans	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Total GAR assets

0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Table 77: 3. GAR KPI stock (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date

		T % (compared to total covered assets in the denominator)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)	TOTAL	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total assets covered	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
	1	Loans and advances	0.00%	0.00%	0.00%	21.64%	1.34%	0.52%	0.00%	0.08%	25.52%
	2	Financial undertakings	0.00%	0.00%	0.00%	0.00%	1.30%	0.11%	0.00%	0.00%	0.00%
	3		Credit institutions	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	1.62%
		5	Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	1.30%	0.11%	0.00%	0.00%	4.86%
	6	Equity instruments corporations	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	1.45%
		8	of which investment firms	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
10	Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
		11	Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
	13	Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.02%
			14	Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.02%
	16	of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.04%
			17	Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.03%
		19	Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
			20	Non-financial undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
		22	Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.25%
23	Equity instruments	0.00%	19.30%	0.52%	0.52%	0.00%	0.00%	13.82%
		25	of which loans collateralised by residential immovable property	19.29%	0.51%	0.51%	0.00%	0.00%	13.34%
26	of which building	0.01%	0.01%	0.01%	0.00%	0.00%	0.47%
		28	Local governments financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.76%
			29	Housing financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.76%
31	Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	0.00%	21.64%	1.34%	0.52%	0.00%	0.08%

Table 78: 3. GAR KPI stock (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

79:3. GAR KPI stock (TURNOVER)

Disclosure reference date T -1	% (compared to total covered assets in the denominator)
Climate Change Mitigation (CCM)
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	21.78%
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
Use of Proceeds
Of which transitional	0.99%
Of which enabling	0.53%
Of which
Financial undertakings	1.47%
Loans and advances	0.00%
Equity instruments	0.00%
Other financial corporations	0.00%
Investment firms	0.00%
Loans and advances	0.00%
Equity instruments	0.00%
Loans and advances	0.00%
Debt securities, including UoP	0.00%
Equity instruments	0.00%
Of which insurance undertakings	0.00%
Debt securities, including UoP	0.00%
Non-financial undertakings	0.46%
Loans and advances	0.42%
UoP	0.04%
Equity instruments	0.00%
Of which loans collateralised by residential immovable property	19.85%
Of which building renovation

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure

Reference Date

T -1 % (compared to total covered assets in the denominator)

Transition to a Circular Economy (CE)

Pollution Prevention and Control (PC)

Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered	Of which Use of Proceeds	Of which enabling GAR - Covered assets in both numerator and denominator
1 Loans and advances, debt securities and equity instruments not H	Financial undertakings	0.00%	0.00%	0.00%
3 Credit institutions	0.00%	0.00%	0.00%	0.00%
4 Loans and advances	0.00%	0.00%	0.00%	0.00%
6 Equity instruments	0.00%	0.00%	0.00%	0.00%
7 Other financial corporations	0.00%	0.00%	0.00%	0.00%
9 Loans and advances	0.00%	0.00%	0.00%	0.00%
10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%
11 Equity management companies	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.00%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%
16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%
19 Equity instruments	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	0.00%
21 Loans and advances, including UoP	0.00%	0.00%	0.00%	0.00%
23 Equity instruments	0.00%	0.00%	0.00%	0.00%
24 Households	0.00%	0.00%	0.00%	0.00%
26 of which building renovation loans	0.00%	0.00%	0.00%	0.00%
27 of which motor vehicle loans	0.00%	0.00%	0.00%	0.00%
28 Local governments financing	0.00%	0.00%	0.00%	0.00%
30 Other local government financing	0.00%	0.00%	0.00%	0.00%
31 Collateral obtained by taking possession: residential and commercial
Total GAR assets	0.00%	0.00%	0.00%	0.00%

Table 80: GAR KPI stock (TURNOVER)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T -1

Protection and Restoration of Biodiversity and Ecosystems (Ecos)	TOTAL	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total assets covered	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
1 Loans and advances	0.00%	0.00%	0.00%	21.78%
2 Financial undertakings	0.00%	0.00%	0.00%	1.47%
3 Credit institutions	0.00%	0.00%	0.00%	0.00%
5 Debt securities, including UoP	0.00%	0.00%	0.00%	1.47%
6 Equity instruments	0.00%	0.00%	0.00%	0.00%
8 of which investment firms	0.00%	0.00%	0.00%	0.00%
9 Loans and advances	0.00%	0.00%	0.00%	0.00%
10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%
11 Equity instruments	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.00%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%
16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%
19 Equity instruments	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	0.00%
22 Debt securities, including UoP	0.00%	0.00%	0.00%	0.04%
23 Equity instruments	0.00%	19.85%	0.53%	0.00%
25 of which loans collateralised by residential immovable property	19.85%	0.53%	0.53%	0.00%
26 of which building renovations	0.00%	0.00%	0.00%	0.00%
28 Local governments financing	0.00%	0.00%	0.00%	0.00%
29 Housing financing	0.00%	0.00%	0.00%	0.00%
31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	18.04%

Table 81: 3. GAR KPI stock (TURNOVER) _6/6

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

82:4. KPIs Flow

	Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources
(Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors	Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-aligned)	Proportion of total covered assets funding taxonomy relevant sectors	Proportion of total covered assets funding taxonomy relevant sectors
Use of Proceeds	Of which enabling	Of which
GAR - Covered assets in both numerator and denominator	1 Loans and advances, debt securities and equity instruments	0.00%
2 Financial undertakings	7.55%	0.59%
3 Credit institutions	0.00%
4 Loans and advances	0.00%
5 Debt securities, including UoP	13.38%	1.04%
6 Other financial corporations	0.00%
7 Loans and advances	0.00%
8 Debt securities, including UoP	0.00%
9 Loans and advances	0.00%
10 Debt securities, including UoP	0.00%
11 of which management companies	0.00%
12 Debt securities, including UoP	0.00%
13 of which insurance undertakings	0.00%
14 Loans and advances	0.00%
15 Debt securities, including UoP	0.00%
16 of which insurance undertakings	0.00%
17 Loans and advances	0.00%
18 including UoP	0.00%
19 Equity instruments	0.00%
20 Loans and advances	55.11%	55.08%
21 Debt securities	0.00%
22 Equity instruments	0.00%
23 Households	90.59%	2.38%	2.38%
24 of which building renovation loans	0.00%
25 of which motor vehicle loans	0.00%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Housing Financing

Other Local Government Financing

Residential and Commercial Immovable Properties	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Total GAR Assets	13.42%	1.22%	0.30%	0

GAR KPIs Flow

Transition to a Circular Economy (CE)

Pollution Prevention and Control (PC)

Proportion of Total Covered Assets Funding Taxonomy Relevant Sectors (Taxonomy-eligible)	Proportion of Total Covered Assets Funding Taxonomy Relevant Sectors (Taxonomy-aligned)	Proportion of Total Covered Assets Funding
Of which Use of Proceeds	Of which enabling GAR - Covered assets in both numerator and denominator	1 Loans and advances, debt securities and equity instruments not HfT eligible

Financial Undertakings

Credit Institutions	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Loans and Advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Equity Instruments	0.00%	0.00%	0.00%	0.00%	0.00%
Other Financial Corporations	0.00%	0.00%	0.00%	0.00%	0.00%

Loans and Advances

Debt Securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%
Equity Instruments	0.00%	0.00%	0.00%	0.00%	0.00%

Non-Financial Undertakings

Loans and Advances	0.00%	0.00%	0.00%	0.00%	0.00%
Equity Instruments	0.00%	0.00%	0.00%	0.00%	0.00%

Households

Loans	0.00%	0.00%	0.00%	0.00%
Of which Building Renovation Loans	0.00%	0.00%	0.00%	0.00%
Of which Motor Vehicle Loans	0.00%	0.00%	0.00%	0.00%

Local Governments Financing

Collateral Obtained by Taking Possession: Residential and Commercial Immovable Properties	0.00%	0.00%	0.00%	0.00%
Total	0.00%	0.00%	0.00%	0.00%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

84:4. GAR KPIs Flow

		Protection and Restoration of Biodiversity and Ecosystems (Ecos)	Total	Proportion of total assets covered	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
	Use of Proceeds	Of which enabling	Of which transitional	Of which enabling	GAR - Covered assets in both numerator and denominator
1 Loans and advances	0.00%	0.00%	41.67%	3.80%	0.92%
	2 Financial undertakings	0.00%	0.00%	0.00%	0.00%	7.55%
		3 Credit institutions	0.00%	0.00%	0.00%	0.00%	2.38%
5 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	13.38%
6 Equity instruments	0.00%	0.00%	0.00%	0.00%	2.20%
	8 of which investment firms	0.00%	0.00%	0.00%	0.00%	0.00%
9 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%
		11 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%
	13 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.01%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%
	16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.09%
		17 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%
	19 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%
		20 Non-financial undertakings	0.00%	0.00%	0.00%	0.00%	55.11%
22 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	2.44%
		23 Equity instruments	0.00%	0.00%	0.00%	0.00%	7.57%
	25 of which loans collateralised by residential immovable property	100.00%	2.53%	2.53%	0.00%	0.00%
		26 of which building renovation loans	0.00%	0.00%	0.00%	0.00%	0.72%
	28 Local governments financing	0.00%	0.00%	0.00%	0.00%	0.52%
		29 Housing financing	0.00%	0.00%	0.00%	0.00%	0.00%
		31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	0.00%	0.30%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

(compared to total eligible off-balance sheet assets)	Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which transitional	Of which enabling	Of which Use of Proceeds
Of which enabling	Of which Use of Proceeds	Of which enabling	1 Financial guarantees (FinGuar KPI)
0.000%	0.300%	0.000%	0.000%
0.000%	0.000%	2 Assets under management (AuM KPI)	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%

Table 86:5.KPI off-balance sheet exposures (CAPEX)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

88:1. Assets for the calculation of GAR (CAPEX)

Disclosure reference date T (in 000 EUR)	Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carrying amount	sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional	Of which enabling	Of which Use of Proceeds
both numerator and denominator	7,158,131	4,103,099	218,652	100,151	2,610	3,682	21,015	21,015	-	14	-	-
1	Loans and advances, debt securities and equity instruments not HfT eligible	-	-	-	-	-	-	-	-	-	-	-
2	Financial undertakings	2,208,690	228,905	19,501	-	-	-	-	-	-	-	-
3	Credit institutions	1,805,874	228,905	19,501	-	-	-	-	-	-	-	-
4	Loans and advances	450,707	-	-	-	-	-	-	-	-	-	-
7	Other financial corporations	402,816	-	-	-	-	-	-	-	-	-	-
8	of which investment firms	-	-	-	-	-	-	-	-	-	-	-
9	Loans and advances	-	-	-	-	-	-	-	-	-	-	-
10	Debt securities, including companies	10,954	-	-	-	-	-	-	-	-	-	-
13	Loans and advances	4,433	-	-	-	-	-	-	-	-	-	-
14	Debt securities, including UoP	-	-	-	-	-	-	-	-	-	-	-
15	Equity instruments	6,521	-	-	-	-	-	-	-	-	-	-
18	Debt securities, including UoP	7,694	-	-	-	-	-	-	-	-	-	-
19	Equity instruments	308	-	-	-	-	-	-	-	-	-	-
20	Non-financial undertakings	841,530	154,896	99,000	-	2,610	3,682	21,015	20,504	-	14	-
22	Debt securities, including UoP	68,675	798	-	511	511	-	-	-	-	-	-
23	Equity instruments	-	-	-	-	-	-	-	-	-	-	-
24	Households	3,850,031	3,719,298	100,151	100,151	-	-	-	-	-	-	-
25	98,667	98,667	-	-	-	-	-	-	-	-	-	-
26	of which building renovation loans	-	-	-	-	-	-	-	-	-	-	-
27	of which motor vehicle loans	132,217	1,484	1,484	1,484	-	-	-	-	-	-	-
28	Local governments financing	212,231	-	-	212,231	-	-	-	-	-	-	-
31	Collateral obtained by taking possession: residential and commercial immovable properties	45,649	-	-	-	-	-	-	-	-	-	-
32	Assets excluded from the numerator	-	-	-	-	-	-	-	-	-	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources (SST)
Of relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carrying amount
Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional
Of which enabling	Of which Use of Proceeds	Of which enabling
Of which Use of Proceeds	Of which enabling
than SMEs) not subject to NFRD disclosure obligations	2,597,922	35
Loans and advances	2,597,905	36
of which loans collateralised by commercial immovable property	37
counterparties not subject to NFRD disclosure obligations	3,478,877	41
Loans and advances	3,467,330	42
Debt securities	9,135	43
Equity instruments	2,412	44
Derivatives	71,418	45
On assets (e.g., Goodwill, commodities etc.)	5,422,224	48
Total GAR assets	19,268,854
4,103,099	218,652	100,151
2,610	3,682	21,015
21,015	-	14
-	-	49
Assets not covered for GAR calculation	banks exposure	3,577,239
Trading book	19,596	53
Total assets	27,864,895
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations	54
Of which debt securities	-	56
Of which equity instruments	-	57

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Use of Proceeds	Of which enabling	Of which transitional
Of which enabling	GAR - Covered assets in both numerator and denominator	943
905	--	7
-	--	-
4,125,064	240,572	100,151
2,610	3,696	2 Financial undertakings
--	-	--
--	--	228,905
19,501	--	3 Credit institutions
--	--	--
228,905	19,501	--
--	--	--
228,905	19,501	--
6 Equity instruments	-	--
--	--	7 Other financial corporations
--	--	--
--	--	-
8 of which investment firms	--	--
--	--	9 Loans and advances
11 Equity instruments	-	--
--	--	12 of which management companies
-	--	--
--	--	13 Loans and advances
-	--	--
14 Debt securities, including UoP	-	--
--	--	--
17 Loans and advances	-	--
--	--	--
18 Debt securities, including UoP	-	--
--	--	--
19 Equity instruments	-	--
20 Non-financial undertaking	7	--
175,552	120,409	-
2,610	3,696	22 Debt securities, including UoP
-	--	--
23 Equity instruments	-	--
24 Households	-	3,719,298
100,151	1	3,717,814
98,667	98,667	-
26 of which building renovation loans	-	--
--	--	27 of which motor vehicle loans
1,484	1,484	1,484
-	-	28 Local governments financing
-	--	--
--	--	--
31 Collateral obtained by taking possession: residential and commercial immovable properties	-	--
--	--	--
32 Assets excluded from the numerator for GAR	(CAPEX)	_3/8

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds
Of which transitional	Of which enabling
Financial and Non-financial undertakings	SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations
immovable property	of which building renovation loans
Debt securities	Equity instruments	Non-EU country counterparties not subject to NFRD disclosure obligations
Loan interbank loans	Cash and cash-related assets	Other categories of assets (e.g., Goodwill, commodities etc.)
Total GAR assets	943	905
	7	4,125,064
	240,572	100,151
	2,610	3,696
	51 Central banks exposure	Trading book
Total assets	Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations	Financial guarantees
	- - -46 - - -- - -- - -- - -- - -- -	securities- - -- - -- - -- - -- - -- - -- -
Of which equity instruments- - -- - -- - -- - -- - -- - -- -

Table 91:1. Assets for the calculation of GAR (CAPEX)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

1. Assets for the calculation of GAR (CAPEX)

Disclosure reference date T - 1 (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carrying amount sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional	Of which enabling	Of which Use of Proceeds
10,413,876	3,549,016	202,449	84,175	2,610	3,682	20,504	20,504	-	-	-
1	Loans and advances, debt securities and equity instruments not HfT eligible	52	-	-	-	-	-	-	-	-
2	Financial undertakings	1,474,013	226,557	19,274	-	-	-	-	-	-
3	Credit institutions	1,274,660	226,557	19,274	-	-	-	-	-	-
4	Loans and advances	297,166	-	-	-	-	-	-	-	-
7	Other financial corporations	199,353	-	-	-	-	-	-	-	-
8	of which investment firms	-	-	-	-	-	-	-	-	-
9	Loans and advances	-	-	-	-	-	-	-	-	-
10	Debt securities, including management companies	5,446	-	-	-	-	-	-	-	-
13	Loans and advances	2,889	-	-	-	-	-	-	-	-
14	Debt securities, including UoP	-	-	-	-	-	-	-	-	-
15	Equity instruments	2,557	-	-	-	-	-	-	-	-
18	Debt securities, including UoP	-	-	-	-	-	-	-	-	-
19	Equity instruments	210	-	-	-	-	-	-	-	-
20	Non-financial undertakings	957,104	154,214	99,000	-	2,613	3,682	20,504	20,504	-
22	Debt securities, including UoP	78,884	116	-	-	-	-	-	-	-
23	Equity instruments	-	-	-	-	-	-	-	-	-
24	Households	7,672,026	3,168,245	84,175	84,175	-	-	-	-	-
26	of which building renovation loans	-	-	-	-	-	-	-	-	-
27	of which motor vehicle loans	-	-	-	-	-	-	-	-	-
28	Local governments financing	189,773	-	-	-	-	-	-	-	-
31	Collateral obtained by taking possession: residential and commercial immovable properties	60,480	-	-	-	-	-	-	-	-
32	Assets excluded from the numerator for GAR calculation	(cov)	-	-	-	-	-	-	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T - 1 (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources (SST)
taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Total [gross] carrying amount
Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	Of which transitional
Of which enabling	Of which Use of Proceeds	Of which enabling
Of which Use of Proceeds	Of which NFCs (other than SMEs) not subject to NFRD disclosure obligations	2,090,316
Loans and advances	2,088,998	36 of which loans collateralised by commercial immovable property instruments
Non-EU country counterparties not subject to NFRD disclosure obligations	3,002,036	41 Loans and advances
2,989,817	42 Debt securities	9,807
Equity instruments	2,470,901	47 Other categories of assets (e.g., Goodwill, commodities etc.)
3,529	Total GAR assets	15,957,585
3,549,016	202,449	84,175
2,610	3,682	20,504
20,504	-52	-
-	-	49 Assets n issuers
3,996,027	51 Central banks exposure	5,763,444
52 Trading book	15,818	53 Total assets
25,732,874	-	-
-	-	-
-	-	-
Off-balance sheet exposures - Undertakings subject to NFRD under management	-	-
-	-	-
56 Of which debt securities	-	-
57 Of which equity instruments	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T - 1 (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems
towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Use of Proceeds	Of which enabling	Of which transitional
GAR - Covered assets in both numerator and denominator	3,569,520	222,953
84,175	2,610	3,734
1 Loan calculation	943	905
--	7	--
--	--	3,569,520
222,953	84,175	2,610
3,734	2 Financial undertakings	--
--	--	226,557
19,274	-	-
3 Credit institutions	--	--
--	--	226,557
19,274	-	-
6 Equity instruments	-	--
7 Other financial corporations	--	--
--	--	--
8 of which investment firms	--	--
9 Loan	--	--
11 Equity instruments	-	--
12 of which management companies	--	--
13 Loans and advances	--	--
14 Debt securities, including UoP	--	--
17 Loans and advances	-	--
18 Debt securities, including UoP	--	--
19 Equity instruments	-	--
20 Non-financial undertakings	--	174,602
119,504	-2,610	3,734
22 Debt securities, including UoP	--	--
116	-	--
23 Equity instruments	--	--
24 Households	--	3,168,245
84,175	84,175	-
25 84,175	-	-
26 of which building renovation loans	--	--
27 of which motor vehicle loans	--	-
28 Local governments financing	-	--
29 Housing financing	-	--
Collateral obtained by taking possession: residential and commercial immovable properties	--	--
32 Assets excluded from the numerator for GAR calculation (covered in (CAPEX)	_7/8

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T - 1 (in 000 EUR)

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems
towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which towards taxonomy relevant sectors (Taxonomy-eligible)
sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)	Of which environmentally sustainable (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds
Of which transitional	Of which enabling
Financial and Non-financial undertakings	SMEs and NFCs (other than SMEs) not subject to NFR	commercial immovable property
of which building renovation loans	Debt securities	Equity instruments
Non-EU country counterparties not subject to NFRD disclosure obligations	demand interbank loans	Cash and cash-related assets
Other categories of assets (e.g., Goodwill, commodities etc.)	Total GAR assets	943
905	-	-
7	-	-
-	-	-
-	-	3,569,520
222,953	84
Supranational issuers	Central banks exposure	Trading book
Total assets	-	-
-	-	-
-	-	-
Off-balance sheet exposures	Undertakings subject to NFRD disclosure obligations	-
management	-	-
-	-	-
Of which debt securities	-	-
Of which equity instruments	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

96:2. GAR sector information (CAPEX) _1/2 (in 000 EUR)

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources
Non-Financial corporates (Subject to NFRD)	SMEs and other NFC not subject to NFRD
carrying amount [Gross]	carrying amount [Gross]	carrying amount
Of which environmentally sustainable (CCM)	Of which environmentally sustainable (CCM)	Of which environmentally sustainable (SST)
Of which environmentally sustainable (SST)	Breakdown by sector - NACE 4 digits level (code and label)
1 02.10 Silviculture and other forestry activities	1	-
of pharmaceutical preparations	--	-
4 24.42 Aluminium production	4,880	3,214
5 25.50 Forging and shaping metal and powder metallurgy	33,358	1,204
6 33.17 Maintenance	non-renewable sources	-
8 35.12 Transmission of electricity	59,111	--
9 35.13 Distribution of electricity	121,597	37,626
10 35.14 Trade of electricity	-	47,063
19 52.21 Supporting service activities in land transport	--	168,404
22 53.10 Universal postal service activities	1,305	42
23 55.10 Hotels and similar accommodation activities	7,673	318
24 61.10 Wired telecommunication	Activities of head offices	10,489
27 71.12 Other engineering activities and related technical consultancy	1	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

(000 EUR)	Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)	TOTAL
Non-Financial corporate (Subject to NFRD)	SMEs and other NFC not subject to NFRD	Non-Financial corporates (Subject to NFRD)	SMEs and other NFC not subject to NFRD	Non-Financial corporates (Subject to NFRD)
carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]
carrying amount [Gross]	carrying amount [Gross]	carrying amount [Gross]	Of which environmentally sustainable (PC)	Of which environmentally sustainable (PC)
Of which environmentally sustainable (Ecos)	Of which environmentally sustainable (Ecos)	Of which environmentally sustainable (Ecos)	digits level (code and label)
1	02.10 Silviculture and other forestry activities	-	-	-
2	20.16 Manufacture of plastics in primary forms	-	-	10,064
3	21.20 Manufacture of pharmaceuticals	-	-
6	25.50 Forging and shaping metal and powder metallurgy	-	-	33,358
1	204	6	33.17 Maintenance and repair of other transport equipment	-
9	35.11 Production of electricity from	-	-	121,597
10	35.13 Distribution of electricity	-	-	47,063
11	35.14 Trade of electricity	-	-	55,716
12	35.30 Steam and air conditioning supply	-	-	37,931
14	47.30 Retail sale of automotive fuel in specialized stores	-	-	69,859
15	49.20 Freight rail transport	-	-	26,986
16	49.31	-	21,129
18	52.10 Cargo handling	37,728	905
19	52.21 Supporting service activities in land transport	-	-	168,404
20	52.23 Supporting service activities in postal service activities	-	-	1,305
23	55.10 Hotels and similar accommodation activities	-	-	7,673
24	61.10 Wired telecommunications activities	-	-	74,202
25	64	10,489	29
27	71.12 Other engineering activities and related technical consultancy	-	-	1

Table 97: 2. GAR sector information (CAPEX) _2/2

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

98:3. GAR KPI stock (CAPEX)

Disclosure reference date	T % (compared to total covered assets in the denominator)	Climate Change Mitigation (CCM)	Climate Change Adaptation (C)
Total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered	Which transitional	Of which enabling	Of which Use of Proceeds
Of which enabling	Of which Use of Proceeds	Of which enabling	GAR - Covered assets in both numerator and denominator calculation
21.29%	1.13%	0.52%	0.01%
0.02%	0.11%	0.11%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
0.80%	0.51%	0.00%	0.01%
0.02%	0.11%	0.11%	0.00%
0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%
19.30%	0.52%	0.52%	Collateralised by residential immovable property
19.29%	0.51%	0.51%	0.00%
0.00%	0.00%	0.00%	0.00%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date

Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding enabling	Of which Use of Proceeds	Of which enabling GAR - Covered assets in both numerator and denominator
1 Loans and advances, debt securities and equity instruments not HfT eligible	Financial undertakings	0.00%	0.00%	0.00%	0.00%	0.00%
3 Credit institutions	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
4 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
6 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
7 Other financial corporations	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
9 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
11 Equity management companies	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
19 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
21 Loans and advances, securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
23 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
24 Households	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
26 of which building renovation loans	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
27 of which motor vehicle loans	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
28 Local governments financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
30 Other local government financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
31 Collateral obtained by taking possession: residential and commercial	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Total GAR assets

21.29%	1.13%	0.52%	0.01%	0.02%	0.11%	0.11%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Table 99: 3. GAR KPI stock (CAPEX) _2/6

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date

T % (compared to total covered assets in the denominator)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)	TOTAL (CCM)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total assets covered	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds	Of which transitional	Of which enabling	GAR - Covered assets in both numerator and denominator
1 Loan	0.00%	0.00%	0.00%	0.00%	21.41%
2 Financial undertakings	0.00%	0.00%	0.00%	0.00%	1.19%
3 Credit institutions	0.00%	0.00%	0.00%	0.00%	0.00%
5 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	1.19%
6 E financial corporations	0.00%	0.00%	0.00%	0.00%	0.00%
8 of which investment firms	0.00%	0.00%	0.00%	0.00%	0.00%
10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%
11 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.02%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.02%
16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.04%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.03%
19 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	0.91%	0.62%
22 Debt securities, including UoP	0.00%	0.00%	0.00%	0.01%	0.00%
23 Equity instruments	0.00%	0.00%	19.30%	0.52%	0.52%
25 of which loans collateralised by residential immovable property	19.29%	0.51%	0.51%	0.00%	0.00%
26 of which building loans	0.01%	0.01%	0.01%	0.00%	0.00%
28 Local governments financing	0.00%	0.00%	0.00%	0.00%	0.76%
29 Housing financing	0.00%	0.00%	0.00%	0.00%	0.76%
31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	0.00%	21.41%

1.25% 0.52% 0.01% 0.02% 69.15%

Table 100: 3. GAR KPI stock (CAPEX) _3/6

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

101:3. GAR KPI stock (CAPEX)

Disclosure reference date T -1	% (compared to total covered assets in the denominator)	Climate Change Mitigation (CCM)	Climate Change Adaptation
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered
Of which transitional	Of which enabling	Of which Use of Proceeds	Of which enabling
Of which Use of Proceeds	Of which enabling	GAR - Covered assets in both numerator and denominator calculation	22.24%
1. Financial undertakings	1.42%	0.12%	0.00%
4. Loans and advances	0.00%	0.00%	0.00%
5. Debt securities	0.00%	0.00%	0.00%
6. Equity instruments	0.00%	0.00%	0.00%
7. Other financial corporations	0.00%	0.00%	0.00%
9. Loans and advances	0.00%	0.00%	0.00%
11. Equity instruments	0.00%	0.00%	0.00%
12. Of which management com	0.00%	0.00%	0.00%
13. Loans and advances	0.00%	0.00%	0.00%
14. Debt securities, including UoP	0.00%	0.00%	0.00%
16. Of which insurance undertakings	0.00%	0.00%	0.00%
18. Debt securities, including UoP	0.00%	0.00%	0.00%
19. Equity instruments	0.00%	0.97%	0.62%
21. Loans and advances	0.97%	0.62%	0.00%
23. Equity instruments	0.00%	0.00%	0.00%
24. Households	19.85%	0.53%	0.53%
Collateralised by residential immovable property	19.85%	0.53%	0.53%
26. Of which building renovation loans	0.00%	0.00%	0.00%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T -1

Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered
Of which Use of Proceeds	Of which enabling GAR - Covered assets in both numerator and denominator
1 Loans and advances, debt securities and equity instruments not H	Financial undertakings	0.00%
3 Credit institutions	0.00%
4 Loans and advances	0.00%
6 Equity instruments	0.00%
7 Other financial corporations	0.00%
9 Loans and advances	0.00%
10 Debt securities, including UoP	0.00%
11 Equity management companies	0.00%
13 Loans and advances	0.00%
14 Debt securities, including	0.00%
16 of which insurance undertakings	0.00%
17 Loans and advances	0.00%
19 Equity instruments	0.00%
20 Non-financial undertakings	0.01%
21 Loans and advances, securities, including UoP	0.00%
23 Equity instruments	0.00%
24 Households	0.00%
26 of which building renovation loans	0.00%
27 of which motor vehicle loans
28 Local governments financing	0.00%
30 Other local government financing	0.00%
31 Collateral obtained by taking possession: residential and commercial
Total GAR assets	0.03%

Table 102: 3. GAR KPI stock (CAPEX) _5/6

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disclosure reference date T -1

Protection and Restoration of Biodiversity and Ecosystems (Ecos)	TOTAL (CCM)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total assets covered	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Of which Use of Proceeds	Of which enabling	Of which Use of Proceeds	Of which transitional	Of which enabling
1 Loan	0.00%	0.00%	0.00%	0.00%	22.37%	1.40%	0.53%	0.02%	0.02%
	2 Financial undertakings	0.00%	0.00%	0.00%	0.00%	1.42%	0.12%	0.00%	0.00%	0.00%
3 Credit institutions	advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
5 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	1.42%	0.12%	0.00%	0.00%	0.00%
6 E financial corporations	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
		8 of which investment firms	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
		11 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
	16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
		17 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
	19 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	1.10%	0.75%	0.00%	0.02%	0.02%	1.10%
22 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
23 Equity instruments	0.00%	0.00%	19.85%	0.53%	0.53%	0.00%	0.00%	19.85%	25 of which loans collateralised by residential immovable property
26 of which building loans	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
	28 Local governments financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
		29 Housing financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	0.00%	0.00%	100.60%	6.31%	2.37%	0.07%
					0.11%	22.84%

Table 103: 3. GAR KPI stock (CAPEX) _6/6

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

KPIs Flow

Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
Use of Proceeds	Of which enabling	Of which
GAR - Covered assets in both numerator and denominator	Loans and advances, debt securities and equity
0.00%	0.00%	0.00%
Financial undertakings	6.19%	0.50%
Credit institutions	0.00%
Loans and advances	0.00%
Debt securities, including UoP	10.97%	0.88%
Other financial corporations	0.00%
Loans and advances	0.00%
Debt securities, including UoP	0.00%
of which management companies	0.00%
Debt securities, including UoP	0.00%
of which insurance undertakings	0.00%
Loans and advances	0.00%
including UoP	0.00%
Equity instruments	0.00%
Loans and advances	58.24%	30.72%
Debt securities	0.00%
Equity instruments	0.00%
Households	90.59%	2.38%
of which building renovation loans	0.00%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	29 Housing financing	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	0.00%
13.24%	0.84%	0.30%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
NLB Group Annual Report 2024		346	Overview	MB Statement	SB Statement	Key Highlights	Business Report	Strategy	Risk Factors & Outlook	Performance Overview	Segment Analysis
		105:4.GAR KPIs FlowC _2/3 % (compared to flow of total eligible assets)	Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)	Proportion of total covered assets funding enabling	Of which Use of Proceeds	Of which enabling GAR - Covered assets in both numerator and denominator
1 Loans and advances, debt securities and equity instruments not HfT eligible	Financial undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	3 Credit institutions	0.00%	0.00%	0.00%	0.00%
4 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	6 Equity instruments	0.00%	0.00%	0.00%	0.00%	7 Other financial corporations
0.00%	9 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	10 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%
11 Equity management companies	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	13 Loans and advances	0.00%	0.00%	0.00%	0.00%
14 Debt securities, includ	0.00%	0.00%	0.00%	0.00%	0.00%	16 of which insurance undertakings	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%	0.00%	19 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	20 Non-financial undertakings
			0.01%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	21 Loans and securities, including UoP	0.00%	0.00%	0.00%	0.00%
			23 Equity instruments	0.00%	0.00%	0.00%	0.00%	0.00%	24 Households	0.00%	0.00%	0.00%	0.00%	0.00%	26 of which building renovation loans
0.00%	0.00%	0.00%	0.00%	27 of which motor vehicle loans	28 Local governments financing	0.00%	0.00%	0.00%	0.00%	31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

GAR KPIs Flow

Protection and Restoration of Biodiversity and Ecosystems (Ecos)	TOTAL	Proportion of total assets covered	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
Use of Proceeds	Of which enabling	Of which transitional	Of which enabling	GAR - Covered assets in both numerator and denominator
1 Loans and advances	0.00%	0.00%	41.13%	2.62%
2 Financial undertakings	0.00%	0.00%	0.00%	0.00%
3 Credit institutions	0.00%	0.00%	0.00%	0.00%
5 Debt securities, including UoP	0.00%	0.00%	0.00%	10.97%
6 Equity instruments	0.00%	0.00%	0.00%	0.00%
8 of which investment firms	0.00%	0.00%	0.00%	0.00%
9 Loans and advances	0.00%	0.00%	0.00%	0.00%
11 Equity instruments	0.00%	0.00%	0.00%	0.00%
13 Loans and advances	0.00%	0.00%	0.00%	0.01%
14 Debt securities, including UoP	0.00%	0.00%	0.00%	0.00%
16 of which insurance undertakings	0.00%	0.00%	0.00%	0.09%
17 Loans and advances	0.00%	0.00%	0.00%	0.00%
19 Equity instruments	0.00%	0.00%	0.00%	0.00%
20 Non-financial undertakings	0.00%	0.00%	0.00%	0.00%
22 Debt securities, including UoP	0.00%	0.00%	0.00%	16.76%
23 Equity instruments	0.00%	0.00%	0.00%	7.57%
25 of which loans collateralised by residential immovable property	100.00%	2.53%	2.53%	0.00%
26 of which building renovation loans	0.00%	0.00%	0.00%	0.72%
28 Local governments financing	0.00%	0.00%	0.00%	0.52%
29 Housing financing	0.00%	0.00%	0.00%	0.52%
31 Collateral obtained by taking possession: residential and commercial immovable properties	0.00%	0.00%	0.00%	0.01%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

		Climate Change Mitigation (CCM)	Climate Change Adaptation (CCA)	Sustainable Use and Protection of Water and Marine Resources	taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which environmentally sustainable (Taxonomy-aligned)	Of which transitional	Of which enabling	Use of Proceeds
0.000%	0.010%	0.000%	0.000%	0.000%	0.000%
		Assets under management (AuM KPI)
0.000%	0.000%	0.000%	0.000%	0.000%	0.000%
		Of which equity instruments	0.000%	0.000%	0.000%	0.000%	0.000%
	TOTAL
Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	0.000%	0.010%	2 Assets under management (AuM KPI)
	0.000%	0.000%	0.000%	0.000%	0.000%	Of which debt securities
0.000%	0.000%	0.000%	0.000%	0.000%	0.000%
		Transition to a Circular Economy (CE)	Pollution Prevention and Control (PC)	Protection and Restoration of Biodiversity and Ecosystems (Ecos)	relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)	Of which environmentally sustainable (Taxonomy-aligned)	Of which Use of Proceeds	0.000%	0.000%	0.000%
0.000%	0.000%	0.000%	0.000%	0.000%	0.000%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Nuclear and fossil gas reporting

In accordance with Article 8(6), (7) and (8) of the amended Disclosures Delegated Act NLB prepared the exposure to nuclear energy and fossil gas energy activities in energy sector are qualified as sustainable under the EU Taxonomy. To calculate KPI’s, data available for this year's disclosure from NFRD undertakings has been used. Limited of exposures to these activities. With ongoing advancements in regulatory reporting practices and continual efforts to improve data collection, we anticipate a progressive enhancement in the thorough analyses of exposures related to nuclear energy and fossil gas activities.

Nuclear energy related activities

1. The undertaking carries out, funds or has exposures to research, development, and production of energy from nuclear processes with minimal waste from the fuel cycle. NO
2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO
3. The undertaking carries out, funds or has exposures to district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO

Fossil gas related activities

1. The undertaking carries out, funds or has exposures to generation facilities that produce electricity using fossil gaseous fuels. NO
2. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat and power generation facilities that produce heat/cool using fossil gaseous fuels. NO

Te

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Template 2 Taxonomy-aligned economic activities (denominator)

Economic activities	Amount	%	Amount	%	Amount	%
1. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%	0.00%	0.00%	0	0.00%
4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%	0.00%	0.00%	0
5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%	0.00%	0.00%	0
6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	258,974	100.00%	252,932	100.00%	5,

CAPEX Amount and proportion (the information is to be presented in monetary amounts and as percentages) (in 000 EUR)

TOTAL	Climate change mitigation (CCM)	Climate change adaptation (CCA)
0	0.00%	0.00%
3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%
4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%
5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	240,572	100.00%
8. Total applicable KPI	240,572	100.0

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

TURNOVER

Amount and proportion (the information is to be presented in monetary amounts and as percentages) (in 000 EUR)

		TOTAL	Climate change mitigation (CCM)	Climate change proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0.00	0
	in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0.00	0	0.00%
	3. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0.00	0	0.00%
	4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%
	5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%
	6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%
rows 1 to 6 above in the nominator of the applicable KPI	258,974	100.00%	252,932	100.00%	5,967	100.00%
8. Total amount and proportion of taxonomy-aligned economic activities in the

Table 112: Template 3 Taxonomy-aligned economic activities (numerator)

CAPEX Amount and proportion (the information is to be presented in monetary amounts and as percentages) (in 000 EUR)

Economic activities	Amount	%	Amount	%	Amount	%
1. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%	0	0.00%
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%	0	0.00%
activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%	0	0.00%
4. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%	0	0.00%
5. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%	0	0.00%
6. Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the nominator of the applicable KPI	0	0.00%	0	0.00%	0	0.00%
proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the nominator of the applicable KPI	240,572	100.00%	218,652	100.00%	21,015	100.00%

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

TURNOVER

Amount and proportion (the information is to be presented in monetary amounts and as percentages) (in 000 EUR)

TOTAL	Climate change mitigation (CCM)	Climate change adaptation (CCA)
taxonomy eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%
taxonomy eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%
taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%
activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	0.00%
Amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI	3,910,860	100.00%
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI	3,910,622	100.00%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

TURNOVER CAPEX

Economic activities	Amount	%	Amount	%
1. "Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with the applicable KPI"	0	0.00%	0	0.00%
2. "Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with the applicable KPI"	0	0.00%	0	0.00%
3. Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation	0	0.00%	0	0.00%
4. Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation
5. Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation
6. Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139
Taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	15,099,020	100.00%	15,143,790	100.00%

Table 114: Template 5 Taxonomy non-eligible economic activities

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Appendix 2: Methodological outline for operational GHG emissions calculation

					Table 115: Methodological outline for operational GHG emission calculation	Scope	Reported metrics	Definition
Fuel Combustion [pellets, biomass]				Carbon emissions related to consumption of natural gas	m3, kWh-GCV, MWh-GCV	Conversion factor from GCV to NCV is 0.9
Accuracy and priority manner:
				1. Consumption data as provided by invoicing from the relevant utility company.
2. In cases, where the NLB Group member does not utilize the whole floor, or ii) the renting provider based on a meter reading and proportional sharing principle.
3. In cases where data were not available or costs were fixed per m2, a location benchmark is created year by the occupied floor area [m2].
					Each entity's calculation spreadsheet includes information on how energy consumption data has been attributed for each branch.
			Emission factors for this category are presented below (Scope 1).
		Carbon emissions related to consumption of heating oil		l, km	t CO2 eq	Consumption data is provided by invoicing from the relevant heating oil Provider.
					Each entity's calculation spreadsheet includes information on how energy consumption data has been attributed for each branch.
			Emission factors for this category are presented below (Scope 1).
Scope 1 - 1.3 Fuel Combustion [liquid petroleum gas]	Carbon emissions related to consumption of liquid petroleum				company	If another unit used, the calculation is made in m3 (=Sm3).
					Each entity's calculation spreadsheet includes information on how energy consumption data has been attributed for each branch.
	Combustion [pellets, biomass]		Zero-emission source	kg t CO2 eq	Consumption data is provided by invoicing from the relevant pellet provider.
		Carbon emissions related to NLB Group's own fleet travel		l, km	t CO2 eq	Data is obtained in the following accuracy and priority manner:
1. Information on the distance [km] as provided by companies per relevant vehicles (reg. plate).
2. Consumption data [l/km] as provided by the fleet managers.
			Emission factors for this category are presented below (Scope 1).
				Scope 1 - 1.3	kg t CO2 eq	Consumption data is obtained in the following accuracy and priority manner:
					1. Consumption data as provided from invoices for maintenance of added refrigerant.
2. Refrigerant Assessment report AR5.
				Emissions factors for this category are presented below (Scope 1).
Scope 2 - 2.1 Electricity (market-based)	Carbon emissions related to purchased electricity consumption	and priority manner:
				1. Consumption data as provided by invoicing from the relevant utility company.
2. In cases, where NLB Group member does not utilize the whole floor, consumption data provider based on a meter reading and proportional sharing principle.
3. In cases where data were not available or costs were fixed per m2, a location benchmark is created [kWh/m2] by dividing.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Scope 2

2.1 Electricity (location-based)

Carbon emissions related to purchased electricity consumed by NLB Group kg t CO2 eq. As for electricity (market-based), emissions factors for location-based emissions are used.

Emissions factors for this category are presented below (Scope 2).

Heat from district heating

km t CO2 eq. Consumption data is obtained in the following accuracy and priority manner: 1. Consumption data as provided by invoicing from the relevant utility.

Consumption data were provided either i) by the building manager based on a meter reading or ii) the renting provider based on a meter reading and proportional sharing principle.

Scope 3 – Cat. 1 Purchases

Water km, type of transport t CO2 eq. Water consumption data was used either from invoices or estimated. No estimation method is prescribed by the methodology.

Scope 3 – Cat. 5 Waste in operations

Carbon emissions related to waste generated in offices t CO2 eq. For all countries data from UK Government, Department for Energy Security & Net Zero (former DEFRA).

Business travel

t CO2 eq. Data from the company’s IT database on business travel in km and type of transport. In the case of public transport, for all countries data from the UK Government.

In the case of airplane emissions, data from airline tickets is used. If data on the business trip is not in a format appropriate for calculation with the ICAO method, DEFRA is used.

Emission factors for this category are presented below (Scope 3).

Carbon emissions caused by employees’ commute to and from work

Anonymized data is obtained from internal HR databases. Selected based on data estimation of driving type Centre; for other countries data from the UK Government, Department for Energy Security & Net Zero (former DEFRA), https://assets.publishing.service.gov.uk/media/6722567487df31a

Emission factors for this category are presented below (scope 3).

Scope Reported metrics

Definition Measurement units Reporting units Methodology and emission factors

NLB Group Annual Report 2024

GHG Emission Factors

Scope	Emission source	Country	EF Source 2024	Unit
Scope 1	Heating oil	All countries	IJS-CEU based on National inventory report, ARSO, Conversion	0.228 kgCO2 eq/kWh
	Natural gas	All countries	IJS-CEU based on National inventory report, ARSO, Conversion	0.251 kgCO2 eq/kWh
	Diesel	All countries	IJS-CEU based on National inventory report, ARSO, Conversion	0.034 kgCO2 eq/kWh
	Refrigerant	R410A	All countries	UK Defra	1,924 kgCO2 eq/kg (AR5)
		R417A	All countries	UK Defra
R134A	All countries	UK Defra	1,300 kgCO2 eq/kg (AR5)
	R1234f	All countries	UK Defra	1 kgCO2 eq/kg (AR5)
	R407C	All countries	UK Defra	1,624 kgCO2 eq/kg (AR5)
		R22	All countries
R422A	All countries	UK Defra	2,847 kgCO2 eq/kg (AR5)

Scope 2 Emission source

Country	EF Source 2024	Unit
Electricity Slovenia	Agencija RS	0.459 kgCO2/kWh
Electricity BIH Sarajevo	AIB, Residual mix	0.720 kgCO2/kWh
Electricity Črna Gora Podgorica	AIB, Residual mix	0.748 kgCO2/kWh
Electricity Makedonija Skopje	Electricity Map, Production mix	0.543 kgCO2 eq/kWh
Electricity Kosovo Prishtina	Electricity Map, Production mix
Electricity Slovenia - Petrol d.d.	Petrol	0.390 kgCO2/kWh
Electricity Slovenia - Energija Plus	Energija Plus	0.405 kgCO2/kWh
Electricity Slovenia - E3	E3	0.433 kgCO2/kWh
Electricity Skopje 2024	IJS-CEUI considering contract mix	0.158 kgCO2 eq/kWh
Market-based District heating Slovenia - Energetika LJ	Energetika LJ	0.47 kgCO2/kWh
District heating Slovenia		0.234 kgCO2 eq/kWh
Electricity BIH	AIB, Production mix	0.701 kgCO2/kWh

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Electricity

Country	Production mix	kgCO2/kWh
Montenegro	AIB	0.467
Serbia	AIB	0.767
North Macedonia	Electricity Map
Croatia	AIB	0.177

District Heating

Location	Source	kgCO2 eq/kWh
Slovenia	IJS-CEU	0.269
BIH-BA	IJS-CEU	0.269
Other Countries	IJS-CEU	0.269
Slovenia	NLB Lease\&go IJS-CEU based on ARSO data	0.204
	Heating oil	0.268

Vehicles

Type	Location-based EF	kgCO2 eq/kWh
Electricity_EV Slovenia		0.234
Electricity_EV Serbia		0.767
Electricity_EV North Macedonia		0.543
Electricity_EV Croatia		0.177

Scope 3 Emission Sources

Emission source	Country	EF Source 2024	Unit
Purchased goods Water	All countries	UK Defra (Water supply)	eq/kg
WTT Heating oil	All countries	UK Defra, WTT fuels, Gas oil, Net NCV	0.063 [kgCO2 eq/kWh]
WTT LPG	All countries	UK Defra, WTT fuels, NET NCV	0.027 [kgCO2 eq/kWh]
WTT Gasoline	All countries	UK Defra, WTT fuels, Average biofuel blend, NET NCV	0.065 [kgCO2 eq/kWh]
WTT Diesel	All countries	UK Defra, WTT fuels, Average biofuel blend
bioenergy, Wood pellets			0.037 [kgCO2 eq/kWh]
Waste	All countries	UK Defra (Plastics: average plastics)	0.009 kgCO2 eq/kg
Work commute and Business travel	public personal car Slovenia	IJS	0.138 [kgCO2 eq/pkm]

Scope 2 Emission Sources

Emission source	Country	EF Source 2024	Unit

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Company Car	Included in Scope 1 [kgCO2 eq/pkm]
Electric Car	Slovenia	UK Defra	0.0442 [kgCO2 eq/pkm]
Bicycle	Slovenia	IJS	0 [kgCO2 eq/pkm]
Electric Scooter	Slovenia	IJS	0.03 [kgCO2 eq/pkm]
Train	Slovenia	IJS	0.048 [kgCO2 eq/pkm]
Electric Bike	Slovenia	UK Defra	0.014 [kgCO2 eq/pkm]
Taxi	Slovenia	IJS	0.089 [kgCO2 eq/pkm]
Airplane	3.6 Work Commute and 3.7 Business Travel	Public Transport	Other Countries
On Foot	Other Countries		0 [kgCO2 eq/pkm]
Personal Car	Other Countries	UK Defra	0.0442 [kgCO2 eq/pkm]
Bicycle	Other Countries	UK Defra	0 [kgCO2 eq/pkm]
Electric Scooter	Other Countries	UK Defra	0.03 [kgCO2 eq/pkm]
Train	Other Countries	UK Defra	0.10846 [kgCO2 eq/pkm]
Electric Bike	Other Countries	UK Defra	0.03546 [kgCO2 eq/pkm]
Taxi	Other Countries	UK Defra	0.014 [kgCO2 eq/pkm]
Passenger, Without RF			0.1029 [kgCO2 eq/pkm]

Scope 3 Emission Source

Country	EF Source	2024	Unit

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Appendix 3: IRO-2

Disclosure requirements in ESRS covered in the Sustainability Statement

List of material disclosure requirements	Page number (TBD)
ESRS 2 General Disclosures	178
GOV-1 The role of administrative, supervisory and management bodies	181
GOV-2 Information provided to and sustainability matters addressed by sustainability-related performance in incentive schemes	190
GOV-4 Statement on due diligence	196
GOV-5 Risk management and internal controls over sustainability reporting	196
SBM-203 SBM-3 Material IROs and their interaction with strategy and business model	204
IRO-1 Description of the processes to identify and assess material IROs	207
E1 Climate change	210
Transition plan for climate change mitigation	210
SBM-3 Material climate-related IROs and their interaction with strategy and business model	217
IRO-1 Identification and assessment of physical and transitional risks	222
E1-2 Policies related to climate change mitigation and adaptation	227
E1-3 Actions and resources related to climate change mitigation and adaptation	23
consumption and mix	240
E1-6 Gross Scopes 1, 2, 3 and total GHG emissions	241
S1 Own workforce	254
SBM-2 Interests and views of stakeholders	203
SBM-3 material IROs and their	266, 267, 268, 269
S1-2 Processes for engaging with employees and workers’ representatives about IROs	270
S1-3 Processes to remediate negative impacts and channels to raise concerns

---

NLB Group Annual Report 2024

360 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

of material disclosure requirements

Page number (TBD)

S1 Own workforce (continued)

S1-6 Employees Characteristic Metrics

257

S1-8 Enabling social dialogue and collective bargaining metrics

263

S1-14 Health and safety metrics

265

S1-16 Pay gap and total remuneration metrics

268

S1-17 Incidents, complaints and severe human rights impacts

261

S3 Affected communities

opportunities and their interaction with strategy and business model

272

S3-1 Policies related to affected communities about impacts

273

S3-2 Processes for engaging with affected communities to raise concerns

275

S3-4 Key actions and targets

275

S3-5 Key actions and targets

275

S4 Consumers and end-users

280

SBM-2 Interests and views of stakeholders and business model

280

S4-1 Policies

282, 283, 284, 285, 286, 288

S4-2 Processes for engaging with clients and end-users about impacts

288

S4-3 Processes to remediate negative impacts

287, 288

S4-5 Targets and metrics

283, 285, 287, 288

G1 Business conduct

290

GOV-1 Role of administrative, supervisory and management bodies related to business conduct

290

G1-1 Corporate culture, ethical governance and integrity, and regulatory compliance

293

G1-3 Prevention of corruption and bribery

295

G1-4 Incidents of corruption or bribery

296

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Appendix 4: List of datapoints that derive from other EU legislation (ESRS 2 appendix B)

List of datapoints in cross-cutting and topical standards that derive from other EU legislation

Regulation reference	EU Climate Law reference	Material / Not material	Page number (TBD)
ESRS 2 GOV-1	Board's gender diversity paragraph 21 (d)	Indicator number 13 of Table #1 of Annex
ESRS 2 GOV-1	Percentage of board members who are independent paragraph 21 (e)	Delegated Regulation (EU) 2020/1816, Annex II	Material	181
ESRS 2 GOV-4	Statement on due diligence	Involvement in activities related to fossil fuel activities paragraph 40 (d) i	Indicators number 4 Table #1 of Annex 1 Article 449a Regulation (EU) No 575/2013; Commission Implementing

Table 2: Qualitative information on Social risk

Delegated Regulation (EU) 2020/1816, Annex II	Material	227, 249, 250
ESRS 2 SBM-1	Involvement in activities related to chemical production
ESRS 2 SBM-1	Involvement in activities related to controversial weapons paragraph 40 (d) iii	Indicator number 14 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1816, Annex II
ESRS 2 SBM-1	Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv	Delegated Regulation (EU) 2020/1818, Article

Transition plan to reach climate neutrality by 2050

paragraph 14 Regulation (EU) 2021/1119, Article 2(1) Material 210

ESRS E1-1 Undertakings excluded from Paris-aligned Benchmark

Template 1: Banking book-Climate Change transition risk

Credit quality of exposures by sector, emissions and residual maturity Delegated Regulation (EU) 2022/2453

Reduction targets

paragraph 34 Indicator number 4 Table #2 of Annex 1 Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Ba

2020/1818, Article 6 Material 236 ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38 Indicator number 5 Table

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

E1-5 Energy consumption and mix

paragraph 37

Indicator number 5

Table #1 of Annex 1	Material	240	ESRS E1-5 Energy intensity associated with activities in high climate impact sectors

Gross Scope 1, 2, 3 and Total GHG emissions

paragraph 44

Indicators number 1 and 2

Table #1 of Annex 1	Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453

Quality of exposures by sector, emissions and residual maturity

Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1)

Material 241

ESRS E1-6 Gross GHG emissions intensity

Template 3: Banking book – Climate change transition risk: alignment metrics

Delegated Regulation (EU) 2020/1818, Regulation (EU) 2021/1119, Article 2(1)

Not Material - ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks

paragraph 66

ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk

paragraph 66 (a)

ESRS E1-9 Location of significant assets at material physical risk

paragraph 66 (c)

2022/2453 paragraphs 46 and 47

Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk.

Material, subject to phase in - ESRS E1-9 Breakdown of the

Article 449a Regulation (EU) No 575/2013

Commission Implementing Regulation (EU) 2022/2453 paragraph 34

Template 2: Banking book - Climate change transition risk: Loans collate

phase in - ESRS E1-9 Degree of exposure of the portfolio to climate-related opportunities

paragraph 69

Delegated Regulation (EU) 2020/1818, Annex II

Material, subject to phase in - ESRS

Pollutant Release and Transfer Register

emitted to air, water and soil, paragraph 28

Indicator number 8

Table #1 of Annex 1	Indicator number 2	Table #2 of Annex 1	Indicator number 1

Marine resources

paragraph 9

Indicator number 7

Table #2 of Annex 1	Not Material - ESRS E3-1 Dedicated policy	paragraph 13	Indicator number 8

Not Material - ESRS E3-4 Total water recycled and reused

paragraph 28 (c)

Indicator number 6.2

Table #2 of Annex 1	Not Material - ESRS E3-4 Total water consumption in m3

Not Material - ESRS 2- IRO 1 - E4

paragraph 16 (a) i

Indicator number 7

Table #1 of Annex 1	Not Material - ESRS 2- IRO 1 - E4	paragraph 16 (b)	Indicator number 10

Table #2 of Annex

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

ESRS 2- IRO 1 - E4

paragraph 16 (c) Indicator number 14

Table #2 of Annex 1	Not Material - ESRS E4-2 Sustainable land / agriculture practices or policies

ESRS E4-2

paragraph 24 (b) Indicator number 12

Table #2 of Annex 1	Not Material- ESRS E4-2 Policies to address deforestation

ESRS E5-5

paragraph 39 Indicator number 9

Table #1 of Annex 1	Not Material - ESRS 2- SBM3 - S1 Risk of incident but disclosed

ESRS 2- SBM3 - S1

Risk of incidents of child labour paragraph 14 (g) Indicator number 12

Table #3 of Annex I	Not Material, but disclosed

ESRS S1-1

Indicator number 11

Table #1 of Annex I	Material

ESRS S1-1

Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21

measures for preventing trafficking in human beings paragraph 22	Indicator number 11	Table #3 of Annex I	Material

ESRS S1-1

workplace accident prevention policy or management grievance/complaints handling mechanisms paragraph 32 (c) Indicator number 5

Table #3 of Annex I	Material

ESRS S1-14

Number of fatalities and number and rate of work-related accidents

Regulation(EU) 2020/1816, Annex II	Material

ESRS S1-14

Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e) Indicator number 3

Table #3 of Annex I	Material

ESRS S1-16

Excessive CEO pay ratio paragraph 97 (b) Indicator number 8

Table #3 of Annex I	Material

ESRS S1-17

Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a) Indicator number 10

Table #1	Indicator n. 14	Table #3 of Annex I	Material

ESRS 2- SBM3 – S2

Significant risk of child labour or forced labour in the value chain paragraph 11 (b) Indicators number 12 and n. 13

Table #3 of Annex I

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

ESRS S2-1

Human rights policy commitments paragraph 17

Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1 Not Material 260

ESRS S2-1

Policies related to value chain

Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19

Indicator number 10 Table #1 of Annex 1 Delegated Regulation (EU) 2020

ESRS S2-1

Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19

Delegated Regulation (EU) 2020/1816, Annex II No downstream value chain paragraph 36

Indicator number 14 Table #3 of Annex 1 Not Material

ESRS S3-1

Human rights policy commitments paragraph 16

Indicator number 9 Table #3 of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17

Indicator number 10 Table #1 Annex 1 Delegated Regulation (EU) 2020/1816, Annex II D rights issues and incidents paragraph 36

Indicator number 14 Table #3 of Annex 1 Material 275

ESRS S4-1

Policies related to consumers and end-users paragraph 16

Indicator number 9 Table #3 of UNGPs on Business and Human Rights and OECD guidelines paragraph 17

Indicator number 10 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1816, Annex II

Delegated Regulation incidents paragraph 35

Indicator number 14 Table #3 of Annex 1 Material 274

ESRS G1-1

United Nations Convention against Corruption paragraph 10 (b)

Indicator number 15 Table #3 of number 6 Table #3 of Annex 1 Material 297

ESRS G1-4

Fines for violation of anti-corruption and anti-bribery laws paragraph 24 (a)

Indicator number 17 Table #3 of Annex 1 Delegated R and anti-bribery paragraph 24 (b)

Indicator number 16 Table #3 of Annex 1 Material 296

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Appendix

5: Responsible banking progress statement for PRB Signatories

Principle 1: Alignment

NLB Group aligns its business strategy to be consistent with and contribute to individual United Nations Guiding Principles on Business and Human Rights, and relevant national and regional frameworks such as the Sofia Declaration on the Green Agenda for the Western Balkans.

Investments AD Skopje and the SLS Group, NLB Group has also expanded its operations to the Croatian market.

Principle 2: Impact & Target Setting

NLB Group is amplifying its positive impact on economies, and human rights within its own workforce. In 2024, NLB Group conducted a Double Materiality Analysis aligned with ESRS standards, leveraging the UNEP FI Impact Analysis.

Inclusive economies, while targets related to climate and resource efficiency are further being developed.

Principle 3: Clients & Customers

The relationship with consumers and end users is crucial. NLB Group is one of the leading financial groups in the SEE region.

Summary template NLB Group 2024

Links & references

For detailed information please refer to:

• NLB Group at Glance p. 298
• SBM-3 Material IROs and their interaction with the strategy and business model p. 204, p. 207
• Targets related to climate targets
• S-4 Consumers and end-users
• E1 Climate Change
• Appendix 1: Taxonomy *Not subject to external assurance.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Principle 4: Stakeholders

NLB Group continually engages with a wide range of stakeholders to provide them with relevant information on various topics, to consider their views, concerns and governance.

Governance & Culture

NLB Group constantly strives to improve its governance structures in the area of sustainability. In 2024, it adopted a revised Sustainability Policy, and in addition to that, Group employees are obliged to take sustainability training at least once a year. With this, the Group is strengthening its commitment to the set goals and responding to the needs arising from stakeholders.

NLB Group reports on sustainability in line with the EU Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS). Third-party limited assurance is also provided.

Target year	Paper consumption (number in thousand)	Share of electricity from zero-carbon sources	Digital penetration (% of active digital users in total number)
2025	68,448	69%	75%
2030	65,343

Stock in EUR million	701	1,370	2030
Green lending to micro and private individuals - outstanding stock in EUR million	327	528	2030
Number of young clients (18-27 years) with products related to long-term savings and/or investment plans	39%	+15%	2030

Links & references

For detailed information please refer to: ›› Interests and views of stakeholders

For detailed information please refer to: ›› Limited Assurance Statement

NLB Group Annual Report 2024

Appendix 6: TCFD Index Table

As an issuer on the London Stock Exchange, NLB discloses climate-related financial information related to NLB Group for the third time in reference to the TCFD framework regarding (1) governance, (2) business strategy, (3) risk management, (4) metrics and targets. NLB acknowledges that this framework is fully incorporated in the IFRS S1 (General Requirements for Climate-related Disclosures) as of year-end 2023. For fiscal year 2024, NLB prepared the Sustainability Statement in accordance with the Corporate Social Responsibility Directive (CSRD) elements of TCFD framework. In addition, NLB Group has published the Pillar III Disclosures, which is available on the NLB Group website. This content index provides to stakeholders the Statement 2024 and NLB Group Pillar III Disclosures for the 2024.

RECOMMENDATIONS

Disclosure location	I. GOVERNANCE
a) The Board’s oversight of climate-related risks and opportunities	Sustainability Statement:
	• Governance, pages 181 – 197
	• Information provided to and sustainability matters addressed by the administrative, supervisory, and management bodies, page 194
II. STRATEGY
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
b) Describe the impact of climate-related risks on the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2 °C or lower scenario.	Sustainability Statement:
	• Transition plan for climate and their interaction with strategy and business model, page 217
	• Resilience analysis, page 218
	• Sustainable finance, pages 246 - 251
d) Banks should describe significant concentrations of credit exposure to carbon-intensive firms, page 127	*Not subject to external assurance.

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

RECOMMENDATIONS

Disclosure location e) Additionally, banks should consider disclosing their climate-related risks (transition and physical) in their lending and other financial intermediary opportunities and their interaction with strategy and business model, page 217

• Pillar III Disclosures: Exposures subject to physical risk, pages 128-129

III. RISK MANAGEMENT

a) The organization’s processes for managing climate-related risks

• Material climate-related IROs and their interaction with strategy and business model, page 217

• Identification and assessment of material climate-related IROs, page 218 - 221

• Identification a 298 - 300

b) The organization’s processes for managing climate-related risks

c) How processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s context of traditional banking industry risk categories such as credit risk, market risk, liquidity risk, and operational risk. Banks should also consider describing any risk classification framework (“Emerging Risks”)

IV. METRICS

a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process

• EU Taxonomy regulation, page 215 and Appendix 1, page 307 - 353

b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks

• Sustainability Statement: Targets related to climate change mitigation and adaptation intermediary business activities where data and methodologies allow. These emissions should be calculated in line with the Global GHG Accounting and Reporting Standard for the Financial Industry comparable methodology.

• Pillar III Disclosures: Credit Quality of Exposures, page 120

FINANCIAL REPORT

Transparency and accuracy are the cornerstones of our integrity. This chapter provides comprehensive explanations of financial data, additional disclosures, detailed notes on the Group’s financial performance and operations.

NLB Group Annual Report 2024

Contents

• Independent Auditor’s Report 372
• Statement of Management’s Responsibility 377
• Income Statement for the Annual Period ended 31 December 378
• Statement of Other Comprehensive Income as at 31 December 380
• Statement of Changes in Equity for the Annual Period ended 31 December 382
• Statement of Cash Flows for the Annual Period ended 31 December 384
• Summary of Material Accounting Policy Information 386
• • 2.1. Statement of compliance 386
• 2.2. Basis for preparation of the financial statements 386
• 2.3. Functional and presentation currency 386
• 2.4. Goodwill and bargain purchases 387
• 2.7. Investments in subsidiaries, associates, and joint ventures 388
• 2.8. A combination of entities or businesses under common control 388
• 2.9. Foreign currency transactions 389
• 2.12. Dividend income 389
• 2.13. Financial instruments 389
• 2.14. Allowances for financial assets 392
• 2.15. Forborne loans 397
• 2.16. Repossessed assets 397
• 2.20. Intangible assets 398
• 2.21. Investment properties 398
• 2.22. Non-current assets and disposal groups classified as held for sale 398
• 2.23. Accounting for leases 399
• 2.24. Cash and cash equivalents 399
• 2.26. Other issued financial instruments with characteristics of equity 400
• 2.27. Provisions 400
• 2.28. Contingent liabilities and commitments 400
• 2.29. Taxes 400
• 2.33. Share capital 402
• 2.34. Segment reporting 402
• 2.35. Critical accounting estimates and judgments in applying accounting policies 402
• 2.36. Implementation of the new accounting standards 402

Composition of the NLB Group 406
- Notes to the Income Statement 408
- - 4.1. Interest income and expenses 408
- 4.2. Dividend income 409
- 4.3. Fee and commission income and expenses 410
- 4.4. Gains less losses from financial assets and liabilities held for trading 412
- 4.5. Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss 412
- 4.6. Operating income and expenses 414
- 4.9. Administrative expenses 415
- 4.10. Cash contributions to resolution funds and deposit guarantee schemes 416
- 4.11. Depreciation and amortisation 417
- 4.14. Impairment charge 418
- 4.15. Income tax 419
- 4.16. Earnings per share 421

Notes to the Statement of Financial Position 421

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

5. Share capital

473

5.21. Other equity instruments issued

473

5.22. Accumulated other comprehensive income and reserves

474

5.23. Capital adequacy ratios

475

5.24. Off-balance sheet liabilities

6. Risk Management

6.1. Credit risk management

484

6.2. Market risk

507

6.3. Liquidity risk

514

6.4. Management of non-financial risks

528

6.5. Fair value hierarchy of financial and non-financial assets and financial liabilities

539

7. Analysis by Segment for NLB Group

541

8. Related-Party Transactions

545

9. Events After the Reporting Date

554

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Independent Auditor’s Report

KPMG SLOVENIJA, podjetje za revidiranje, d.o.o.

Telefon: +386 (0) 1 420 11 60

Železna cesta 8a

Internet: http://www.kpmg.si

SI- 1000 Ljubljana Slovenija

Okrožno sodišče v Ljubljani družba z omejeno odgovornostjo in članica globalne organizacije

št. reg. vl.: 061/12062100

neodvisnih članic, ki so povezane s KPMG International Limited, osno

ID za DDV: SI20437145

pridržane. matična št.: 5648556000

Independent Auditor's Report

To the shareholders of NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA

Report on the Audit of financial statements of NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA (the “Bank”) and the consolidated financial statements of the Bank and its subsidiaries (collectively, the “Group”), with respect to the financial year ended 31 December 2024; and, for the period from 1 January to 31 December 2024:

• the separate and consolidated statements of profit or loss;
• the separate and consolidated statements of other comprehensive income;
• the separate and consolidated statements of cash flows; and
• notes, comprising material accounting policies and other explanatory information.

In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the financial position, respectively, of the Bank and the Group as at 31 December 2024, and of their respective unconsolidated and consolidated financial performance and unconsolidated and consolidated cash flows for the year then ended, in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS EU”).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and Regulation (EU) No 537/2014 of the European Parliament and of the Council on statutory audit of public-interest entities (OJ L 158, 27 May 2014, p. 77 -112 - Regulation (EU) No 537/2014). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank and the Group in accordance with the International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants (including International Independence Standards) and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Loans and Advances to Customers

As at 31 December 2024, the gross carrying amount of loans and advances to customers of the Bank and the Group, respectively:

Bank	Group
EUR 8,811,061 thousand	EUR 16,721,410 thousand

and related impairment loss recognised in the income statement in the year then ended, for the Bank and the Group, respectively:

Bank	Group
EUR 41,348 thousand	EUR 357,761 thousand

---

customers of the Bank and the Group, respectively: EUR 7,267,851 thousand and EUR 14,063,228 thousand; related impairment allowance of the Bank and the Group, respectively: EUR 119,568 income statement for the Bank and the Group, respectively: EUR 11,435 thousand and EUR (3,764) thousand). Refer to the Note 2.14. Allowances for financial assets, Note 2.35. Critical account Note 5.6. Financial assets measured at amortised cost, Note 5.14. Movements in allowance for the impairment of financial assets and Note 6.1. Credit risk management.

Key audit matter

Our response expected credit losses (“ECLs”) within loans and advances to customers (“loans”, “exposures”) measured at amortized cost at the reporting date. We focused on this area as the measurement of allowances and judgements. The Bank and the Group calculate allowances for credit losses in accordance with IFRS 9 Financial Instruments, based on the ECL model under the general approach losses or lifetime expected credit losses, depending on whether or not there has been a significant increase in credit risk since initial recognition. ECLs for performing exposures (Stage 1 and Stage 2) not exceeding EUR 0.5 million for corporate exposures and EUR 0.1 million for retail exposures, are determined by modelling techniques relying on key parameters such as the probability of default (PD).

Procedures in this area, performed, where applicable, with the assistance of our own financial risk management (FRM) and information technology (IT) audit specialists, included, among others:

• Assessing their compliance with the requirements of the relevant regulatory and financial reporting frameworks;
• Making relevant inquiries of the Bank’s and the Group’s risk management process, IT applications used therein, as well as key data sources and assumptions in the ECL model.
• Testing of IT control environment for data security and access, assisted by our own IT specialists.
• Controls in the process of approval, recording and monitoring of loans, including, but not limited to, those relating to the credit rating classification, calculation of days past due, collateral.

NLB Group Annual Report 2024 373 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Given default (LGD), taking into account historical experience, identification of exposures with a significant increase in credit risk (SICR), forward-looking information and management judgement exceed EUR 0.5 million for corporate exposures and EUR 0.1 million for retail exposures, are determined on an individual basis by means of a discounted cash flows analysis. The process involves the expected proceeds from the sale of the related collaterals and minimum period for collateral disposal. Due to the above factors, including the significantly higher estimation uncertainty stemming from interest rates we considered allowance for impairment of loans and advances to customers to be associated with a significant risk of material misstatement in the consolidated and separate financial statements, determined to be a key audit matter.

Challenging the appropriateness of the Bank’s and the Group’s application of the significant increase in credit risk assumption and definition of default impairment allowance:

• Obtaining an understanding of the key internal rating models for loans, and assessing the relevance and reliability of the key data used therein;
• Obtaining the forward assessment. Independently assessing the information by reference to publicly available data and corroborating inquiries of the Management Board;
• Assisted by our own financial risk model, such as PD and LGD by reference to, among other things, our own analysis of the Bank’s and the Group’s data on past default occurrence and realised losses on those defaults;
• Examining industry and our understanding of the current macro-economic situation;
• For a risk-based sample of exposures critically assessing the existence of any triggers for classification inquiries of the loan officers and credit risk management personnel and by considering business operations of the respective customers as well as market conditions and historical debt.

Challenging the Bank’s and the Group’s cash flow projections and key assumptions used, by reference to our knowledge of the relevant industry and of the borrower. Challenging the Bank and the Group, and also by reference to publicly available data;

For all impairment allowances: Critically assessing the overall reasonableness of the allowances for impairment, including the data; Examining whether the Bank’s and Group’s loan impairment and credit risk-related disclosures in the separate and consolidated financial statements appropriately address the relevant framework.

Business combinations

As at 31 December 2024 the fair value of net assets acquired in material business combinations during the year amounted to EUR 124,078 thousand resulting in financial position under Intangible assets. Refer to: Note 2.6. Business Combinations, goodwill, and bargain purchases, Note 3. Changes in the composition of the NLB Group and Note 5.12.c)

Ljubljana

Key audit matter

Our response: As disclosed in the Note 5.12.c) Investments in subsidiaries, associates, and joint ventures - Acquisition of SLS HOLDCO d.o.o., Ljubljana, during 2024 HOLDCO d.o.o., the parent company of Summit Leasing Slovenija d.o.o., Ljubljana, and its subsidiary Mobil Leasing d.o.o., Zagreb. The total purchase price amounted to EUR 127,216 thousand.

Complying with the above requirements in the context of the acquisitions required significant judgement and complex assumptions, in particular as regards the following:

Our audit procedures performed included:

• Assessment of the criteria defined in IFRS 10 Consolidated Financial Statements, the assessment made by management with regard to the control over entities acquired;
• Assessing the completeness of the inspection of the share purchase agreements, our understanding of the acquirees’ operations and inspection of the acquirees’ accounting records;
• Assisted by our own valuation specialists, assessment of the methods and models applied to fair valuations of specific assets and liabilities assumed in the acquisitions, which included:

Identification of all of the assets acquired, with main focus on intangible assets (primarily distribution agreements), and measurement of distribution agreements acquired with respect to which we determine fair value, with key assumptions such as discount rates, churn rates, useful lifetime, growth rates and terminal growth rate. As a result, the Group recognized total assets of EUR 964,153,138 thousand.

Due to the above factors, the business combination and valuation of the distribution agreement was associated with an increased risk of material misstatement to the consolidated financial statements, considered by us to be a key audit matter.

Our testing included:

• Testing the integrity of the model for fair value measurement of distribution agreement, including mathematical accuracy, and evaluating the key assumptions (discount rates and terminal growth rate) for reasonableness compared to both externally derived data and historical financial performance;
• Assessing the accuracy, completeness and relevance of the disclosures in accordance with the relevant requirements of the financial reporting standards.

Other Information

Management is responsible for the other information. The other information comprises the “Overview”, the “Business Report” included in the Annual Report but does not include the separate and consolidated financial statements and our auditor’s report thereon. Our opinion on the separate and consolidated financial statements is not affected by the other information, and in our report, we do not express any form of assurance conclusion thereon.

With regard to the Sustainability Statement, which constitutes a separate part of the Business Report, we performed a limited assurance engagement with an unmodified conclusion. In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement, we have nothing to report in this regard.

Other Reporting Responsibilities Related to Other Information – Business Report

In addition, with respect to the Business Report, we are required to report on its compliance with the disclosures required by the Companies Act dated 4 May 2006 (Official Gazette of the Republic of Slovenia no. 42/2006 with amendments - hereafter referred to as “the Act”). Based solely on the work required to be undertaken in the course of the audit of the separate and consolidated financial statements and the procedures above, in our opinion:

• The information included in the Business Report is consistent, in all material respects, with the separate and consolidated financial statements; and
• The Business Report has been prepared in accordance with the Act.

Based on our understanding of the Bank and its environment obtained in the course of our audit, we are required to report if we have identified material misstatements in the Business Report. We have nothing to report in this regard.

Independent Auditor's Report

For the Separate and Consolidated Financial Statements, Management is responsible for the preparation of the separate and consolidated financial statements that give a true and fair view in accordance with applicable laws and regulations.

Management is also responsible for enabling the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the separate and consolidated financial statements, management is required to:

• Continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Bank’s and the Group’s financial reporting process.

Auditor's Responsibilities for the Audit of the Separate and Consolidated Financial Statements

Our responsibility is to express an opinion on the separate and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISAs) and EU Regulation (EU) No 537/2014. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and EU Regulation (EU) No 537/2014 will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated financial statements.

As part of an audit in accordance with ISAs and EU Regulation (EU) No 537/2014, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
• Detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overriding of internal control.
• Design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s and the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s and the Group’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Bank and the Group to cease to continue as a going concern.

We evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for our opinion on the consolidated financial statements. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.

We were appointed by the shareholders of the Bank on the shareholders meeting dated 20 June 2022 to audit the Bank’s and the Group’s respective separate and consolidated financial statements for the year ended 31 December 2024.

We confirm that:

• Our audit opinion is consistent with the additional report presented to the Audit Committee of the Bank dated 9 April 2025.
• We have not provided any prohibited non-audit services and remain independent of the Bank and the Group in conducting the audit.

Independent Auditor's Report on the Compliance of the Electronic Separate and Consolidated Financial Statements

We provide reasonable assurance as to whether the audited separate and consolidated financial statements of the Bank and the Group for the financial year ended 31 December 2024 (respectively, “Audited Separate and Consolidated Financial Statements”) have been prepared in accordance with requirements of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 of the Council with regard to regulatory technical standards for establishing a single electronic reporting format applicable for the year 2024 (“Delegated Regulation”).

Presentation of the Audited Separate and Consolidated Financial Statements

In accordance with the Delegated Regulation, and for such internal control as management determines is necessary to be free from material misstatement, whether due to fraud or error. Those charged with governance are responsible for overseeing the preparation of the Audited Separate and Consolidated Financial Statements.

Responsibilities

Our responsibility is to express an opinion on whether the Audited Separate and Consolidated Financial Statements are prepared in accordance with the requirements of the Delegated Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the International Auditing and Assurance Standards Board (IAASB).

We obtain reasonable assurance about whether the separate and consolidated financial statements in the ESEF format are properly prepared and presented in accordance with the requirements of the Delegated Regulation.

We adhere to the independence and ethical requirements of the EU Regulation 537/2014 and the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA). The Code is based on the fundamental principles of integrity, objectivity, professional competence and due care.

Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, issued by the IAASB, including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Summary of Work Performed

Within the risks of material non-compliance of the Audited Separate and Consolidated Financial Statements with the requirements of the Delegated Regulation, whether due to error or fraud:

• Obtained assurance for designing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control;
• Assessed whether the Audited Consolidated Financial Statements comply with the requirements of the Delegated Regulation applicable as of the reporting date;
• Obtained reasonable assurance that the Audited Consolidated Financial Statements in XHTML format are correctly marked and in Inline XBRL (iXBRL) technology;
• Obtained reasonable assurance that notes to the consolidated financial statements are correctly block-tagged.

We believe that the evidence obtained, procedures performed and the evidence obtained, the Audited Separate and Consolidated Financial Statements of the Bank and the Group for the financial year ended 31 December 2024 are in our opinion compliant with the Delegated Regulation.

On behalf of audit firm KPMG SLOVENIJA, podjetje za revidiranje, d.o.o.

Domagoj Vuković, FCCA Certified Auditor Partner

Ljubljana, 9 April 2025

NLB Group Annual Report 2024

Statement of Management’s Responsibility

The Management Board hereby confirms its responsibility for preparing the consolidated financial statements of NLB Group and the financial accounting policies and notes to the financial statements. The Management Board is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements of the Slovenian Companies Act and the Banking Act so as to give a true and fair view of the financial position of NLB Group and NLB as at 31 December 2024, and confirms that the appropriate accounting policies were consistently applied, and that the accounting estimates were prepared according to the principles of prudence and good management.

NLB, together with the accompanying notes, have been prepared on a going-concern basis for NLB Group and NLB, and in line with valid legislation and the International Financial Reporting Standards. The Management Board is responsible for appropriate accounting practices, the adoption of appropriate measures for safeguarding assets, and the prevention and identification of fraud and other irregularities or illegal acts.

Andreas Burkhardt

Antonio Argir

Blaž Brodnjak

Member

Member

Member

Member

Member

Chief Executive Officer

NLB Group Annual Report 2024

Income Statement for the Annual Period ended 31 December in EUR thousands

NLB Group	NLB	Notes	2024	2023
Interest and similar income	4.1.	1,207,638	993,405	646,930
Interest expenses calculated using the effective interest method		(232,863)	(148,034)	(174,429)
Other interest		(273,477)	(160,071)	(215,050)
Net interest income		934,161	833,334	431,880
Dividend income	4.2.	116	169	223,579
Fee and commission income	4.3.	435,284	398,741
Net fee and commission income		312,924	277,961	144,689
Gains less losses from financial assets and liabilities not measured at fair value through profit or loss	4.4.	(160)	(742)	2,503
Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss	4.6.	3,263	1,784	3,848
Gains less losses from financial liabilities measured at accounting	5.5.a)	(1,411)	3,899	(1,403)
Foreign exchange translation gains less losses	4.7.	(3,644)	(2,778)	(3,547)
Net gains or losses on derecognition of investments in subsidiaries, non-financial assets		3,032	3,200	(213)
Other operating income	4.8.	21,849	17,408	14,574
Other operating expenses	4.8.	(11,829)	(22,100)	(3,908)
Administrative expenses	4.9.	(40,213)	(39,093)	(10,793)
Depreciation and amortisation	4.11.	(58,217)	(49,232)	(24,016)
Gains less losses from modification of financial assets	4.12
Other liabilities and charges	4.13.	(12,847)	(25,925)	(7,149)
Impairment of financial assets	4.14.	(31,306)	6,717	(40,690)
Impairment of non-financial assets	4.14.	(4,014)	53	53
Gains less losses from non-current assets held for sale		676	5,903	446
Profit before income tax		608,149	578,413	511,990
Income tax
Attributable to owners of the parent		514,552	550,700	478,161
Attributable to non-controlling interests		15,681	12,623
Earnings per share (in EUR per share)	4.16.	25.7	27.5	23.9

integral part of these financial statements.

NLB Group Annual Report 2024

Statement of Other Comprehensive Income for the Annual Period ended 31 December

in EUR thousands

NLB Group	NLB	Notes	2024	2023	2024	2023
Net profit for the year after tax	53	48,078
Items that will not be reclassified to income statement			Actuarial gains/(losses) on defined benefit pensions plans			5.16.c)	(1,307)	(444)	(860)	588
Fair value changes of equity instruments	m of other comprehensive income/(losses) of entities accounted for using the equity method	18	45	-	-
Income tax relating to components of other comprehensive income	5.18.	(1,433)	(973)	(476)	(46)
Currency translation	3,178	1,884	-	-
Translation gains/(losses) taken to equity	3,178	1,884	-	-
Debt instruments measured at fair value through other comprehensive income	57,414	70,926	32,233	33
Income statement	4.4., 4.14.	1,633	(6,312)	408	(4,224)
Income tax relating to components of other comprehensive income	5.18.	(10,589)	6,718	(7,091)	11,849
Total comprehensive income for the	635,233	504,129	562,365
Attributable to non-controlling interests	15,856	13,042	-	-

The notes are an integral part of these financial statements.

NLB Group Annual Report 2024

Statement of Financial Position as at 31 December

in EUR thousands

			NLB Group	NLB	Notes	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Cash, cash balances at central banks, and held for trading			18,338	15,718	21,073	17,957
					Non-trading financial assets mandatorily at fair value through profit or loss	17,429	14,175	19,135	16,643
				Financial assets measured at amortised cost - debt securities	3,725,195	2,522,229	2,846,779	1,966,169
					- loans and advances to banks	458,921	547,640	193,172	149,011
- loans and advances to customers	136,854	165,962	81,518	101,596
				Derivatives - hedge accounting	77,771	47,614	77,771	47,614
Fair value changes of the hedged items in portfolio hedge of interest rate risk	(6,995)	13,217	9,977	17,510
			Investments in associates and joint ventures	14,661	12,519	4,823	4,823
Tangible assets	Property and equipment	10,017	278,034	91,320	85,970
Investment property	26,132	31,104		-	-
			Deferred income tax assets	120,701	111,305	106,327	109,449
					Other assets	56,819	49,154	17,825	13,907
					Non-current assets held for sale	11,036	4,849	2,849	4,048
			Total	24,737,322	22,993,995	14,449,482	13,765,325
				Financial liabilities measured at fair value through profit or loss	9,633	4,482	5,597	3,210
Financial liabilities measured at amortised cost - deposits from banks		120,612	140,419	51,106	82,797
				- due to customers	22,206,310	20,732,722	12,293,708	11,881,563
					- borrowings from other customers	104,519	99,718	-	-
- debt securities	296,725	357,116	145,802	198,020
				Derivatives - hedge accounting	3,592	3,540	1,261	1,420
					Provisions	104,388	113,305	41,646	48,456
					Current income tax liabilities	18,026	-	35	-
				Total liabilities	24,737,322	22,993,995	14,449,482	13,765,325
Equity and reserves attributable to owners of the parent	Share capital	200,000	200,000	200,000	-
				Accumulated other comprehensive income	(19,642)	(76,118)	(10,348)	(36,316)
					Profit reserves	186,332	13,522	186,332	13,522
Retained earnings			72,085	65,140	-	-
				Total equity	3,298,045	2,947,990	2,525,609	2,249,451
					Total liabilities and equity	28,035,367	25,941,985	16,975,091	16,014,776

The notes are an integral part of the financial statements.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Management Board of NLB has authorised for issue the financial statements and the accompanying notes.

Management Board of NLB

Hedvika Usenik

Andrej Lasič

Archibald Kremser

Member Chief Executive Officer

Ljubljana, 9 April 2025

NLB Group Annual Report 2024

Statement of Changes in Equity for the Annual Period ended 31 December

in EUR thousands

Accumulated other comprehensive income	Total equity
NLB Group Share capital	Share premium	Other equity instruments	Other Profit reserves	Retained earnings	Equity attributable to owners of the parent	Equity attributable to non-controlling interests
1,789,890	2,882,850	65,140	2,947,990	-	-	514,552	514,552
	15,681	530,233	-	54,541	3,222	(1,234)	-	56,529
-	-	-	-	(220,000)	(220,000)	(8,911)	(228,911)
-	-	-	172,810	(172,810)	-	-	-
-	-	-	-	6	-	(11,366)	(2,740)
186,332	1,903,708	3,225,960	72,085	3,298,045	-	-	-

in EUR thousands

Accumulated other comprehensive income			Total equity
NLB Group Share capital	Share premium	Other equity instruments	Other Profit reserves	Retained earnings	Equity attributable to owners of the parent	Equity attributable to non-controlling interests
1,357,089	2,365,585	56,740	2,422,325	-	-	550,700	550,700
			12,623	563,323	-	82,953	1,897	(317)	-	84,533
-	-	-	-	(110,000)	(110,000)	(4,634)	(114,634)
-	-	-	-	8	8	(8)	-
-	-	-	-	(63)	-	-	63
		-	-	-	-	(60,019)	(14,588)	(1,511)	13,522
1,789,890	2,882,850	65,140	2,947,990	-	-	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

	in EUR thousands	Accumulated other comprehensive income	Total equity
NLB Share capital	Share premium					Other equity instruments	Fair value reserve of financial assets measured at FVOCI	Other Profit reserves
	Balance as at 1 January 2024	200,000	871,378	84,178	(35,111)	(1,205)	1,116,689	2,249,451
							Net profit for the year	--	478,161
									Other comprehensive income	--	26,828
Dividends	--	(220,000)
			Transfer to profit reserves	--	(172,810)
						Other	6	--	(7,977)
								Balance as at 31 December 2024	200,000	871,378	84,184	(8,283)	(2,934)	13,522	515,463	1,602,870
			Net profit for the year	--	514,287
						Other comprehensive income	--	48,078
									Total comprehensive income after tax	--	202,187
		Other	--	--	(7,965)
					Balance as at 31 December 2023	200,000	871,378	84,178	(35,111)	(1,205)	1,116,689	2,249,451

The notes are an integral part of the financial statements.

Statement of Cash Flows for the Annual Period ended 31 December

in EUR thousands		NLB Group	NLB	Notes
			2024	2023	2024	2023
						Interest received	1,176,909	997,912	625,877	494,577
Interest paid	(237,651)	(135,715)	(197,468)	(110,439)
			Dividends received	963	417	213,425	138,327
					Fee and commission receipts	434,272	397,366	186,775	164,611
Fee and commission payments	(123,432)	(120,892)	(47,382)	(41,809)
					Realised gains from financial assets and financial liabilities not at fair value through profit or loss	455	94	-	2
Net gains/(losses) from financial assets and liabilities held for trading		33,491	29,374	8,783	4,287
					Payments to employees and suppliers	(502,249)	(467,937)	(243,299)	(216,407)
						Other receipts	17,878	16,913	12,295	11,141
Other payments	(63,387)	(63,413)	(15,448)	(24,090)
				Income tax (paid)/received	(88,128)	(33,404)	(36,790)	(7,750)
Cash flows from operating activities before changes in operating assets and liabilities	649,121	620,715	506,768	412,450
				(Increases)/decreases in operating assets	(2,824,264)	(74,575)	(2,148,023)	(14,214)
						Net (increase)/decrease in trading assets	(9,138)	200	(9,138)	200
			Net (increase)/decrease in non-trading financial assets mandatorily at fair value through profit or loss			1,191	6,416	998	648
Net (increase)/decrease in financial assets measured at fair value through other comprehensive income			(240,602)	733,788	(595,088)	400,123
						Net (increase)/decrease in loans and receivables measured at amortised cost	(2,562,328)	(818,626)	(1,542,445)	(414,239)
		Net (increase)/decrease in other assets		(13,387)	3,647	(2,350)	(946)
					Increases/(decreases) in operating liabilities	1,380,011	854,231	373,482	280,488
Net increase/(decrease) in deposits and borrowings measured at amortised cost				1,378,653	847,289	371,637	274,363
						Net increase/(decrease) in other liabilities	1,358	6,942	1,845	6,125
Net cash flows from operating activities	(795,132)	1,400,371	(1,267,773)	678,724
					CASH FLOWS FROM INVESTING ACTIVITIES
						Receipts from investing activities	739,185	445,345	159,890	196,331
Proceeds from sale of property, equipment, and investment property			16,310	11,314	2,510	224
						Proceeds from sale of subsidiaries, net of cash and cash equivalents	-12,776	-	20,068
Proceeds from non-current assets held for sale		2,045	16,786	1,893	944
					Proceeds from maturity/disposals of debt securities measured at amortised cost	720,830	404,469	155,487	175,095
Payments from investing activities	(2,077,402)	(1,083,639)	(1,184,301)	(551,632)
					Purchase of property, equipment, and investment property	(43,452)	(42,681)	(14,920)	(10,152)
Purchase of intangible assets	(29,122)	(19,305)	(19,620)	(12,587)
					Purchase of subsidiaries, net of cash acquired and increase in subsidiaries‘ equity	(103,926)	-	(130,545)	-
Purchase of debt securities measured at amortised cost	(1,900,902)	(1,021,653)	(1,019,216)	(528,893)
					Net cash flows from investing activities	(1,338,217)	(638,294)	(1,024,411)	(355,301)
						CASH FLOWS FROM FINANCING

---

ACTIVITIES

Proceeds from financing activities	795,958	497,708	795,958	497,708
Issuance of subordinated bonds 5.15.c)	298,611	-	298,611	-
Issuance of senior preferred notes 5.15.c)	497,347	497,708	497,347	497,708
Payments from financing activities	(807,886)	(122,273)	(812,061)	(111,264)
Dividends paid	(228,679)	(114,749)	(220,000)	(110,000)
Repayments of subordinated debt 5.15.c)	(270,659)	-	(270,659)	-
Repayment of senior preferred notes 5.15.c)	(300,000)	-	(300,000)	-
Other payments related to financing activities	-	-	(19,930)	-
Lease payments	(8,548)	(7,524)	(1,472)	(1,264)
Net cash flows from financing activities	(11,928)	375,435	(16,103)	386,444
Effects of exchange rate changes on cash and cash equivalents	6,788	(595)	(1,904)	1,039
Net increase/(decrease) in cash and cash equivalents	(2,145,277)	1,137,512	(2,308,287)	709,867
Cash and cash equivalents at beginning of year	6,637,139	5,500,222	4,323,499	3,494,435
Cash and cash equivalents of merged bank at the date of the merger	-	-	-	118,158
Cash and cash equivalents at end of year	4,498,650	6,637,139	2,013,308	4,323,499

The notes are an integral part of these financial statements.

in EUR thousands

	NLB Group	NLB	Notes	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Cash and cash equivalents comprise:	Cash, cash balances at central banks, and other	385	NLB Group Annual Report 2024	Overview	MB Statement	SB Statement
demand deposits at banks 5.1.	4,040,816	6,104,851	1,973,308	4,318,499
		Loans and advances to banks with original maturity up to three months	431,997	506,266	40,000	5,000
Debt securities measured at fair value through other comprehensive income with original maturity up to three months		25,837	26,022	-	-
		Total	4,498,650	6,637,139	2,013,308	4,323,499

---

386 NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

to the Financial Statements

1. General Information on Reporting Entity

Nova Ljubljanska banka d.d. Ljubljana (hereinafter: ‘NLB’ or ‘the Bank’) is a Slovenian joint-stock entity providing services in nine countries, mainly in Slovenia and the SEE market. Information on NLB Group’s structure is disclosed in note 5.12. Information on other related party relationships of NLB Group is also available. The registered office is Trg Republike 2, 1000 Ljubljana. NLB’s shares are listed on the Ljubljana Stock Exchange, and the global depositary receipts (‘GDR’) representing ordinary shares of NLB. As at 31 December 2024 and as at 31 December 2023, the largest shareholder of NLB with significant influence is the Republic of Slovenia, owning 25.00% plus one share.

2. Accounting Policies

2.1 Statement of compliance

The principal accounting policies applied in the preparation of the separate and consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (hereinafter: ‘EU’). Additional requirements under the national legislation are included where appropriate. The separate and consolidated financial statements include the statement of income, the statement of financial position, the statement of changes in equity, the statement of cash flows, material accounting policy information, and the notes.

2.2 Basis for preparation

The financial statements have been prepared on a going concern basis, under the historical cost convention, except for the following items, which are measured at fair value: financial assets measured at fair value through other comprehensive income, including all derivative contracts, hedged items in fair value hedge accounting relationships, non-current assets held for sale, liabilities for cash-settled share-based payment arrangements.

The IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements. Although these estimates are based on management’s best knowledge of current events and activities, actual results may ultimately differ from those estimates. Accounting estimates are recognised in the period in which the estimate is revised. Critical accounting estimates and judgements in applying accounting policies are disclosed in note 2.

The presented accounting policies apply to both sets of financial statements, with the exception of policies described in notes 2.5. and 2.7., where differences in the accounting treatment for investments in subsidiaries, associates, and joint ventures between separate and consolidated financial statements are detailed.

2.3. Functional and presentation currency

These consolidated financial statements are presented in euro, which is B except when otherwise indicated.

2.4. Comparative amounts

Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with conform to the changes in presentation in the current year.

NLB Group Annual Report 2024 Overview

MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N Consolidation

Consolidation

In the consolidated financial statements (NLB Group), subsidiaries which are directly or indirectly controlled by NLB have been fully consolidated. Subsidiaries are considered to control an entity when all three elements of control are met:

• it has power over the entity;
• it is exposed or has rights to variable returns from its involvement with the entity; and
• it has the ability to use its power to affect its returns.

NLB reassesses whether it controls an entity if facts and circumstances indicate there are changes to one or more of the three elements of control. If the loss of control of a subsidiary occurs, necessary, the accounting policies of subsidiaries have been amended to ensure consistency with the policies adopted by NLB. The financial statements of consolidated subsidiaries are presented in the consolidated statement of changes in equity.

Non-controlling interest is that part of the net results, and of the equity of a subsidiary, attributable to interests which NLB does not own, transaction-by-transaction basis, either at fair value, or by the non-controlling interest’s proportionate share of net assets of the acquiree. Inter-company transactions, balances, and unrealized profits are also eliminated unless the transaction provides evidence of impairment of the asset transferred.

NLB Group treats transactions with non-controlling interests as transactions with equity holders. The difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is deducted from the equity. For sales to non-controlling interests, the effects are also recorded in the equity. All effects are presented in the line item ‘Equity Attributable to Non-controlling Interest.’

2.6. Business combinations, goodwill, and

method when the acquired set of activities and assets meets the definition of a business, and control is transferred to the Group. In determining whether a particular set of activities and assets includes, at a minimum, an input and substantive process, and whether the acquired set has the ability to produce outputs. The acquired process is considered substantive if it is critical to the workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique to continue producing outputs.

The consideration transferred is measured at the fair value of the assets transferred, equity interest issued, liabilities incurred or assumed, including the fair value of any pre-existing equity interest in the subsidiary. However, this excludes amounts related to the settlement of pre-existing relationships which are recognised in profit or loss. Acquisition costs are recognised in profit or loss as well. Transaction costs incurred for issuing equity instruments are deducted from the equity, and all other transaction costs associated with the acquisition.

2.8 A combination of entities or businesses under common control

For such mergers, members of NLB Group apply merger accounting principles, and use the book value accounting at the date of merger of merged entities as reported in the consolidated financial statements. When accounting for a merger in separate financial statements (the merger of a parent company and its subsidiary) if a surviving entity is the parent, the following are considered:

1. the amounts assigned to the assets and liabilities in the parent’s separate financial statements after the merger; and
2. the carrying amounts of the investments in the merged subsidiaries.

Liabilities are recognised at the carrying amounts from the consolidated financial statements of merged subsidiary as at the date of the merger, including any recognised goodwill and amounts in separate financial statements are not restated.

2.9 Foreign currency translation

Functional and presentation currency

The items included in the financial statements of each entity are measured using the currency of the primary economic environment in which the entity operates (i.e., the functional currency). The financial statements are presented in euros, which is NLB Group’s presentation currency. Transactions and combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

A contingent consideration classified as equity is not re-measured and its subsequent asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments is measured at fair value at each reporting date, and changes in fair value are recognised.

Considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date, and changes in fair value are recognised in profit or loss. For each business combination, acquiree at fair value or at the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets at the date of acquisition. All other unless another measurement basis is required by IFRSs.

Goodwill is measured as the excess of the aggregate of the consideration transferred measured at fair value, the amount of any non-controlling interest in the acquiree immediately before the acquisition date over the net amounts of the identifiable assets acquired, as well as the liabilities assumed less any accumulated impairment losses. Any negative goodwill is tested.

A business combination is, from the acquisition date, allocated to the Group’s cash-generating units (CGUs) or groups of CGUs that are expected to benefit from the synergies of the combination. If the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal.

Goodwill of associates and joint ventures is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. The goodwill achieved in stages, NLB Group remeasures its previously held equity interest in the acquiree at its acquisition-date fair value, and recognises the resulting gain or loss, if any, in profit or loss.

In the consolidated financial statements, investments in subsidiaries, associates, and joint ventures are accounted for with the cost method. Dividends from subsidiaries, joint ventures, or associates are recognised when established. In the consolidated financial statements, investments in associates are accounted for using the equity method of accounting. These are generally undertakings in which NLB exercises significant influence, but does not have control.

Joint ventures are entities over whose activities NLB Group has joint control, established by contractual agreement. In the consolidated financial statements, NLB Group’s share of its associates and joint ventures post-acquisition profits or losses is recognised in the consolidated income statement, and its share of cumulative post-acquisition movements are adjusted against the carrying amount of the investment.

When NLB Group’s share of losses in an associate and joint venture equals or exceeds its interest in the associate and joint venture, NLB Group does not recognise further losses unless it has incurred obligations or made payments on behalf of the associate and joint venture. NLB Group resumes recognising losses when the associate and joint venture make profits.

NLB Group’s subsidiaries, associates, and joint ventures are presented in note 5.12.

exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges. Translation differences resulting from changes in the amortised cost of monetary items are recognised in the income statement. Translation differences on non-monetary items, such as equity instruments at fair value through other comprehensive income, are included together in the income and accumulated in the equity. Gains and losses resulting from foreign currency purchases and sales for trading purposes are included in the income statement as gains less losses.

Statements of all NLB Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities of the foreign entity are translated at the closing rate;
• income and expenses for each income statement are translated at average annual exchange rates; and
• components of equity are translated at the historical exchange rates.

In the consolidated financial statements, exchange differences arising from the translation of the net investment in foreign operation are lost, the previously recognised exchange differences on translations to a different presentation currency are reclassified from other comprehensive income to profit and loss. A portion of accumulated currency translation differences is reclassified as a non-controlling interest within the equity.

2.10 Interest income and expenses

Interest income and expenses for financial assets at fair value through other comprehensive income are recognised in the income statement for all interest-bearing instruments on an accrual basis using the effective interest method. Interest at fair value through profit or loss is recognised using the contractual interest rate. The effective interest method is used to calculate the amortised cost of a financial asset or financial liability.

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts over the expected life of the financial instrument, or a shorter period (when appropriate). Interest income includes coupons earned on fixed-yield investments and trading securities, and accrued discounts and premiums on securities. The calculation of the interest income is based on the contractual terms of the financial instrument and all transaction costs, but excludes future credit risk losses.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets. If the financial asset is classified in Stage 3, interest income is calculated by applying the effective interest rate to the net amortised cost of the financial asset. If the financial asset cures and is no longer classified as purchased or originated credit-impaired financial assets (POCI), the credit-adjusted effective interest rate is applied to the amortised cost of the financial asset from initial recognition. This rate discounts the estimated future cash flows (including credit losses) to the amortised cost of the purchased or originated credit-impaired financial asset. At the NLB Group level, most POCI are recognised in a business combination.

2.11 Fee and commission income and expenses

Fees and commission income and expenses mainly include those related to credit cards and ATMs, customer transactions, and guarantees. Fee and commission income are recognised at an amount that reflects the consideration to which the NLB Group expects to be entitled, in exchange for providing the service. The amount is identified and determined at the inception of the contract. The Group’s revenue contracts do not include multiple performance obligations.

When the NLB Group provides a service to a customer, the revenue is recognised at the satisfaction of a service provided at a point in time. When the service is provided over time, the consideration is invoiced and due in line with the contractual provisions.

typically controls the services before transferring them to the customer. Fees and commissions that are integral to the effective interest rate of financial assets and liabilities are presente the income statement within the line item ‘Dividend income’ when NLB Group’s right to receive payment has been established and an inflow of economic benefits is probable. In the co reduce the carrying value of the investment.

2.13. Financial instruments

a) Classification and measurement

Financial instruments are initially measured at fair value plus or minus, in the transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Subsequent measurement depends on the classification of the instrument. Financial business model for managing the assets and the instruments’ contractual cash flow characteristics. The measurement categories of financial assets are as follows:

• Financial assets, measured at fair value through other comprehensive income (FVOCI);
• Financial assets held for trading (FVTPL); and
• Non-trading financial assets, mandatorily at fair value through profit or loss (FVTPL).

Financial assets collecting contractual cash flows (‘held to collect’), and if cash flows are solely payments of principal and interest on the principal amount outstanding. After initial recognition, they are impairment. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment are recognised in profit or loss. Each of them is presented recognised in profit or loss in line item ‘Gains less losses.

390 NLB Group Annual Report 2024 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N financial assets and liabilities not measured at fair value through profit or loss. Debt financial instruments are measured at FVOCI if they are held within a business model for the purpose flows are solely payments of principal and interest on the principal amount outstanding. FVOCI results in the debt instruments being recognised at fair value in the statement of financial position.

Effective interest method, foreign exchange gains and losses, and impairments are recognised separately in the income statement. Other net gains and losses are recognised in other comprehensive income. Instrument, the cumulative gains and losses previously recognised in other comprehensive income are reclassified to the income statement under the line item ‘Gains less losses from financial instruments that are not held for trading may be irrevocably designated as FVOCI, with no subsequent reclassification of gains or losses to the income statement. Dividends are recognised the cost of the investment, in which case, such gains are recorded in other comprehensive income. Other net gains and losses are recognised in other comprehensive income and are never irrevocably designated as FVOCI is the investment in the National Resolution Fund (note 5.4.a).

NLB Group decided to use this presentation alternative because the fund was established safety, low risk, and the high liquidity of the fund. All other financial assets are mandatorily measured at FVTPL, including financial assets within other business models such as financial contractual cash flows that are not solely payments of principal and interest on the principal amount outstanding. Net gains and losses, including any interest or dividend income, are recognised measured at the amortised cost or at fair value through profit or loss, when they are held for trading, derivative instruments, or the fair value designation is applied.

Upon initial recognition profit or loss if that eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains instruments which are managed and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy. Changes in the fair value recognised in profit or loss, with the exception of movement in the fair value due to changes of NLB Group’s own credit risk. Such changes are presented in other comprehensive income are subsequently measured at amortised cost using the effective interest method. Interest expenses and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss of derecognition of a financial liability measured at amortised cost, the gains and losses are recognised in the line item ‘Gains less losses from financial assets and liabilities not measur.

Designated as Measured at Fair Value Through Profit or Loss

Designated as measured at fair value through profit or loss are also presented separately from those held for trading.

Assessment of NLB Group’s Business Model

NLB Group has determined based on observable factors for different portfolios that best reflect how the Group manages groups of financial assets to achieve its business objective, such as:

• How the performance is evaluated and reported to key management personnel;
• The risks that affect the performance of the business model and, in particular, the way those risks are managed;
• How the management value of the assets or on collection of contractual cash flows;
• The expected frequency, value, and timing of sales.

The business model assessment is based on reasonably expected general, the business model assessment of the Group can be summarised as follows:

• Loans and deposits given are included in a business model ‘held to collect’ since the primary objective.
• Securities are divided into three business models:
• The first group of debt securities presents the ‘held for trading’ category;
• Debt securities in the second group are held under a business model for collecting cash flows and sale of financial assets, and forms part of the Group’s liquidity reserves;
• The third part of debt securities is held within the business model for holding them with the objective.

In this business model, the sales which are related to the increase of the issuers’ credit risk, sales made close to the final maturity, or sales in order to meet liquidity needs in a stress case scenario are with a held to collect business model if such sales are incidental to the overall business model, and:

• Are insignificant in value both individually and in aggregate, even when such sales are.

Review of Instruments’ Contractual Cash Flow Characteristics

The SPPI test – solely payment of principal and interest on the principal amount outstanding. The second step in the classification sell relates to the assessment of whether the contractual cash flows are consistent with the SPPI test. The principal amount reflects the fair value at initial recognition less any subsequent.

The time value of money, credit risk, other basic lending risks, and a profit margin consistent with basic lending features. If the cash flows introduce more than de minimis exposure to risk, they are mandatorily measured at fair value through profit or loss.

NLB Group reviews the portfolio within ‘held to collect’ and ‘held to collect and sell’ for standardised products on a level of a.

Established a procedure for SPPI identification as part of regular investment process with defined responsibilities for primary and secondary controls. Special emphasis is put on new and financial assets.

Modification of Financial Assets

When contractual cash flows of a financial asset are modified, NLB Group assesses whether the cash flows of modified asset are substantially different to the extent that when making such assessment:

• Reason for modification of cash flows;
• Change in currency of the loan;
• Introduction of an equity feature;
• Replacement of initially agreed debtor with.

The result of the SPPI test. If the modification results in derecognition of a financial asset, the new financial asset is initially recognised at fair value, with the difference recognised as a recorded.

If the modification does not result in cash flows that are substantially different, the modification does not result in derecognition. In such cases, NLB Group recalculates the gross carrying amount as the present value of the renegotiated or modified contractual cash flows that are discounted at the financial asset’s origin.

Reclassification

Financial assets can be reclassified when and only when NLB Group’s business model for managing those assets change. Such changes are expected to be very infrequent, and none occurred during the presented periods. Financial liabilities shall not be reclassified.

Day One Gains or Losses

The consideration given or received, unless the fair value of that instrument is evidenced by a comparison with other observable current market transactions in the same instrument (i.e. only include data from observable markets). If the transaction price on a non-active market is different than the fair value from other observable current market transactions in the same observable markets, the difference between the transaction price and fair value is recognised immediately in the income statement (‘day one gains or losses’).

not recognised immediately in the income statement. The timing of recognition of deferred day one gains or losses is determined individually. It is either amortised over the life of the tr observable inputs, or realised through settlement.

d) Derecognition

A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire, or when the liability is derecognised only when it is extinguished, i.e., when the obligation specified in the contract is discharged, cancelled, or expires.

e) Write-offs

NLB Group writes off financial recovery. Criteria indicating that there is no reasonable expectation of recovery include default period, quality of collateral, and different stages of enforcement procedures. NLB Group does not affect its rights in the enforcement procedures. NLB Group still seeks to recover all amounts it is legally entitled to in full. A write-off reduces the gross carrying amount of a financial credit loss expenses. Write-offs and recoveries are disclosed in note 5.14.a and b).

f) Fair value measurement principles

The fair value of financial instruments traded on active markets is measured at the reporting date, excluding transaction costs. If there is no active market, the fair value of the instruments is estimated using discounted cash flow techniques. Cash flows are based on management’s best estimates; and the discount rate is a market-based rate at the reporting date for an instrument with similar terms and conditions. If pricing models...

Derivative financial instruments and hedge accounting

Derivative financial instruments – including forward and futures contracts, swaps, and options – are initially recognised in the statement and subsequently re-measured at their fair value. Fair values are obtained from quoted market prices, discounted cash flow models, or pricing models, as appropriate. All derivatives are carried within assets when the derivative position is favourable to NLB Group, and within liabilities when the derivative position is unfavourable to NLB Group.

The method of recognising the resulting fair value gain or loss depends on whether the derivative is designated as either:

• hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedge);
• hedges of highly probable future transactions (cash flow hedge); or
• hedges of a net investment in a foreign operation (net investment hedge).

Hedge accounting is used when certain criteria are met. NLB Group and NLB Group requirements in accordance with the policy choice permitted under IFRS 9. However, disclosures that are required by the IFRS 9-related amendments to IFRS 7 ‘Financial Instruments: the relationship between hedged items and hedging instruments, as well as its risk management objective, valuation methodology, and strategy for undertaking various hedge transactions on an ongoing basis, of whether the derivatives used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The actual results of a hedge value of derivatives that are designated and qualify as fair value hedges are recognised in the income statement together with any changes in the fair value of the hedged asset or liability. The hedging instruments and related hedged items are reflected in ‘Fair Value Adjustments in Hedge Accounting’ in the income statement. Any ineffectiveness from derivatives is recognised in the income statement.

The adjustment to the carrying amount of the hedged item is recognised in the income statement upon disposal of the equity security. Cash flow hedges that qualify as cash flow hedges are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is immediately recognised in the income statement. Amounts are reclassified from other comprehensive income to the income statement in the periods when the hedged item affects the profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets hedge accounting criteria, the amounts previously accumulated in equity at that time remains in other comprehensive income and in equity, and is recognised in profit or loss only when the forecasted transaction is ultimately...

to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income statement. Hedge of a net investment in a foreign operat financial statements similar to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised directly in equity. The gain or lo statement in ‘Gains Less Losses on Financial Assets and Liabilities Held for Trading.’ Gains and losses accumulated in other comprehensive income are included in the consolidated inc disposal.

2.14. Allowances for financial assets

a) Expected credit losses for collective allowances IFRS 9 applies an expected loss model that provides an unbiased and probability-weighted forecasts of future economic conditions. The expected loss model requires NLB Group to recognise not only credit losses that have already occurred, but also losses that are expected to loans and other debt financial assets not measured at FVTPL, together with loan commitments and financial guarantee contracts. In the general model, the allowance is based on the ex there has been a significant increase in credit risk since initial recognition, in which case, the allowance is based on the probability of default over the life of the financial asset (LECL).

recognition, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative infor assessment, and incorporation of forward-looking information.

393 NLB Group Annual Report 2024 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N Classification into stages NLB Group prepared a methodology for ECL defining the criteria for classification into stages, transition criteria between stages, models for risk indicators calcul financial instruments into Stage 1, Stage 2, and Stage 3, based on the applied ECL allowance methodology as described below:

• Stage 1 – A performing portfolio: no significant increase o month period;
• Stage 2 – An underperforming portfolio: significant increase in credit risk (SICR) since initial recognition, NLB Group recognises an allowance for lifetime period; and
• defaulted financial assets. The Bank has aligned its definition of credit impaired assets under IFRS 9 to the European Banking Authority (EBA) definition of non-performing loans (NP clients are rated D, DF, or E based on the internal rating system and contain the clients with material delays over 90 days, as well as the clients that were assessed as unlikely to pay.

All is assumed: - when a credit rating significantly deteriorates at the reporting date in comparison to the credit rating at initial recognition a significant deterioration is a 3-notch rating d performing rating classes) or deterioration from invest/invest with care to speculative investment rating grade on the short rating scale (with only three performing rating groups), - w assessed using the PD curve calculated at instrument origination and the last available PD curve), - when a financial asset has material delays over 30 days with a healing period of three materiality limit is aligned with the regulatory limit for default definition, the holding period of three months is applied), - if NLB Group grants a forbearance to the borrower where the placed on the watch list or intensive care list, - if a retail client is placed on the watch list based on features which lead to increased credit risk (such as spending habits, decreased emplo sovereign classification depends on the existence or non-existence of a rating from international credit rating agencies – Fitch, Moody’s, or the S&P. Ratings are set on a basis of the ave credit rating classification is based on the internal Methodology Rating Classification for Financial Markets clients’ segments in NLB d.d. and NLB Group. For banks without an intern Company, using the modules BankScore and BankFocus. Additionally, information is obtained by an analyst from the annual reports with the assistance of the central relationship mana delays on one facility may trigger the stage deterioration of other facilities of the same client.

When the SICR criteria no longer exist, the facility may be transferred to a more favourable assets is calculated based on 12-month PDs or shorter period PDs, if the remaining maturity of the financial asset is shorter than one year. The 12-month PD already includes the macro

losses that had been incurred in the performing portfolio but have not been identified. The ECL for Stage 2 financial assets is calculated based on lifetime PDs (LPD) because their credit on a forward-looking assessment that considers several economic scenarios in order to recognise the probability of losses associated with the predicted macro-economic forecasts. For fin credit impaired. Exposures below the materiality threshold obtain collective allowances using a PD of 100%. Financial instruments will be transferred out of Stage 3 if they no longer m for purchased or originated credit-impaired financial instruments (POCI), where only the cumulative changes in lifetime expected losses since the initial recognition are recognised as a EAD (exposure at default) at the end of each month with an appropriate PD and LGD (loss-given default). The obtained result for each month is discounted to the present time using the 12-month period into account, while for Stage 2 or 3 all potential losses until the maturity date are included. Risk parameters are calculated separately for each of the three possible scen scenario. The EAD represents the anticipated outstanding amount owed by the obligor, which is determined as the sum of on-balance exposure and expected future drawings of the off-b factor) based on the Bank’s historic experience with similar types of facilities. The PD is the estimation of the likelihood of default over a given time horizon. The estimation is perform government), or by product group (mortgage, consumer loans, and other retail products). Through the cycle, the PD is supplemented with the forward-looking aspect using three possib while the calculations and modelling are performed centrally. In the case where

394NLB Group Annual Report 2024 OverviewMB Statement SB Statement Key HighlightsBusiness Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N data samples are not sufficiently large, hurdle rates are applied based on the regulatory or other benchmarks.

Expected Life When measuring ECL, NLB Group must consider the maximum revolving credit facilities that do not have a fixed maturity, the expected life is estimated based on the period over which the NLB Group is exposed to credit risk and where the credit los 2024, NLB Group reviewed the IFRS 9 provisioning by testing the relevant macroeconomic scenarios to accurately reflect the current circumstances and their future impacts. NLB Gro calculation, aiming to create a unified projection of macroeconomic and financial variables for the Group, aligned with the Bank’s consolidated view of the future of economic developm probability of occurrence for forward-looking assessment of risk provisioning in the context of the IFRS 9. These IFRS 9 macroeconomic scenarios incorporate the forward- looking an change when material changes in the future development of the economy are recognised and not embedded in previous forecasts.

The baseline scenario presents an expected forecast m official and professional forecasts, with specific adjustments for individual countries of the Group. Key characteristics include decreasing inflation as an energy-related impact on good declining interest rates and strong private consumption due to real wage growth, resilient labour market and positive expectations, industry and export activity pick-up, and limited spill real economy.

The alternative scenarios are based on plausible drivers of economic development for the next three years. The optimistic alternative scenario demonstrates supply-driven stance– this keeps a lid on inflation pressures. Labour skill mismatches are addressed through targeted training programs. Automation and technology adoption create new job opportunities. Business confidence rebounds. Consumer spending picks up, contributing to overall growth. The ECB considers both demand and supply factors when setting interest rates. In this scen towards the ECB target.

The severe alternative scenario paints a picture of bleak economic developments, where supply constraints, geopolitical tensions, technological shifts, and labo from productive investments. Policymakers must navigate these challenges to ensure stability and sustainable growth. This adverse scenario results in a prolonged global recession, with the mid-term. The ECB carefully considers both supply and demand factors when setting interest rates to prevent abrupt economy shifts. All of the above scenarios are included in the ca

Macroeconomic scenarios for explanatory variables, developed for each country in the NLB Group used in 2024 (in %):

Country	Optimistic scenario	Baseline scenario	Severe scenario
	2024	2025	2026	2024	2025	2026	2024	2025	2026
		Slovenia	2.9	3.3	3.8	1.9	2.5	3.0	0.8	0.4	2.4
				Unemployment rate	4.0	3.8	3.6	12.0	10.6	10.1	12.5
	EURIBOR (6 months)	1.7	1.5	1.8	2.9	2.6	2.6	3.9	3.6	3.7
		Bosnia and Herzegovina	3.1	3.5	3.5	2.5	3.0	3.0	1.8	1.6	2.6
		Montenegro	5.4	4.9	5.0	3.3	3.2	3.3	1.5	(0.7)	2.5
		North Macedonia	3.8	4.2	4.2	2.6	3.2	3.2	1.4	0.7	2.6
		Serbia	3.8	4.1	4.1	2.9	3.4	3.4	2.1	1.7	3.0
	Kosovo	4.6	4.7	4.7	3.7	4.0	4.0	2.8	2.1	3.5

---

Macroeconomic scenarios for explanatory variables, developed for each country in the NLB Group used in 2023 (in %):

Country	Optimistic scenario	Baseline scenario	Severe scenario
		2023	2024	2025	2023	2024	2025	2023	2024	2025
			Slovenia	2.4	3.4	2.5	0.6	2.2	2.5	(0.6)	0.4	0.7
			Unemployment rate	3.9	4.0	4.1	4.0	4.2	4.2	4.5	5.0	5.3
			Bosnia and Herzegovina	2.3	2.9	2.4	1.0	2.0	2.3	0.3	0.9	1.2
			Unemployment rate	15.0	14.0	14.2	15.2	15.1	14.8	15.9	16.2	16.2
			Montenegro	6.0	5.5	3.4	2.6	3.2	3.2	0.6	0.1	0.1
			Unemployment rate	13.5	12.2	12.3	13.7	13.3	12.9	14.4	14.4	14.3
			North Macedonia	3.6	4.3	3.3	1.6	3.0	3.3	0.3	1.1	1.4
			Unemployment rate	13.7	12.7	12.8	13.9	13.7	13.4	15.3	16.0	16.3
		Serbia	3.3	4.2	3.6	1.8	3.1	3.4	1.1	2.0	2.3
			Unemployment rate	9.4	8.6	8.7	9.5	9.2	9.0	10.2	10.4	10.6
		Kosovo	4.1	4.6	3.8	2.4	3.5	3.8	1.4	2.0	2.3
			Unemployment rate	16.3	14.9	14.6	16.5	16.0	15.2	17.2	17.1	16.6

NLB Group formed three probable scenarios with an associated probability of occurrence for forward-looking assessment of risk provisioning in the context of IFRS 9. IFRS 9 macroeconomic scenarios incorporate the forward-looking and probability-weighted aspects of ECL impairment calculation. Both features may change when material changes in the future development of the economy are recognised and not embedded in previous forecasts. On this basis, for the year 2024, NLB Group assigned weights of 20%–60%–20% (alternative scenarios receiving 20% each, and the baseline scenario 60%).

Effects of changed risk parameters The effects of the changed risk parameters on the amount of expected credit losses are disclosed in notes 5.14. and 5.16.b).

b) Individual assessment of allowances for impaired financial assets NLB Group assesses impairments of financial assets separately for all individually significant assets classified in Stage 3. The materiality threshold is set at a EUR 0.5 million exposure for legal entities, and EUR 0.1 million for private persons on the level of NLB, while the Group members apply lower thresholds applicable to their portfolio size. All other financial assets obtain collective allowances. The amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, which are discounted to the estimation date. The scenario of expected cash flows can be based on the ‘going concern’ assumption, where the cash flow from operations is considered along with the sale of collateral that is not crucial for future business. In the case of the ‘gone concern’ principle, the repayments are based on expected cash flows from the sale of collateral. The expected payment.

from the collateral is calculated from the appraised market value of the collateral, the haircut is used as defined in the Haircut Methodology, and discounted. Off-balance sheet liabilities are also assessed individually and, where necessary, related allowances are recognised as liabilities. The carrying amount of financial assets measured at amortised cost is reduced through an allowance account and the loss is recognised in the income statement line item ‘Impairment of financial assets.’ If the number of allowances for ECL decreases subsequently due to an event occurring after the impairment was recognised (e.g., repayment in the collection process exceeds the assessed expected payment from collateral), the reversal of the loss is recognised as a reduction in the balance exposures, the amount of ECL is recognised in the statement of financial position in the line item ‘Provisions’ and in the income statement in the line item ‘Provisions for credit comprehensive income do not reduce the carrying amount of these financial assets in the statement of financial position, which remains at fair value. Instead, an amount equal to the all other comprehensive income as an accumulated impairment amount, with a corresponding charge to profit or loss. The accumulated loss recognised in other comprehensive income is r allowances for ECL decreases due to an event occurring after the impairment was recognised.

15. Forborne loans

A forborne loan (or restructured financial asset) arises as a result of the terms of the original contract (via an annex) or by signing a new contract under which the contracting parties agree the partial or total repayment of the original debt. When receivables grade C or lower. The definitions of forborne loans closely follow definitions that were developed by the European Banking Authority (EBA). These definitions aim to achieve compreh accounting treatment of forborne loans depends on the type of restructuring. When NLB Group embarks on a forborne loan via the modified terms of repayment proceeding from exten of the repayment of the principal, and/or interest or a reduction in the interest rate, and/or other expenses, it adjusts the carrying amount of the forborne loan on the basis of the discount resulting effect in profit or loss. In the event of the reduction of a claim against the debtor via the reduction in the amount of the claims as a result of a contractually agreed debt waiver the part relating to the write-down or the contractually agreed upon debt waiver. The new estimate of the future cash flows for the residual claim, not yet written down, is based on an up.

2.16 Repossessed assets

In certain circumstances, assets are repossessed following the foreclosure on loans and are recognised in the financial statements at their fair value and classified in the appropriate category according to their purpose. They are sold as soon as it is feasible in order to reduce exposure (note 6.1.l). After initial recognition, the policies applicable to the relevant asset categories apply. Non-financial repossessed assets mainly represent items of real estate that NLB Group classifies within investment properties measured in accordance with IAS 2 Inventories. Real estate obtained as collateral from the foreclosure of loans and receivables, classified as other assets, are initially recognised at fair value, considered up to the amount of gross carrying amount of the foreclosed loan. At subsequent measurement, the realisable value is verified at least annually. Valuations of the fair value of the assets are performed when the carrying value exceeds the realisable value. The effect of impairment is recognised as the impairment of other assets, and the reversal of impairment as income from the reversal is offset, with the net amount reported in the statement of financial position.

2.18 Financial liabilities

There is a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. (repos) are retained in the financial statements, and the counterparty liability is recognised in financial liabilities measured at an amortised cost. Securities sold subject to sale and repurchase agreements are presented as financial liabilities. The transferee has the right by contract or custom to sell or re-pledge the collateral. Securities purchased under agreements to resell (reverse repos) are presented as loans to other banks or customers. The repurchase price is treated as interest and accrued over the life of the repo agreements using the effective interest method.

2.19 Property and equipment

All items of property and equipment are recognised at cost less accumulated depreciation and any accumulated impairment loss. Each year, NLB Group assesses whether there are indications that property and equipment may be impaired. If any such indications exist, the recoverable amount is determined as the higher of the fair value less costs to sell and value in use. If the recoverable amount exceeds the carrying value, the assets are not impaired. If the carrying amount exceeds the recoverable amount, an impairment loss is recognised.

Items of a largely independent property and equipment which do not generate cash flows are included in the cash-generating unit and later tested for possible impairment. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. The annual depreciation rates applied are:

Asset Type	Depreciation Rate (%)
Buildings	2 – 5
Leasehold improvements	5 – 25
Computers	12.5 – 50
Furniture and equipment	10 – 33.3

---

Motor vehicles

Depreciation does not begin until the assets are available for use. The assets’ residual values and useful lives are reviewed and adjusted if appropriate on each reporting date. Gains and losses between the sale proceeds and their carrying amount are recognised in the income statement. Maintenance and repairs are charged to the income statement during the financial period.

Maintenance and repairs are recognised in the carrying amount of an asset, and the replaced part, if any, is derecognised.

Intangible assets

Intangible assets include software licenses, goodwill (note 2.6.), and identifiable intangible assets. Goodwill has a finite useful life and is stated in the statement of financial position at cost, less accumulated amortisation and impairment losses. Amortisation is calculated on a straight-line basis over the useful life. The core banking system is amortised over a period of 10 years, and other software over a period of three to five years. Amortisation does not begin until the assets are available for use.

Identifiable intangible assets, recognised separately from goodwill, are recorded at fair value on the acquisition date if the intangible asset is separable or arises from contractual or other legal rights. After initial recognition, they are measured in accordance with IAS 38 Intangible Assets. Other intangible assets acquired in a business combination (note 5.10.) relate to core deposits and trade name. Their useful life is assessed to be five years. For core deposits, accelerated amortisation is applied, since it better reflects the pattern of the asset’s consumption.

Investment properties

Investment properties include properties held to earn rentals or for capital appreciation. Investment properties are carried at fair value determined by a certified appraiser. Fair value is based on current market prices. Any gain or loss arising from a change in fair value is recognised in the income statement.

Non-current assets and disposal groups classified as held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This classification is made only when the sale is highly probable, and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale.

Disposal groups classified as held for sale are measured at the lower of the assets’ previous carrying amount and fair value less costs to sell. In the case of business combinations, NLB Group measures assets held for sale at the acquisition date in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations at fair value less costs to sell. During subsequent measurements, the measurement requirements are measured in accordance with the applicable standards (e.g., deferred tax assets, assets arising from employee benefits, financial instruments, investment property measured at fair value, and contractual rights under insurance contracts).

Lease liabilities

NLB Group recognises a liability to make lease payments and an asset representing the right to use the underlying asset (i.e., the right-of-use asset) during the lease term for all leases, except those which at the commencement date have a lease term of 12 months or less without the option to purchase the underlying asset. Leases of underlying assets with a value, when new, less than a specified amount are recognised as expenses on a straight-line basis over the lease term.

At the commencement date, NLB Group measures the right-of-use asset at cost. The cost of right-of-use assets includes an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset to the condition required by the terms and conditions of the lease and lease payments made at or before the commencement date. NLB Group measures the right-of-use asset using a cost model (the asset is measured at cost, reduced by any accumulated depreciation and impairment losses, and amortised on a straight-line basis over the lease term, and (separately) interest on the lease liabilities).

In the statement of financial position, right-of-use assets are presented in the line item ‘Other financial liabilities.’ NLB Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments consist of fixed payments, variable lease payments that depend on an index or rate, the exercise price of a purchase option if there exists a reasonable certainty for it to be exercised, and payments of penalties for terminating the lease if the lease term suggests that the lessee will exercise that option.

NLB Group measures the lease liability by increasing the carrying amount to reflect interest on the lease liability; reducing the carrying amount to reflect the lease payments made; and remitting the lease liability.

In the statement of financial position, lease liabilities are presented in the line item ‘Other financial liabilities.’ NLB Group as a lessor recognises payments under operating leases as income. Leases are presented in the statement of financial position as investment property or as property and equipment. NLB Group classifies a lease as a finance lease when the risks and rewards of ownership are transferred to the lessee. Under a finance lease, the present value of the lease payments is recognised as a receivable. Income from finance lease transactions is amortised over the lifetime of the lease using the interest method.

equal to the net investment in the lease, including the unguaranteed residual value and any initial direct costs of the lessor. Sale-and-leaseback transactions NLB Group also enters into which the leased assets are purchased from, and then leased back to the lessee. These contracts are classified as finance leases or operating leases, depending on the contractual leases acquired in business combinations, the acquiree is the lessee. For such leases, NLB Group applies the IFRS 16 initial measurement provisions (with exceptions for leases with rem liability as if the lease contract was a new lease at the acquisition date. The right-of-use asset is measured at an amount equal to the recognised liability. There are no favourable or unfavourable characteristics of the right-of-use assets.

2.24 Cash and cash equivalents For the purpose of the statement of cash flows, cash and cash equivalents comprise cash and balances with central banks, and trading with an original maturity of up to three months. Cash and cash equivalents are disclosed under the cash flow statement.

2.25 Borrowings, deposits, and issued debt securities are initially recognised at fair value. Borrowings are subsequently measured at the amortised cost. The difference between the value at initial recognition and the final value is recognised in repurchased own debt is disclosed as a reduction of liabilities in the statement of financial position. The difference between the book value and the price at which own debt was repurchased.

400 NLB Group Annual Report 2024 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis

Other issued financial instruments with characteristics of equity Upon initial recognition, other issued financial instruments are classified in part or in full as equity instruments if the characteristics of equity are recognised in equity in the statement of financial position. Transaction costs incurred for issuing such instruments are deducted from retained earnings. The issued financial instrument with characteristics of equity is presented in the statement of changes in equity in the line item ‘Other Equity Instruments.’

2.27 Provisions Provisions are recognised when there is a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. The provision assessment considers: - the likelihood of demonstrating compliance with information, - the final resolution and timing of disputes, - the estimation of legal costs, and the statute of limitations on claims. When the effect of the time value of money is material, NLB Group discounts the provision to reflect the current rates specific to the liability.

2.28 Contingent liabilities and commitments Financial and non-financial guarantees Financial guarantees are contracts that require the guarantor to make payments to the holder of the guarantee if the specific debtor fails to make payments when due, in accordance with the terms of debt instruments. Such financial guarantees are given to banks, financial institutions, and other bodies. Issued guarantees covering non-financial obligations of the clients represent the obligation of the Bank (guarantor) to pay if the client fails to perform certain works in accordance with the contract. Financial guarantees are recognised at fair value, which is usually evidenced by the fees received. The fees are amortised to the income statement over the contract term using the straight-line method. NLB Group measures the guarantee at fair value, less amortisation calculated to recognise fee income over the period of guarantee; or - ECL provisions as set out in note 2.14.

Documentary letters of credit Documentary letters of credit are issued by the issuing (opening) bank on behalf of the issuer (importer) to pay the beneficiary (exporter) the value set out in the documents by a defined deadline: - if the letter of credit is payable on sight, according to the contractual agreement when and if the beneficiary (exporter) presents the bank with documents that are in line with the conditions and deadlines set out in the letter. This is usually done at the request or authorisation of the issuing (opening) bank and constitutes a firm commitment by the confirming bank, in addition to that of the issuing bank, which independently guarantees the payment.

Contingent Liabilities and Commitments

Other contingent liabilities and commitments represent undrawn loan commitments to extend credit, uncovered letters of credit, and other commitments where the loan agreed to be provided is on market terms, are not recognised in the statement of financial position. Contingent liabilities recognised in a business combination are measured at fair value and is recognised in the statement of financial position in the line item ‘Provisions.’ After initial recognition, it is measured at the higher of:

• the amount that would be recognised
• or the amount initially recognised less, if appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15 Revenue from Contracts with Customers.

9.2.29 Taxes

Income tax expenses are comprised of current and deferred income tax. Current corporate income tax in NLB Group is calculated on taxable profits at the applicable tax rate of 32%. The corporate income tax rate for 2024 in Slovenia was 22% (2023: 19%). According to the Reconstruction, Development and Provision of the Financial Resources Act, the corporate tax rate is applicable.

Current and deferred taxes are recognised in profit or loss, except to the extent that they relate to a business combination or taxes related to effects recognised directly in equity (deferred through other comprehensive income, cash flow hedges, and actuarial gains and losses on defined benefit pension plans is charged or credited directly to other comprehensive income).

Deferred tax assets and liabilities are recognised for differences arising between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes. Deferred tax assets are recognised if it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets and liabilities are measured at tax rates enacted or substantively enacted at the end of the reporting period that are expected to apply when the asset is realised or the liability is settled.

At each reporting date, NLB Group reviews the carrying amount of deferred tax assets and assesses future taxable profits against which temporary taxable differences can be utilised. Deferred tax assets associated with investments in associates and joint ventures are recognised only to the extent that it is probable that:

• the temporary differences will be reversed in the foreseeable future; and
• taxable profit will be available against which the temporary differences can be utilised.

Deferred tax liabilities are recognised for temporary differences associated with investments in subsidiaries to the extent that NLB is able to control the timing of reversal of the temporary differences, and that it is probable that the taxable profit will be available against which the temporary differences can be utilised. In accordance with the dividend policy of its subsidiaries, NLB Group recognised the deferred tax liability on withholding tax payable on future planned dividend pay-out.

In the case of business combinations, deferred tax assets and liabilities are recognised for tax losses of an acquiree that exist at the acquisition date, or if they arise as a result of the acquisition. Income taxes are measured in accordance with IAS 12 Income Taxes. In accordance with the transitional provision, accumulated unused tax losses can be carried forward to subsequent periods for a maximum of five years after the period in which they occurred. Prior to 2025, Slovenian legislation did not set deadlines by which uncovered tax losses expire.

A tax on financial services is a tax on fees, paid for prescribed financial services (including securities transactions and the services of insurance brokers and agents), paid in Slovenia. The tax rate is 8.5% (2023: 8.5%) and the tax is paid monthly. Given that the tax on financial services is recognised in the financial statements, for the years 2024-2028, a tax on banks’ balance sheets was introduced in Slovenia. The tax is recognised in other general and administrative expenses.

2.30 Fiduciary Activities

Fiduciary activities conducted in a fiduciary capacity are not reported in NLB Group’s financial statements as they do not represent assets of NLB Group. Fee and commission income and expenses relating to fiduciary activities are provided (see also note 2.11.). Fee and commission income charged for this type of service is broken down by items in note 4.3.b). Further details on transactions managed on behalf of clients are available.

Employee Benefits

Employee benefits include:

• short-term employee benefits (such as salary, compensations, annual holiday allowance, separation allowance, and non-monetary benefits);
• retirement indemnity bonuses (post-employment benefits);
• other employment benefits (jubilee long-service benefits, voluntary supplementary pension insurance);
• various resources;

These relate and are included in the income statement line item ‘Administrative expenses.’ Among others, they include the payment of contributions for pension and disability insurance, which accounts for salaries. According to legislation, employees retire after they fulfil certain conditions and are entitled to a lump-sum severance payment. Employees are also entitled to a long-service bonus.

These obligations are measured at the present value of future cash outflows considering future salary increases and other conditions, and then apportioned to past and future employee services. They are recognised in the income statement in the line item ‘Administrative expenses’ as defined benefit costs, while interest expenses on the defined benefit liability are recognised in the line item ‘Interest and defined benefit liability’ that arises from the passage of time. For post-employment benefits, actuarial gains and losses from the effect of changes in actuarial assumptions and experience (realised and expected payments) are recognised in other comprehensive income under the line item ‘Actuarial Gains/(Losses) on Defined Benefit Pensions Plans,’ and will not be recycled.

Benefits are recognised in the income statement as defined benefit costs. In the statement of financial position, liabilities for short-term employee benefits are included in the line item ‘Provisions.’ In the case of a business combination, employee benefits are recognised and measured in accordance with transactions.

Cash-Settled Share-Based Payment Transactions

If certain conditions are met, members of the Management Board and employees performing special work (i.e., those who contribute to specific activities) receive part of their variable remuneration in the form of financial instruments, whose value is linked to the value of NLB share. Upon expiration of the legally prescribed period, the value is determined based on the NLB share. The first contracts, including share-based payment transactions, were concluded in the second quarter of 2022. In the statement of financial position, a liability is recognised, and fair value is measured initially and at each reporting date up to and including the settlement date, with changes in fair value recognised in the income statement line item ‘Gains less losses from share-based payment transactions.’

NLB Group does not have any equity-settled share-based payment transactions.

Share Capital

Dividends on ordinary shares are paid to NLB’s shareholders. If NLB or another member of NLB Group purchases NLB shares, the consideration paid is deducted from the total shareholders’ equity as treasury equity. If NLB shares are purchased by NLB itself or other NLB Group entities, NLB creates reserves for treasury shares in equity. Costs directly attributable to the issuance of shares are also accounted for.

Segment Reporting

Operating segments are reported in a manner consistent with internal reporting to the Management Board of the Bank, which is the executive body that makes decisions regarding the segment. Transactions between organisational units (OUs) are managed under normal operating conditions. Interest income among individual OUs in the parent bank (NLB) is allocated to the OU. Net non-interest income is allocated to the OU that actually provides the service that generates income. Direct costs are attributed to the segment that is directly related to the provision of services, whereas overhead costs are allocated according to general keys. External net income is the net income of NLB Group from the analysis by segment for NLB Group, which is presented in note 7. In accordance with IFRS 8, NLB Group has the following reportable segments: Retail Banking in Slovenia, Corporate and Investment Banking.

Non-core members, and Other Activities.

35. Critical accounting estimates and judgments in applying accounting policies

NLB Group’s financial statements are influenced by accounting estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. All estimates and assumptions required in conformity with the IFRS are evaluated on a continuing basis, and are based on past experience and other factors, including expectations with regard to future events.

a) Allowances for expected credit

NLB Group creates individual allowances for individually significant financial portfolio at the individual and portfolio levels to continuously estimate the necessary allowances for ECL. Individual assessments are based on the expected discounted cash flows from fulfilment of contractual obligations or other financial difficulties of the debtor, and other important facts. Financial assets are assessed collectively for those assigned to Stage 1 or 2, or for financial assets in Stage 3 with exposure below the materiality threshold. Disclosure regarding allowances by stage is estimated based on expected value of risk parameters combining the historic movements with the future macroeconomic predictions for three separate scenarios. The models used to estimate loss estimations as realistic as possible.

NLB Group in EUR thousands	31 Dec 2024	31 Dec 2023	Of which Collective allowances	Of which Collective allowances
Gross Individual Loans	7,320,791	7,183,783	(70,386)	(79,386)
Loans with Optimistic scenario	(103,604)	(82,439)	(92,667)	6,343,920
Average collective scenario	6,198,141	(59,740)	(72,321)	(109,972)
Individuals	8,734,989	8,713,898	(154,935)	(164,266)
Average allowances	(185,229)	(166,654)	(10,630)	7,235,314
7,212,398	(121,473)	(130,512)	(159,304)	(137,304)
(11,195)

The result shows that for collective allowances, the optimistic scenario would result in 92% of the baseline provisions (89% as at 31.12.2023), while the severe scenario and its conservative assumptions lead to an increase of 119% compared to the baseline (133% as at 31.12.2023).

b) Fair value of financial instruments

The fair values of financial investments traded on the active market are based on current bid prices (financial assets) or offer prices (financial liabilities). The fair values of financial instruments that are not traded on the active market are determined by using valuation models. These include a comparison with recent transaction prices, the use of a discounted cash flow model, valuation based on comparable entities, and other frequently used valuation models. These valuation models at their best estimate reflect current market conditions at the measurement date, which may not be representative of market conditions either before or after the measurement date. Management reviewed all applied models as at the reporting date to ensure they appropriately reflect current market conditions, including the relative liquidity of the market and the applied credit spread. Changes in assumptions regarding these factors could affect the reported fair values of financial instruments held for trading, and financial assets measured at fair value through other comprehensive income.

The fair values of derivative financial instruments are determined on the basis of market data (mark-to-market), in accordance with NLB Group’s methodology for the valuation of financial instruments. The market exchange rates, interest rates, yield, and volatility curves used in valuations are based on the market snapshot principle. Market data are saved daily at 4 p.m., and later used for the calculation of the fair values (market value, NPV) of financial instruments. NLB Group applies market yield curves for valuation, and fair values are additionally adjusted for credit risk of the counterparty. The fair value hierarchy of financial instruments is disclosed in note 6.5.

c) Impairment of investments in subsidiaries, associates, and joint

---

The process of identifying and assessing the impairment of investments in subsidiaries, associates, and joint ventures is inherently uncertain, as the forecasting of cash flows requires the significant use of estimates, which themselves are sensitive to the assumptions used. The review of impairment represents management’s best estimate of the facts and assumptions such as:

• Future cash flows from individual investments present the estimated cash flow for periods for which adopted business plans are available. For core members, estimated cash flows are based on a five-year business plan. For non-core members, estimated cash flows are based on a period in line with the strategy of divestment. The business plans of individual entities are based on an assessment of future economic conditions that will impact an individual member’s business and the quality of the credit portfolio;
• The growth rate for cash flows in perpetuity, following the period of the adopted business plan, ranges between 2.5 and 3.7%;
• The target capital adequacy ratio of an individual bank is between 15 and 18%;
• The discount rate derived from the capital asset pricing model that is used to discount future cash flows is based on the cost of equity allocated to an individual investment. The discount rate reflects the impact of a range of financial and economic variables, including the risk-free rate and risk premium. The value of variables used is subject to fluctuations outside management’s control. The pre-tax discount rate is between 10.6 and 18.35% (31 December 2023: between 10.2 and 20.25%).

NLB Group

NLB	2024	2023
Actuarial assumptions	Discount factor	3.0% - 6.4% 3.6% - 8.0%
	Wage growth based on inflation, promotions, and wage growth based on past years of service	2.4% - 5.7% 2.4% - 13.4%
	Other assumptions
Number of employees eligible for benefits	7,306	7,177
	2,475	2,519

Employee benefits

Liabilities for certain employee benefits are calculated by an independent actuary. The main assumptions included in the actuarial calculation are as follows:

Sensitivity analysis of significant actuarial assumptions for post-employment benefit:

	31 Dec 2024	NLB
Discount rate	Future salary increases
+0.5 p.p.	-0.5 p.p.	Impact on provisions for employee benefits - post-employment benefits (in %)
(4.6)	4.9	5.0
(4.6)	(4.2)	4.5
4.5	(4.2)

31 Dec 2023

NLB	Discount rate	Future salary increases
+0.5 p.p.	-0.5 p.p.	Impact on provisions for employee benefits - post-employment benefits (in %)
(4.4)	4.8	4.8
(4.5)	(4.2)	4.5
4.5	(4.2)

Individual analysis is done by changing one assumption for +/- 0.5 percentage points, while all other assumptions stay the same. The breakdown of actuarial gains and losses for post-employment benefit by causes: in EUR thousands

NLB Group

2024

2023

Actuarial gains and losses due to changed financial assumptions

(1,765)	(470)	(973)	614

Actuarial gains and losses due to changes in demographic assumptions

834	141	832	-

Actuarial gains and losses due to experience

(376)	(115)	(719)	(26)

Total actuarial gains and losses for the year

(1,307)	(444)	(860)	588

The weighted average duration of liabilities in years:

NLB Group	NLB	2024	2023
	Post-employment benefit	9.4 - 20.5	9.6 - 20.9	10.2	10.9

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Taxes

NLB Group operates in countries governed by different laws. The deferred tax assets recognised as at 31 December 2024 are based on profit forecasts and take the expected manner of recovering assets or changes in profit forecasts can lead to the recognition of currently unrecognised deferred tax assets or derecognition of previously created deferred tax assets that are expected to be reversed in the foreseeable future (i.e., within five years). If the change by 10%, the estimated amount of deferred tax assets would change by approximately EUR 11 million.

Financial Reporting Standards

During the current year, NLB Group adopted all new and revised standards and interpretations issued by the International Accounting Standards Board (the IASB) and the IFRS Interpretations Committee (hereinafter: ‘the IFRIC’), and that are endorsed by the EU that are effective for annual accounting periods beginning on 1 January 2024. Accounting standards and amendments were endorsed by the EU and adopted by NLB Group:

• IAS 1 (amendment and deferral of effective date) – Presentation of Financial Statements: Classification of Liabilities as Current or Non-current. The amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected. It also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. The changes had no impact on the financial statements.
• IAS 1 (amendment) – Presentation of Financial Statements: Classification of Liabilities as Current or Non-current, beginning on or after 1 January 2024. The amendments improved the information an entity provides when its right to defer settlement of a liability for at least 12 months is subject to the classification of such a liability as current or non-current. The changes had no impact on the financial statements.
• IFRS 16 (amendment) – Leases: Lease Liability in a Sale and Leaseback. The amendments affect only the subsequent measurement of lease liabilities arising from a sale and leaseback transaction with variable lease payments, which occurred from the date of initial recognition. The changes had no impact on the financial statements.
• IAS 7 (amendment) – Statement of Cash Flows and IFRS 7 (amendment) – Financial Instruments: Disclosures.

---

Periods beginning on or after 1 January 2024. The amendments add a disclosure objective to IAS 7 stating that an entity is required to disclose information about its supplier finance arrangements on the entity’s liabilities and cash flows, and the entity’s exposure to liquidity risk. Supplier finance arrangements are characterised by one or more finance providers offering terms and conditions of the arrangements at the same date as, or a date later than, suppliers are paid. The amendments note that arrangements that are solely credit enhancements of amounts owed are not supplier finance arrangements. Meanwhile, the amendments to IFRS 7 require from an entity to disclose a description of how it manages the liquidity risk resulting from supplier finance arrangements that provide the entity with extended payment terms or the entity’s suppliers with early payment terms. The changes are to existing standards that were endorsed by the EU, but not adopted early by NLB Group. New and revised accounting standards and interpretations endorsed by the EU that are not mandatory by NLB Group. These standards and amendments are not expected to have a material impact on the consolidated financial statements of NLB Group in the future reporting periods and amendments listed below for reporting periods commencing on or after the effective date.

• IAS 21 (amendment) – The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability. The amendments clarify how an entity should assess whether a currency is exchangeable, and how it should determine a spot exchange rate when exchangeability is lacking. A currency is exchangeable through market or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose. If a currency is not exchangeable, the entity should use the rate as the rate that would have applied to an orderly exchange transaction between market participants at the measurement date under prevailing economic conditions, and disclose expected impact on the financial statements.
• Accounting standards and amendments to existing standards, but not endorsed by the EU - IFRS 9 and IFRS 7 (amendment) – Amendments to the standards are effective for annual periods beginning on or after 1 January 2026. The Amendments mainly respond to a request from stakeholders to clarify some aspects of the application guidance for assessing the contractual terms of financial assets and accounting for the settlement of financial liabilities through electronic payment systems. NLB Group does not expect there to be an impact on the financial statements.
• IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with categories and defined subtotals in the statement of profit or loss; provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements; presentation of financial statements.
• IFRS 19 (new standard) – Subsidiaries without Public Accountability: Disclosures is effective for annual periods beginning on or after 1 January 2026. A subsidiary is eligible for the reduced disclosures if it does not have public accountability, and its ultimate or any intermediate parent does not prepare consolidated financial statements that comply with IFRS Accounting Standards. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.
• Volume 11 (amendment) – amendments are effective for annual periods beginning on or after 1 January 2026. The amendments bring small improvements to existing standards.
• IFRS 7 (amendment) - Contracts Referencing Nature-dependent Electricity. Amendments are effective for annual periods beginning on or after 1 January 2026. Amendments help companies often structured as power purchase agreements (PPAs). The amount of electricity generated under these contracts can vary based on uncontrollable factors such as weather conditions. The amendments include: clarifying the application of the ‘own-use’ requirements; permitting hedge accounting if these contracts are used as hedging instruments; and adding new disclosures about the company’s financial performance and cash flows. NLB Group does not expect there to be an impact on the financial statements.

3. Changes in the Composition of the NLB Group

Change of 100% of financial company Generali Investments a.d. Skopje. The purchase price for the company was EUR 2,515 thousand and was fully paid in cash (note 5.12.b). In August 2024, Ljubljana completed the acquisition of a 100% stake in the company SLS HOLDCO d.o.o., the parent company of Summit Leasing Slovenija d.o.o., Ljubljana and its subsidiary Mobil Leasing (note 5.12.c). In October 2024, NLB d.d. Ljubljana increased share capital in the form of a cash contribution in the amount of EUR 3,329 thousand in company NLB Lease&Go, NLB Lease&Go, leasing, d.o.o., Ljubljana increased share capital in the form of a cash contribution in the company NLB Lease&Go Leasing d.o.o. Beograd in the total amount of EUR.

Lease&Go leasing d.o.o. Beograd increased to 50.89%, and NLB Komercijalna banka a.d. Beograd to 48.91%.

In December 2024, NLB Lease&Go, leasing, d.o.o., Ljubljana and NLB amount of EUR 684 thousand in the company NLB Lease&Go, d.o.o. Skopje. Other changes:

• In January 2024, according to the new NLB Group Governance Policy, three real estate companies in Podgorica were transferred from non-core members to core members.
• In May 2024, company S-REAM d.o.o., Ljubljana was renamed ‘NLB Real Estate d.o.o., Ljubljana,’ company REAM d.o.o., Beograd was renamed ‘NLB Real Estate d.o.o., Beograd.’
• On 1 July 2024, after merging with NLB Lease&Go, leasing, d.o.o., Ljubljana, subsidiary NLB Leasing d.o.o. became its universal legal successor after the merger.
• On 1 July 2024, after merging with NLB Real Estate d.o.o., Ljubljana, subsidiary NLB Real Estate d.o.o., Ljubljana became its universal legal successor after the merger.
• In September 2024, NLB Komercijalna banka a.d. Beograd changed its name to NLB Komercijalna banka a.d. Beograd.
• In October 2024, the company KomBank Invest a.d. Beograd was renamed ‘NLB Fondovi a.d. Beograd.’
• In October 2024, NLB Lease&Go, NLB Car&Go, upravljanje spletnih platform, d.o.o.
• In November 2024, NLB Zavod za upravljanje kulturne dediščine was renamed ‘NLB MUZA Zavod za upravljanje kulturne dediščine.’

NLB Lease&Go, leasing, d.o.o., Ljubljana increased its share capital in the form of a cash contribution in the amount of EUR 2,100 thousand in the company Zastava Istrabenz Lizing, d.o.o., Beograd. The ownership interest increased from 95.20% to 99%.

In January 2023, NLB Lease&Go, leasing, d.o.o., Ljubljana increased its share capital in the form of a cash contribution in the amount of EUR 1,195 thousand in the company NLB Lease&Go leasing.

In 2023, NLB Komercijalna banka a.d. Beograd increased its share capital in the form of a cash contribution in the amount of EUR 767 thousand in the company KomBank Invest a.d. Beograd.

NLB Lease&Go, a.d., Skopje increased its share capital in the form of a cash contribution in the total amount of EUR 1,571 thousand in the company NLB Lease&Go, d.o.o. Skopje.

In December 2023, NLB Lease&Go, leasing, d.o.o. Beograd made a cash contribution in the amount of EUR 3,804 thousand in the company NLB Lease&Go leasing d.o.o. Beograd. After that, NLB Lease&Go, leasing, d.o.o., Ljubljana ownership of NLB Lease&Go Beograd ownership of NLB Lease&Go leasing d.o.o. Beograd is 48.91%.

• Other changes:
• In April 2023, after merging with REAM d.o.o., Beograd, subsidiary SPV 2 d.o.o., Beograd became its universal legal successor after the merger.
• In May 2023, NLB Group sold its subsidiary Tara Hotel d.o.o. Budva (note 5.12.e).
• In July 2023, a purchase agreement was entered into the Register of Companies on 13 September 2023 (note 5.12.d).
• In August 2023, NLB received an authorisation of the ECB. The process of the legal merger of N Banka with NLB was closed. As at the date of the merger, N Banka ceased to exist as an independent legal entity, and NLB.
• In September 2023, NLB Leasing d.o.o., Beograd – u likvidaciji was liquidated. In accordance with the court order, the company was removed from the court register.
• In September 2023, NLB Zagreb ceased to exist. All its assets and liabilities were transferred to S-REAM d.o.o., Ljubljana, which became its universal legal successor after the merger.
• On 30 November 2023, SLS HOLDCO d.o.o., the parent company of Summit Leasing Slovenija d.o.o. and its subsidiaries from funds managed by affiliates of Apollo Global Management, Inc. and the European.

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLB Group	2024	2023
Interest and similar income	Interest income calculated using the effective interest method	1,112,288	952,875	602,004	408

Financial assets measured at fair value through other comprehensive income	54,463	38,645	25,289	9,184
Securities measured at amortised cost	85,320	36,886	54,016	24,237

Notes to the Income Statement

4.1. Interest income and expenses Analysis by type of assets and liabilities

Deposits with banks and central banks	121,456	130,829	115,927	122,807
Loans and advances to banks measured at amortised cost	17,271	21,616	11,142	9,584
Loans and advances to customers measured at amortised cost	833,778	724,899	395,630	311,342
Other interest and similar income	95,350	40,530	44,926	21,184
Financial assets held for trading	5,939	6,213	6,444	6,459
Non-trading financial assets mandatorily at fair value through profit or loss	19	48	412	417
Derivatives - hedge accounting	38,474	14,529	38,070	14,308
Finance leases	50,913	18,959	-	-
Other	5	781	-	-
Total	1,207,638	993,405	646,930	498,338

Interest and similar expenses

Interest expenses calculated using the effective interest method	232,863	148,034	174,429	115,779
Deposits from banks and central banks	3,543	3,372	9,068	6,914
Borrowings from banks and central banks	3,871	1,880	2,220	712
Due to customers	115,578	68,784	56,353	36,266
Borrowings from other customers	2,187	1,515	-	-
Subordinated liabilities	46,302	35,155	46,302	35,155
Debt securities issued	60,306	36,579	60,306	36,579
Lease liabilities (note 5.11.a)	1,076	728	180	132
Negative interest	-	21	-	21
Other interest and similar expenses	40,614	12,037	40,621	9,993
Derivatives - hedge accounting	34,164	4,470	34,164	4,444
Financial liabilities held for trading	5,546	5,595	6,020	5,191
Interest expenses on defined employee benefits (note 2.31., 5.16.c)	768	668	409	330
Other	136	1,304	28	28
Total	273,477	160,071	215,050	125,772

Net interest income

934,161

833,334

431,880

372,566

NLB Group

Financial assets measured at fair value through other comprehensive income

in EUR thousands	NLB Group	2024	2023
Financial assets measured at fair value through other comprehensive income	55,116	-	-
related to investments held at the end of reporting period	55,116	-	-
Investments in subsidiaries	-	222,652	144,930
Investments in associates and joint ventures	-	866	275
Non-trading financial assets mandatorily at fair value	-	-	-
Dividend income	6,153	61	53
Total	116,169	223,579	145,258

Fee and commission income and expenses

a) Fee and commission income and expenses relating to activities of NLB Group and NLB

in EUR thousands	NLB Group	NLB	2024	2023
Fee and commission income	-	-	-	-
Fee and commission income relating to financial instruments not at fair value through profit or loss			Credit cards and ATMs	138,680	130,460	56,164	50,094
Customer transaction accounts	100,204	93,527	57,184	53,355
Other fee and commission income	Payments	90,399	88,334	25,992	24,977
Investment funds	42,812	32,994	14,104	9,916
Agency of insurance products	18,621	13,425	11,880	9,679
Other services	10,505	10,381	3,862	3,816
Total fee and commission income from contracts with customers	401,221	369,121	169,186	151,837
Guarantees	19,141	17,954	11,048	9,577
Total	420,362	387,075	180,234	161,414

Fee and commission expenses

Fee and commission expenses relating to financial instruments not at fair value through profit or loss	Credit cards and ATMs	90,454	91,543	36,654	33,387
Other fee and commission expenses	Payments	13,168	13,169	1,678	1,351
	Insurance for holders of personal accounts and gold cards	1,412	1,516	1,039	888
Investment banking	6,287	4,627	820	679
Guarantees	1,685	1,691	1,643	1,598
Other services	4,873	4,314	904	606
	Total	117,879	116,860	42,738	38,509

Net fee and commission income related to banking activities

302,483	270,215	137,496	122,905

---

Fee and Commission Income Related to Fiduciary Activities

in EUR thousands	NLB Group	NLB	2024	2023
Receipt, processing, and execution of orders	2,695	1,661	2,244	1,546
Management of financial instruments portfolio	2,439	1,724	-	-
Initial or subsequent underwriting and/or placing of financial instruments without a firm commitment basis	579	228	579	228
Fee and commission income and expenses relating to fiduciary activities	Custody and similar services	6,640	6,027	6,498	5,842
Management of clients‘ account of non-materialised securities	2,291	1,942	2,291	1,942
Safe-keeping of clients‘ financial instruments	213	75	-	-
Advice to companies on capital structure, business strategy, and related matters and advice, and services relating to mergers and acquisitions of companies	65	9	65	9
Total	14,922	11,666	11,677	9,567

Fee and Commission Expenses Related to Fiduciary Activities

in EUR thousands	NLB Group	NLB	2024	2023
Fee and commission related to Central Securities Clearing Corporation and similar organisations	4,379	3,844	4,382	3,847
Fee and commission related to stock exchange and similar organisations	102	76	102	76
Total	4,481	3,920	4,484	3,923

Net Fee Income Related to Fiduciary Activities

in EUR thousands	NLB Group	NLB	2024	2023
Total net fee and commission	312,924	277,961	144,689	128,549

---

NLB Group 2024

Corporate and Strategic Financial Non-Core Other Intercompany Total

Retail Banking Investment Foreign Markets in Members activities relations in Slovenia Banking

Analysis of fee and commission income and expenses by type and by segments in EUR thousands

	Slovenia	Slovenia	Fee and commission income	Fee and commission income relating to financial instruments not at fair value through profit or loss
	89,681	23,602	125,601	63
Credit cards and ATMs	35,051	21,104	82,521	8
Customer transaction accounts	54,630	2,498	43,080	55
Other fee and commission	87,587	25,011	78,701	514
Payments	13,919	11,711	64,326	76
Investment funds	55,994	449	93	-
Agency of insurance products	11,877	2	6,741	-
Other services	5,797	13,254	6,641	438
Total fee and commission income from contracts with customers	Guarantees	110	10,893	8,423
Total	177,378	59,506	212,725	62239
Fee and commission expenses	(47,296)	(18,421)	(70,670)	(2,666)
Total	(47,296)	(18,421)	(70,670)	(2,666)
Net fee and commission income	130,082	41,085	142,055	(2,044)

NLB Group 2023

Retail Banking Corporate and Strategic Financial Non-Core Other Intercompany Total in Slovenia Investment Foreign Markets in Members activities relations Banking in Markets Slovenia

Analysis of fee and commission income and expenses by type and by segments in EUR thousands

	Slovenia	Slovenia	Fee and commission income	Fee and commission income relating to financial instruments not at fair value through profit or loss
	84,170	22,043	117,756	125
Credit cards and ATMs	31,771	19,679	79,002	5
Customer transaction accounts	52,399	2,364	38,754	120
Other fee and commission	71,260	23,400	71,358	493
Payments	13,704	11,146	62,574	152
Investment funds	42,663	47	233	-
Agency of insurance products	10,124	1	3,294	4
Other services	4,769	12,206	5,257	337
Total fee and commission income from contracts with customers	Guarantees	120	10,361	7,545
Total	155,550	55,804	196,659	65346
Fee and commission expenses	(41,434)	(15,593)	(72,547)	(2,727)
Total	(41,434)	(15,593)	(72,547)	(2,727)
Net fee and commission income	114,116	40,211	124,112	(2,074)

---

NLB Group

2024

2023

Debt instruments measured at fair value through other comprehensive income

	2024	2023
- gains	160	94
- losses	(3,328)	(836)

Financial assets measured at amortised cost

	2024	2023
- gains	169	-

Financial liabilities measured at amortised cost

	2024	2023
- gains	2,839	-
- losses	2,713	-

Total

	2024	2023
	(160)	(742)
	2,503	(834)

Gains less losses from financial assets and liabilities not measured at fair value through profit or loss

Gains less losses from financial assets and liabilities held for trading

	2024	2023
				Foreign exchange trading	- gains	40,675	35,774
	- losses	(8,833)	(7,394)
		Debt instruments	- gains	583	188
	- losses		(340)	(28)
				Derivatives	- currency	1,192	2,462
	- interest rate	(51)	1,182
	- securities	3	3

Total

	2024	2023
	33,229	32,187
	9,979	(408)

Interest income from financial assets held for trading is included in the income statement line item ‘Interest and similar income’ and interest expenses from financial liabilities held for trading in line item ‘Interest and similar expenses’ (note 4.1.).

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLB Group	2024	2023
Equity securities	- gains	4,076	2,667
	- losses	(863)	(985)
Debt securities	- gains	54	122
	- losses	(4)	(44)
Loans and advances to customers	- gains	-	24
		658	1,256
Total		3,263	1,784
		3,848	2,445

Interest income from non-trading financial assets mandatorily at fair value through profit or loss is included in the income statement line item ‘Interest and similar income’ (note 4.1.).

Foreign exchange translation gains less losses

in EUR thousands	NLB Group	2024	2023
Financial assets and liabilities not measured as at fair value through profit or loss	(3,867)	(2,549)	(3,770)
Financial assets measured at fair value through profit or loss	167	(7)	167
Other	56	(222)	56
Total	(3,644)	(2,778)	(3,547)

---

Other operating income

in EUR thousands	NLB Group	2024	2023
				Income from non-banking services	8,360	7,933	7,029	6,862
					- cash transportation	3,279	3,455	414
	- operating leases of movable property	2,491	2,133	527	485
		- IT services	316	221	1,486	1,249
				- other	2,274	2,124	1,737	1,647
					Rental income from investment property	1,348	1,755
	Other operating income and expenses
	293	359
	Revaluation of investment property to fair value (note 5.9.)	1,714	617	221	223
				Sale of investment property	816	427	258	17
					Other operating income	9,611	6,676	6,773	2,915
Total	21,849	17,408	14,574	10,376

Other operating expenses

Donations	2,187	12,008	1,541	11,564
Expenses related to issued service guarantees	3	545	3	545
Revaluation of investment property to fair value (note 5.9.)	1,228	1,734	354	1
Other operating expenses	8,411	7,813	2,329	2,232
Total	11,829	22,100	3,908	14,382

The line item ‘Donations,’ classified under the ‘Other operating expenses’ in year 2023 also include donations of NLB for floods mitigation in Slovenia to municipalities in the total amount of EUR 4,000 thousand, and to the Budget of the Republic of Slovenia to a particular budget line to raise funds to recover the consequences of the August floods in the amount of EUR 5,000 thousand. Other operating expenses mainly include expenses associated with the changes in proportional deduction of VAT, licences, penalties, and damages. Other operating income mainly include reimbursement of costs and taxes and income from sale of gold.

NLB Group

Employee costs

in EUR thousands	NLB Group	2024	2023
		Gross salaries, compensations, and other short-term benefits	288,583	252,731	144,109	118,962
Defined contribution scheme	18,591	17,424	9,055	8,225
	Social security contributions	14,198	12,612	7,544	6,864
		Defined benefit expenses (note 5.16.c)	780	(602)	501	(279)
		Post-employment benefits
	Other employee benefits	806	532	688	173
	Total	322,152	282,165	161,209	133,772

Other general and administrative expenses

Type	2024	2023	2024	2023
Material	6,994	6,672	1,746	1,624
Services	58,476	46,735	33,146	26,824
Intellectual services	22,218	18,385	12,810	9,768
Costs of supervision	7,136	4,942	4,384	2,806
Costs of other services	29,122	23,408	15,952	14,250
Tax expenses	37,915	4,454	34,507	1,040
Tax on balance sheet	33,204	-	33,204	-
Other tax expenses	4,711	4,454	1,303	1,040
Membership fees and similar	994	903	363	359
Business travel	2,172	1,684	787	561
Marketing	20,502	17,373	10,439	9,213
Buildings and equipment	32,591	32,680	16,091	15,290
Electricity	7,481	8,285	3,714	4,307
Rents and leases	2,423	3,012	400	526
Maintenance costs	10,135	9,370	5,333	4,977
Costs of security	6,371	5,952	2,582	2,203
Insurance for tangible assets	810	656	293	152
Other costs related to buildings and equipment	5,371	5,405	3,769	3,125
Technology	43,558	43,093	22,692	23,100
Maintenance of software and hardware	21,695	22,527	8,996	10,232
Licences	13,959	12,612	9,707	8,829
Data assets and subscription costs	3,359	3,267	2,342	2,157
Other technology costs	4,545	4,687	1,647	1,882
Communications	12,150	12,490	4,498	4,567
Postal services	4,697	4,868	2,828	2,814
Telecommunication and internet	4,996	5,141	521	558
Other communication costs	2,457	2,481	1,149	1,195
Other general and administrative costs	6,491	4,374	2,964	2,057
Total	221,843	170,458	127,233	84,635

Total administrative expenses

543,995 452,623 288,442 218,407

Number of employees

8,322 7,982 2,523 2,554

Costs of other services include insurance costs, costs for cash transport, archiving costs, costs for certification agency and e-business, meeting fees of members of the Supervisory Board.

Statutory audit fees

in EUR thousands	NLB Group	NLB	2024	2023
Cost of statutory audit	1,307	944	526	333
Audit overruns due to additional scope	90	-53	-	-
Total	1,397	416	-	-

Other audit fees

in EUR thousands	NLB Group	NLB	2024	2023
Other assurance services	225	28	210	28
Non assurance services	34	-	15	-
Total	259	28	225	28

Total audit fees

in EUR thousands	NLB Group	NLB	2024	2023
Total audit fees	1,656	972	804	361

The contractual amount of the auditor’s remuneration for auditing the annual report (excluding VAT, predefined costs and inflation, if it exceeds 3% in an individual member state of the NLB Group) amounted to EUR 915 thousand in 2024 at the NLB Group (2023: EUR 757 thousand), and EUR 302 thousand at NLB (2023: EUR 341 thousand). For other audit assurance services, the contractual values (excluding VAT and additional costs) for the NLB Group amount to EUR 180 thousand (2023: EUR 17 thousand), and EUR 163 thousand at NLB (2023: EUR 8 thousand), and relate to the sustainability report and other audit services. For other audit services, excluding assurance, the contractual values for the NLB Group amount to EUR 24 thousand (2023: EUR 15 thousand), and in NLB amounted to EUR 7 thousand (2023: EUR 7 thousand). In addition to the services included in the paragraph above, the statutory auditor also performed certain non-audit services in 2024 in the amount of EUR 159 thousand (2023: EUR 75 thousand) and other assurance services in 2023 in the amount of EUR 260 thousand, both related to the issuance of bonds. Amounts are presented without VAT. The payment was included in the calculation of the effective interest rate on the instrument issued.

Cash contributions to resolution funds and deposit guarantee schemes

in EUR thousands	NLB Group	NLB	2024	2023
Cash contributions to deposit guarantee schemes	39,968	36,946	10,793	9,686
Cash contributions to resolution funds	245	2,147	-	1,697
Total	40,213	39,093	10,793	11,383

In February 2024, Bank of Slovenia announced Single Resolution Board decision that no regular annual contributions to Single Resolution Fund will be collected in 2024 since the target level of at least 1% of covered deposits held in the member states participating in the Single Resolution Mechanism was reached. Accordingly, NLB was not obligated to contribute its regular contribution to resolution funds for the year 2024.

NLB Group

Financial Overview

in EUR thousands	NLB Group	NLB	2024	2023
Amortisation of intangible assets (note 5.10.)	20,775	16,402	11,625	7,528
Depreciation of property and equipment:	- own property and equipment (note 5.8.b)	29,561	24,832	10,838	10,508
- right-of-use assets (note 5.11.a)	7,881	7,998	1,553	1,421
Total	58,217	49,232	24,016	19,457

4.12. Gains less losses from Depreciation and amortisation

in EUR thousands	NLB Group	2024	2023	12-month ECL	Lifetime ECL	Total
Financial assets modified during the period	Amortised cost before modification	515,034	16,401	2,083	533,518	510,682
Net modification gains/(losses)	(4,113)	(143)	(24)	(4,280)	(16,043)	(123)	(105)	(16,271)

The majority of modification loss of financial assets in 2024 and 2023 refers to the Decision on temporary measures for banks in relation to housing loans to natural persons, which limited the interest rates of housing loans in Serbia. The loss represents the difference between the balance of the loan on the modification date and the discounted value of the cash flows of the modified repayment plans using the original effective interest rate.

Financial assets modified since initial recognition

in EUR thousands	NLB Group	31 Dec 2024	31 Dec 2023
Gross carrying amount of financial assets for which loss allowance has changed to 12-month measurement during the period	-	775	-

4.13. Provisions

in EUR thousands	NLB Group	NLB	2024	2023
Provision for credit losses	(10,728)	(5,055)	(8,701)	(3,074)
Guarantees and commitments (note 5.16.b)	(10,728)	(5,055)	(8,701)	(3,074)
Provision for other liabilities and charges	12,847	25,925	7,149	14,422
Restructuring provisions (note 5.16.d)	3,919	3,654	2,500	3,800
Provisions for legal risks (note 5.16.e)	8,928	7,280	4,649	(2,678)
Other provisions (note 5.16.f)	-	14,991	-	13,300
Total	2,119	20,870	(1,552)	11,348

---

Impairment of financial assets

in EUR thousands	NLB Group	2024	2023
Cash balances at central banks, and other demand deposits at banks	(53)	(504)	(272)
Loans and advances to banks measured at amortised cost (note 5.14.a)	(79)	23	36
Loans and advances to individuals measured at amortised cost (note 5.14.a)	39,711	37,632	23,535
Loans and advances to other customers measured at amortised cost (note 5.14.a)	(8,280)	(41,396)	17,813
Debt securities measured at fair value through other comprehensive income (note 5.14.b)	(1,535)	(7,054)	198
Debt securities measured at amortised cost (note 5.14.b)	1,923	1,749	723
Other financial assets measured at amortised cost (note 5.14.a)	(381)	2,833	(1,343)
Total impairment of financial assets	31,306	(6,717)	40,690
Impairment of investments in subsidiaries, associates and joint ventures
Investments in subsidiaries	-	-	(53,525)
Investments in associates and joint ventures	-	-	(241)
Total	-	-	(53,525)
Impairment of other assets
Property and equipment (note 5.8.b)	3,667	47	-
Other assets	347	(100)	1
Total	4,014	(53)	1
Total impairment of non-financial assets	4,014	(53)	(53,524)
Total impairment	35,320	(6,770)	(12,834)

In 2024, NLB released impairments related to equity investments in subsidiaries in total amount of EUR 53,705 thousand (2023: EUR 97,847 thousand). Release of impairments in subsidiaries was due to increase in their estimated recoverable amounts. The recoverable amounts have been calculated based on value in use, determined by discounting the future cash flows expected to be generated from holding the investments. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant sectors and have been based on historical data from both internal and external sources (discount rate from 10.6% to 18.35%; growth rate from 2.5% to 3.7%; target capital adequacy ratio between 15% and 18%). Details of the assumptions used in the estimates are presented in note 2.35.c). In 2024, NLB impaired equity investment in non-core subsidiary in amount of EUR 180 thousand (2023: EUR 730 thousand), which is included in the amount in the line item ‘Investments in subsidiaries.’ In 2024, impairment of financial assets includes EUR 1,661 thousand of 12-month expected credit losses for Stage 1 financial assets measured at amortised cost, acquired through a business combination (note 5.12.c).

Income Tax

in EUR thousands	NLB Group	NLB	2024	2023
Current income tax	76,432	66,072	34,423	25,210
Global minimum tax	6,037	-	3,851	-
Deferred income tax (note 5.17.)	(4,553)	419	-	-
Total	77,916	15,090	33,829	(35,541)

Reconciliations of differences from the amount of tax determined by applying the Slovenian statutory tax rate and Income tax reconciliation of effects:

in EUR thousands	NLB Group	NLB	2024	2023
Profit before tax	608,149	578,413	511,990	478,746
Tax calculated at prescribed rate of 22% (in 2023: 19%)	133,793	22.0%	109,898	19.0%
	112,638	22.0%	90,962	19.0%
Tax effect of:
Income not subject to tax	(14,855)	-2.4%	(13,180)	-2.2%
	(58,988)	-11.5%	(45,966)	-9.6%
Non-deductible expenses	10,385	1.7%	10,572	1.7%
	1,239	0.2%	3,130	0.7%
Utilization of previously non-deductible expenses	-	-	(16,034)	-2.6%
	-	-	(2,578)	-0.5%
Tax reliefs	(4,840)	-0.8%	(3,324)	-0.5%
	(3,273)	-0.6%	(3,301)	-0.7%
Use of previously unrecognised tax losses	(27,689)	-4.6%	(22,266)	-3.7%
	(27,079)	-5.3%	(21,898)	-4.6%
Unrecognised deferred tax assets on current period tax losses	1,107	0.1%	14,218	2.3%
	-	-	-	-
Recognition of previously unrecognised deferred tax on tax losses	(6,920)	-1.1%	(46,697)	-7.7%
	(5,501)	-1.1%	(46,697)	-9.8%
Recognition of previously unrecognised deferred tax on deductible temporary differences	-	-	-	-
	-	-	(1,918)	-0.3%
Changes in deferred taxes due to the increase of tax rate	-	-	-	-
	-	-	(13,491)	-2.2%
Effect of different tax rates in other countries	(29,794)	-4.9%	(18,636)	-3.1%
	-	-	-	-
Withholding tax for which no tax credit was available	10,197	1.7%	10,197	2.0%
	6,920	1.1%	6,920	1.4%
Deferred tax liability on undistributed profits	840	0.1%	9,626	1.6%
	-	-	-	-
Adjustment to tax in respect of prior years	(670)	-0.1%	50	-
	(420)	-	(3)	-
Global minimum tax	6,037	1.0%	-	-
	3,851	0.8%	-	-
Other	325	0.1%	(648)	-0.1%
	325	0.1%	(648)	-0.1%
Total	77,916	12.8%	15,090	2.6%
	33,829	6.6%	(35,541)	-7.4%

Each member of NLB Group (disclosed in note 5.12.a) is taxable as required by local tax legislation. Income tax rates within NLB Group ranges from 9 to 32%. A tax rate of 22% was applied in Slovenia in 2024 (2023: 19%). For the years 2024 – 2028, the rate in Slovenia will be 22%. The effect of income not subject to tax of NLB in 2024, related to:

• dividends in 2024 amounted EUR 46,728 thousand (2023: EUR 26,219 thousand). They are based on non-taxable dividend income in 2024 which amounts to EUR 212,400 thousand (2023: EUR 137,994 thousand);
• release of impairments of equity investments in 2024 amounted to EUR 11,815 thousand (2023: EUR 18,591 thousand). They are based on non-taxable income from release of impairments of equity investments in 2024 in amount of EUR 53,705 thousand (2023: EUR 97,847 thousand).

NLB recognised deferred tax assets accrued on the basis of temporary differences in an amount that, given

Future profit estimates are expected to be reversed in the foreseeable future (i.e., within five years). Due to some uncertainties regarding external factors (regulatory environment, market situation, etc.), a lower range of expected outcomes was considered for the purposes of deferred tax assets calculation. NLB recognised deferred tax assets on all temporary differences. The deferred tax assets for tax loss total amount of deferred tax assets, for which a reversal is expected within five years. The deferred tax assets with respect to which simultaneously deferred tax liabilities are recognised are expenses for impairment of debt securities measured at fair value through other comprehensive income and deferred tax assets related to fair value hedge accounting.

NLB Group members the tax losses could be utilised, because it is not probable that future taxable profits will be available against which the deferred tax assets can be utilised. The majority of the impact of loss of a subsidiary that realised tax loss due to the utilisation of previously tax non-deductible expenses for impairments in the subsidiary, which was divested in 2023. Deferred tax liabilities year 2025 on projected dividends. The tax authorities may audit operations of NLB Group entities. In general, tax inspection, which may result in the emergence of additional tax liabilities from the date of tax statement or from the year in which tax should have been assessed. NLB is not aware of any circumstances that could give rise to a potential material tax liability in Slovenia (FURS).

The purpose of the status is to establish cooperation between FURS and the taxpayers, with the aim of encouraging voluntary compliance and reducing administrative burdens to resolve NLB’s tax compliance issues, which reduces NLB’s tax risks and uncertain tax positions. Global minimum tax NLB Group became subject to global minimum top-up tax from jurisdictions, where effective tax rate, calculated by the rules related to global minimum top-up tax, is below 15%. NLB as the parent company recognised the global minimum top-up tax in Herzegovina and Kosovo, where the statutory corporate income tax rate is 10%. North Macedonia, where a 10% statutory corporate income tax also applies, introduced a domestic top.

NLB Group applied a mandatory temporary exception from the requirements of IAS 12, according to which information on deferred tax assets and liabilities related to Global minimum.

NLB Group

2024

2023

2024

2023

Net profit attributable to the owners of the parent (in EUR thousands)	514,552	550,700	478,161	514,287

Weighted average number of ordinary shares

(in thousands)	20,000	20,000	20,000	20,000

Basic earnings per share (in EUR per share)

25.7	27.5	23.9	25.7

Diluted earnings per share (in EUR per share)

25.7	27.5	23.9	25.7

5. Notes to the Earnings per share

Earnings per share are calculated by dividing the net profit by the weighted average number of ordinary shares in issue, less treasury shares. Diluted earnings per share have no future conversion options, and consequently there are no dilutive potential ordinary shares.

Statement of Financial Position

5.1. Cash, cash balances at central banks, and other demand deposits at banks

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Balances and obligatory reserves with central banks	3,322,029	5,435,460	1,708,488	4,077,399
Cash	540,283	470,902	214,637	181,735
Demand deposits at banks	178,504	198,489	50,183	59,365
Total	4,040,816	6,104,851	1,973,308	4,318,499
Allowance for impairment	(1,235)	(1,290)	(195)	(467)
Total	4,039,581	6,103,561	1,973,113	4,318,032

Slovenian banks are required to maintain a compulsory reserve with the Bank of Slovenia relative to the volume and structure of their customer deposits. Other banks in NLB Group maintain a compulsory reserve in accordance with local legislation. NLB and other banks in NLB Group fulfil their compulsory reserve deposit requirements.

in EUR thousands

NLB Group

31 Dec 2024

31 Dec 2023

NLB

31 Dec 2024

31 Dec 2023

		Derivatives, excluding hedging instruments	Swap contracts	7,649	13,867	10,393	16,135
- currency swaps	1,598	3,687	1,919	3,712
	- interest rate swaps	6,051	10,180	8,474	12,423
		Options	486	1,249	486	1,249
		- interest rate options	463	1,229	463	1,229
			- securities options	23	20
Forward Financial instruments held for trading	a) Financial assets held for trading	contracts	779	602	770	573
	- currency forward	779	602	770	573
		Total derivatives	8,914	15,718	11,649	17,957
		Securities	Bonds	9,424	-	9,424	-
			- other EU members	2,036	-	2,036	-
- other non-EU members	7,388	-	7,388	-
	Total securities	9,424	-	9,424	-
	Total	18,338	15,718	21,073	17,957
		- quoted securities	9,424	-	9,424	-
			- of these debt instruments	9,424	-	9,424	-

The notional amounts of derivative financial instruments are disclosed in note 5.24.b).

b) Financial liabilities held for trading

in EUR thousands

NLB Group

31 Dec 2024

31 Dec 2023

NLB

31 Dec 2024

31 Dec 2023

Derivatives, excluding hedging instruments	Swap contracts	5,496	11,139	8,478	15,440
- currency swaps	660	2,035	1,311	4,216
- interest rate swaps	4,836	9,104	7,167	11,224
Options	595	1,573	595	1,573
- interest rate options	595	1,573	595	1,573
Forward contracts	904	505	904	497
- currency forward	904	505	904	497
Total	6,995	13,217	9,977	17,510

The notional amounts of derivative financial instruments are disclosed in note 5.24.b).

NLB Group Annual Report 2024

Overview

Assets

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Shares	8,650	6,300	8,650	6,300
Investment funds	7,779	2,658	6,521	2,558
Bonds	1,000	5,217		423
Loans and advances to companies		-	3,964	7,785
Total	17,429	14,175	19,135	16,643
Quoted securities	1,000	5,217	-
Of these debt instruments	1,000	5,217	-
Unquoted securities	16,429

Non-trading financial instruments measured at fair value through profit or loss

a)	Financial assets mandatorily at fair value through profit or loss	NLB Group	NLB	31 Dec 2024	31 Dec 2023
	Financial liabilities measured at fair value through profit or loss	8,958	15,171	8,858
	Of these equity instruments	16,429	8,958	15,171	8,858

As at 31 December 2024 and 2023

NLB Group and NLB did not have any assets received by taking possession of collateral and included in financial assets mandatorily at fair value through profit or loss.

b) Financial liabilities measured at fair value through profit or loss

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Liabilities	Loans and advances to companies	-	637	1,234
Other financial liabilities (note 2.32.)	9,633	4,482	4,960	1,976
Total	9,633	4,482	5,597	3,210

---

NLB Group

in EUR thousands

	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Bonds	2,262,669	1,836,604	1,601,875	962,084
- governments	1,707,776	1,398,036	1,046,982	424
- Republic of Slovenia	523,516	385,768	246,155	365,517
- other EU members	636,688	200,914	564,737	194,599
- Republic of Serbia	347,103	579,333	4,701	4,482
- other non-EU members	338,217	371,634	112,027	113,926

Financial assets measured at fair value through other comprehensive income

a) Analysis by type of financial assets measured at fair value through other comprehensive income

	31 Dec 2024	31 Dec 2023
- banks	459,750	413,926
- other issuers	95,143	24,642
Shares	33,819	26,467
- National Resolution Fund	62,774	60,625
- Treasury bills	173,614	301,838
- Republic of Slovenia	-	19,902
- other EU members	140,774	247,827
- other non-EU members	32,840	34,109
- Commercial bills	30,640	26,022
Total	2,563,516	2,251,556
of these debt securities	2,466,923	2,164,464
of these equity securities	96,593	87,092

Allowance for impairment (note 5.14.b)

	31 Dec 2024	31 Dec 2023
- quoted securities	(5,793)	(7,329)
of these debt instruments	2,363,268	1,992,263
of these equity instruments	29,218	4,863
- unquoted securities	171,030	254,430
of these debt instruments	103,655	172,201
of these equity instruments	67,375	82,229

The credit quality analysis for financial assets and contingent liabilities is disclosed in note 6.1.j) and movements in allowance for the impairment of debt securities in note 5.14.b).

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Balance as at 1 January

	NLB Group		NLB
	2024	2023	2024	2023
Debt securities	2,164,464	2,838,796	962,084	1,291,277
Equity securities	87,092	80,407	60,928	42,784

Effects of translation of foreign operations to presentation currency

	NLB Group		NLB
	2024	2023	2024	2023
Effects	2,433	103	(293)	(34)

Movements of financial assets measured at fair value through other comprehensive income

	NLB Group		NLB
	2024	2023	2024	2023
Additions	2,433,207	541,446	836,368	54
Derecognition	(2,253,476)	(87)	(2,249,943)	(82)
Net interest income	54,462	-	38,624	-
Exchange differences on monetary assets	4,177	-	1,901	-
Changes in fair values	61,656	9,431	88,633	6,801
Merger of subsidiary (note 5.12.f)	-	-	-	-

Balance as at 31 December

	NLB Group		NLB
	2024	2023	2024	2023
Debt securities	2,466,923	2,164,464	1,601,875	962,084
Equity securities	96,593	87,092	63,144	60,928

Accumulated other comprehensive income related to financial assets measured at fair value through other comprehensive income

	NLB Group		NLB
	2024	2023	2024	2023
Debt securities	(66,934)	(144,578)	(35,255)	(78,283)
Equity securities	7,011	1,332	144	(1,460)

Net gains/(losses) from changes in fair value

	NLB Group		NLB
	2024	2023	2024	2023
Net gains/(losses)	55,795	9,431	77,269	6,801

Gains/losses transferred to net profit on disposal

	NLB Group		NLB
	2024	2023	2024	2023
Gains/losses	3,168	-	742	-

Impairment

	NLB Group		NLB
	2024	2023	2024	2023
Impairment	(1,535)	-	(7,054)	-

Transfer of gains/losses to retained earnings

	NLB Group		NLB
	2024	2023	2024	2023
Transfer	-	(58)	-	(63)

Deferred income tax

	NLB Group		NLB
	2024	2023	2024	2023
Deferred income tax	(10,589)	(1,484)	6,718	(1,054)

Merger of subsidiary

	NLB Group		NLB
	2024	2023	2024	2023
Merger	-	-	-	-

Balance as at 31 December

	NLB Group		NLB
	2024	2023	2024	2023
Balance	(20,109)	14,892	(10,113)	1,830

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands		NLB Group	NLB	2024	2023
				Fair value hedge from assets items	(231)	2,735	(223)	2,424
					Net effects from hedging instruments	(10,840)	(24,799)	(10,731)	(22,803)
	- interest rate swap for micro hedge		(7,098)	(15,677)	(6,989)	(13,681)
					- interest rate swap for macro hedge	(3,742)	(9,122)	(3,742)	(9,122)
						Net effects from hedged items	10,609	27,534	10,508
	Derivatives for hedging purposes	NLB Group entities measure exposure to interest rate risk using repricing gap analysis and by calculating the sensitivity of the statement of financial position.
25,227			- loans measured at amortised cost - micro hedge	- (3)	- (3)
					- bonds measured at amortised cost - micro hedge	894	2,684	894	2,684
						- bonds measured at fair value through OCI - micro
				portfolio duration is used as a measure of risk in the management of securities in the banking book.	NLB Group entities use interest rate swaps (IRS) to close open positions in an individual hedge.
5,861	- loans measured at amortised cost - macro hedge			3,854	13,560	3,753	11,253
in EUR thousands		NLB Group	NLB	2024	2023
Fair value hedge from swapping of a fixed interest rate on a hedged item for a variable interest rate.	Micro cash flow hedges are also occasionally used, i.e. the swapping of a variable interest rate on a hedged item.
liability items	(1,180)	1,164	(1,180)	1,164
				Net effects from hedging instruments	25,204	6,505	25,204	6,505
					- interest rate swap for micro hedge	25,204	6,505	25,204	6,505
Net effects from hedged items	(26,384)	(5,341)	(26,384)	(5,341)
				- debt securities issued	(26,384)	(5,341)	(26,384)	(5,341)

In both years presented, all fair value hedges were effective, with actual results of item match (i.e., the principal terms match), while the dollar-offset method is used to regularly measure hedge effectiveness retrospectively. Efficiency is considered when total differences in the hedge ratio within a range of 80–125% (or within the materiality of change), therefore, no discontinuation of the hedge accounting was required. As at 31 December 2024 and 2023, NLB Group and NLB had no relationships designated for cash flow hedge accounting or for hedge of a net investment in a foreign operation.

NLB Group applied a hedge of a net investment in a foreign operation in years 2011 and 2012, and at that time recognised a EUR 754 thousand gain on the hedging instrument in other comprehensive income (note 5.22.b). Hedge ineffectiveness may arise from the difference of discount rates used for valuation of hedged and hedging instruments, notional and timing differences, as well as differences in the assessment of the hedged item.

This gain will be included in the consolidated income statement when the foreign operation is disposed of as a part of the gain or loss on the disposal.

NLB Group

Fair value Change in fair value

Fair value hedge of assets items

Notional of hedging instrument amount	Asset	Liability used for calculating hedge ineffectiveness
	31 Dec 2024	589,141	26,815	3,592	(10,802)
31 Dec 2023	633,798	38,738	3,540	19,708

Fair value hedge of liability items

Notional of hedging instrument amount	Asset	Liability used for calculating hedge ineffectiveness
	31 Dec 2024	1,520,000	50,956	-	41,997
		31 Dec 2023	450,000	8,876	-	8,774

The hedging instrument is included in the statement of financial position in the line item ‘Derivatives – hedge accounting.’

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Accumulated Fair Value Adjustments

Accumulated fair value adjustments arising from the corresponding continuing hedge relationships. The table below presents accumulated fair value adjustments arising from the corresponding hedged items.

in EUR thousands	NLB Group	NLB	2024	2023	Accumulated	Accumulated
Carrying amount of FV	Carrying amount of FV	Carrying amount of FV	Accumulated adjustments	Accumulated adjustments	Accumulated adjustments	Accumulated adjustments
Micro fair value hedges	Fixed rate bonds measured at AC	114,743	(3,768)	108,494	(4,349)	114,743
	Fixed rate bonds measured at FVOCI	213,207	(9,980)	242,347	(15,841)
	Fixed rate issued bonds	1,096,577	31,725	464,393	5,341
Macro fair value hedges	Fixed rate retail loans	257,465	(6,353)	267,908	(10,207)
		194,962	(8,761)	205,601	(12,514)

Change in Fair Value of Hedge Item

The change in fair value of the hedge item used as the basis for recognising hedge ineffectiveness:

in EUR thousands	NLB Group	NLB	2024	2023
Micro fair value hedges	(38,270)	3,591	(38,270)	3,591
Macro fair value hedges	3,560	10,577	3,364	8,540

IBOR Reform

NLB Group continuously monitors the development of Benchmark Interest Rate Reform and is actively preparing for the changes imposed by the regulation. In 2018, NLB formed a special working group which deals with the preparation for the discontinuation of some important reference interest rates and reports on this to the NLB Group ALCO. NLB Group no longer offers new products that would be tied to reference rates in termination. With regard to the reference rates, the NLB Group offers only products related to EURIBOR, which is not scheduled for discontinuation.

Therefore, NLB Group’s attention in the past few years has been focused on the modification of new contractual relationships with customers in which EURIBOR occurs. Due to the timely transition to the new hybrid EURIBOR methodology which meet the BMR requirements, EURIBOR can continue to be used in new and legacy contracts for the foreseeable future.

EU-supervised entities are bound to include robust fallback clauses into contractual documentation with the clients. In November 2019, the Euro risk-free rates (RFR) Working Group published high level recommendations for fallback provisions for products referencing EURIBOR. The inclusion of robust fallback language is a requirement in contracts subject to the EU Benchmark Regulation. The Bank already incorporated the generic fallback clause into all new EURIBOR (both retail and corporate) contracts. In May 2021, the Euro RFR Working Group produced its recommendations on EURIBOR fallback trigger events and €STR-based EURIBOR fallback rates. NLB's mid-term activities are expected to undertake on the implementation of.

NLB Group Annual Report 2024

Overview

More precise fallback provisioning, based on these recommendations. NLB identified potential €STR-based fallbacks for EURIBOR, in line with the current market consensus on those fallbacks and intends to proceed with the activities for inclusion on EURIBOR fallbacks into all new EURIBOR-based contracts. In the next step, the Bank is also expected to include fallback provisions in legacy contracts. The exact timing depends on the regulatory/market development and best practices.

Interest Rate Swaps

Type	Notional Amount (in EUR thousands)	Weighted Average Maturity (years)
Assets		EURIBOR (3 months)	310,250	8.05
			EURIBOR (6 months)	272,189	5.47
				USD LIBOR (6 months)	6,702	8.93
Liabilities	EURIBOR (3 months)	800,000	2.53
			EURIBOR (6 months)	720,000	3.87

As can be seen from the table, the majority of long-term derivatives in hedging relationships are exposed to EURIBOR, therefore, the uncertainty arising from interest rate benchmark reform derives mainly from derivatives with longer maturities, when a change of EURIBOR could be expected. As at 31 December 2024, derivatives with remaining maturity of five or more years amount to EUR 242,830 thousand (31 December 2023: EUR 285,280 thousand).

NLB, as a user of benchmarks, must produce and maintain a robust written plan setting out the actions NLB would take in the event that a benchmark materially changes or ceases to be provided. NLB will continue to closely follow market standards to identify alternative benchmarks that could be referenced in substitute of existing benchmarks.

Incremental LIBOR transactions were not allowed unconditionally. NLB Group activities for implementation of LIBOR transition will include analysis of how the alternative reference rate will be calculated and how to calculate any economic difference between LIBORs with alternative reference rates, as well as documentation of the transition of the loans.

NLB Group

Financial assets measured at amortised cost

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Debt securities	3,725,195	2,522,229	2,846,779	1,966,169
Loans and advances to banks	458,921	430	547,640	193,172
Loans and advances to customers	16,363,649	13,734,601	8,653,348	7,148,283
Other financial assets	136,854	165,962	81,518	101,596
Total	20,684,619	16,970,432

Analysis by type

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Debt securities	3,732,662	2,527,751	2,850,309	1,968,966
Governments	2,707,448	1,898,725	1,832,344	1,347,161
Companies	75,923	79,679	68,674	72,458
Banks	882,616	536,096	882,616	536,096
Financial organisations	66,675	13,251	66,675	13,251
Allowance for impairment (note 5.14.b)	(7,467)	(5,522)	(3,530)	(2,797)
Total	3,725,195	2,522,229	2,846,779	1,966,169

Loans and advances to banks

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Loans	456,623	131,794	119,914
Time deposits	229,591	249,765	61,684	25,865
Reverse sale and repurchase agreements	229,049	294,069
Purchased receivables	-	3,482	-	3,482
Finance lease receivables (note 5.11.b)	65	-	-
Allowance for impairment (note 5.14.a)	(240)	(299)	(306)	(250)
Total	458,921	547,640	193,172	149,011

Loans and advances to customers

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Loans	14,817,888	13,117,311	8,440,471	6,946,199
Overdrafts	507,933	449,145	276,421	236,792
Finance lease receivables (note 5.11.b)	1,227,783	337,610	-
Credit card business	158,702	154,664	87,211	82,457
Called guarantees	9,104	4,498	6,958	2,403
Total	16,721,410	14,063,228	8,811,061	7,267,851
Allowance for impairment (note 5.14.a)	(357,761)	(328,627)	(157,713)	(119,568)
Total	16,363,649	13,734,601	8,653,348	7,148,283

---

NLB Group

in EUR thousands

	NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Governments	511,129	386,291	209,228	118,220
Financial organisations	149,132	91,523	1,326,073	431
Companies	384,995	7,145,683	6,169,972	3,235,837	3,101,465
Individuals	8,557,705	7,086,815	3,882,210	3,543,603
Total	16,363,649	13,734,601	8,653,348	7,148,283

d) Other financial assets

Analysis of loans and advances to customers by sector

Analysis by type of other financial assets in EUR thousands

	NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
						Receivables in the course of settlement	43,265	43,608	25,701	20,207
	Credit card receivables	26,108	54,748	13,881	42,753
				Debtors	14,181	9,265	3,437	2,013
						Fees and commissions	7,974	9,734	3,405	2,924
Accrued income	15,081	7,171	7,451	6,247
	Prepayments	5,183	2,176
		Other financial assets	34,055	50,065	28,856	29,066
					145,847	176,767	82,731	103,210
Allowance for impairment (note 5.14.a)	(8,993)	(10,805)	(1,213)	(1,614)
	Total	136,854	165,962	81,518	101,596

Receivables in the course of settlement are temporary balances which will be transferred to the appropriate item in the days following their occurrence. Other financial assets in the amount of EUR 23,975 thousand (31 December 2023: EUR 22,745 thousand) relate to a receivable recognised in accordance with the ‘Act for Value Protection of Republic of Slovenia’s Capital Investment in Nova Ljubljanska banka d.d., Ljubljana’ (note 5.16.a). The remaining balance includes claims for fees and legal costs, and claims from refunds.

Analysis of other financial assets by sector

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
	Banks	42,218	51,020	10,114	19,779
	Government	26,315	44,233	26,000	25,756
Financial organisations	21,126	30,715	11,932	23,554
Companies	9,385	5,062	824	723
	Individuals	37,810	34,932	32,648	31,784
	Total	136,854	165,962	81,518	101,596

Movement of called non-financial guarantees

in EUR thousands	NLB Group	NLB	2024	2023
Balance as at 1 January	984	397	60	90
Effects of translation of foreign operations to presentation currency	(1)	-	-	-
Called guarantees	1,599	1,184	1,300	-
Paid guarantees	(1,722)	(534)	(1,144)	-
Merger of subsidiary	-	-	-	32
Write-offs	(357)	(62)	(176)	(62)
Balance as at 31 December	504	984	406	0

Non-current assets held for sale

The line item ‘Non-current assets held for sale’ includes business premises and assets received as collateral that are in the process of being sold.

As at 31 December 2024, the value of assets received by taking possession of collateral and included in non-current assets held for sale by NLB Group amounted to EUR 7,191 thousand (31 December 2023: EUR 474 thousand). As at 31 December 2024, and as at 31 December 2023, NLB did not have any non-current assets obtained by taking possession of collateral and included in non-current assets held for sale (note 6.1.l).

Analysis of movements of non-current assets held for sale

in EUR thousands	NLB Group	NLB	2024	2023
Balance as at 1 January	4,849	15,436	4,048	4,235
Effects of translation of foreign operations to presentation currency	6	11	-	-
Transfer from/(to) property and equipment (note 5.8.)	7,681	-	584	240
Transfer from/(to) other assets	8	-	-	-
Transfer from/(to) investment property (note 5.9.)	81	-	-	-
Disposals	(1,286)	(10,861)	(1,136)	(655)
Valuation	(303)	(321)	(311)	(116)
Balance as at 31 December	11,036	4,849	2,849	4,048

---

NLB Group

in EUR thousands

	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Own property and equipment	274,683	249,920	85,677	80,240
Right-of-use assets (note 5.11.)	35,334	433
Total	310,017	278,034	91,320	85,970

b) Movement of own property and equipment in EUR thousands

NLB Group	NLB	Land & Buildings for own use	Computers & Other equipment	Total
Cost Balance as at 1 January 2024	357,527	93,968	104,612	15,004
	571,111	202,080	46,552	44,866
Effects of translation of foreign operations to presentation currency	233	66	61	1
Acquisition of subsidiary (note 5.12.b, c)	-	302	627	20,777
Additions	14,155	11,067	16,355	20,791
	62,368	7,825	5,962	2,439
Disposals	(1,529)	(9,358)	(8,830)	(10,596)
	(30,313)	(93)	(2,312)	(3,007)
Transfer from/to property and equipment	385	-	(547)	162
Transfer to/from investment property (note 5.9.)	1,106	-	-	1,106
Transfer to/from non-current assets held for sale (note 5.7.)	(10,436)	-	-	(10,436)
Other	-	-	(7,793)	(7,793)
Balance as at 31 December 2024	361,441	96,045	112,278	38,346
	608,110	208,074	50,202	43,913

Depreciation and impairment

	NLB	Land & Buildings	Computers & Other equipment	Total
Balance as at 1 January 2024	183,334	58,823	73,838	5,196
	321,191	141,780	33,419	38,690
Effects of translation of foreign operations to presentation currency	34	20	161	71
Disposals	(664)	(8,808)	(7,513)	(123)
	(17,108)	-	(2,307)	(2,999)
Depreciation (note 4.11.)	9,665	9,348	7,710	2,838
	29,561	3,880	4,710	2,004
Impairment (note 4.14.)	3,667	-	-	3,667
Transfer from/to property and equipment	47	-	(88)	41
Transfer to/from investment property (note 5.9.)	(8)	-	-	(8)
Transfer to/from non-current assets held for sale (note 5.7.)	(2,755)	-	-	(2,755)
Other	-	-	(1,192)	(1,192)
Balance as at 31 December 2024	193,320	59,383	73,963	6,761
	333,427	143,824	35,822	37,648

Net carrying value

	NLB	Land & Buildings	Computers & Other equipment	Total
Balance as at 31 December 2024	168,121	36,662	38,315	31,585
	274,683	64,250	14,380	6,265
Balance as at 1 January 2024	174,193	35,145	30,774	9,808
	249,920	60,300	13,133	6,176
As at 31 December 2024, the value of assets received by taking possession of collateral and included in property and equipment by NLB Group amounted to EUR 1,644 thousand (31 December 2023: EUR 11,641 thousand).
As at 31 December 2024 and as at 31 December 2023, NLB did not have any assets received by taking possession of collateral and included in property and equipment (note 6.1.l).

---

NLB Group

Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLB Group	NLB Land & Buildings	Computers	Other equipment	Total
		Land	Buildings in use	Operating lease	Land	Buildings in use	Operating lease	Land	Buildings in use	Operating lease
			Cost Balance as at 1 January 2023	347,252	84,875	95,075	9,304	536,506	195,685	42,180	43,783	3,722	285,370
Effects of translation of foreign operations to presentation currency	(68)	(20)	(3)	-	(91)	-	-	-	-	-
			Additions	16,827	14,104	15,217	7,604	53,752	3,527	4,737	2,829	482	11,575
						Disposals	(5,519)	(4,969)	(5,627)	(1,904)	(18,019)	-	(1,357)	(2,403)	(2)	(3,762)
		Transfer to/from investment property (note 5.9.)		86	-	-	86	-	-	-	-	-	-
						Transfer to/from non-current assets held for sale (note 5.7.)	(1,051)	-	-	(1,051)	(1,051)	-	-	(1,051)	-	-
Merger of subsidiary (note 5.12.f)		-	-	-	3,919	992	657	-	5,568	-	-
					Disposal of subsidiaries (note 5.12.d, e)	-	(22)	(50)	-	(72)	-	-	-	-	-
						Balance as at 31 December 2023	357,527	93,968	104,612	15,004	571,111	202,080	46,552	44,866	4,202	297,700

Depreciation and impairment

Balance as at 1 January 2023	177,896	53,340	72,310	4,016	307,562	138,264	29,619	38,891	3,334	210,108
Effects of translation of foreign operations to presentation currency	(10)	(3)	11	-	(2)	-	-	-	-	-
Disposals	(914)	(4,615)	(4,845)	(335)	(10,709)	-	(1,350)	(2,359)	(2)	(3,711)
Depreciation (note 4.11.)	6,782	10,123	6,412	1,515	24,832	3,750	4,635	1,884	239	10,508
Impairment (note 4.14.)	47	-	-	-	47	-	-	-	-	-
Transfer to/from non-current assets held for sale (note 5.7.)	(467)	-	-	(467)	(467)	-	-	(467)	-	-
Merger of subsidiary (note 5.12.f)	-	-	-	-	233	515	274	-	1,022	-
Disposal of subsidiaries (note 5.12.d, e)	-	(22)	(50)	-	(72)	-	-	-	-	-
Balance as at 31 December 2023	183,334	58,823	73,838	5,196	321,191	141,780	33,419	38,690	3,571	217,460

Net carrying value

Balance as at 31 December 2023	174,193	35,145	30,774	9,808	249,920	60,300	13,133	6,176	631	80,240
Balance as at 1 January 2023	169,356	31,535	22,765	5,288	228,944	57,421	12,561	4,892	388	75,262

---

in EUR thousands

NLB Group

	NLB Group	NLB	2024	2023
Balance as at 1 January	31,116	35,639	7,640	6,753
Effects of translation of foreign operations to presentation currency	65	(14)	-	-
Disposals	(4,340)	(3,392)	(2,227)	(79)
Transfer from/(to) property and equipment (note 5.8.)	(1,114)	(86)	-	-
Transfer from/(to) non-current assets held for sale (note 5.7.)	(81)	-	-	-
Transfer from/(to) other assets	-	86	-	-
Net valuation to fair value (note 4.8.)	486	(1,117)	186	182
Merger of subsidiary (note 5.12.f)	-	-	-	784
Balance as at 31 December	26,132	31,116	5,599	7,640

As at 31 December 2024, the value of assets received by taking possession of collateral and included in investment property by NLB Group amounted to EUR 17,844 thousand (31 December 2023: EUR 21,253 thousand), and in NLB amounted to EUR 619 thousand (31 December 2023: EUR 2,263 thousand) (note 6.1.l).

Operating expenses arising from investment properties:

	NLB Group	NLB	2024	2023
Leased to others	529	1,986	333	373
Not leased to others	476	459	342	298
Total	1,005	2,445	675	671

---

Intangible Assets

in EUR thousands	NLB Group	NLB Software licenses	Other Goodwill	Total
	Software licenses	intangible assets	Cost	Balance as at 1 January 2024	Balance as at 31 December 2024
		Balance as at 1 January 2024	272,445	13,214	32,336	317,995	218,179
Effects of translation of foreign operations to presentation currency	68	51	(1)	118	-
		Acquisition of subsidiaries (note 5.12.b, c)	1,590	21,959	4,541	28,090	-
		Additions	31,023	-	-	31,023	18,670
Write-offs	(3,946)	-	-	(3,946)	(3,250)
	Balance as at 31 December 2024	301,180	35,224	36,876	373,280	233,599

Amortisation and Impairment

in EUR thousands	NLB Group	NLB Software licenses	Other Goodwill	Total
Amortisation	Balance as at 1 January 2024	Balance as at 31 December 2024
		Balance as at 1 January 2024	217,335	9,736	28,807	255,878	180,800
Effects of translation of foreign operations to presentation currency	39	38	-	77	-
		Amortisation (note 4.11.)	18,147	2,628	-	20,775	11,625
Write-offs	(3,946)	-	-	(3,946)	(3,250)
Balance as at 31 December 2024	231,575	12,402	28,807	272,784	189,175

Net Carrying Value

Balance as at 31 December 2024	Balance as at 1 January 2024
69,605	55,110
22,822	3,478
8,069	3,529
100,496	62,117
44,424	37,379

Other intangible assets represent additionally identified intangible assets in a business combination, namely core deposits, trade name and intangible assets related to the distribution agreements. The newly identified intangible assets related to the distribution agreements recognised at the acquisition date were measured by referring to the fair value which amounted to EUR 21,959 thousand. Useful life is assessed to be 10 years. This fair value was estimated by applying an income approach.

5.11. Leases

a) NLB Group as a lessee

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Right-of-use assets	Land and buildings	31,802	24,541	3,103	2,794
	Vehicles	85	92	2,377	2,681
	Computers	375	395	163	255
	Furniture and equipment	3,072	3,086
Total	35,334	28,114	5,643	5,730

Lease liabilities	NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
	35,935	28,944	5,775	5,793

In the statement of financial position, right-of-use assets are included in the line item ‘Property and equipment’ and lease liabilities are included in the line item ‘Other financial liabilities.’

Additions to the right-of-use assets during 2024 in NLB Group amounted to EUR 17,305 thousand (2023: EUR 19,149 thousand), and in NLB EUR 2,675 thousand (2023: EUR 4,656 thousand). Due to the acquisition of subsidiaries in 2024, the right-of-use assets in NLB Group increased by EUR 1,894 thousand (note 5.12.c).

Depreciation of right-of-use assets (note 4.11.)

in EUR thousands	NLB Group	NLB	2024	2023
Land and buildings	6,653	6,519	684	692
Vehicles	81	160	82	170
Computers	91	61	438
Furniture and equipment	1,056	1,258
Total	7,881	7,998	1,553	1,421

Interest expenses on lease liabilities (note 4.1.)

in EUR thousands	NLB Group	NLB	2024	2023
Interest expenses	(1,076)	(728)	(180)	(132)

Expenses relating to leases

Description	NLB Group	NLB	2024	2023
Expenses relating to short-term leases (included in administrative expenses)	(929)	(1,554)	(269)	(403)
Expenses relating to leases of low-value assets that are not shown above as short-term leases (included in administrative expenses)	(1,393)	(1,237)	(138)	(182)
Income from sub-leasing right-of-use assets (included in other operating income)	112	140

Total cash outflow for leases

The total cash outflow for leases in 2024 in NLB Group was EUR 9,433 thousand (2023: EUR 8,242 thousand), and in NLB EUR 1,646 thousand (2023: EUR 1,386 thousand).

Lease Terms

NLB Group leases various offices, branches, vehicles, and other equipment used in its business. Rental contracts for offices and branches generally have lease terms between 5 to 20 years, while some contracts are made for indefinite periods. Contracts for indefinite periods are included in the measurement of the liability in accordance with planning projections. Normally, a lease term of five years is assumed, with the exemption of business premises on strategic locations where management assesses a different (longer) lease term. Vehicles and other equipment generally have lease terms between 1 and 5 years. There are several lease contracts that include extension and termination options. These options are negotiated by management to align with the Group’s business needs. Lease payments to be made under reasonably certain extension options are included in measurement of the liability. Lease terms are negotiated on an individual basis and contain a range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

Short-term leases and low-value assets

NLB Group also has certain leases of other equipment with a lease term of 12 months or less, and equipment with low value. For these leases, NLB Group applies the short-term lease and the lease of low-value assets recognition exemptions. Lease payments on short-term leases and leases of low-value assets are recognised as expenses on a straight-line basis over the lease term. For calculation of the net present value of the future lease payments, NLB Group applies the internal transfer price as a discount rate. NLB Group and NLB do not have expenses relating to variable payments and gains or losses arising from a sale and leaseback transactions.

NLB Group

31 Dec 2024

31 Dec 2023

	Up to 1 Month	641,518	143	163
	1 Month to 3 Months	1,291	1,016	283	285
	3 Months to 1 Year	5,732	439
1 Year to 5 Years	24,005	18,155	3,734	3,835
	Over 5 Years	8,607	7,719	794	640
	Total	40,276	31,359	6,199	6,221

b) NLB Group as a lessor

Finance and operating leases of motor vehicles and operating leases of business premises and POS terminals represent the majority of agreements in which NLB Group acts as a lessor. Most of the lease agreements entered into by NLB Group as lessor contracts are finance lease agreements. Most of the finance lease agreements are concluded for a non-cancellable period of between 48 and 60 months. By paying the last instalment at the end of the contract, the leasing object becomes the lessee’s property. The financial leasing receivables are secured by the object of financing. NLB Group does not have finance lease contracts with variable payments not included in the measurement of the net investment in the lease. The investment properties are leased to the lessee under operating leases with rentals payable monthly. There are no variable lease payments that depend on an index or a rate. The investment properties generally have lease terms between 2 and 10 years. Some contracts are made for an indefinite period.

Finance leases

Loans and advances to customers in NLB Group include finance lease receivables. The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the reporting date.

	NLB Group		2024	2023
		Less than 1 year	242,013	115,449
				1 to 2 years	191,168	89,047
				2 to 3 years	204,981	76,876
					3 to 4 years	198,055	62,091
					4 to 5 years	184,840	31,172
More than 5 years	397,203	20,787
		Total undiscounted lease receivable		1,418,260	395,422
				Unearned finance income	(190,412)	(57,812)
					Net investment in the lease	1,227,848	337,610

During 2024, NLB Group recognised interest income on lease receivables in the amount of EUR 50,913 thousand (2023: EUR 18,959 thousand).

Operating lease

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date.

	NLB Group		2024	2023
Less than 1 year					7,376	5,590	910	899
1 to 2 years	2,778	3,516	907	893
		2 to 3 years	2,674	2,271	861	864
				3 to 4 years	2,382	2,005	793	825
				4 to 5 years	1,494	1,573	723	749
More than 5 years					3,838	3,490	3,616	3,393
					Total	20,542	18,445	7,810	7,623

NLB Group realised rental income arising from: investment properties in the amount of EUR 1,348 thousand (2023: EUR 1,755 thousand); and movable property in the

amount of EUR 2,491 thousand (2023: EUR 2,133 thousand). NLB realised rental income arising from: investment properties in the amount of EUR 293 thousand (2023: EUR 359 thousand); and movable property in the amount of EUR 527 thousand (2023: EUR 485 thousand) (note 4.8.).

in EUR thousands	NLB	31 Dec 2024	31 Dec 2023
Banks	975,400	901,765
Other financial organisations	160,952	30,407
Enterprises	43,405	43,585
Total	1,179,757	975,757

Data of NLB Group Annual Report 2024 Overview MB Statement SB Statement Key Highlights Business Report Strategy Risk Factors & Outlook Performance Overview Segment Analysis N subsidiaries as included in the consolidated financial statements of NLB Group as at 31 December 2024:

Equity as at 31 Dec 2024	Profit/(loss) for 2024	Shareholding (in %)	Voting rights (in %)	Business	Country of Incorporation	(in EUR thousands)
Core members	NLB Banka a.d., Skopje	322,944	67,838	86.97	86.97	Banking	North Macedonia
		NLB Banka a.d., Podgorica	119,729	27,714	99.87	99.87	Banking	Montenegro
NLB Banka a.d., Banja Luka		130,314	29,510	99.85	99.85	Banking	Bosnia and Herzegovina
			NLB Banka sh.a., Prishtina	173,827	37,028	82.38	82.38	Banking	Kosovo
NLB Banka d.d., Sarajevo		107,662	14,384	97.34	97.34	Banking	Bosnia and Herzegovina
			NLB Komercijalna banka a.d. Beograd	865,365	140,482	100	100	Banking	Serbia
NLB Skladi d.o.o., Ljubljana		22,971	12,113	100	100	Finance	Slovenia
		NLB Fondovi a.d., Beograd	401	(355)	100	100	Finance	Serbia
			NLB Fondovi a.d. Skopje	1,130	17100	100	-	Finance	North Macedonia
	NLB Lease\&Go, leasing, d.o.o., Ljubljana	29,551	3,251	100	100	Finance	Slovenia
			NLB Lease\&Go, d.o.o. Skopje (i)	1,497	(677)	100	100	Finance	North Macedonia
NLB Lease\&Go leasing d.o.o. Beograd (ii)		13,204	226	99.80	99.80	Finance	Serbia
			NLB Car\&Go, upravljanje spletnih platform, d.o.o.	(26)	(33)	100	100	Web portal	Slovenia
Summit Leasing Slovenija d.o.o., Ljubljana (iii)		102,906	(1,009)	100	100	Finance	Slovenia
			Mobil Leasing d.o.o., Zagreb	24,659	(2)	100	100	Finance	Croatia
NLB MUZA Zavod za upravljanje kulturne dediščine, Ljubljana		3,613	113	100	100	Management	Slovenia
			NLB DigIT d.o.o., Beograd	2,823	243	100	100	IT services	Serbia
NLB Real Estate d.o.o., Podgorica		2,642	486	100	100	Real estate	Montenegro
		NLB Real Estate d.o.o., Beograd	1,085	(964)	100	100	Real estate	Serbia
NLB Real Estate d.o.o., Ljubljana	22,675	113	100	100	Real estate	Slovenia
		Non-core members	NLB Crna Gora d.o.o., Podgorica	4,011	368	100	100	Finance	Montenegro
			NLB InterFinanz AG, Zürich	in Liquidation

---

Finance

Country of Incorporation	Nature of Business	Shareholding (in %)	Voting rights (in %)	Equity as at 31 Dec 2023 (in EUR thousands)	Profit/(loss) for 2023 (in EUR thousands)
Switzerland	Finance	10,483	895	100	100
Serbia	NLB InterFinanz d.o.o., Beograd - u likvidaciji	3	2	100	100
Germany	LHB AG, Frankfurt	524	(160)	100	100
Slovenia	PRO-REM d.o.o., Ljubljana - v likvidaciji	19,984	175	100	100
Croatia	OL Nekretnine d.o.o., Zagreb - u likvidaciji	567	(73)	100	100
Serbia	NLB Srbija d.o.o., Beograd	18,768	444	100	100
Slovenia	SLS HOLDCO, holdinška družba, d.o.o. Ljubljana	104,150	(2,113)	100	100
(i) 51% ownership of NLB Lease\&Go, leasing, d.o.o., Ljubljana and 49% ownership of NLB Banka a.d., Skopje.
(ii) 50.89% ownership of NLB Lease\&Go, leasing, d.o.o., Ljubljana and 48.91% NLB Komercijalna banka a.d. Beograd.
(iii) 100% ownership of SLS HOLDCO, holdinška družba, d.o.o. Ljubljana.
(iv) 100% ownership of NLB Real Estate d.o.o., Ljubljana.
North Macedonia	NLB Banka a.d., Skopje	279,987	44,517	86.97	86.97
Montenegro	NLB Banka a.d., Podgorica	120,390	26,658	99.87	99.87
Bosnia and Herzegovina	NLB Banka a.d., Banja Luka	107,270	24,269	99.85	99.85
Kosovo	NLB Banka sh.a., Prishtina	149,669	35,968	82.38	82.38
Bosnia and Herzegovina	NLB Banka d.d., Sarajevo	95,980	12,819	97.34	97.35
Serbia	NLB Komercijalna banka a.d. Beograd	827,575	132,313	100	100
Serbia	KomBank Invest a.d. Beograd	769	(1,201)	100	100
Slovenia	NLB Skladi d.o.o., Ljubljana	13,707	9,498	100	100
Slovenia	NLB Lease\&Go, leasing, d.o.o., Ljubljana	21,251	1,664	100	100
North Macedonia	NLB Lease\&Go, d.o.o. Skopje	1,493	(605)	100	100
Serbia	NLB Lease\&Go leasing d.o.o. Beograd	7,115	(736)	99.64	99.64
Slovenia	NLB Zavod za upravljanje kulturne dediščine, Ljubljana	3,500	86	100	100
Serbia	NLB DigIT d.o.o., Beograd	2,569	204	100	100
Slovenia	NLB Leasing d.o.o., Ljubljana - v likvidaciji	2,021	1,487	100	100
Montenegro	NLB Crna Gora d.o.o., Podgorica	3,643	348	100	100
Switzerland	NLB InterFinanz AG, Zürich in Liquidation	9,762	(2,321)	100	100
Serbia	NLB InterFinanz d.o.o., Beograd - u likvidaciji	3	1	100	100
Germany	LHB AG, Frankfurt	684	(402)	100	100

---

Podgorica

Real estate Montenegro

2,156	389100	100	100100

REAM d.o.o., Beograd - Novi Beograd

Real estate Serbia

2,042	(576)	100100	100

S-REAM d.o.o., Ljubljana

Real estate Slovenia

22,452	(384)	100	100

PRO-REM d.o.o., Ljubljana - v likvidaciji

Real estate Slovenia

20,447	635	100	100

OL Nekretnine d.o.o., Zagreb - u likvidaciji

Real estate Croatia

1,153	(314)	100	100

NLB Srbija d.o.o., Beograd

Real estate Serbia

18,252	(603)	100100	100

Privatinvest d.o.o., Ljubljana

Real estate Slovenia

110	(11)	100	100

(i) 100% ownership of NLB Lease&Go, leasing, d.o.o., Ljubljana.

(ii) 51% ownership of NLB Lease&Go, leasing, d.o.o., Ljubljana and 49% ownership of NLB Banka a.d., Skopje.

(iii) 50.73% ownership of NLB Lease&Go, leasing, d.o.o., Ljubljana and 48.91% NLB Komercijalna banka a.d. Beograd.

Changes in ownership interest in the subsidiaries of NLB Group in 2024 and 2023 are presented in note 3.

in EUR thousands

NLB Banka, NLB Banka, Skopje Prishtina	2024	2023	2024	2023
Non-controlling interest in equity (in %)	13.03	13.03	17.62	17.62
Non-controlling interest‘s voting rights	442

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Income statement and statement of comprehensive income

Revenues	125,449	111,640	78,654	68,468
	Profit/(loss) for the year	67,838	44,517	37,028	35,968
of subsidiaries with significant non-controlling interests, before intercompany eliminations:	Attributable to non-controlling interest	8,839	5,801	6,525	6,339
Other comprehensive income	1,768	3,363	(154)	(141)
	Total comprehensive income	69,606	47,880	36,874	35,827
Attributable to non-controlling interest	9,070	6,239	6,498	6,314
Paid dividends to non-controlling interest	4,765	4,391	3,997

Statement of financial position

Current assets	991,343	867,333	713,084	716,000
Non-current assets	1,167,424	1,034,922	713,778	513,757
Current liabilities	1,568,345	1,393,480	963,407	856,340
Non-current liabilities	267,478	228,788	289,628	223,748
Equity	322,944	279,987	173,827	149,669
Attributable to non-controlling interest	42,080	36,482	30,634	26,376

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Acquisition of Generali Investment, Skopje

In May 2024, NLB Skladi d.o.o., Ljubljana became an owner of 100% of financial company Generali Investments a.d. Skopje. Generali Investments holds an 18% market share. As at 30 June 2024, the company managed approximately EUR 53 million of client assets in different investment funds and portfolios. In August 2024, Generali Investments was acquired for EUR 2,515 thousand and was fully paid in cash. There are no contingent consideration arrangements. At the acquisition date, cash in acquired entities amounted to EUR 1 thousand.

Statement of Cash Flows

Within payments from investing activities, the assets and liabilities recognised in the NLB Group financial statements as a result of the acquisition are as follows:

in EUR thousands
Cash, cash balances at central banks and other demand deposits at banks	173
Non-trading financial assets mandatorily at fair value through profit or loss	857
Financial assets measured at amortised cost
- other financial assets	2
Tangible assets
Property and equipment	4
Intangible assets	34
Current income tax assets	15

---

Acquisition of NLB Fondovi a.d. Skopje

The acquisition of NLB Fondovi a.d. Skopje, resulted in goodwill in the amount of EUR 1,403 thousand, which is recognised in the statement of financial position under the line, ‘Intangible assets’. NLB Group, the existing distribution channels and the presence on the strategically important market of the NLB Group. Acquisition-related costs were immaterial.

Acquisition of SLS HOLDCO d.o.o., Ljubljana

On 11 September 2024, NLB completed the acquisition of a 100% stake in the company SLS HOLDCO d.o.o., Ljubljana, the parent company of SLS HOLDCO d.o.o., Zagreb. The purchase price for the company was EUR 127,216 thousand and was fully paid in cash. There are no contingent consideration arrangements. At the acquisition date, the assets and liabilities recognised in the NLB Group financial statements amounted to EUR 101,584 thousand (included in the statement of cash flows within payments from investing activities).

Financial Overview

Other assets		83
Total assets		1,168
Financial liabilities measured at amortised cost	- other financial liabilities	39
Other liabilities		17
Total liabilities		56
Net identifiable assets acquired		1,112
Consideration given		2,515
Goodwill		1,403

Assets and Liabilities Recognised

in EUR thousands
Cash, cash balances at central banks and other demand deposits at banks	25,632
Financial assets measured at amortised cost
- loans and advances to banks	69
- loans and advances to customers	874,816
- other financial assets	3,877
Tangible assets
Property and equipment	23,596
Intangible assets	23,515
Current income tax assets	522

---

Deferred income tax assets

3,726

Other assets

8,406

Total assets

964,159

Financial liabilities measured at amortised cost

• borrowings from banks and central banks: 809,939
• other financial liabilities: 16,036

Provisions

2,002

Deferred income tax liabilities

3,155

Other liabilities

8,949

Total liabilities

840,081

Net identifiable assets acquired

124,078

Consideration given

127,216

Goodwill

3,138

The acquisition of SLS HOLDCO d.o.o., Ljubljana, resulted in a goodwill in the amount of EUR 3,138 thousand, which is recognised in the statement of financial position under the line benefits from combining the acquirer and acquiree’s net assets and businesses. The goodwill will not be deductible for income tax purposes. In 2024, acquisition-related costs amounted to 1,100 thousand. As a result of the acquisition, NLB Group’s off-balance sheet liabilities increased by EUR 1,868 thousand.

Valuation technique

Performing loans

For the performing loans portfolio, fair value was determined by using the discounted cash flow method, whereby future cash flows were discounted to their present value at current market interest rates. Contractual cash flows were adjusted for historical prepayment rate. In the absence of publicly available market interest rate for financial leases, market interest rates were estimated based on the weighted average interest rate of the financial leases issued in the last three months by Summit Leasing Slovenija and Mobil Leasing.

Non-performing loans

The market value of non-performing loans was determined on the market value of the underlying collateral. Financial leases are secured by the assets under lease. The market value is recovered as profit for sale as underlying assets on average reduced for the appropriate haircut. Consumer loans are secured by insurance, and 100% of the exposure can be recovered.

Distribution agreements

For valuation of distribution agreements, multi-period excess earnings method (MEEM) under the income approach was applied. This method is based on the principle that the value of intangible assets is equal to the present value of the excess earnings attributable only to the subject intangible asset after deducting contributory assets charges like fixed assets and assembled workforce.

Financial Overview

The fair value of acquired loans and advances to customers is EUR 874,816 thousand, of which EUR 848,638 thousand relates to performing portfolio and EUR 26,178 thousand to non-performing portfolio. The latter was recognised as purchased or originated credit impaired financial assets (POCI). The gross contractual amount for performing loans and advances to customers is EUR 857,488 thousand, and for this exposure, 12-month expected credit losses in the amount of EUR 1,596 thousand were recognised through the income statement. The gross contractual amount for non-performing loans and advances to customers is EUR 38,952 thousand, and it is expected that approximately EUR 6 million of the contractual cash flows will not be collected.

Since the transaction was completed on 11 September 2024, a loss of EUR 1,821 thousand was included in the income statement for 2024, 12-month expected credit losses for financial assets in Group 1 of EUR 1,661 thousand, and related deferred taxes of EUR 358 thousand were recognized. If the acquisition had occurred on 1 January 2024, management estimates that consolidated revenues would have been approximately EUR 53 million higher. Consolidated profit for the period would not have changed materially. NLB obtained all the necessary information for measuring fair values, therefore no amounts were measured and recognised on a provisional basis.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Disposal of subsidiary Optima Leasing d.o.o., Zagreb – u likvidaciji

In September 2023, NLB Group sold its subsidiary Optima Leasing d.o.o., Zagreb – u likvidaciji. The assets and liabilities are as follows:

in EUR thousands
Cash, cash balances at central banks and other demand deposits at banks	713
Financial assets measured at amortised cost
- other financial assets	4
Other assets	104
Total assets	821
Provisions	30
Other liabilities	22
Total liabilities	52
Net assets of subsidiary	769

---

Disposal of Subsidiaries

Total disposal consideration: 470

Cash and cash equivalents in subsidiary sold: (713)

Cash outflow on disposal: (243)

Consideration for disposal of the subsidiary: 470

Carrying amount of net assets disposed of: 769

Loss from disposal of subsidiary in consolidated financial statements: (299)

At sale of subsidiary Optima Leasing d.o.o., Zagreb – u likvidaciji, NLB Group realised a loss in the amount of EUR 299 thousand.

Disposal of subsidiary Tara Hotel d.o.o., Budva

In liabilities derecognised from NLB Group financial statements as a result of disposal are as follows:

in EUR thousands
Cash, cash balances at central banks and other demand deposits at banks	2
Financial assets measured at amortised cost
- other financial assets	19
Other assets	13,938
Total assets	13,959
Financial liabilities measured at amortised cost
- borrowings from banks and central banks	178
- other financial liabilities	20
Deferred income tax liabilities	193
Other liabilities	82
Total liabilities	473
Net assets of subsidiary	13,486
Total disposal consideration	13,019
Cash inflow on disposal	13,019
Consideration for disposal of the subsidiary	13,019
Carrying amount of net assets disposed of	13,486
Loss from disposal of subsidiary in consolidated financial statements	(467)

At sale of Tara Hotel d.o.o., Budva NLB Group realised a loss in the amount of EUR 467 thousand and NLB in the amount of EUR 105 thousand.

Merger of N Banka d.d., Ljubljana

On 1 September 2023, with entry of the merger in the Register of Companies, the process of the legal merger of N Banka d.d. with NLB d.d. was closed and NLB, as a universal legal successor, took over all of its rights and obligations. The merger was accounted for using merger accounting principles, due to the fact that such a merger has applied for the merger the following accounting policy:

• As at 1 September 2023, all assets, liabilities, and off-balance sheet items of N Banka were recognised as they were reported line items of assets, liabilities, and off-balance sheet items of merged bank;
• As at 1 September 2023, all income and expenses of N Banka were recognised as they were reported for retained earnings. Therefore, only income and expenses from 1 September 2023 onwards were recognised in the income statement of the merged bank.

As at the day of the merger, NLB Banka and whose assets consist only of repossessed real estate. N Banka also had an investment in Bankart d.o.o., Ljubljana, which was on the day of the merger transferred to NLB.

in EUR thousands
Cash, cash balances at central banks and other demand deposits at banks	118,158
Financial assets measured at fair value through other comprehensive income	49,477
Financial assets measured at amortised cost
- debt securities	13,044
- loans and advances to banks	3
- loans and advances to customers	765,552

---

Financial Overview

Assets

Other financial assets	2,664
Investments in associates and joint ventures	134
Tangible assets
Property and equipment	4,884
Own property and equipment	4,546
Right-of-use assets	338
Investment property	784
Intangible assets	685
Deferred income tax assets	2,426
Other assets	68
Total assets	957,879

Liabilities

Financial liabilities held for trading	189
Financial liabilities measured at amortised cost
Deposits from banks and central banks	131,070
Borrowings from banks and central banks	40,084
Due to customers	574,747
Other financial liabilities	2,193
Provisions	7,881
Current income tax liabilities	1,026
Other liabilities	943
Total liabilities	758,133

Equity

Equity	199,746
Total liabilities and equity	957,879

NLB Group Financial Data

in EUR thousands	NLB Group	31 Dec 2024	31 Dec 2023	Carrying amount of the NLB Group‘s interest
Other financial organisations	14,661	12,519	4,293	448
Enterprises	-	-	530	530
Total	14,661	12,519	4,823	4,823

Investment Analysis

NLB Group’s associates in %	2024	2023	Nature of Business	Country of Incorporation	Shareholding	Voting rights
Result of the merger, NLB’s off-balance sheet liabilities increased by EUR 200,933 thousand:
Bankart d.o.o., Ljubljana	46.03	46.03	Processing	Slovenia	46.03	46.03
ARG - Nepremičnine d.o.o., Horjul	75.00	75.00	Real estate	Slovenia	75.00	75.00

Commitments

Guarantees	108,673
Commitments to extend credit	92,260
Total	200,933

Income Statement Items

Items of the N Banka income statement for the period 1 January – 31 August 2023 as they were reported for the purposes of NLB Group financial statements:
Net interest income	27,822
Net fee and commission income	6,016
Profit for the year	13,389

Analysis by Type of Investment in Associates and Joint Ventures

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Carrying amount of the NLB Group‘s interest

in EUR thousands	2024	2023
Carrying amount of the NLB Group‘s interest	14,661	12,519
NLB Group‘s share of:
- Profit for the year	2,990	1,072
- Other comprehensive income	184	5
Total comprehensive income	3,008	1,117

In previous years, NLB Group’s interest in an associate was reduced to zero. Consequently, NLB Group did not recognise a share of profit in the carrying amount of interests in associates included in the consolidated financial statements of NLB Group: amount of EUR 37 thousand in 2024 (2023: EUR 347 thousand). The cumulative unrecognised share of losses of an associate as at 31 December 2024 amounted to EUR 1,705 thousand (31 December 2023: EUR 1,742 thousand).

NLB Group’s joint ventures in %

2024	2023	Nature of Business	Country of Incorporation	Voting rights
Prvi Faktor Group, Ljubljana	Finance	Slovenia	50	50

In previous years, NLB Group’s interest in a joint venture was reduced to zero. Consequently, NLB Group did not recognise a share of profit in the amount of EUR 485 thousand in 2024 (2023: EUR 751 thousand). The cumulative unrecognised share of losses of a joint venture as at 31 December 2024 amounted to EUR 13,160 thousand (31 December 2023: EUR 13,645 thousand).

Movements of investments in associates

in EUR thousands	NLB Group	2024	2023
Balance as at 1 January		12,519	11,677
Share of result before tax		3,408	1,394
Share of tax		(418)	(322)
Net gains/(losses) recognised in other comprehensive income		18	45
Dividends received		(866)	(275)
Balance as at 31 December		14,661	12,519

---

Assets

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Assets, received as collateral (note 6.1.l)	20,598	1,468	31 Dec 2024	31 Dec 2023
Deferred expenses	17,131	450	12,313
Inventories	10,383	4,807	6,915	5,825
Claim for taxes and other dues	5,180	586	1,599	531
Prepayments	1,972	581	1,780	389
Total	56,819	17,825	49,154	13,907

Movements in allowance for the impairment of financial assets

a) Movements in allowance for the impairment of loans and receivables measured at amortised cost

in EUR thousands	Effects of Foreign	Translation	Increases/	Write-offs	Changes in exchange	Balance as at	Repayments	Balance as at	of written-off	1 Jan 2024
Loans and advances to banks	213	2	-	(108)	-	(1)	(2)	104	-	-
Loans and advances to individuals	39,668	31	37,441	(20,732)	(120)	(11,206)	1	45,083	-	-
Loans and advances to other customers	51,087	61	4,088	6,013	(2)	(17,737)	(6)	43,504	-	-
Other financial assets	624	(1)	(56)	135	(55)	(85)	105	72	-	-
Lifetime ECL not credit-impaired	Loans and advances to individuals	25,051	4	(30,636)	35,412	(26)	5,165	(11)	34,959	-
Loans and advances to other customers	19,778	17	(6,647)	10,534	(31)	5,283	(6)	28,928	-	-
Other financial assets	40	1	(22)	56	(17)	(2)	(2)	54	-	-
Lifetime ECL credit-impaired	Loans and advances to banks	86	-	-	2	-	28	20	136	-
Loans and advances to individuals	83,780	32	(6,805)	36,596	(28,683)	7,923	4,399	97,242	13,447	-
Loans and advances to other customers	109,263	(142)	2,559	(2,604)	(21,203)	729	19,443	108,045	10,498	-
Other financial assets	10,141	10	783	05	(5,527)	129	3,231	8,367	919	-
Of which: Purchased or originated credit-impaired	Loans and advances to individuals	1,024	(2)	-	1,443	(506)	(197)	1,147	2,909	493
Loans and advances to other customers	5,985	-	-	(12,719)	(607)	7	11,700	4,366	927	-
Other financial assets	1,231	4	-	(831)	(1,165)	-	777	16	-	-

Column Increases/(Decreases) for year 2024 also includes 12-month expected credit losses recognised at the acquisition of SLS HOLDCO in the amount of EUR 472 thousand for Loans and advances to individuals, in the amount of EUR 1,124 thousand for Loans and advances to other customers, and in the amount of EUR 65 thousand for Other financial assets (notes 4.14. and 5.12.c).

NLB Group

Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	Effects of translation	Foreign exchange differences	Balance as at 1 Jan 2023	Increases/ (Decreases)	Changes in models/risk parameters	Write-offs of written-off receivables	Balance as at 31 Dec 2023	Repayments
Loans and advances to banks	161	-	-	49	-	3	213	-
Loans and advances to individuals	31,385	(13)	31,614	(22,681)	(221)	(419)	39,668	-
Loans and advances to other customers	59,840	(17)	(1,229)	5,634	-	(13,134)	(7)	51,087
Other financial assets	1,246	-	(17)	(201)	(42)	(117)	(225)	(20)
Lifetime ECL not credit-impaired	Loans and advances to individuals	14,582	(5)	(28,704)	34,051	(18)	5,121	24
Loans and advances to other customers	31,230	1	(1,988)	(9,837)	(8)	156	224	-
Other financial assets	38	-	(36)	82	(17)	(26)	(1)	-
Lifetime ECL credit-impaired	Loans and advances to banks	108	-	-	(26)	-	4	-
Loans and advances to individuals	75,807	(5)	(2,910)	29,543	(23,445)	720	4,070	-
Loans and advances to other customers	111,154	645	3,217	(8,614)	(19,399)	(364)	22,624	-
Other financial assets	7,750	-	53	3,374	(764)	(18)	17	(271)
Of which: Purchased or originated credit-impaired	Loans and advances to individuals	(499)	-	-	(414)	(456)	-	2,393
Loans and advances to other customers	(3,134)	(6)	-	(4,817)	(1,026)	-	14,968	-
Other financial assets	185	(2)	-	185	-	-	863	-

in EUR thousands	Balance as at 1 Jan 2024	Transfers	Increases/ (Decreases)	Write-offs	Changes in models/risk parameters	Foreign exchange differences	Balance as at 31 Dec 2024	Repayments
Loans and advances to banks	164	-	6	-	-	-	170	-
Loans and advances to individuals	8,073	19,915	(15,710)	(115)	(2,733)	-	9,430	-
Loans and advances to other customers	13,482	(569)	772	(2)	(1,423)	(6)	12,254	-
Other financial assets	98	8	32	(8)	(16)	1	115	-
Lifetime ECL not credit-impaired	Loans and advances to individuals	11,489	(13,058)	16,507	(22)	3,393	(12)	18,297
Loans and advances to other customers	2,553	1,733	6,912	(31)	2,871	-	14,038	-
Other financial assets	2	14	(12)	(1)	(1)	-	2	-
Lifetime ECL credit-impaired	Loans and advances to banks	86	-	2	-	28	201	36
Loans and advances to individuals	45,663	(6,857)	18,562	(10,029)	6,720	1,193	55,252	3,204
Loans and advances to other customers	38,308	(1,164)	9,947	(4,040)	213	5,178	48,442	1,479
Other financial assets	1,514	(22)	(926)	(332)	(7)	869	1,096	413
Of which: Purchased or originated credit-impaired	Loans and advances to individuals	1,755	-	(123)	(501)	(196)	184	1,119
Loans and advances to other customers	5,678	-	(2,757)	(524)	-	4,075	6,472	200
Other financial assets	2	-	(842)	-	858	18	-	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	Foreign Changes in exchange	Repayments	NLB Balance as at 1 Jan 2023	Transfers	Increases/ (Decreases)	Write-offs	models/risk differences	Merger of subsidiary	Balance as at 31 Dec 2023	receivables movements	Notes
Loans and advances to banks	216	-	(54)	-	2	-	164	-	-	-	4.14.
Loans and advances to individuals	6,161	15,744	(14,192)	(189)	(603)	1	1,151	8,073	-	-	5.12.f)
Loans and advances to other customers	14,880	(1,199)	(2,541)	-	(3,622)	25	5,939	13,482	-	-	5.6.b, c, d)
Other financial assets	203	(193)	(92)	(7)	(34)	(1)	222	98	-	-	-
Lifetime ECL not credit-impaired	Loans and advances to individuals	7,385	(14,921)	15,949	(10)	2,127	24	935	11,489	-	-
Loans and advances to other customers	800	1,344	(2,647)	(1)	(444)	-	3,501	2,553	-	-	-
Other financial assets	2	(6)	7	(1)	-	-	2	-	-	-	-
Lifetime ECL credit-impaired	Loans and advances to banks	-	-	(28)	-	-	4	110	86	-	-
Loans and advances to individuals	34,286	(823)	15,358	(5,797)	17	819	1,803	45,663	2,967	-	-
Loans and advances to other customers	29,900	(145)	11,822	(7,292)	(29)	1,677	2,375	38,308	6,793	-	-
Other financial assets	808	199	785	(296)	-	(8)	26	1,514	77	-	-
Of which: Purchased or originated credit-impaired	Loans and advances to individuals	-	-	1,672	(20)	-	88	151,755	-	-	-
Loans and advances to other customers	638	-	4,661	(247)	-	626	-	5,678	-	-	-
Other financial assets	1	-	-	-	1	-	2	-	-	-	-

Other movements relate mainly to expenses due to initial recognition of non-performing exposure at fair value. The contractual amount outstanding on financial assets that were written off during the year ending 31 December 2024 and that are still subject to enforcement activity for NLB Group amounted to EUR 39,408 thousand (31 December 2023: EUR 43,080 thousand), and for NLB amounted to EUR 11,576 thousand (31 December 2023: EUR 15,715 thousand), of which EUR 2,590 thousand in NLB Group (31 December 2023: EUR 2,962 thousand) and EUR 1,122 thousand in NLB (31 December 2023: EUR 1,904 thousand) represent interest receivables that have not been recognised in the income statement prior to the write-off.

Effects of translation

Foreign exchange NLB Group

		Balance as at 1 Jan 2024	Increases/ (Decreases)	Transfers	Changes in models/ risk parameters and other	Balance as at 31 Dec 2024
Debt securities measured at amortised cost	4,946	(4)	2,047	(92)	14	6,913
	Debt securities measured at fair value through other comprehensive income	6,475	-	-	(1,273)	(243)	-	4,959
Lifetime ECL not credit-impaired Debt securities measured at amortised cost	576	2	4	153	(185)	4	554
	Debt securities measured at fair value through other comprehensive income	56	-	-	(11)	(8)	(1)	36
Lifetime ECL credit-impaired through other comprehensive income Debt securities measured at fair value	798	-	-	-	-	798

Effects of translation

Foreign exchange NLB Group

Balance as at 1 Jan 2023	Increases/ (Decreases)	Transfers	Changes in models/ risk parameters and other	Balance as at 31 Dec 2023
Debt securities measured at amortised cost	3,519	2	(52)	1,478	-	9	(10)	4,946
Debt securities measured at fair value through other comprehensive income	9,029	4	-	(2,470)	-	(87)	(1)	6,475
Lifetime ECL not credit-impaired Debt securities measured at amortised cost	265	(1)	52	(253)	-	515	(2)	576
Debt securities measured at fair value through other comprehensive income	70	-	-	(13)	-	(1)	-	56
Lifetime ECL credit-impaired through other comprehensive income Debt securities measured at fair value	6,777	-	-	(4,483)	(1,537)	-	41	798

Release of lifetime ECL credit-impaired debt securities measured at fair value through other comprehensive income relates to impairment of Russian sovereign debt, which was sold in February 2023.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	Foreign exchange	NLB Balance as at 1 Jan 2024	Transfers (Increases/ Decreases)	Changes in models/risk parameters and other	Balance as at 31 Dec 2024
	Debt securities measured at amortised cost	2,624	(4)	858	(34)	6	3,450
Debt securities measured at fair value through other comprehensive income	1,650	-	206	(8)	1	1,849
Lifetime ECL not credit-impaired	Debt securities measured at amortised cost	1734	(101)	-	4	80
Lifetime ECL credit-impaired	Debt securities measured at fair value through other comprehensive income	798	-	-	-	798

	in EUR thousands	Foreign	Changes in exchange	NLB Balance as at 1 Jan 2023	Transfers (Increases/ Decreases)	Write-offs	models/risk parameters and other	Balance as at 31 Dec 2023
Debt securities measured at amortised cost	1,990	(52)	585	-(36)	140	(3)	2,624
	Debt securities measured at fair value through other comprehensive income	2,022	-	(554)	-(21)	204	(1)	1,650
Lifetime ECL not credit-impaired	Debt securities measured at amortised cost	-	52	123	-	-(2)	173
Lifetime ECL credit-impaired	Debt securities measured at fair value through other comprehensive income	6,777	-	(4,483)	(1,537)	-	41	798

Release of lifetime ECL credit-impaired debt securities measured at fair value through other comprehensive income relates to impairment of Russian sovereign debt, which was sold in February 2023.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLB Group	NLB
2024	2023	2024	2023
12-month	Lifetime	12-month	Lifetime	12-month	Lifetime
expected ECL credit-	expected ECL credit-	expected ECL credit-	credit losses impaired	credit losses impaired	credit losses impaired
	Balance as at 1 January	547,826	113	223,126	108	149,148	113
Explanation of how significant changes in the gross carrying amount of financial instruments contributed to changes in the loss allowance
Movement of gross carrying amount of loans to	350,841	-	Effects of translation of foreign operations to presentation currency	1,003	-
	Acquisition of subsidiaries (note 5.12.c)	69	-	-	-	-
	Increases/(Decreases)	(91,570)	23	322,034	5	44,176
(202,175)	-	Exchange differences on monetary assets	1,697	-	2,771
-	18	-	482	-	-
	Merger of subsidiary (note 5.12.f)	-	-	-	-	113
	Balance as at 31 December	459,025	136	547,826	113	193,342	136
-	149,148	113	-	-	-

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLB Group	NLB
12-month	Lifetime ECL	Lifetime	12-month	Lifetime ECL	Lifetime
Total credit losses impaired				6,854,725	248,424	132,165	7,235,314	3,379,513	152,261
			Balance as at 1 January 2024		7,235,314	3,608,828
Effects of translation of foreign operations to presentation currency		5,063	816	2	5,206
				Acquisition of subsidiaries (note 5.12.c)	549,397	-25,902	575,299	-	-
					Transfers	(220,285)	185,613	34,672	-	(112,291)	101,857
	Increases/(Decreases)	992,732	(24,689)	(15,525)	952,518	366,370	(3,516)
				Write-offs	(120)	(26)	(28,683)	(28,829)	(115)	(22)
Exchange differences on monetary assets	293	(21)	(868)	(596)	-	(863)
			Modification losses (note 4.12.)	(3,793)	(106)	(24)	(3,923)	-	-
Balance as at 31 December 2024	8,178,012	409,276	147,701	8,734,989	3,633,477	250,580

In year 2024, the loss allowance for loans and advances to individuals increased by EUR 28,785 thousand at the NLB Group level, while at the NLB level it increased by EUR 17,754 thousand. At the NLB Group level, the gross carrying amount increased by EUR 1,499,675 thousand, mainly due to increased exposure and the acquisition of subsidiaries, while at the NLB level it increased by EUR 356,361 thousand. In year 2023, the loss allowance for loans and advances to individuals increased by EUR 26,725 thousand at the NLB Group level, while at the NLB level it increased by EUR 17,393 thousand. The reasons for increases are also changed risk parameters, which increased the loss allowance by EUR 5,422 thousand at the NLB Group level, and by EUR 1,541 thousand at NLB level. At the NLB level, it also increased due to the merger of N Banka by EUR 3,889 thousand.

EUR 491,870 thousand, mainly due to increased exposure, while at the NLB level it increased by EUR 524,497 thousand due to increased exposure and the merger of N Banka (EUR 318,198 thousand).

in EUR thousands

	NLB Group	NLB	12-month ECL	Lifetime ECL	Lifetime credit losses impaired	Total
		Balance as at 1 January 2024	6,207,653	451,154	169,107	6,827,914	3,434,833	162,976	61,214	3,659,023
Effects of Movement of gross carrying amount of loans and advances to other customers	translation of foreign operations to presentation currency	6,100	525	(217)	6,408	-	-	-
			Acquisition of subsidiaries (note 5.12.c)	287,202	-	12,315	299,517	-	-	-	-
Transfers	(245,302)	198,802	46,500	-	(162,091)	147,783	14,308	-
		Increases/(Decreases)	922,294	(27,899)	(20,310)	874,085	1,180,061	14,321	(4,840)	1,189,542
			Write-offs	(2)	(31)	(21,203)	(21,236)	(2)	(31)	(4,040)	(4,073)
	Exchange differences on monetary assets	(1,330)	(151)	1,571	90	(139)	-	1,519	1,380
			Modification losses (note 4.12.)	(320)	(37)	-	(357)	-	-	-	-
Balance as at 31 December 2024	7,176,295	622,363	187,763	7,986,421	4,452,662	325,049	68,161	4,845,872

in EUR thousands

	NLB Group	NLB	12-month ECL	Lifetime ECL	Lifetime credit losses impaired	Total
Balance as at 1 January 2023	6,028,285	423,671	201,584	6,653,540	2,960,455	51,906	51,133	3,063,494
			Effects of translation of foreign operations to presentation currency	(1,887)	(128)	960	(1,055)	-	-	-	-
Transfers	(94,306)	80,889	13,417	-	(41,456)	36,860	4,596	-
		Increases/(Decreases)	277,557	(53,135)	(27,449)	196,973	115,612	26,546	(2,303)	139,855
				Write-offs	-	(8)	(19,399)	(19,407)	-	(1)	(7,292)	(7,293)
Exchange differences on monetary assets		(1,622)	(97)	(6)	(1,725)	(91)	-	-	(91)
			Modification losses (note 4.12.)	(374)	(38)	-	(412)	-	-	-	-
				Merger of subsidiary (note 5.12.f)	-	-	-	-	400,313	47,665	15,080	463,058
	Balance as at 31 December 2023		6,207,653	451,154	169,107	6,827,914	3,434,833	162,976	61,214	3,659,023

In 2024, the gross carrying amount of loans and advances to other customers increased by EUR 1,158,507 thousand at the NLB Group level and EUR 1,186,849 thousand at the NLB level, mostly in Stage 1 due to the acquisition of subsidiaries and the increased exposure. The loss allowance increased by EUR 349 thousand at the NLB Group level and EUR 20,391 thousand at the NLB level. The main reason for the small increase in allowance compared to the increased exposure were write-offs in the amount of EUR 21,236 thousand at the NLB Group level and EUR 4,073 thousand at the NLB level.

In 2023, the gross carrying amount of loans and advances to other customers increased by EUR 174,374 thousand at the NLB Group level mostly in Stage 1 due to the increased exposure. Irrespective of that, the loss allowance decreased by EUR 22,096 thousand. The main reason for the decrease were write-offs in the amount of EUR 19,407 thousand. Also, in 2023, the gross carrying amount of loans and advances to other customers increased by EUR 595,529 thousand at the NLB level, mostly due to merger of N Bank (EUR 463,058 thousand). The loss allowance increased by EUR 8,925 thousand, the main reason was the merger of N Banka (EUR 11,815 thousand).

NLB Group

NLB	2024	2023	2024	2023	12-month	Lifetime ECL	12-month	Lifetime ECL
expected not credit -	expected not credit -	credit losses impaired	credit losses impaired	credit losses impaired	credit losses impaired	Balance as at 1 January	2,515,430	12,321
		1,914,170	7,229

Movement of gross carrying amount of other financial assets The gross carrying amount of other financial assets in 2024 decreased (by EUR 30,920 thousand at the NLB Group level a 1,963,866 5,100 1,599,438 - Effects of translation of foreign operations to presentation currency 746 28 (344) (8) -- - - Additions 1,881,834 - 1,023,233 - 1,024,531 - 531,650 - Derecognition to receivables for credit cards. As these receivables are by their nature short-term, they did not contribute significantly to the decrease of the loss allowance. The loss allowance for other (762,104)(8,415) (453,836) (24) (194,214)(8,415) (200,534) (24) Net interest income 85,111 210 36,750 136 53,806 210 24,101 136 Exchange differences on monetary assets 6,581 25 while at the NLB level by EUR 401 thousand. The main reason for these decreases are write-offs (EUR 5,599 thousand at the NLB Group level and EUR 341 thousand at the NLB level (2,234)(5) 4,505 25 (1,664) (5) Other 895 - 2,684 - 895 - 2,684 - Merger of subsidiary (note 5.12.f) - - -- - - 13,184 - Transfers (8,198) 8,198 (4,993) 4,993 (8,198) 8,198 (4,993) 4,993 thousand at the NLB Group level and EUR 12,202 thousand at the NLB level), with the majority of these decreases relating to receivables for the sale of securities. As these receivables Balance as at 31 December 3,720,295 12,367 2,515,430 12,321 2,845,191 5,118 1,963,866 5,100 loss allowance. Therefore, the loss allowance for other financial assets in year 2023 on the NLB Group level increased only by EUR 1,771 thousand, while at the NLB level by EUR 60 NLB level are write-offs (EUR 823 thousand at the NLB Group level and EUR 304 thousand at the NLB level). Movement of gross carrying amount of debt securities measured at amor

NLB Group

Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

NLB Group	NLB	12-month ECL	Lifetime ECL	Lifetime expected credit losses	Total credit losses impaired
		Balance as at 1 January 2024	2,252,797	144	798	2,253,739	1,008,933	-798	1,009,731
Effects of translation of foreign operations to presentation currency
Movement of gross carrying amount of debt securities measured at fair value through other comprehensive income in EUR thousands	2,447	-	2,447	-	-	-	-	-	-
	Additions	2,433,207	-	-	2,433,207	836,368	-	-	836,368
			Derecognition	(2,250,764)	(21)	-	(2,250,785)	(255,327)	-	-	(255,327)
Net interest income	54,462	-	-	54,462	25,289	-	-	25,289
	Exchange differences on monetary assets		4,177	-	4,177	1,427	-	-	1,427
				Balance as at 31 December 2024	2,496,326	123	798	2,497,247	1,616,690	-	798	1,617,488

NLB Group	NLB	12-month ECL	Lifetime ECL	Lifetime expected credit losses	Total credit losses impaired
		Balance as at 1 January 2023	2,999,030	165	8,337	3,007,532	1,367,496	-	8,337	1,375,833
Effects of translation of foreign operations to presentation currency	(262)	-	(262)	-	-	-	-	-
	Additions	1,446,746	-	1,446,746	59,345	-	-	59,345
		Derecognition	(2,233,255)	(21)	(7,526)	(2,240,802)	(463,403)	-	(7,526)	(470,929)
Net interest income	38,624	-	-	38,624	9,163	-	-	9,163
		Exchange differences on monetary assets	1,914	(13)	1,901	(753)	(13)	(766)	-	-
			Merger of subsidiary (note 5.12.f)	-	-	-	37,085	-	-	37,085
Balance as at 31 December 2023		2,252,797	144	798	2,253,739	1,008,933	-	798	1,009,731

---

NLB Group

Financial Liabilities, Measured at Amortised Cost	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Deposits from banks and central banks	136,000	95,283	220,120	147,002
Borrowings from banks and central banks	460
Due to customers	22,206,310	20,732,722	12,293,708	11,881,563
Borrowings from other customers	104,519	99,718
Debt securities issued	1,608,939
Other financial liabilities	296,725	357,116	145,802	198,020
Total	24,473,105	22,763,493	14,319,675	13,647,617

a) Deposits from banks and central banks and amounts due to customers

Type	NLB Group 31 Dec 2024	NLB 31 Dec 2023	NLB Group 31 Dec 2024	NLB 31 Dec 2023
Deposit on demand - banks and central banks	115,897	75,756	210,872	127,726
- other customers	18,260,144	17,454,515	10,927,307	10,674,541
- governments	339,454	351,313	38,803	64,406
- financial organisations	212,487	285,540	187,123	225,295
- companies	4,922,384	4,639,997	2,601,847	2,543,280
- individuals	12,785,819	12,177,665	8,099,534	7,841,560
Other deposits - banks and central banks	20,103	19,527	9,248	19,276
- other customers	3,946,166	3,278,207	1,366,401	1,207,022
- governments	50,245	61,880	31,520	35,813
- financial organisations	279,888	215,457	56,119	90,590
- companies	889,837	718,230	412,897	378,340
- individuals	2,726,196	2,282,640	865,865	702,279
Total	22,342,310	20,828,005	12,513,828	12,028,565

b) Borrowings from banks and central banks and other customers

Type	NLB Group 31 Dec 2024	NLB 31 Dec 2023	NLB Group 31 Dec 2024	NLB 31 Dec 2023
Loans - banks and central banks	120,612	140,419	51,106	82,797
- other customers	104,519	99,718
- governments	17,911	20,357
- financial organisations	86,608	79,361
Total	225,131	240,137	51,106	82,797

As at 31 December 2024, NLB Group and NLB had EUR 97,874 thousand in undrawn borrowings (31 December 2023: EUR 95,249 thousand).

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

NLB Group and NLB

Currency	Due date	Interest rate	Carrying amount	Nominal value
EUR	06.05.2029	4.20% to 06.05.2024, thereafter 5Y MS + 4.159% p.a.	-	45,980
EUR	19.11.2029	3.65% to 19.11.2024, thereafter 5Y MS + 3.833% p.a.	-	119,781
EUR	05.02.2030	3.40% to 05.02.2025, thereafter 5Y MS + 3.658% p.a.	10,785	123,176
EUR	28.11.2032	10.75% to 28.11.2027, thereafter 5Y MS + 8.298% p.a.	224,960	225,000
EUR	24.01.2034	6.875% to 24.01.2029, thereafter 5Y MS + 4.230% p.a.	324,398	300,000
Total Subordinated bonds			560,143	535,500
EUR	19.07.2025	6% to 19.07.2024, thereafter 1Y MS + 4.835% p.a.	-	307,507
EUR	27.06.2027	7.125% to 27.07.2026, thereafter 1Y MS + 3.606% p.a.	524,638	500,000
EUR	29.05.2030	4.50% to 29.05.2029, thereafter 1Y MS + 1.650% p.a.	524,158	500,000
Total Senior Preferred notes			1,048,796	1,000,000
Total Debt securities issued			1,608,939	1,535,500

(i) In January 2024, NLB conducted a liability management exercise where it repurchased its two outstanding subordinated Tier 2 notes in the total nominal value EUR 219,600 thousand with approaching call dates (ISIN code XS2080776607 and XS2113139195).

(ii) NLB has, based on the obtained permission of the European Central Bank, redeem its subordinated notes in the aggregate nominal amount of EUR 45,000 thousand, issued on 6 May 2019 and with maturity on 6 May 2029 (ISIN code SI0022103855), before their maturity. Pursuant to the terms and condition of the notes the early repayment of principal and accrued and unpaid interest was made on the fifth anniversary from the issuance, 6 May 2024.

(iii) NLB has, based on the obtained permission of the Single Resolution Board, redeem its senior preferred notes in the aggregate nominal amount of EUR 300,000 thousand, issued on 19 July 2022 and with maturity on 19 July 2025 (ISIN code XS2498964209), before their maturity. Pursuant to the terms and condition of the notes the early repayment of principal and accrued and unpaid interest was made on the second anniversary of the issuance, being 19 July 2024.

All of the above-mentioned subordinated bonds represent non-convertible Tier 2 instruments (note 5.23.). In the event of bankruptcy or liquidation of the issuer, claims arising from Tier 2 instruments shall be repaid: a) after repayment of all unsubordinated claims of the Issuer, as well as at all other subordinated claims (if any), except claims arising from Tier 2 instruments and Additional Tier 1.

instruments; b) with the same priority (pari passu) as, and proportionally with the claims arising from other instruments which qualify as Tier 2 instruments; c) in priority to the claims arising from shares or other instruments which qualify as Additional Tier 1 instruments and claims arising from Common Equity Tier 1 capital instruments.

NLB Group and NLB

Subordinated bonds

	Senior Preferred notes	2024	2023	2024	2023
	Balance as at 1 January	509,395	508,778	828,840	307,212
		Cash flow items:	(3,211)	(34,538)	143,722	462
NLB Group Annual Report 2024 Overview	MB Statement	SB Statement	Key Highlights	Business Report
		Strategy	Risk Factors & Outlook	Performance Overview	Segment Analysis	N
479,708	- new issued	298,611	-	497,347
	497,708	- repayment	(270,659)	-	(300,000)
-	- repayments of interest	(31,163)	(34,538)	(53,625)
		(18,000)	Non-Cash flow items:	53,959	35,155	76,234
Movement of debt securities issued in EUR thousands	41,920	- accrued interest	46,322	35,155
	60,201	36,579	- other	7,637	-
	16,033	5,341	Balance as at 31 December	560,143	509,395
1,048,796		828,840	d) Other financial liabilities in EUR thousands	NLB Group	NLB
	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
	Items in the course of settlement	78,192	93,425	13,878	17,957
		Debit or credit card payables	37,169	113,398	33,874	90,495
Suppliers	30,470	22,872	18,208	16,614
	Lease liabilities (note 5.11.a)	35,935	28,944	5,775	5,793
		Accrued expenses	54,337	35,628	29,631	17,065
Fees and commissions	935	1,242	800	1,133
	Liabilities to brokerage firms and others for securities purchase and custody services	228	288	224	268
		Other financial liabilities	59,459	61,319	43,412	48,695
Total	296,725	357,116	145,802	198,020

Other financial liabilities in the amount of EUR 25,255 thousand (31 December 2023: EUR 24,025 thousand) relate to a liability recognised in accordance with the ‘Act for Value Protection of Republic of Slovenia’s Capital Investment in Nova Ljubljanska banka d.d., Ljubljana’ (note 5.16.a). The remaining balance also includes liabilities to insurance companies, liabilities for received EIB financial initiatives, that can be used for specified purposes, and received warranties.

NLB Group

	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Provisions for guarantees and commitments (note 5.24.a)	21,850	32,548	9,240	17,941
Stage 1	11,953	18,429	3,851	463
Stage 2	7,653	2,306	1,655	834
Stage 3	7,591	12,464	4,555	9,969
Employee benefit provisions	20,903	17,892	13,296	11,795
Restructuring provisions	10,366	12,592	5,309	7,198
Provisions for legal risks	46,913	44,833	10,125	6,219
Other provisions	4,356	5,440	3,676	5,303
Total	104,388	113,305	41,646	48,456

Provisions for guarantees and commitments represent expected credit losses in accordance with IFRS 9, employee benefits are recognised in accordance with IAS 19, while all other provisions are recognised according to IAS 37.

Provisions for legal risks are formed based on expectations regarding the probable outcome of legal disputes. As at 31 December 2024, NLB Group was involved in 40 (31 December 2023: 41) legal disputes with material claims against Group members in the total amount of EUR 463,087 thousand, excluding accrued interest (31 December 2023: EUR 463,122 thousand). As at 31 December 2024, NLB was involved in 23 (31 December 2023: 21) legal disputes with material monetary claims against NLB. The total amount of these claims, excluding accrued interest, was EUR 243,599 thousand (31 December 2023: EUR 236,727 thousand).

In connection with legal risks, the largest amount of material monetary claims relates to civil claims filed by Privredna banka Zagreb (the PBZ) and Zagrebačka banka (the ZaBa) against NLB, referring to the old savings of LB Branch Zagreb savers, which were transferred to these two banks in a principal amount of approximately EUR 174.75 million (as per 31 December 2024). Due to the fact the proceedings had been pending for such a long time, the penalty interest already exceeds the principal amount. As NLB is not liable for the old foreign currency savings, based on numerous process and content-related reasons, NLB has all along objected to these claims.

Two key reasons NLB is not liable for the old foreign currency savings are that it was only founded on the basis of the Constitutional Act on 27 July 1994 (at the time the savings were deposited with LB Branch Zagreb, NLB did not yet exist), and NLB did not assume any such obligations. Moreover, this is a former Yugoslavia succession matter, as the governments of the Republic of Slovenia and the Republic of Croatia agreed in a Memorandum of Understanding signed in 2013 whose intent was to find a solution to the transferred foreign currency savings of Ljubljanska banka in Croatia (LB) on the basis of the Agreement on Succession Issues. The Memorandum also said that the Republic of Croatia would ensure the stay of all the proceedings commenced by the PBZ and the ZaBa in relation to the transferred foreign currency.

savings until the issue was finally resolved. Despite the agreement in the Memorandum of Understanding to stay all of the proceedings commenced, the Court of Appeal, the County Court of Zagreb, ruled in six claims (as explained below in detail) in favour of the plaintiff. In six of those cases, NLB filed a constitutional suit after an extraordinary legal measure of NLB with the Supreme Court of the Republic of Croatia was not successful. In two of the six cases mentioned, the plaintiff was fully repaid and therefore there are no further liabilities for NLB in this regard. Contrary to the decisions of the court described above in another case, a claim filed by the PBZ was refused and the judgment became final in favour of NLB. The extraordinary legal measure with the Supreme Court of the Republic of Croatia, filed by the plaintiff, was dismissed by the Supreme Court on 16 June 2015. In the other cases, with respect to which court procedures described above are pending, final court decisions have not yet been issued.

464 NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

The table below summarises the amounts according to final court decisions (not including penalty interest) and which have not yet been recovered from NLB:
Date of the ruling		Plaintiff	Principal amount in thousands of currency	Costs of the proceed in thousands of curr

---

April 2018 PBZ EUR 222 EUR 34

November 2017 PBZ EUR 220 EUR 91

December 2018 PBZ SEK 3,855 EUR 90

March 2019 PBZ USD 9,185 EUR 425

The NLB Shareholders’ Meeting provided the Management Board of NLB with instructions how to act in the event of existing or potential new final decisions by Croatian courts again voluntarily settle the adjudicated amounts, and also gave some additional instructions on the usage of legal remedies and regarding the management of the property from that perspective for Value Protection of Republic of Slovenia’s Capital Investment in Nova Ljubljanska banka d.d., Ljubljana’ (Zakon za zaščito vrednosti kapitalske naložbe Republike Slovenije v Novi on 14 August 2018. In accordance with the ZVKNNLB, the Succession Fund of the Republic of Slovenia (Sklad Republike Slovenije za nasledstvo, javni sklad, hereinafter: ‘the Fund’) judgements delivered by Croatian courts with regard to the transferred foreign currency deposits, that is the principle amount, accrued interest, expenses of court, attorney’s expenses, and shall not compensate NLB for its own costs or for the difference between the book value of its assets sold in enforcement proceedings and the price obtained for such asset payments by NLB. In accordance with the ZVKNNLB and pursuant to the agreement between NLB and the Fund, as envisaged by the ZVKNNLB (which was concluded on 14 August transferred foreign currency deposits, and use against court decisions that are disadvantageous for NLB, all reasonable legal remedies and to continue to actively challenge the judicial currency deposits on the basis of which enforcement took place, leading, on the basis of ZVKNNLB, to the compensation of the sums recovered from NLB by enforcement. In the aforementioned already compensated the sums recovered from NLB by enforcement. Provisions for legal risks for existing claims filed by PBZ and ZaBa are not formed, since NLB believes that based end in favour of NLB than the opposite. Regardless of the negative outcomes for claims for which the final ruling was issued, in the financial statements NLB Group did not recognise the final judgements, NLB Group recognised the liabilities and related assets, which are included within other financial assets (note 5.6.d) and other financial liabilities (note 5.15.d).

Effects of translation of Changes in Foreign exchange NLB Group

Balance as at foreign operations Acquisition of Transfers Increases/ models/risk differences and Balance as at 1 Jan 2024 to

Notes	5.12.c)	4.13.	4.13.	5.16.a)
12-month expected credit losses	18,429	9	1,417	(834)	(7,089)	20

Provisions for guarantees and commitments

Movements in provisions for guarantees and commitments in EUR thousands

	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Provisions	11,953	1,655	2	-	489	(9)	168	1	2,306
Of which: Purchased or originated credit-impaired	3,095	1	-	(2,674)	-	(160)	262

Effects of translation of Changes in Foreign exchange NLB Group

Balance as at foreign operations Transfers Increases/ Changes in models/ risk parameters differences and Balance as at 1 Jan 2023 to

	Notes	4.13.	4.13.	5.16.a)
12-month expected credit losses	18,826	(3)	583	2,609	(3,587)	1	18,429
Lifetime ECL not credit-impaired	1,953	-	(263)	(873)	837	1	1,655
	Lifetime ECL credit-impaired	16,830	-	(320)	(4,039)	(2)	(5)	12,464
Of which: Purchased or originated credit-impaired	4,095	1	-	(1,015)	-	14	3,095

NLB Balance as at Transfers

Increases/ Changes in models/ Foreign exchange NLB Balance as at Transfers (Decreases) risk parameters differences and Balance as at 1 Jan 2024 other movements 31 Dec 2024

Notes	4.13.	4.13.	5.16.a)
	12-month expected credit losses	7,653	646	(1,608)	(2,841)	1	3,851
Lifetime ECL not credit-impaired	319	1,146	(806)	175	-	834
Lifetime ECL credit-impaired	9,969	(1,792)	(4,014)	393	(1)	4,555
	Of which: Purchased or originated credit-impaired	2,935	-	(2,673)	-	-	262

NLB Balance as at Transfers

Increases/ Changes in models/ Merger of Balance as at 1 Jan 2023 (Decreases) risk parameters subsidiary 31 Dec 2023

Notes	4.13.	4.13.	5.12.f)	5.16.a)
12-month expected credit losses	8,156	158	(146)	(1,142)	627	7,653
Lifetime ECL not credit-impaired	378	147	(616)	387	233	19
Lifetime ECL credit-impaired	11,765	(305)	(1,589)	32	669	969
Of which: Purchased or originated credit-impaired	2,876	-	(3)	-	62	2,935

---

NLB Group

12-month expected Lifetime ECL

credit losses

Balance as at 1 January 2024	4,032,559	106,616	20,917	4,160,092	2,783,977	66,619	13,978	2,864,574
Effects of translation of foreign operations to presentation currency	2,539	110	132,662	-	-	-	-	-
Acquisition of subsidiaries (note 5.12.c)	1,868	-	-	1,868	-	-	-	-
Increases/(Decreases)	333,795	14,058	(9,522)	338,331	232,852	(9,697)	(7,463)	215,692
Foreign exchange differences	417	-	417	33	-	33	-	-
Transfers	(14,379)	13,601	778	-	(15,703)	15,244	459	-
Balance as at 31 December 2024	4,356,799	134,385	12,186	4,503,370	3,001,159	72,166	6,974	3,080,299

12-month expected Lifetime ECL

credit losses

Balance as at 1 January 2023	3,843,293	83,270	26,897	3,953,460	2,397,742	35,243	15,019	2,448,004
Effects of translation of foreign operations to presentation currency	(837)	(28)	(2)	(867)	-	-	-	-
Increases/(Decreases)	224,499	(9,271)	(7,960)	207,268	216,455	1,071	(2,041)	215,485
Foreign exchange differences	231	-	-	231	152	-	-	152
Transfers	(34,627)	32,645	1,982	-	(28,955)	28,362	593	-
Disposal of subsidiary	-	-	-	198,583	1,943	407	200,933	-
Balance as at 31 December 2023	4,032,559	106,616	20,917	4,160,092	2,783,977	66,619	13,978	2,864,574

---

NLB Group

NLB 2024

2023

Balance as at 1 January

15,468	16,021	10,369	10,672

Effects of translation of foreign operations to presentation currency

16	(3)	-	-

Acquisition of subsidiaries (note 5.12.c)

623	-	-	-

Merger of subsidiary (note 5.12.f)

-	-	531	-

Additional provisions (note 4.9.)

934	227	641	587

Provisions released (note 4.9.)

(960)	(1,361)	(828)	(1,039)

Movements in employee benefit provisions

Post-employment benefits in EUR thousands

Interest expenses (note 4.1.)	660	587	355	297
Utilised during year (payments)	(329)	(447)	(138)	(91)
Actuarial gains and losses	1,307	444	860	(588)
Balance as at 31 December	17,719	15,468	11,259	10,369

Other employee benefits in EUR thousands

NLB Group	NLB	2024	2023
Balance as at 1 January	2,424	2,005	1,426	1,204
Effects of translation of foreign operations to presentation currency	4	(1)	-	-
Acquisition of subsidiary (note 5.12.c)	73	-	-	-
Merger of subsidiary (note 5.12.f)	-	-	79	-
Additional provisions (note 4.9.)	885	636	688	173
Provisions released (note 4.9.)	(79)	(104)	-	-
Interest expenses (note 4.1.)	108	81	54	33
Utilised during year	(231)	(193)	(131)	(63)
Balance as at 31 December	3,184	2,424	2,037	1,426

Other employee benefits include NLB Group’s obligations for jubilee long-service benefits.

Movements in restructuring provisions in EUR thousands

NLB Group	NLB	2024	2023
Balance as at 1 January	12,592	21,036	7,198	7,288
Effects of translation of foreign operations to presentation currency			18	(1)	-	-
			Additional provisions (note 4.13.)	3,919	4,006	2,500	3,800
Provisions released (note 4.13.)	-	(352)	-	-
		Utilised during year	(6,163)	(12,097)	(4,389)	(3,890)
			Balance as at 31 December	10,366	12,592	5,309	7,198

Additional restructuring provisions recognised during the year 2024 and 2023 relate mainly to NLB for the purpose of continuing the reorganisation, optimisation of work processes/business in individual segments, and HR restructuring (restructuring of workforce in accordance with business demands) and the related reduction in the number of employees.

NLB Group

NLB 2024

2023

2024

2023

Balance as at 1 January	44,833	43,209	6,219	3,584
Effects of translation of foreign operations to presentation currency	98	8	-	-
Acquisition of subsidiary (note 5.12.c)	761	-	-	-
Disposal of subsidiaries (note 5.12.d)	-	(30)	-	-
Merger of subsidiary (note 5.12.f)	-	-	-	5,382
Additional provisions (note 4.13.)	11,730	16,354	4,660	899
Movements in provisions for legal risks in EUR thousands
Provisions released (note 4.13.)	(2,802)	(9,074)	(11)	(3,577)
Utilised during year	(7,707)	(5,634)	(743)	(69)
Balance as at 31 December	46,913	44,833	10,125	6,219

Movements in other provisions in EUR thousands

NLB Group	NLB	2024	2023
			Balance as at 1 January	5,440	2,772	5,303	2,169
Effects of translation of foreign operations to presentation currency					-	1	-	-
Acquisition of subsidiary (note 5.12.c)		544	-	-	-
			Merger of subsidiary (note 5.12.f)	-	-	1,173	-
					Additional provisions (note 4.13.)	-	15,019	-	13,300
					Provisions released (note 4.13.)	-	(28)	-	-
Utilised during year	(1,628)	(12,324)	(1,627)	(11,339)
			Balance as at 31 December	4,356	5,440	3,676	5,303

Other provisions in the NLB Group and NLB relate mainly to liability in relation to reimbursement of fees in case of early loan repayment.

NLB Group Annual Report 2024

Overview

Deferred Income Tax

Analysis by type of deferred income taxes in EUR thousands

	NLB 31 Dec 2024	2024	Included	Included	Included	Included
Deferred income tax assets	50,852	10,345	279	(12,192)	48,892	5,219
Deferred income tax liabilities	(346)	(7,523)	Impairment of financial assets	15,182	5,159	336
				119	1,358	582	205	(44)
Provisions for liabilities and charges	8,559	-	(743)	51	1,529	-
	(327)	-	Depreciation and valuation of non-financial assets	3,720	1,206	(336)
	-		129	139	35	-
Fair value adjustments of financial assets measured at amortised cost	3,116	8,004	(1,722)	-	788	-
	(624)	-	Tax losses	60,989	-	6,920
	-	59,571	-	5,502	-
Undistributed profit of subsidiaries	-	10,466	(840)	-	-	-
Other	576	4,807	659	-	-	-
Total	142,994	39,987	4,553	(12,022)	112,267	5,940
	4,445	(7,567)

Deferred Income Tax (31 Dec 2023)

	NLB 31 Dec 2023	2023	Included	Included	Included	Included
Deferred income tax assets	59,640	7,218	8,055	4,322	55,098	3,556
Deferred income tax liabilities	7,517	10,244	Impairment of financial assets	9,704	3,589	801
			1,342	1,153	538	(961)	1,171
Provisions for liabilities and charges	9,047	-	(928)	811	1,856	-
	23	(31)	Depreciation and valuation of non-financial assets	4,141	1,304	(452)
	-	123	168	9	-
Fair value adjustments of financial assets measured at amortised cost	1,940	6,651	(1,398)	-	1,412	-
	94	-	Tax losses	54,069	-	54,069
	-	54,069	-	54,069	-
		Undistributed profit of subsidiaries	-	9,626	(9,626)	-	-	-
			Other	248	522	461	-	-	-
Total	138,789	28,910	50,982	5,745	113,711	4,262
	60,751	11,384

The table above does not include the effects of the merger of N Banka. The tax loss on which NLB did not recognise deferred tax assets, as at 31 December 2024 amounts to EUR 430,086 thousand (31 December 2023: EUR 580,388 thousand). In accordance with the amendment to Slovenian corporate income tax law effective from January 1, 2025, tax losses can be carried forward to subsequent periods for a maximum of five years after the period in which they occurred. Based on the transitional provision, accumulated unused old tax losses, incurred before the entry into force, can be claimed in the five years (until 2029). By Slovenian tax law, use of tax loss is limited to 50% of the actual tax base. Other banking members have no tax losses. NLB did not recognise deferred tax assets on temporary differences arising from the impairments of investments in.

subsidiaries and associates where it is not probable that the temporary difference will reverse in the foreseeable future. These temporary differences amount to EUR 137,277 thousand as at 31 December 2024 (31 December 2023: EUR 189,311 thousand).

Valuation

Fair value Provisions for of financial Depreciation Impairment of Tax losses adjustments of Other Total NLB Group liabilities and instruments and valuation financial assets financial

		Balance as at 1 January 2023	9,899	48,415	4,737	9,480	-	2,046	141	74,718
Effects of translation of foreign operations to presentation currency	(5)	1	-	(8)	-	2	-	(10)
(Charged)/credited to profit and loss		(928)	7,490	(596)	232	54,069	(108)	107	60,266
(Charged)/credited to other comprehensive income	81	3,734	-	-	-	3,815
	Balance as at 31 December 2023	9,047	59,640	4,141	9,704	54,069	1,940	248	138,789
Effects of translation of foreign operations to presentation currency				18	12	14	27	-	-	-	71
(Charged)/credited to profit and loss	(743)	(346)	(435)	2,023	6,920	(394)	216	7,241
			(Charged)/credited to other comprehensive income	51	(8,454)	-	-	-	(8,403)
Acquisition of subsidiaries (note 5.12.c)	186	-	-	3,428	-	1,570	112	5,296
		Balance as at 31 December 2024	8,559	50,852	3,720	15,182	60,989	3,116	576	142,994

Valuation

Depreciation Fair value Provisions for of financial and valuation Impairment of adjustments of NLB liabilities and instruments of non-financial financial assets Tax losses financial assets Total

	Balance as at 1 January 2023	1,819	38,028	109	2,050	-	42,006
(Charged)/credited to profit and loss	23	7,517	14	(961)	54,069	94	60,756
(Charged)/credited to other comprehensive income	(31)	8,517	-	-	-	8,486
	Merger of subsidiary (note 5.12.f)	45	1,036	-	64	-	1,318	2,463
Balance as at 31 December 2023	1,856	55,098	123	1,153	54,069	1,412	113,711
(Charged)/credited to profit and loss	(327)	(346)	6	205	5,502	(624)	4,416
(Charged)/credited to other comprehensive income	-	(5,860)	-	-	-	(5,860)
Balance as at 31 December 2024	1,529	48,892	129	1,358	59,571	788	112,267

---

Valuation

Fair value of financial instruments

Depreciation and adjustments of NLB Group

Impairment of financial assets

Other Total financial assets

	in EUR thousands	Balance as at 1 January 2023	Balance as at 31 December 2023	Balance as at 31 December 2024
Valuation	Depreciation and	Impairment of	Non-financial	Capital	Assets	Valuation	Depreciation and	Impairment of	Non-financial	Capital	Assets	Valuation	Depreciation and	Impairment of	Non-financial	Capital	Assets
5,501	8,375	1,641	-	5,366	877	21,760	3,589	7,218	1,304	9,626	6,651	522	28,910	5,159	10,345	1,206	10,466	8,004	4,807	39,987

Effects of translation of foreign operations

to presentation currency	(1)	(4)	-	-	(5)	(1)	(11)
Charged/(credited) to profit and loss	(569)	(565)	(144)	9,626	1,290	(354)	9,284
Charged/(credited) to other comprehensive income	(1,342)	(588)	-	-	-	(1,930)	-
Disposal of subsidiaries	-	-	(193)	-	-	(193)	-

Charged/(credited) to profit and loss

1,687	(625)	(99)	840	1,328	(443)	2,688
Charged/(credited) to other comprehensive income	(119)	3,738	-	-	-	3,619
Acquisition of subsidiaries (note 5.12.c)	-	-	-	-	4,725	4,725

Balance as at 1 January 2023

in EUR thousands	Valuation	Depreciation and	Impairment of	Non-financial	Capital	Assets
	1,672	5,283	163	7,118	-	-
Charged/(credited) to profit and loss	-	5	5	-	-
Charged/(credited) to other comprehensive income	(1,171)	(1,727)	-	(2,898)	-
	Merger of subsidiary (note 5.12.f)	37	-	-	37	-

Balance as at 31 December 2023

538	3,556	168	4,262	-	-
Charged/(credited) to profit and loss	-	(29)	(29)	-	-
Charged/(credited) to other comprehensive income	441	663	-	1,707	-

Balance as at 31 December 2024

582	5,219	139	5,940	-	-

---

NLB Group

Before tax

Tax expense	Net of tax	Before tax	Tax expense	Net of tax
Actuarial gains and losses	(1,307)	51	(1,256)	(860)	-	(860)
Financial assets measured at fair value through other comprehensive income	66,837	(12,073)	54,764	34,395	(7,567)	26,828
Share of associates and joint ventures	18	-	18	-	-	-
Total	65,548	(12,022)	53,526	33,535	(7,567)	25,968

Income tax relating to components of other comprehensive income in EUR thousands

EUR thousands	2023	NLB Group	NLB	Before tax	Tax expense	Net of tax	Before tax	Tax expense	Net of tax
Actuarial gains and losses	(444)	81	(363)	588	(31)	557
Financial assets measured at fair value through other comprehensive income	77,722	5,664	83,386	36,106	11,415	47,521
Share of associates and joint ventures	45	-	45	-	-	-
Total	77,323	5,745	83,068	36,694	11,384	48,078

Other liabilities in EUR thousands

NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Accrued salaries	34,445	28,228	24,388	19,461
Unused annual leave	8,362	7,657	3,106	2,761
Deferred income	8,941	11,376	734	4,376
Taxes payable	41,350	7,015	38,367	4,895
Payments received in advance	10,791	4,377	403	857
Total	103,889	58,653	66,998	32,350

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Share Capital

The share capital of NLB amounts to EUR 200,000 thousand and did not change in 2024. It is comprised of 20,000,000 no-par-value ordinary registered shares, with no un-issued authorised shares. As at 31 December 2024, the major shareholder of NLB with significant influence is the Republic of Slovenia, who owns 25.00% plus one share.

The book value of net assets amounts to EUR 1,194,063 thousand (31 December 2023: EUR 1,116,689 thousand) and consists of NLB net profit for 2024 in the amount of EUR 478,161 thousand (2023: EUR 514,200 thousand), reduced for the transfer of profit to reserves in the amount of EUR 172,810 thousand, for the payment of dividends in the amount of EUR 220,000 thousand, and for the amount of EUR 7,977 thousand. Its allocation will be subject to a decision by the Bank’s General Assembly. The proposal for the General Assembly will be prepared by the Management Board, considering the Group’s risk appetite, the target capital adequacy at the Group’s level, and actual prevailing capital position at the time of the proposal.

The shares give to their holders the right to vote. Nevertheless, a shareholder who acquires shares which, together with the shares already held by such shareholder or by a third person on behalf of such shareholder, represent more than 25% of NLB’s shares must obtain approval from NLB’s Supervisory Board for such an acquisition. The Supervisory Board’s approval may only be rejected if, following such an acquisition, such a person would hold shares exceeding the threshold. Approval shall be considered given if not expressly rejected in 20 days. No such approval is necessary with respect to the shares acquired by a person on behalf of third persons provided that such person acts in its own discretion, and undertakes to NLB that it will not exercise the voting rights based on voting instructions unless such voting instructions are accompanied with a confirmation that specifies which votes are to be exercised and does not hold in the aggregate, directly or indirectly, 25% or more NLB shares with voting rights.

The shares also give their holders the right to be included in the case of a share capital increase, the right to a pro-rata share of remaining assets in the case of bankruptcy or liquidation of NLB, and the right to receive a dividend. In 2024, NLB paid EUR 11.00 per share, which decreased retained earnings by EUR 220,000 thousand (2023: EUR 110,000 thousand). As at 31 December 2024 and 31 December 2023, NLB holds no own shares.

During the period of 36 months from the adoption of the shareholders’ resolution, it can buy own shares of the Bank for the payment of variable remuneration to certain employees as required by the regulations.

5. Other equity instruments issued

On 23 September 2022, NLB issued subordinated notes intended to qualify as Additional Tier 1 Instruments in the aggregate n has the option for early redemption of the notes in the period between 23 September 2027 and 23 March 2028, and on each distribution payment date after 23 March 2028. Until 23 Ma 9.721% per annum, and for each subsequent 5-year period, will accrue at the applicable interest rate, which shall be reset prior to the commencement of each such period (5Y MS + 7.2 terms provide for a temporary write-down in the event that the Common Equity Tier 1 ratio of NLB Group and/or NLB drop(s) below 5.125%. The issue price was equal to 100% of the amount as at 31 December 2024 is EUR 84,184 thousand (31 December 2023: EUR 84,178 thousand).

NLB Group

	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Financial assets measured at fair value through other comprehensive income - debt securities			(19,978)	(66,666)	(10,113)	(35,255)
Financial assets measured at fair value through other comprehensive income - equity securities		14,442	6,647	1,830	144
			Actuarial defined benefit pension plans	(3,494)	(2,265)
Accumulated other comprehensive income and reserves
		a) Reserves	The share premium account as at 31 December 2024 and 31 December 2023 comprises paid-up premiums in the amount of EUR 49,205 thousand.
Profit reserves as of 31 December 2024 amount to EUR 186,332 thousand and consist of EUR 13,522 thousand of legal reserves and EUR 172,81
General Meeting. As at 31 December 2023, profit reserves in the amount of EUR 13,522 thousand relate entirely to legal reserves in accordance with the Companies Act. In 2024, NLB	514,287 thousand
			b) Accumulated other comprehensive income in EUR thousands

---

NLB Group

	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Paid up capital instruments	200,000	200,000	200,000	200,000
Share premium	871,378	871,378	871,378	871,378
Retained earnings - from previous years	1,385,040	1,235,363	715,902	602,402
Profit eligible - from current year	256,973	327,398	220,905	159,833
Accumulated other comprehensive income	(19,197)	(75,662)	(10,348)	(36,316)
Other reserves	186,332	13,522	186,332	13,522
Minority interest	38,480	28,798	-	-
Prudential filters: Additional Valuation Adjustments (AVA)	(2,606)	(2,295)	(1,711)	(1,067)
Goodwill	(8,069)	(3,529)	-	-
Other intangible assets	(65,420)	(37,153)	(23,959)	(20,846)
Deferred tax assets	(51,667)	(47,002)	(56,419)	(54,069)
Insufficient coverage for non-performing exposures	(5,426)	(907)	(706)	(246)
COMMON EQUITY TIER 1 CAPITAL (CET1)	2,785,818	2,509,911	2,101,374	1,734,591
Capital instruments eligible as AT1 Capital	82,000	82,000	82,000	82,000
Minority interest	4,534	5,907	-	-
Additional Tier 1 capital	86,534	87,907	82,000	82,000
TIER 1 CAPITAL	2,872,352	2,597,818	2,183,374	1,816,591
Capital instruments and subordinated loans eligible as Tier 2 capital	533,421	507,516	533,421	507,516
Minority interest	5,485	3,874	-	-
TIER 2 CAPITAL	538,906	511,390	533,421	507,516
TOTAL CAPITAL	3,411,258	3,109,208	2,716,795	2,324,107
RWA for credit risk	14,508,398	12,168,121	9,105,028	7,449,829
RWA for market risks	1,505,108	1,447,713	859,088	818,113
RWA for credit valuation adjustment risk	16,613	14,200	17,425	15,613
RWA for operational risk	2,185,986	1,707,128	1,171,163	923,943
TOTAL RISK EXPOSURE AMOUNT (RWA)	18,216,105	15,337,162	11,152,704	9,207,498
Common Equity Tier 1 Ratio	15.3%	16.4%	18.8%	18.8%
Tier 1 Ratio	15.8%	16.9%	19.6%	19.7%
Total Capital Ratio	18.7%	20.3%	24.4%	25.2%

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Overall capital requirements of NLB Group on consolidated level:

SREP requirement		2024
	CET1	4.5%
Pillar 1 (P1R)	AT1	1.5%
	T2	2.0%
	CET1	1.19%
Pillar 2 (P2R)	Tier 1	1.59%
	Total Capital	2.12%
	CET1	5.69%
Total SREP Capital Requirement (TSCR)	Tier 1	7.59%
	Total Capital	10.12%
Capital Conservation buffer	CET1	2.50%

---

Overall Capital Requirement (OCR)

O-SII buffer	CET1	1.25%
Systemic risk buffer	CET1	0.11%
Countercyclical buffer	CET1	0.52%
Combined buffer requirement (CBR)	CET1	4.38%
	CET1	10.07%
Overall capital requirement (OCR) = MDA threshold	Tier 1	11.97%
	Total Capital	14.50%
Pillar 2 Guidance (P2G)	CET1	1.0%
	CET1	11.07%
OCR + P2G	Tier 1	12.97%
	Total Capital	15.50%

As at 31 December 2024, the Group’s Overall Capital Requirement (OCR) on a consolidated basis was 14.50%, which is slightly lower (by 0.01 percentage point, hereinafter: p.p.) than offset by an increase in the Countercyclical buffer by 0.26 p.p. The OCR comprises:

• The Total SREP Capital Requirement (TSCR) is 10.12%, including 8.00% Pillar 1 and 2.12% Pillar 2 due to a better overall SREP assessment.
• The second component is the Combined Buffer Requirement (CBR), which is 4.38%, and includes a 2.50% Capital Conservation buffer.

In addition to the above requirements, the Pillar 2 Guidance (P2G) is 1.0% of Common Equity Tier 1 (CET1). Effective 1 January 2025, changes to capital buffer rates in Slovenia will be made, reducing the sectoral systemic risk buffer for retail exposures to natural persons secured by residential real estate from 1.0% to 0.5%. In addition, the CCYB for NLB Banka, Skopje, NLB Banka, Podgorica will be adjusted.

The Bank and NLB Group’s capital covers all the current and announced regulatory capital requirements, including capital buffers and overall capital ratios on a consolidated basis stand at:

• 15.3% CET1 ratio,
• 15.8% Tier 1 ratio,
• 18.7% Total Capital ratio.

In the scope of regulatory risks, which include credit risk, operational risk, and market risks, the calculation of capital requirement for operational risks is made according to a basic indicator approach. The same approaches are used for calculating the capital requirement for operational risks where the standardized approach is used. As at 31 December 2024, the Group’s TCR stood at 18.7% (or 1.5 p.p. decrease YoY), and the CET1 ratio stood at 15.3%.

The capital adequacy derives from higher RWA (EUR 2,878.9 million YoY), although capital increased by EUR 302.1 million YoY. The Group increased its capital by partially including 2023 profits. The Group’s RWA for credit risk increased by EUR 2,340.3 million due to lending activity in the corporate and retail segments, of which the acquisition of Summit Leasing companies contributed to a higher RWA by EUR 698.0 million. The RWA for high-risk exposures increased due to finance loans. Furthermore, higher RWA for liquidity assets resulted from EUR-denominated placements with central banks and liquidity surpluses placed at commercial banks.

The increase in RWA of EUR 59.8 million YoY was driven by a higher RWA for FX risk of EUR 58.6 million (mainly the result of more open positions in domestic currencies of non-euro subsidiary banks – mostly R). The value for derivative transactions subject to CRR risk based on the OEM method also contributed to this increase. The increase in the Group’s RWA for operational risks (EUR 478.9 million YoY) derived from the higher three-year average of relevant income from Komercijalna banka, Beograd, and Summit Leasing. This resulted in a higher three-year average of relevant income.

The other components used in the calculations did not significantly change. The assessment process (ICAAP) in NLB Group, set up in accordance with ECB Guidelines, is ensuring adequate capital and sustainability on an ongoing basis. The purpose of this process is to ensure that the Group can maintain capital on an ongoing basis, as well as the adequate distribution of internal capital for covering the nature and level of the risks to which NLB Group is or might be exposed.

NLB Group manages its capital adequacy by ensuring that all its regulatory and supervisory requirements and internal capital needs allow it to sustainably follow its business strategy. A normative perspective includes several stress scenarios which...

NLB Group

	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Short-term guarantees	349,733	369,849	197,356	205,731
- financial	159,847	154,769	84,865	88,373
- non-financial	189,886	215,080	112,491	117,358
Long-term guarantees	1,455,838	1,261,764	925,219	817,646
- financial	534,861	513,523	299,008	309,909
- non-financial	920,977	748,241	626,211	507,737

Off-balance sheet liabilities

	Contractual amounts of off-balance sheet financial instruments in EUR thousands
Loan commitments	2,640,323	2,469,800	1,940,563	1,822,847
Letters of credit	34,577	41,026	670	10,446
Other	22,899	17,653	16,491	7,904
	4,503,370	4,160,092	3,080,299	2,864,574

Provisions (note 5.16.b)

	(21,850)	(32,548)	(9,240)	(17,941)

Total

4,481,520	4,127,544	3,071,059	2,846,633

Fee income from issued non-financial guarantees amounted to EUR 10,239 thousand (2023: EUR 8,628 thousand) in NLB Group, and to EUR 6,743 thousand (2023: EUR 5,552 thousand) in NLB.

In addition to the instruments presented in the table above, NLB Group and NLB have also some low-risk off-balance sheet items, for which a 0% credit conversion factor is applied in accordance with the Capital Requirements Regulation (credit and other lines which can be irrevocably cancelled by a bank). As at 31 December 2024, these items at the NLB Group level amount to EUR 1,097,316 thousand (31 December 2023: EUR 915,450 thousand), and at the NLB level EUR 433,363 thousand (31 December 2023: EUR 412,330 thousand).

NLB Group

	31 Dec 2024	31 Dec 2023	Short-term	Long-term
Swaps	419,642	2,330,260	479	1,526,962	556,373	2,390,260
	- currency swaps	328,259	-482,463	10,799	464,990	-710,762	10,799
		- interest rate swaps	91,383	2,330,260	4,411	1,516,163	91,383
	Options	-	37,382	-	45,924	-37,382	-45,924
		- interest rate options	-16,696	-	30,189	-16,696	-
		- securities options	-20,686	-	15,735	-20,686	-
Forward contracts	44,783	241	74,351	6,640	43,367	241
		- currency forward	44,783	241	74,351	6,640	43,367	241
		Total	464,425	2,367,883	561,225	1,579,526	599,740	2,427,883

As at 31 December 2024, the NLB Group held interest rate swaps intended as fair value hedges of assets with a total nominal value of EUR 589,141 thousand (31 December 2023: EUR 633,798 thousand) and intended to hedge the fair value of bonds issued in 2024 with a total nominal value of EUR 1,520,000 thousand (31 December 2023: EUR 450,000 thousand) (note 5.5.b). As at 31 December 2024, the NLB held interest rate swaps intended as fair value hedges of assets with a total nominal value of EUR 529,141 thousand (31 December 2023: EUR 573,798 thousand) and intended to hedge the fair value of bonds issued in 2024 with a total contractual value of EUR 1,520,000 thousand (31 December 2023: EUR 450,000 thousand) (note 5.5.b). Derivatives that qualify for hedge accounting are used to hedge interest rate risk. The fair values of derivative financial instruments are disclosed in notes 5.2. and 5.5. c)

Capital commitments in EUR thousands

	NLB Group	31 Dec 2024	31 Dec 2023
	Capital commitments for purchase of:	- property and equipment	7,733	3,131	7,189	3,022
		- intangible assets	3,278	2,901	3,066	2,470
		Total	11,011	6,032	10,255	5,492

---

Fiduciary activities

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Fiduciary activities	26,083,756	30,241,726	23,873,013	28,278,498
Settlement and other services	1,043,073	1,085,213	943,592	1,010,624
Total	27,126,829	31,326,939	24,816,605	29,289,122

Funds managed on behalf of third parties

Funds managed on behalf of third parties are accounted separately from NLB Group’s funds. Income and expenses arising with respect to these connection with these transactions. NLB Group charges fees for its services.

Assets	31 Dec 2024	31 Dec 2023	31 Dec 2024
	Clearing or transaction account claims for client assets	26,032,877	30,196,860	23,830,528	28,243,725
		From financial instruments	26,030,300	30,196,322	23,827,995

Liabilities

Liabilities	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Clearing or transaction liabilities for client assets	26,083,756	30,241,726	23,873,013	28,278,498
To clients from cash and financial instruments	26,077,151	30,238,652	23,867,594	28,275,954

Fee income for funds managed on behalf of third parties

	in EUR thousands	NLB Group	2024	2023	NLB	2024	2023
Fiduciary activities (note 4.3.b)	14,922	11,666	11,677	9,567
Settlement and other services	641	912	638	806
Total	15,563	12,578	12,315	10,373

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Risk Management

Risk management in NLB Group is implemented in accordance with the set strategic guidelines, established internal policies, and procedures which take into account European guidelines, and relevant good banking practices. In addition, the Group is constantly enhancing and complementing the existing approaches, methodologies, and processes in all risk management areas. Efficient capital management is crucial for NLB Group's sustained long-term profitable operations. A robust Risk Management framework is comprehensively integrated into decision-making, steering risk culture and awareness of all relevant risks within the entire Group.

NLB Group’s Risk management framework supports business decision-making on strategic and operating levels through:

• Risk appetite statement and risk strategy orientations;
• Yearly review of strategic business goals, budgeting, and the capital planning process;
• Internal capital adequacy assessment process;
• Plan activities;
• Other internal stress-testing capabilities, early warning systems, and regular risk analysis;
• Regulatory and internal management reporting.

NLB Group uses the ‘three lines of defence’ model where the Risk management function acts as a second line of defence. Set governance and different risk management tools enable adequate oversight of the Group’s risk profile. Moreover, the Group has established escalation procedures and different mitigation measures when necessary.

a) Risk management strategies and processes

The key goal of NLB Group’s Risk Management is to proactively manage risks. Risk management is embedded into the entire organisation, focusing on risk identification at a very early stage, efficient risk management, and mitigation of risks with the aim of ensuring the resilience of the Group. Key strategic risk management principles of NLB Group are defined by its Risk Appetite and Risk Strategy, designed in accordance with the Group’s business objectives.

Risk Appetite, Risk Strategy, and the key internal policies of NLB Group – which are approved by the Management and Supervisory Boards – specify the strategic goals, risk appetite guidelines, and types of risk in order to meet internal strategic objectives and fulfil all external requirements. The main strategic risk guidelines are comprehensively integrated into decision-making processes, risk profile management, and optimal capital usage, representing an important element of its business strategy and related mid-term financial targets.

The management of credit risk, which is the most significant risk, focuses on maintaining a diversified credit portfolio, adequate credit portfolio quality, sustainable costs of risk, and ensuring an optimal return considering the risks assumed. As regards liquidity risk, the Group monitors its liquidity position on an ongoing basis. The Group limited exposure to credit spread risk, arising from the valuation risk of debt securities portfolio servicing as liquidity reserves, to a medium level.

unexpected negative effects on revenues and capital, therefore, a medium tolerance for this risk is stated. When assuming operational risk, the Group pursues the orientation that such activities, processes, and/or organisation are performed when necessary. Besides, the Group also focuses on proactive mitigation, prevention, and minimisation of potential damage. The limited to servicing customers and hedging Bank’s own positions. In the area of currency risk, NLB Group pursues the goals of low to moderate exposure. The tolerance for other risk types is in line with its risk appetite. The usage of risk limits and potential deviations from limits and target values are regularly reported to the respective committees and/or the Management.

NLB Group adapted a corresponding approach to monitor and manage their target risk profiles. NLB Group established a comprehensive stress-testing framework and other early warning controls and timely response when necessary. A robust and uniform stress-testing programme includes all material types of risk and relevant stress scenario analysis, according to the view of testing concept to identify the most relevant financial vulnerabilities stemming from climate risk, which is constantly further enhanced by considering disposable ESG-related data. Strategic budgeting process to support proactive management of the Group’s risk profile, namely the capital and liquidity positions in a forward-looking perspective. In addition, the Group also conducts partial risk assessments covered by other risk analysis, based on relevant risk parameters, and integrated into the process of setting a risk management limit system.

the purpose of an efficient risk mitigation process, NLB Group applies a single set of standards to retail and corporate loan collateral, representing a secondary source of repayment with a system for monitoring and reporting collateral at fair (market) value in accordance with the International Valuation Standards (IVS). The eligibility of collateral, by types and ratio mitigation principles and rules in NLB Group are described in more relevant details in the section ‘Credit risk management.’ When hedging market risks, namely interest rate risk and foreign exchange risk, the Group employs a natural hedge or using derivatives in line with hedge accounting principles.

b) Risk management structure and organisation

NLB Group’s corporate governance framework is based on the legislation of the Republic of Slovenia, particularly the provisions of the Companies Act (ZGD-1M) and the Banking Act (ZBan-3), the Regulation on Internal Governance Arrangements for Banks and Savings Banks, the EBA Guidelines on internal governance, the EBA Guidelines on the assessment of the suitability of members of the management body, and key function management provide cohesive risk management governance in NLB Group. NLB Group established the three lines of a defence framework with the aim of managing risks effectively.

Responsibilities for risk management at different levels within the Group. Risk management in the Group acts as a second line of defence, accountable for appropriate managing, as well as the competence centre in charge of group banking and leasing members, and other non-core subsidiaries which are in a controlled wind-out. Overall, the organisation and delineation of responsibilities aim to mitigate conflicts of interest and ensure a transparent and documented decision-making process, subject to an appropriate upward and downward flow of information.

Risk management in NLB Group encompasses several professional areas for which the Global Risk Department, the Credit Risk – Corporate Department, the Credit Risk – Retail Department and the Management Board, Assets and Liabilities Committee (ALCO), Risk Committee (RICO) and Credit Committee of the Management Board and the Risk Committee of the Supervisory Board are responsible for the risk management policies of NLB Group, setting limits, establishing methodologies, overseeing the harmonisation of risk management policies within the NLB Group, monitoring NLB Group that are included in the financial statements of NLB Group, report their exposure to risks to the competent organisational units within the Risk management competence line.

Board and its respective Committees and the Supervisory Board and its respective Committees, where the appropriate measures are adopted. The credit ratings of clients that are material.

Credit Committee of NLB

The process follows the co-decision principle, in which the credit committee of the respective Group member first approves their decision, following which a decision of NLB is made on the basis of all available documentation, including a non-binding rating opinion prepared by the underwriting department of NLB. Risk monitoring in NLB Group enables uniform risk monitoring on standardised risk management approaches. Such monitoring provides a comprehensive overview of the Group’s and of each member’s risk profile.

In the Group, risk monitoring in each NLB Group member is separated from its management and/or business function to maintain the objectivity required when assessing business decisions to the Management Board and its committees (Credit Committee, ALCO, RICO and the Operational Risk Committee) and to the Supervisory Board.

Risk measurement and reporting

Mechanism (SSM), which is supervised by the Joint Supervisory Team (JST) of the ECB and the Bank of Slovenia. The Group member complies with the ECB regulation, while NLB Group aligns with local regulators. A third-party equivalent was approved in Serbia, Bosnia and Herzegovina, and North Macedonia, resulting in alignment of local regulation with CRR rules. With regards to risk, NLB Group applies a standardised approach to credit and market risk, and the basic approach (a simplified approach with less data granularity) to operational risks, with the exception of monitored, managed, or mitigated in a uniform manner, as defined in the Group’s Risk management standards, and consider also the specifics of the markets in which individual NLB Group members operate.

Risk, interest rate, and credit spread risk in the banking book, operational risk, market risk, ESG, and non-financial risks, in addition to the prescribed regulations, NLB Group uses internal methodologies for the management of risks. These internal methodologies are aligned with ECB, EBA, and Basel guidelines, as well as best practices in banking methodologies.

Risk reporting

For risk reporting, NLB Group’s internal guidelines reflect, in addition to internal requirements, the substance and frequency of reporting required by the Bank of Slovenia and the ECB regulations. Risk reporting is carried out in the form of standardised reports, pursuant to risk management policies based on common methodologies for measuring exposure to risks, assurance, and automated report preparation, which ensures the quality of reports and reduces the possibility of errors.

Data and IT system

Risk data are calculated and stored in NLB process provides an integrated information in common reference structure where business users can access in a consistent and subject-oriented format. Data are regularly checked and used for regulatory reporting. The Group has established a strong and robust data governance program that aligns with the goals and objectives of the Group, consisting of identifying risks, developing policies and controls on data confidentiality, integrity, accuracy, and availability, and by executing the second line of defence controls by an independent framework that covers the agreed upon service level standards for both in-house and outsourced data-related processes. By that, the Group complies with BCBS 239 principles and ECB Guidelines.

Risk management in 2024

Efficient managing of risks and capital remains crucial for NLB Group to sustain long-term profitable operations. The Group further enhanced the robustness of its risk management processes to manage risks proactively, comprehensively, and prudently. Risk identification in a very early stage, its efficient managing, and the corresponding mitigation processes represent essential steps in successful risk management.

Changing with trends, such as sustainability, social responsibility, governance, changing customer behaviours, emerging new technologies and competitors, as well as increasing new regulations, with the aim of detecting and managing new potential emerging risks. The NLB Group gives special focus on the inclusion of risk analysis into the decision-making process on strategic usage of internal capital, appropriate risk-adjusted pricing, regular education/trainings at all levels of management, and the assurance of overall compliance with internal policies/rules and well-diversified, with a stable rating structure and lower NPLs level. There was no large concentration in any selected industry sector. The latter is particularly important as geopolitical risks can have significant impacts on specific industry sectors.

The Group monitored the macroeconomic and geopolitical circumstances closely, remaining very prudent in identifying any increase in credit risk at a very early stage. The German automotive industry did not severely influence the Slovenian export-oriented industry. With that in mind, the bank downgraded some selected clients in stage 2 and formed additional provisions.

Impairments derive from portfolio development, new financing and any portfolio deterioration. In contrast, the successful collection of previously written-off receivables and changes capitalised and above the risk appetite at both the Group and banking member levels. The liquidity position of the Group also remained solid, with liquidity indicators high above the re unfavourable liquidity scenario would materialise, the Group holds a sufficient level of high-quality liquidity reserves. Significant attention was put into the structure and concentration market movements. Investment activity continued with a balanced approach to finding attractive market opportunities while pursuing well-managed credit spread and interest rate risk, well within the risk appetite tolerance.

The management of ESG risks follows ECB and EBA guidelines, focusing on their comprehensive integration into all relevant processes. It addresses portfolio management. Sustainable ESG financing in accordance with Environmental and Social Management System is integrated into the Group’s Risk Appetite Statement. Additional appetite. In its initial round of NZBA targets, NLB Group has focused on fossil fuel-based and highly energy-intensive sectors, such as power generation and iron and steel, and other sectors include residential mortgages and commercial real estate. Defined Net Zero targets are regularly followed. Activities for setting second round of NZBA targets, for sectors such as transport.

Morningstar Sustainalytics further improved in 2024, reflecting a low risk of material financial impacts from ESG factors. As a systemically important institution, the Group is included in ECB Stress test exercises: the 2024 EBA Fit-for-55 climate risk scenario analysis and the 2024 ECB Cyber Resilience Stress Test Exercise. By performing these exercises, the ECB assesses cyber risk. Starting on 1.1.2025 the calculation of Risk weighted assets for credit risk is based on CRR3 regulation. NLB Group is using Standardized approach, therefore no materially result of the new regulation will lead to the increase of RWA, primarily due to increased credit conversion factor (CCF) for unused credit lines and introduction of foreign exchange (FX).

The increases will be compensated by more favourable risk weights for residential real-estate collateral.

6.1. Credit risk management

a) Introduction

In its operations, NLB Group is exposed to credit risk. For that reason, it proactively and comprehensively monitors and assesses the aforementioned risk. In that process, NLB Group follows the International Financial Reporting and the EBA guidelines. This area is governed in greater detail by the internal methodologies and procedures set out in internal acts. Through regular reviews of the business practices and entities functioning in accordance with NLB Group’s risk management standards to enable meaningfully uniform procedures at the consolidated level.

NLB Group manages credit risk using customer/group of customers, appropriate procedures are followed in various phases of the relationship with a customer prior to, during, and after the conclusion of an agreement. Prior cooperation with NLB are assessed. To objectively assess a client’s operation, internal scoring models for particular client segments or product types have been developed. It is also important rating. This is followed by various forms of monitoring a customer, in particular an assessment of its ability to generate sufficient cash flows for the regular settlement of its liabilities within the Early Warning System (EWS) is important. In the case of client default, restructuring or work-out is initiated depending on the severity of the client’s position.

• Performance balance and off-balance sheet exposures, are actively monitored and analysed at the level of the overall portfolio of NLB Group and single banking entities. Comprehensive analyses are conducted to identify any breach of limits or targets. Great emphasis is placed on the evolution of portfolio structure in terms of client segmentation, credit rating structure, structure by stages (based of potential future losses that is closely monitored.

- Stress-testing and Scenario Analysis: Regular stress-testing and scenario analyses are conducted to assess the resilience of credit portfolios, vulnerabilities and formulating contingency plans. Beside default risk, portfolio management is also focused on monitoring single name and industry concentration, migration, FX lending.

for credit risk at NLB Group level within the first pillar are calculated according to the Standardised approach, while within the second pillar an internal IRB approach is used to estimate concentration add-on is based on the Granularity adjustment methodology, and an industry concentration add-on is estimated based on the HHI concentration indexes. NLB and other N material claims, and at the collective level for the rest of the portfolio. An individual review is performed for material Stage 3 financial assets which have been rated as non-performing customer, actual breaches of contractual obligations such as arrears in the settlement of liabilities, whether financial assets will be restructured for economic or legal reasons, and the like future cash flows (from ordinary operations and possible redemption of collateral) are assessed following an individual review. If their discounted value differs from the book value of the provisions. The models used to estimate future risk parameters are validated and backtested on a regular basis to make loss estimations as realistic as possible.

485 NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

management of ESG risks is incorporated in the Group’s overall credit approval process and related credit portfolio management. Sustainable financing is addressed in the basic document Group where in the special sub-chapter Environmental, Social and Governance Framework three categories are defined (prohibited, restricted, normal activities); - The Environmental transactions with the greatest potential for significant E&S impact (exclusion list, regulatory and performance standards compliance check, project categorisation); - The Environmental Group provides a guide to the typical level of inherent environmental and social risk according to NACE codes. Beside addressing ESG risks in all relevant stages of the credit-granting process.

On the portfolio level, the Group does not face any large concentration towards specific NACE industrial sectors exposed to climate risk, whereby the role of transitional risk is more pronounced, nevertheless the Group has made material progress in this respect in 2024 and has ambitious plans for the following year.

b) Main emphasis in 2024

In the process of constantly moderate risks, and at the same time ensuring an optimal return considering the risks assumed. Preserving high credit portfolio quality represents the most important key aim, with a focus on the Group is actively present on the market in the region, financing existing and new creditworthy clients. To further enhance existing risk management tools, the Group is constantly developing in credit risk assessment in line with best banking practices, while at the same time enabling faster responsiveness towards clients. Lending growth, which was modest in 2023 due to increasing interest rates was prevailing, especially in the housing loan market. In the Corporate segment, the Bank seized opportunities to finance some of the top corporate clients in the region which are diversified, and there is no large concentration in any specific industry or client segment. The share of retail portfolio in the whole credit portfolio is quite substantial, with still prevailing solid with a stable rating structure and diversified portfolio. Great emphasis was placed on intensive and proactive handling of problematic customers and customers active in the industry.

an early warning system for detecting increased credit risk at a very early stage. The stock of NPE volume increased, primarily as a result of SLS Group acquisition. As at 31 December 1.1% (the same as at the end of 2023). Moreover, the coverage ratio remains high at 62.7%, which is above the EU average published by the EBA (41.6% in 3Q 2024).

NLB Group

in EUR thousands

	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Cash, cash balances at central banks, and other demand deposits at banks	4,039,581	6,103,561
Financial assets held for trading	18,338	15,718	21,073	17,957
Non-trading financial assets mandatorily at fair value through profit or loss	1,000	5,217	3,964	7,785
Financial assets at fair value through other comprehensive income	2,466,923	2,164,464	1,601,875	962,084
Financial assets at amortised cost
Debt securities	3,725,195	2,522,229	2,846,779
Loans to governments	511,129	386,291	209,228	118,220
Loans to banks	458,921	547,640	193,172	149,011
Loans to financial organisations	149,132	91,523	1,326,073	384,995
Loans to individuals	8,557,705	7,086,815	3,882,210	3,543,603
Loans to companies	7,145,683	6,169,972	3,235,837	3,101,465
Other financial assets	136,854	165,962	81,518	101,596
Derivatives - hedge accounting	77,771	47,614	77,771	47,614
Total net financial assets	27,288,232	25,307,006	15,452,613	14,718,531
Guarantees	1,805,571	1,631,613	1,122,575	1,023,377
Financial guarantees	694,708	668,292	383,873	398,282
Non-financial guarantees	1,110,863	963,321	738,702	625,095
Loan commitments	2,640,323	2,469,800	1,940,563	1,822,847
Other potential liabilities	57,476	58,679	17,161	18,350
Total contingent liabilities	4,503,370	4,160,092	3,080,299	2,864,574
Total maximum exposure to credit risk	31,791,602	29,467,098	18,532,912	17,583,105

Maximum exposure to credit risk is a presentation of NLB Group’s exposure to credit risk separately by individual types of financial assets and contingent liabilities.

Exposures stated in the above table are shown for the balance sheet items in their net book value as reported in the statement of financial position, and for off-balance sheet items in the amount of their nominal value.

NLB Group Annual Report 2024

Overview

Financial Assets

in EUR thousands

31 Dec 2024	31 Dec 2023
Gross value of financial assets	Net value of financial assets	Fair value of financial assets	Gross value of financial assets	Net value of financial assets	Fair value of financial assets
Fully/over collateralised financial assets	487		-	-	-	-	-
Financial assets not or not fully covered with collateral			-	-	-	-	-	-
			Financial assets at amortised cost	-	-	-	-	-	-
			Loans to banks	-	-	136	-	-	113
		Loans to individuals	47,477	27,871	128,687	47,586	28,634	133,472
		Loans to other customers	97,394	48,781	308,698	102,763	47,238	343,157
			Other financial assets	6530	3,503	8,847	11957	4,507	10,484
		Total	144,936	76,682	440,888	150,468	75,929	481,136

---

Financial Assets Overview

in EUR thousands 31 Dec 2024

Fully/over collateralised financial assets	Financial assets not or not fully covered with collateral	Gross value of financial assets	Net value of financial assets	Fair value of financial assets
Loans to banks	-	-	-	136
Loans to individuals	29,840	15,986	73,399	50,299
Loans to other customers	27,961	10,648	98,625	39,882
Other financial assets	2	1	5	1,144
Total	57,803	26,635	172,029	91,461

in EUR thousands 31 Dec 2023

Fully/over collateralised financial assets	Financial assets not or not fully covered with collateral	Gross value of financial assets	Net value of financial assets	Fair value of financial assets
Loans to banks	-	-	-	113
Loans to individuals	32,400	20,097	76,149	43,943
Loans to other customers	41,759	18,968	145,806	19,456
Other financial assets	7	2	355	1,655
Total	74,166	39,067	222,310	65,167

---

NLB Group Annual Report 2024

Overview

Financial Assets

in EUR thousands

31 Dec 2024	31 Dec 2023
Gross value of financial assets	Net value of financial assets	Fair value of financial assets	Gross value of financial assets	Net value of financial assets	Fair value of financial assets
Fully/over collateralised financial assets		7,126,489	7,084,685	16,348,643	5,963,606	5,933,459	12,847,635
Financial assets not or not fully covered with collateral		13,593,230	13,476,160	1,262,436	11,041,259	10,930,042	805,302
		Financial assets at amortised cost
		Debt securities	156,568	156,493	156,355	113,822	113,724	113,161
	Loans to banks	194	194	195	216	216	1,037
	Loans to individuals	3,999,354	3,981,774	8,539,514	3,358,508	3,351,490	7,084,152
		Loans to other customers	2,968,522	2,944,379	7,647,688	2,489,620	2,466,593	5,645,989
	Other financial assets	1,851	1,845	4,891	1,440	1,436	3,296

---

NLB Group Annual Report 2024

Overview

Financial Assets

in EUR thousands	31 Dec 2024	Fully/over collateralised financial assets	Financial assets not or not fully covered with collateral	Gross value of	Net value of	Fair value	Gross value of	Net value of	Fair value of financial assets
Financial assets of collateral
Debt securities	156,568	156,493	156,355	2,693,741	2,690,286	-
Loans to banks	-	-	-	193,342	193,172	-
Loans to individuals	2,059,295	2,051,482	4,411,879	1,825,755	1,806,148	31,114
Loans to other customers	1,062,028	1,059,346		2,390,689	3,716,001	3,692,553	361,951
Other financial assets	20	20	77	81,565	81,448	15
Total	3,277,911	3,267,341		6,959,000	8,510,404	8,463,607	393,080

Financial Assets as of 31 Dec 2023

in EUR thousands	31 Dec 2023	Fully/over collateralised financial assets	Financial assets not or not fully covered with collateral	Gross value of	Net value of	Fair value	Gross value of	Net value of	Fair value of financial assets
Financial assets of collateral
Debt securities	113,822	113,724	113,161	1,855,144	1,852,445	-
Loans to banks	-	-	-	149,148	148,984	-
Loans to individuals	1,902,110	1,900,201	4,027,602	1,630,374	1,612,726	38,207
Loans to other customers	1,024,057	1,025,532		2,437,145	2,573,752	2,556,242	311,166
Other financial assets	44	44	130	101,504	101,404	18
Total	3,040,033	3,039,501		6,578,038	6,309,922	6,271,801	349,391

Collateral from Loans Mandatorily at Fair Value Through Profit or Loss

in EUR thousands	31 Dec 2024	31 Dec 2023	Fully/over collateralised loans	Loans not or not fully covered with collateral	Fair value of loans	Fair value of collateral
Loans mandatorily at fair value through profit or loss	76	149	3,888	2,030	70	149
		7,715	5,800

---

NLB Group Annual Report 2024

Overview

Credit protection policy

NLB Group applies a single set of standards to retail and corporate loan collateral, as developed by NLB Group members in accordance with regulatory requirements. The Collateral Policy in NLB d.d. and NLB Group has been adopted by the Management Board of NLB Group. The Policy represents the basic principles that NLB Group’s employees follow in managing collateral, with the aim of reducing credit risk.

In line with the policy, the primary source of loan repayment is the debtor’s solvency, and the accepted collateral is a secondary source. NLB Group primarily accepts collateral complying with the Basel II requirements with the aim of improving credit risk management and consuming capital economically. In accordance with Basel II, accepted collateral includes securities issued by central governments and central banks, bank debt securities, and real-estate mortgages (the real estate must be, beside other criteria, located in the European Economic Area to be recognised).

Loans made to companies and sole proprietors may be secured by other forms of collateral as well (e.g., a lien on movable property, a pledge of an equity stake, investments). This collateral could generate a cash flow if it were needed as a secondary source of payment. If there is a lower probability that this type of collateral would generate a cash flow, NLB Group has established a system for monitoring and reporting collateral at fair (market) value.

From spring 2024 onwards, NLB Group has been intensively preparing for the introduction of the amended Basel III standards. The amended regulation came into force on 1 January 2024. NLB Group’s adaptation is to establish such collateral and monitoring in the application support in order to be able to fully exploit the regulatory opportunities to realise capital savings.

The market value of real estate used as collateral is obtained from valuation reports of licensed appraisers or from sales agreements. Both valuation reports and sales agreements must not be older than one year. In NLB and members of NLB Group, most reports of external appraisers are subject to control regarding the content, value, scope, and format of the report, its compliance with international valuation standards, and the estimated value. If they notice deviations, they can adjust and correct the value of the external valuation. The value adjustment can only be negative and can be applied only in a limited range.

For the purposes of business decisions and the calculation of collateral, these haircuts for the purpose of liquidation value are for real estate in the range of 30 to 70%, depending on the type of collateral, and up to 100%, depending on the type of movable collateral. The market value of financial instruments held by NLB Group is obtained from the organised market – such as the stock exchange, for listed instruments.

Unlisted Financial Instruments

Collateral is used exceptionally and on a small scale in loans granted to companies and sole proprietors. NLB has compiled a reference list of licensed secured lending and in accordance with the international valuation standards (IVS, EVS, and RICS). Appraisals related to retail loans are generally ordered only from appraisers with the necessary qualifications.

Appraisals are usually submitted by clients. If a client submits an appraisal that is not made by an appraiser included on NLB’s reference list, NLB’s expert department, which employs certified real estate appraisers with licenses granted by the Slovenian Institute of Auditors, will verify the appraisal. The expert department is also responsible for reviewing valuations from in-house appraisers and outsourced appraisers, all possessing the necessary licenses.

NLB Group has compiled a reference list of appraisers for valuations of real estate with the international valuation standards, and for larger exposures, real-estate evaluations must also be reviewed by an internal licensed appraiser with knowledge of the local real estate market. If the value adjustment is greater than a certain limit, the appraisal is rejected as inadequate.

When assuring collateral, NLB Group follows the internal regulations which define the minimum collateral value required to be greater than the underlying exposure (depending on the borrower’s rating, loan maturity, etc.) with the aim of reducing negative consequences resulting from any major swings in market prices.

To serve as collateral, NLB Group’s lien on such assets should be top ranking. Exceptionally, where the value of the mortgaged real estate is large enough, the lien can have a different priority in accordance with the mandatory periods and internal instructions. For example, the value of collateral using mortgaged real estate is monitored annually, either by preparing individual appraisals or by using public records and indexes of real-estate value published by the relevant government authorities (the Surveying and Mapping Authority in the Republic of Slovenia).

Once a year, the value of collateral is assessed in NLB automated, with a straight-line depreciation over the period of the remaining useful life.

Main Types of Collateral Taken by the NLB Group

NLB Group accepts the following material types of loan collateral:

• Collateral in the form of business and residential real estate: land, buildings, and individual parts of buildings in a specified area foreseen for construction, apartments, residential buildings, garages and holiday homes, business premises, industrial buildings, offices, shops, hotels, branches, and warehouses.

Priority is given to property where the pledge right of the Bank is entered in the first place and real estate is already owned by the debtor and/or the pledger. For real estate, there must be a clear title.

Movable Property

Priority is given to the types of movable property that are highly likely to be sold in the event of execution, and the funds received are used to repay the collateralized loan. The appropriate types of movable property include:

• Motor vehicles
• Agricultural machinery
• Construction machinery
• Production lines
• Series-produced machines
• Some custom machinery

Cash and Securities

NLB Group also accepts:

• Deposits or cash-like instruments, debt securities of different issuers, investment fund units, equity securities, or convertible bonds.
• Cash receivable collateral: bank deposits and savings.
• Marketable securities: bonds and shares which, according to the Bank’s assessment, are suitable for securing investments and are traded on a regulated market (marketable securities of higher quality).
• Investment products managed by management companies (a priority company NLB Skladi) and are, according to the Bank’s assessment, suitable for insurance of investments.
• A pledge of an equity stake.
• Assignment of receivables as collateral: cash receivables must have longer maturities than the maturity of the investment and they must not be due and not be paid.

Insurance Products

Other material forms of collateral include products of Vita, life insurance company d.d. Ljubljana – a pledge of an investment life insurance policy and a life insurance policy with a guaranteed return that includes saving, in addition to a third party undertaking to pay the debt in case of the primary debtor (borrower) defaulting.

Personal Loan Collateral

NLB Group accepts the following types of personal loan collateral:

- Joint and several guarantees from family members, employees, or pensioners who are adequate guarantors. They must not be in the process of personal bankruptcy. They are responsible for fulfilling the debtor’s obligations for loans with a repayment schedule.

Loan Collateral Policy in NLB d.d. and NLB Group

Investments, legal entities, individuals, or private individuals are adequate guarantors; - Bank guarantees; - Government guarantees (e.g., of the Republic of Slovenia); - Guarantees by the acceptance of guarantees (e.g. the Slovenian Enterprise Fund); - Other types of personal loan collateral. Loans are very often secured by a combination of collateral types. The general rec...

The decision on the type of collateral and the coverage of loan by collateral depends on the client’s creditworthiness (credit rating), loan maturity, and varies depending on the area of real-estate loan collateral, an ‘online’ connection with the Surveying and Mapping Authority in the Republic of Slovenia, which allows direct and immediate verification of the...

Long-term loans, in particular mortgages where possible. As a result, the mortgaging of real estate is the most frequent form of loan collateral of corporate and retail clients. In corporate loans, it is guarantees, while in retail loans, it is guarantors.

i) Risks, deriving from valuation of received collateral

Client/counterparty credit risk is the key decision parameter when approving exposures. Approvals of exposures should not primarily be based on the provided collateral. However, collateral is an important comfort element in the approval process and, depending on the creditworthiness, the value of collateral and the loan amount, depending on the type of collateral, loan maturity, and the client rating. The ratios are based on experience and regulatory guidelines.

NLB Group pays particular attention to closely monitoring the fair value of collateral, and to receiving regular and independent revaluations by applying the International Valuation Standards. Collateral from which payment can be realistically expected if it is liquidated, is considered. NLB Group has the largest concentration of collaterals arising from mortgages on real estate.

Of real-estate market prices, the Group closely monitors the real-estate collateral values and, where required, establishes higher amounts of impairments and provisions for non-performing loans which are expected to be achieved in a sale (expected payment from collateral). Priority is given to property where the pledge right of the Group is entered in the first place and the real market, and it must be redeemable within a reasonable time.

Collateral consisting of securities entails market risk, specifically the risk of changes in the prices of securities on capital markets. As collateral falling below approved limits, the Rules determine minimum pledge ratios for securing loans based on pledged securities and equity shares in NLB. Deviations from the Rules...

The ratio between the loan amount and the securities’ value is determined regarding the rating of the issuer, the securities’ liquidity, maturity, and correlation with changes in market indexes and the ability to sell the securities at the market price. Collateral consisting of the sureties of corporate clients, sureties of private individuals, and bank guarantees entail the credit risk of the exposure of the guarantor, and guarantees are only taken into account as collateral if the guarantor has sufficient overall creditworthiness.

NLB Group Annual Report 2024

Credit quality analysis for financial assets and contingent liabilities

in EUR thousands		NLB Group	NLB	31 Dec 2024	12-month expected ECL	Lifetime expected ECL	Lifetime not ECL	Purchased credit-impaired
Debt securities at amortised cost	2,714,402	-	-	2,714,402	2,419,414	-	-	-	2,419,414
				Loans and advances to banks at amortised cost	161,030	-	-	161,030	193,342	-	-	-	193,342
Loans and advances to individuals at amortised cost			7,213,612	113,659	-	567	7,327,838	2,762,800	37,680	-	2,801,033
Loans and advances to other customers at amortised cost	1,577,298	2,304	-	122	1,579,724	2,162,169	555	-	2,162,724
				Other financial assets at amortised cost	124,420	127	-	-	124,547	76,951	1	-	76,952
Debt instruments at fair value through other comprehensive income	1,795,347	-	-	-	1,795,347	1,489,490	-	-	1,489,490
		Contingent liabilities	1,920,809	4,505	-	3	1,925,317	1,518,483	2,518	-	1,521,004

---

7

in EUR thousands	NLB Group	NLB Purchased	12-month ECL	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired	Total credit-impaired financial assets
Debt securities at amortised cost	A	1,779,525	-	-	1,779,525	1,590,676
	B	735,905	-	-	735,905	373,190
	C	-	12,321	-	12,321	-
Loss allowance		(4,946)	(576)	-	(5,522)	(2,624)
Carrying amount		2,510,484	11,745	-	2,522,229	1,961,242
Loans and advances to banks at amortised cost	A	166,615	-	-	166,615	145,666
	B	381,211	-	-	381,211	3,482
	D and E	-	113	-	113	-
Loss allowance		(213)	-	(86)	(299)	(164)
Carrying amount		547,613	-	27	547,640	148,984
Loans and advances to individuals at amortised cost	A	6,787,523	111,211	-	632	6,899,366
	B	64,863	55,590	-	10	120,463
	C	2,339	81,623	-	514	84,476
	D and E	-	-	126,743	4,266	131,009
Loss allowance		(39,668)	(25,051)	(82,756)	(1,024)	(148,499)
Carrying amount		6,815,057	223,373	43,987	4,398	7,086,815
Loans and advances to other customers at amortised cost	A	1,344,256	3,758	-	-	1,348,014
	B	4,724,560	158,829	-	12	4,883,401
	C	138,837	288,567	-	-	427,404
	D and E	-	-	152,759	16,336	169,095
Loss allowance		(51,087)	(19,778)	(103,278)	(5,985)	(180,128)
Carrying amount		6,156,566	431,376	49,481	10,363	6,647,786
Other financial assets at amortised cost	A	125,514	77	-	125,591	83,727
	B	39,042	156	-	-	39,198
	C	819	556	-	-	1,375
	D and E	-	-	9,346	1,257	10,603
Loss allowance		(624)	(40)	(8,910)	(1,231)	(10,805)
Carrying amount		164,751	749	436	261	165,962
Debt instruments at fair value through other comprehensive income	A	1,221,592	-	-	1,221,592	854,472
	B	1,031,205	-	-	1,031,205	154,461
	C	-	144	-	144	-
	D and E	-	-	798	-	798
Loss allowance		(6,475)	(56)	(798)	-	(7,329)

---

Liabilities

A	1,691,834	26,522	-37	1,718,393	1,358,079	25,286	-10	1,383,375
B	2,286,997	33,489	-	112,320,497	1,383,937	25,497	-1	1,409,435
C	53,728	46,605	-170	100,503	41,961	15,836	-	5657,853
D and E	-	17,221	3,478	20,699	-	10,613	3,298	13,911
Loss allowance	(18,429)	(1,655)	(9,369)	(3,095)	(32,548)	(7,653)	(319)	(7,034)	(2,935)	(17,941)
Carrying amount	4,014,130	104,961	7,852	6014,127,544	2,776,324	66,300	3,579430	2,846,633

NLB Group Annual Report 2024 Overview

The Group’s client credit rating classification is based on an internally developed methodologies, drawing from internal statistical analyses, good banking practices, as well as Bank of Slov methodologies are used across the entire NLB Group. They include a uniform credit grade scale of 12 rating classes, out of which nine represent performing clients and three non-performing clients.

Rating Group A is considered as investment grade classification. Rating Group B is a notch higher than at ‘A’ rating group clients. These clients show stable performance, acceptable financial ratios, and qualitative elements, and have sufficient cash flow to settle their obligations.

Rating Group B classification is an investment grade for BBB, and an ‘invest with care’ for BB and B rating classes. Rating Group C (CCC to C rating classes) includes clients who are supported by the Bank only in the case when such support brings more positive effects for the Bank; however, Rating Group C is overall considered as a substantial risk.

The Bank reasonably restricts support for D and DF rating classes and E represent non-performing clients that are treated as defaulted. D, DF, and E rating classified clients are ordinarily transferred to the specialised units for minimising losses and restoring the client to a performing status or workout and legal support with the goal of minimising losses due to default.

Rating class

Rating class	Average PD in %
AAA	0.05
AA	0.15

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

A	0.30
BBB	0.60
BB	1.20
B	2.40
CCC	4.80
CC	9.60
C	19.20
D	100
DF	100
E	100

NLB Group applies the default definition based on the EBA guidelines, where the materiality threshold for delays is determined in absolute and relative terms (EUR 100 for retail and E level). In 2023, a scoring model for private individual clients came into effect in NLB d.d., while the models in banking subsidiaries were deployed in 2024, which will enable higher de (instead of the previous three). A general corporate rating methodology, with the prescribed set of parameters (qualitative and quantitative) applies to all the NLB Group entities. Groups exposure exceeds EUR 7 million for NLB Group members with total assets lower than EUR 1.5 billion, EUR 15 million for NLB Group members with total assets between EUR 1.5 billion and above EUR 4.0 billion. Materially important clients are ordinary under authority of the NLB Credit Committee. NLB regularly reviews the business practices and credit portfolios of N management standards of NLB Group. This ensures appropriate standard processes for managing and reporting credit risks at the consolidated level.

Collateral Impairment, Provisions and Value Adjustments

All Forborne Exposures

31 Dec 2024

in EUR thousands	NLB Group	Gross	Performing	Non-performing	Received on carrying amount	Impaired	Defaulted	Exposures	Loans and advances (including at amortised cost and fair value)
		220,566	104,419	116,147	116,147	(10,089)	(79,861)	98,496
Governments	544	247	297	297	(7)	(297)	-
Other financial organisations	457	-	457	457	-	(457)	-
Non-financial organisations	128,446	54,637	73,809	73,809	(2,062)	(52,107)	67,158
Households	91,119	49,535	41,584	41,584	(8,020)	(27,000)	31,338
Loan commitments given	1,018	866	152	152	(2)	(47)
Total exposures with forbearance measures	221,584	105,285	116,299	116,299	(10,091)	(79,908)	99,402

31 Dec 2023

in EUR thousands	NLB Group	Gross	Performing	Non-performing	Received on carrying amount	Impaired	Defaulted	Exposures	Loans and advances (including at amortised cost and fair value)
		246,402	116,477	129,874	129,925	(7,883)	(81,121)	92,352
Governments	624	419	205	205	(22)	(205)	-
Other financial organisations	1,388	-	1,388	1,388	-	(1,388)	-
Non-financial organisations	168,726	77,709	90,966	91,017	(3,857)	(59,606)	58,611
Households	75,664	38,349	37,315	37,315	(4,004)	(19,922)	33,741
Loan commitments given	434	84	350	350	(1)	(27)	352
Total exposures with forbearance measures	246,836	116,561	130,224	130,275	(7,884)	(81,148)	92,704

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLBCollateral Impairment, provisions and value and financial adjustments guarantees		Gross	Performing	Non-performing	forborne	forborne	forborne	received on 31 Dec 2024
Loans and advances (including at amortised cost and fair value)			129,624	67,114	62,510	62,510	(7,997)	(46,847)	51,358
		Governments	125	-	125	125	-	(125)	-
			Other financial organisations	457	-	457	457	-	(457)	-
Non-financial organisations	51,956	25,233	26,723	26,723	(502)	(22,733)	26,650
	Households	77,086	41,881	35,205	35,205	(7,495)	(23,532)	24,708
			Loan commitments given	313	169	144	144	(2)	(42)	209
Total exposures with forbearance measures	129,937	67,283	62,654	62,654	(7,999)	(46,889)	51,567

in EUR thousands	NLB Collateral Impairment, provisions and value and financial adjustments guarantees	31 Dec 2023	Gross	All forborne exposures	Performing	Non-performing	forborne	forborne	forborne	received on
Loans and advances (including at amortised cost and fair value)		110,905	42,584	68,270	68,321	(3,718)	(41,050)	53,937
			Other financial organisations	1,388	-	1,388	1,388	-	(1,388)	-
Non-financial organisations		50,979	15,166	35,762	35,813	(70)	(23,142)	27,232
			Households	58,538	27,418	31,120	31,120	(3,648)	(16,520)	26,705
				Loan commitments given	434	84	350	350	(1)	(27)	352
	Total exposures with forbearance measures	111,339	42,668	68,620	68,671	(3,719)	(41,077)	54,289

---

NLB Group

Financial Overview

in EUR thousands	NLB Group	31 Dec 2024	Up to 3 months	3 to 6 months	6 to 12 months	Over 12 months
Performing exposures	28,990	5,151	16,141	44,048
Non-performing exposures	3,210	499
Total exposures with forbearance measures	32,200	7,042	19,656	71,717

31 Dec 2023

in EUR thousands	NLB	31 Dec 2023	Up to 3 months	3 to 6 months	6 to 12 months	Over 12 months
Performing exposures	7,519	1,813	8,140	91,122
				Non-performing exposures	1,569
Forborne exposures of loans and advances by periods of forbearance	6,838	5,071	35,275	126,397

NLB

31 Dec 2024

in EUR thousands	NLB	31 Dec 2024	Up to 3 months	3 to 6 months	6 to 12 months	Over 12 months
Performing exposures	14,634	4,078	14,046	26,359
Non-performing exposures	2,038	1,522	2,155	9,948
Total exposures with forbearance measures	16,672	5,600	16,201	36,307

31 Dec 2023

in EUR thousands	NLB	31 Dec 2023	Up to 3 months	3 to 6 months	6 to 12 months	Over 12 months
Performing exposures	7,059	1,690	2,880	27,237
	Non-performing exposures	1,312	6,634	2,455	16,819
		Total exposures with forbearance measures	8,371	8,324	5,335	44,056

Forbearance Measurements

The main forbearance measurements used by NLB Group and NLB are: deferral of payment, reduction of interest rates, acquisition of collateral for partial repayment of claims, and others, either as a single forbearance measurement or as a combination of those.

Repossessed Assets

in EUR thousands	NLB Group	NLB	Net value	31 Dec 2024	31 Dec 2023
Nature of assets	Investment property (note 5.9.)	17,844	21,253	619	2,263
Property and equipment (note 5.8.)	1,644	11,641
Investments in subsidiaries and associates	-	-	530	530
Real estates (note 5.13.)	18,976	27,122	1,468	3,129
Other assets (note 5.13.)	1,622	515
Non-current assets held for sale (note 5.7.)	7,191	474
Total	47,277	61,005	2,617	5,922

---

Analysis of loans and advances by industry sectors

		Industry sector	NLB Group	NLB
			Gross loans	Impairment provisions	Net loans (%)	Gross loans	Impairment provisions	Net loans (%)
Banks	459,161	(500)	458,921 (2.71)	193,478	(306)	193,172 (2.16)
		Finance	228,729	(1,759)	226,970 (1.34)	1,397,781	(4,142)	1,393,639 (15.60)
				Electricity, gas, and water	682,054	(6,781)	675,273 (3.98)	466,900	(2,863)	464,037 (5.20)
Construction industry	731,917	(18,724)	713,193 (4.21)	191,539	(8,229)	183,310 (2.05)
				Heavy industry	1,719,369	(44,177)	1,675,192 (9.88)	936,494	(23,615)	912,879 (10.22)
Education	22,247	(564)	21,683 (0.13)	8,671	(423)	8,248 (0.09)
			Agriculture, forestry, and fishing	132,097	(3,973)	128,124 (0.76)	18,775	(111)	18,664 (0.21)
				Public sector	429,321	(3,558)	425,763 (2.51)	125,747	(485)	125,262 (1.40)
		Individuals	8,734,987	(177,282)	8,557,705 (50.46)	3,965,189	(82,979)	3,882,210 (43.46)
				Mining	42,036	(842)	41,194 (0.24)	18,475	(16)	18,459 (0.21)
Entrepreneurs	485,774	(7,785)	477,989 (2.82)	89,796	(2,848)	86,948 (0.97)
			Services	1,180,787	(34,029)	1,146,758 (6.76)	700,644	(17,287)	683,357 (7.65)
				Transport and communications	826,287	(21,530)	804,757 (4.75)	489,078	(3,608)	485,470 (5.44)
			Trade industry	1,462,654	(36,306)	1,426,348 (8.41)	379,557	(10,957)	368,600 (4.13)
				Health care and social security	43,151	(451)	42,700 (0.25)	26,379	(150)	26,229 (0.29)
		Other financial assets	145,847	(8,993)	136,854 (0.81)	82,731	(1,213)	81,518 (0.91)
				Total	17,326,418	(366,994)	16,959,424 (100.00)	9,091,234	(159,232)	8,932,002 (100.00)

---

NLB Group

Analysis of net loans and advances by geographical sectors

in EUR thousands	NLB Group	NLB Country	31 Dec 2024	31 Dec 2023
Slovenia	7,969,478	8,006,737	6,705,660	6,701,924
Other European Union members	720,158	414,732	501
Serbia	3,755,300	225,207	3,306,766	193,376
Other countries	4,514,488	324,392	4,021,045	288,819
Total	16,959,424	8,932,002	14,448,203	7,406,675

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Financial Assets

Analysis of Debt Securities and Derivative Financial Instruments by Geographical Sectors

Country	Financial Assets	Non-trading Financial Assets	Financial Measured at Amortised Cost	Financial Measured at Fair Value through OCI	Derivative Financial Assets
Slovenia	525,678	-	402,577	107	390
Other members of European Union	2,342,901	2,036	1,267,941	893	85,264
Austria	168,320	-	103,179	-	-
Belgium	328,701	-	308,327	-	13,311
Bulgaria	46,205	-	-	46,205	-
Cyprus	23,191	-	1,529	-	-
Denmark	36,232	-	4,369	-	-
Estonia	13,834	-	-	13,834	-
Finland	115,999	-	99,633	-	86,118
France	360,058	-	213,353	-	18,437
Germany	204,034	2,036	166,371	893	34,374
Hungary	49,125	-	5,769	-	-
Ireland	73,921	-	18,630	-	17,387
Italy	70,985	-	9,231	-	-
Latvia	30,324	-	-	30,324	-
Lithuania	27,701	-	-	27,701	-
Luxembourg	153,457	-	124,075	-	-
Malta	41,281	-	-	41,281	-
Netherlands	168,307	-	79,593	-	1,755
Poland	58,091	-	4,073	-	-
Portugal	47,147	-	16,470	-	-
Romania	60,950	-	5,066	-	-
Slovakia	91,839	-	4,950	-	-
Spain	120,383	-	65,491	-	-
Sweden	50,784	-	37,832	-	-
Other	2,032	-	-	2,032	-
United States of America	84,268	7,388	77,416	-	28,204
Other countries	772,348	-	718,989	-	1,031
Bosnia and Herzegovina	90,442	-	108,057	-	4,074
Kosovo	-	-	30,355	-	23
Montenegro	25,942	-	19,203	-	6,787
North Macedonia	206,379	-	116,933	-	9
Serbia	299,661	-	347,105	-	989
Albania	-	-	28,339	-	-
Canada	55,418	-	7,557	-	-
Great Britain	21,239	-	35,875	-	10
Iceland	10,669	-	8,497	-	-
Israel	7,839	-	9,392	-	-
Kazakhstan	-	-	7,676	-	-
Mexico	10,505	-	-	10,505	-
Norway	21,264	-	-	21,264	-
Other	22,990	-	-	22,990	-
Total	3,725,195	9,424	2,466,923	1,000	86,685

Other members of the European Union included in the line item ‘Other’ is Greece. Other members of the ‘Other countries’ in the line item ‘Other’ are Chile, South Korea, Egypt, Brazil, and Oman.

in EUR thousands 31 Dec 2023

NLB Group

Country	Financial assets measured at fair value through profit or loss	Financial assets measured at fair value through OCI	Financial assets measured at amortised cost	Financial assets measured at fair value through OCI	Financial assets measured at amortised cost
	Slovenia	428,163	274,855	-	1,092	416,679	219,307
				Other members of European Union	1,567,873	805,334	5,217	35,121	1,440,075	551,192
A Austria					113,531	77,472	707	-	105,552	46,541
B Belgium		173,326	84,471	706	7,819	156,407	34,407
C Bulgaria				34,226	1,002	-	-	34,226	1,002
D Czech Republic					12,975	-	-	12,975	-	-
E Cyprus					18,172	1,550	-	-	18,172	1,550
F Denmark	16,662	8,187	-	-	16,662	8,187
G Estonia				5,640	-	-	5,640	-	-
H Finland				67,257	90,419	707	-	59,293	57,919
I France					239,395	136,115	-	9,227	211,895	92,483
J Germany	167,538	107,278	505	12,301	136,969	54,500
K Hungary				45,211	5,639	-	-	45,211	5,639
L Ireland					58,793	31,191	-	2,677	52,634	29,141
M Italy					51,566	5,989	100	-	51,566	5,989
N Latvia	23,276	-	-	23,276	-	-
O Lithuania			20,596	-	-	20,596	-	-
P Luxembourg				69,567	7,337	-	-	69,567	7,337
Q Malta					27,442	-	-	27,442	-	-
R Netherlands					117,309	112,840	2,492	3,097	91,519	70,653
S Poland		35,024	7,126	-	-	35,024	7,126
T Portugal				42,677	16,574	-	-	42,677	16,574
U Romania					53,190	5,013	-	-	53,190	5,013
V Slovakia					63,406	18,900	-	-	58,488	18,900
W Spain	67,471	40,190	-	-	67,471	40,190
X Sweden			41,597	48,041	-	-	41,597	48,041
Y Other					2,026	-	-	2,026	-	-
Z United States of America					37,158	58,889	-	-	6,831	7,427
AA Other countries	489,035	1,025,385	-	27,119	102,584	184,158
AB Bosnia and Herzegovina				59,073	132,027	-	-	4,064	2,917
AC Kosovo		-			48,614	-	20	-	20
AD Montenegro					60,109	22,665	-	-	6,760	3,008
AE North Macedonia		154,398	115,535	-	29	13,129	46,539
AF Serbia				140,796	579,332	-	821	3,972	4,482
AG Albania	-				27,819	-	-	27,819	-
AH Canada					26,681	12,133	-	-	26,681	12,133
AI Great Britain	1,638	51,436	-	26,249	1,638	51,436
AJ Iceland				7,737	8,205	-	-	7,737	8,205
AK Israel					7,408	9,062	-	-	7,408	9,062
AL Kazakhstan	-				7,507	-	-	7,507	-
AM Norway	19,303	6,465	-	-	19,303	6,465
AN Other		11,892	4,585	-	-	11,892	4,585
				Total	2,522,229	2,164,463	5,217	63,332	1,966,169	962,084

Other members of the European Union included in the line item ‘Other’ is Greece.

Other members of the ‘Other countries’ in the line item ‘Other’ are Egypt, Uzbekistan, South Korea, and Oman.

NLB Group

	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
A	94.34	92.94	94.72	93.80
B	5.58	6.91	5.20	6.06
C	0.04	0.08	0.04	0.07
D and E	0.04	0.08	0.04	0.07
Total	100.00	100.00	100.00	100.00

All derivatives in the banking book are entered into with counterparties with an external investment-grade rating. When derivatives are entered into on behalf of NLB Group’s customers, such customers usually do not have an external rating, but all such transactions are covered through back-to-back transactions involving third parties with an external investment-grade rating.

Debt financial instruments in NLB Group’s and NLB’s portfolio that represent subordinated liabilities for the issuer in EUR thousands

	31 Dec 2024			Total	31 Dec 2024		Total
NLB Group	AB	C	D	Total	AB	C	D	Total
			Financial assets measured at fair value through other comprehensive income	25,162	2,491	-	27,653	25,162	2,491	-	27,653
	Financial assets measured at amortised cost - debt securities	34,494	5,927	-	40,421	34,494	5,927	-	40,421
				- loans and advances to banks	-	-	-	-	114,702	-	-	114,702
- loans and advances to customers	-	-	-	-	7,124	-	-	7,124
	Total	59,656	8,418	-	68,074	174,358	8,418	7,124	189,900

in EUR thousands 31 Dec 2023

	NLB Group	NLB	Internal rating	AB	C	D	Total
Financial assets measured at fair value through other comprehensive income	28,421	-	-	28,421	28,421	-	-	28,421
		Financial assets measured at amortised cost - debt securities	9,484	-	-	9,484	9,484	-	-	9,484
- loans and advances to banks	-	-	-	90,153	-	-	90,153
	- loans and advances to customers	-	-	-	-	7,050	-	7,050
		Total	37,905	-	-	37,905	128,058	-	7,050	135,108

---

NLB Group

Financial assets as of 31 Dec 2024

Measurement Category	Cash and obligatory reserves with central banks, and other	Demand deposits at banks	Securities	Loans and receivables	Total
Assets mandatorily measured at FV	505	-	4,039,581	-	4,040,086
Financial assets held for trading	-	-	9,424	-	9,424
Financial assets measured at FV through P\&L	-	17,429	2,563,516	-	2,581,945
Financial assets measured at FV through OCI	-	-	3,725,195	-	3,725,195
Financial assets measured at amortised cost	-	-	-	15,603,331	15,603,331
Total	18,338	17,429	2,563,516	23,504,961	27,401,254

Financial assets as of 31 Dec 2023

Measurement Category	Cash and obligatory reserves with central banks, and other	Demand deposits at banks	Securities	Loans and receivables	Total
Assets mandatorily measured at FV	-	-	6,103,561	-	6,103,561
Financial assets held for trading	-	-	14,175	-	14,175
Financial assets measured at FV through P\&L	-	2,251,556	2,522,229	-	4,773,785
Financial assets measured at FV through OCI	-	-	-	13,945,973	13,945,973
Financial assets measured at amortised cost	-	-	-	14,282,241	14,282,241
Total	15,718	14,175	2,251,556	22,737,725	25,403,056

---

Financial Assets

in EUR thousands NLB 31 Dec 2024

		Financial assets	Non-trading financial assets	Financial assets held for trading	Financial assets mandatorily measured at FV	at amortised cost	Derivatives for hedge accounting	Total
Cash and obligatory reserves with central banks, and other demand deposits at banks	-	-	1,973,113	-	1,973,113
Securities	9,424	15,171	1,665,019	2,846,779	-	4,536,393
		Bonds	9,424	-	1,601,875	2,846,779	-	4,458,078
Shares	-	8,650	63,144	-	71,794
Investment funds	-	6,521	-	-	6,521
Derivatives	11,649	-	-	-	77,771
Loans and receivables	-3,964	-	8,846,520	-	8,850,484
Loans to governments	-	-	209,228	-	209,228
Loans to banks	-	-	193,172	-	193,172
Loans to financial organisations	-	-	1,326,073	-	1,326,073
Loans to individuals	-	-	3,882,210	-	3,882,210
Loans to other customers	-	3,964	3,235,837	-	3,239,801
Other financial assets	-	-	81,518	-	81,518
Total financial assets	21,073	19,135	1,665,019	13,747,930	77,771	15,530,928

in EUR thousands NLB 31 Dec 2023

	Financial assets	Non-trading financial assets	Financial assets held for trading	Financial assets mandatorily measured at FV	at amortised cost	Derivatives for hedge accounting	Total
Cash and obligatory reserves with central banks, and other demand deposits at banks	-	-	4,318,032	-	4,318,032
	Securities	-8,858	1,023,012	1,966,169	-	2,998,039
		Bonds	-	962,084	1,966,169	-	2,928,253
		Shares	-	6,300	60,928	-	67,228
Investment funds	-2,558	-	-	-	2,558
	Derivatives	17,957	-	-	47,614	65,571
	Loans and receivables	-	7,785	7,297,294	-	7,305,079
		Loans to governments	-	-	118,220	-	118,220
Loans to banks	-	-	149,011	-	149,011
	Loans to financial organisations	-	-	384,995	-	384,995
		Loans to individuals	-	-	3,543,603	-	3,543,603
		Loans to other customers	7,785	-	3,101,465	-	3,109,250
	Other financial assets	-	-	101,596	-	101,596
	Total financial assets	17,957	16,643	1,023,012	13,683,091	47,614	14,788,317

As at 31 December 2024 and 31 December 2023, all of NLB Group’s financial liabilities, except for derivatives designated as hedging instruments, trading liabilities, and financial liabilities measured at fair value through profit or loss, were carried at amortised cost.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Market risk

NLB Group defines market risk as the risk of potential financial losses due to changes in rates and/or market prices (exchange rates, credit spreads, and equity prices), or in loss directly, for example in the case of trading book positions. However, for the banking book positions they are reflected in the revaluation reserve. The exposure to market risk is to a financial results and value.

The Global Risk Department of NLB is independent from the trading activities and reports to the Bank’s Assets and Liabilities Committee (ALCO). Global trading books. Exposures and limits are monitored daily and reported to the ALCO committee on a regular basis. The Bank uses a wide selection of quantitative and qualitative tools for analysis, stress-testing, backtesting, scenarios, other market risk mitigants (concentration of exposures, gap limits, stop-loss limits, etc.), net interest income sensitivity, economic value of equity could occur in severe market conditions.

In the area of currency risk, NLB Group pursues the goal of low to medium exposure. NLB monitors the open position of NLB Group on an ongoing basis to mitigate negative effects on the net interest income and economic value of equity arising from changed market interest rates. The conclusion of transactions involving derivatives at NLB is limited in accordance with the provisions of the Strategy on trading with financial instruments in NLB Group; the trading activities in other NLB Group members are very restricted.

For monitoring exposure limits for each type of risk, they are set for individual NLB Group entities. The methodologies are in line with regulatory requirements on individual and consolidated levels, while the approach is pursuant to the relevant policies. NLB Group entities must monitor and manage exposure to market risks and report to NLB accordingly. The exposure of an individual NLB Group entity is reported to the NLB Group ALCO.

2.1 Currency risk (FX)

Foreign currency risk (FX) is a risk of the potential losses from the open FX positions due to the changes of the foreign exchange rates on the financial position and cash flows of the Bank. The Bank measures and manages the FX risk by using a combination of sensitivity analysis, VaR, scenarios, and stress-testing.

Limits that are approved by the Management Board of the Bank and in accordance with the adopted policy of managing market risk in the trading book of NLB. The trading FX risk is managed in the banking book according to the policy of managing FX risk in NLB. The policy is primarily composed to protect Common Equity Tier 1 against the negative effects of the volatility of the banking book resulting from core banking business activities. Each member is responsible for its own currency risk policy, which also includes a limit system and is in line with the parent.

Financial Instruments Analysis

NLB monitors and manages NLB Group currency risk exposure on a monthly basis for each member and on the NLB Group. The guidelines’ goal is to address risks stemming from the potential excessive growth of FX lending, to identify hidden risks, and tail-event risks related to FX lending, to capital with respect to FX lending. The positions of all currencies in the statement of financial position of NLB, for which a daily limit is set, are monitored daily. FX positions are managed on a consolidation level, assets, and liabilities held in foreign operations are translated into euro at the closing FX rate on the reporting date. Foreign exchange differences affect shareholder’s equity and CET1 capital. NLB Group ALM employs strategies to manage this foreign currency exposure, including matched funding of assets and liabilities. Exposure is reported to the ALCO committee of the NLB Group, and quarterly on the consolidated level.

Analysis of Financial Instruments by Currency Exposure

in EUR thousands	NLB Group	31 Dec 2024	EUR	RSD	USD	CHF	Other	Total
				Financial assets	Cash, cash balances at central banks, and other demand deposits at banks	2,862,691	577,522	508			4,039,581
			Financial assets held for trading	10,950	-7,388	-	-	-	18,338
					Non-trading financial assets mandatorily at fair value through profit or loss	7,931	-8,650	-848			17,429
			Financial assets measured at fair value through other comprehensive income	2,133,137	241,315	119,170	-69,894		2,563,516
	Financial assets measured at amortised cost - debt securities	3,037,241	265,376	137,879	5,383	279,316	3,725,195
				- loans and advances to banks	166,871	229,524	36,524	17,313	8,689	458,921
	- loans and advances to customers	13,152,456	1,401,937	37,987	73,186	1,698,083	16,363,649
			- other financial assets	86,171	16,195	24,494	45	9,949	136,854
					Derivatives - hedge accounting	77,771	-	-	-	77,771
	Fair value changes of the hedged items in portfolio hedge of interest rate risk			(6,353)	-	-	-	(6,353)
				Total financial assets		21,528,866	2,731,869	402,286	132,533	2,599,347	27,394,901
			Financial liabilities	Financial liabilities held for trading	6,992	3	-	-	-	6,995
				Financial liabilities measured at fair value through profit or loss	6,670	1,129	-	1,834		9,633
					Derivatives - hedge accounting	3,592	-	-	-	3,592
	Financial liabilities measured at amortised cost - deposits from banks and central banks			97,980	1,150	15,351	10,480	11,039	136,000
					- borrowings from banks and central banks	106,632	-	13,980	-	-	120,612
	- due to customers	17,720,288	1,816,332	360,291	203,175	2,106,224	22,206,310
				- borrowings from other customers	104,519	-	-	-	104,519
					- debt securities issued	1,608,939	-	-	-	1,608,939
	- other financial liabilities	199,241	42,028	27,155	3,364	24,937	296,725
				Total financial liabilities		19,854,853	1,860,642	416,777	217,019	2,144,034	24,493,325
Net on-balance sheet financial position		1,674,013	871,227	(14,491)	(84,486)	455,313	2,901,576
				Derivative financial instruments		(188,260)	12,828	17,817	93,905	41,523	(22,187)
					Net financial position		1,485,753	884,055	3,326	9,419	496,836	2,879,389
		31 Dec 2023	Total financial assets	20,405,012	2,338,709	362,174	114,750	2,172,204	25,392,849
					Total financial liabilities	18,858,907	1,474,262	414,604	220,268	1,816,691	22,784,732
		Net on-balance sheet financial position		1,546,105	864,447	(52,430)	(105,518)	355,513	2,608,117
					Derivative financial instruments	(233,578)	(25,498)	55,204	123,650	59,879	(20,343)
	Net financial position		1,312,527	838,949	2,774	18,132	415,392	2,587,774

‘Other’ mostly relates to exposures in currency MKD and BAM.

NLB Group Annual Report 2024

Overview

Financial Assets and Liabilities

in EUR thousands	NLB	31 Dec 2024	EUR	RSD	USD	CHF	Other	Total
		Financial assets	Cash, cash balances at central banks, and other demand deposits at banks	1,945,093	342	4,403	6,603	509	1,973,113
	Financial assets held for trading	13,685	-	7,388	-	-	21,073
			Non-trading financial assets mandatorily at fair value through profit or loss	10,485	-	8,650	-	-	19,135
	Financial assets measured at fair value through other comprehensive income	1,640,292	-	23,386	-	1,341	1,665,019
			Financial assets measured at amortised cost - debt securities	2,741,307	-	81,816	5,383	18,273	2,846,779
	- loans and advances to banks	193,172	-	-	-	193,172	-
		- loans and advances to customers	8,547,034	-	30,565	75,749	-	8,653,348
			- other financial assets	57,071	3	24,412	1	31	81,518
	Derivatives - hedge accounting	77,771	-	-	-	77,771
			Fair value changes of the hedged items in portfolio hedge of interest rate risk	(8,761)	-	-	-	(8,761)
Total financial assets		15,217,149	345	180,620	87,736	36,317	15,522,167

Financial liabilities		NLB	31 Dec 2024	EUR	RSD	USD	CHF	Other	Total
		Financial liabilities held for trading		9,977	-	-	-	9,977
		Financial liabilities measured at fair value through profit or loss		5,597	-	-	-	5,597
	Derivatives - hedge accounting		1,261	-	-	-	1,261
		Financial liabilities measured at amortised cost - deposits from banks and central banks		170,798	52	13,985	18,834	16,451	220,120
- borrowings from banks and central banks		37,126	-	13,980	-	51,106
		- due to customers		12,037,455	111	31,979	75,831	48,432	12,293,708
		- debt securities issued		1,608,939	-	-	-	1,608,939
- other financial liabilities		121,744	3	23,367	175	513	145,802
		Total financial liabilities		13,992,897	66	183,311	94,840	65,396	14,336,510

Net Financial Position

	NLB	31 Dec 2024	EUR	RSD	USD	CHF	Other	Total
Net on-balance sheet financial position	1,224,252			279	(2,691)	(7,104)	(29,079)	1,185,657
			Derivative financial instruments	(64,061)	-	3,208	6,677	32,605	(21,571)
				Net financial position	1,160,191	279	517	(427)	3,526	1,164,086

31 Dec 2023

Total financial assets	NLB	31 Dec 2023	EUR	RSD	USD	CHF	Other	Total
Total financial assets	14,542,589	547	137,918	57,960	36,789	14,775,803
			Total financial liabilities	13,310,922	103	192,177	96,385	70,170	13,669,757
Net on-balance sheet financial position	1,231,667	444	(54,259)	(38,425)	(33,381)	1,106,046
		Derivative financial instruments	(157,517)	5	55,204	39,957	40,143	(22,208)
			Net financial position	1,074,150	449	945	1,532	6,762	1,083,838

‘Other’ mostly relates to exposures in currency GBP, CAD, and JPY.

FX sensitivity analysis

	NLB Group		NLB
	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
USD	+/-6.49	+/-13.32	+/-6.49	0
CHF	+/-8.93	+/-9.67	+/-8.93	0
CZK	+/-6.14	+/-7.10	+/-6.14	0
RSD	+/-0.43	+/-0.55	+/-0.43	0
MKD	+/-2.50	+/-1.82	+/-2.50	0
JPY	+/-23.19		+/-23.19
AUD	+/-19.69	+/-10.02	+/-19.69	+/-10.02
HUF	+/-9.20	+/-7.48	+/-9.20	+/-7.48
BAM	+/-20.39	+/-6.49	+/-20.39	+/-6.49

Effects on income statement

	Effects on income statement	Effects on other comprehensive income
Appreciation of USD	(22) - (15) 53 (342) -(294) 248	0
CHF	(746) 1,127 (14) -(730) 1,330 53 -	0
CZK	40 -40 - - -- -	0
RSD	683,845 1 - (125)	0
MKD	5 8,051 5 -4 5,234 4 -	0
Other	99 176 91 -100 93 102-	0

Effects on comprehensive income

	Effects on comprehensive income
Depreciation of USD	20- 13 (47) 262 - 225(190)
CHF	624 (942) 12 -601 (1,096) (44) -
CZK	(35) - (36) - -- -
RSD	(68) (3,813)(1) -124 (4,724) (2) -
MKD	(5) (7,659) (5) - (4) (5,047) (4) -
Other	(83) (176) (76) - (70) (93) (71) -

The effect on the other comprehensive income statement of NLB Group has increased due to the higher translation positions in MKD currency, and because of the higher volatility growths’ scenario for MKD currency.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

2. Managing market risks in the trading book

Market risk exposure in the trading book arises mostly as a result of the changes in interest rates, credit spreads, FX rates, and equity prices. Limits are monitored daily by the Global Risk Department. NLB uses an internal VaR model based on the variance-covariance method for other market risks. The daily calculation of the VaR is based on 250 business days, a 10-day holding position period.

6.2.3. Interest rate risk

Interest rate risk is the risk to NLB Group’s capital and profit or loss arising from changes in market interest rates on- and off-balance sheet assets and liabilities which are divided into the trading and banking book according to regulatory standards. It takes into account the positions in each currency appetite and risk strategy, based on general Basel standards on interest rate management in the banking book (IRRBB; hereinafter: ‘Standards’) and European Banking Authority guidelines.

The interest rate risk in the banking book is measured and monitored with methodologies, models, and limit systems. NLB Group manages interest rate risk exposure through application of two main measures:

• Economic value sensitivity – using BPV method, which estimates how the banking book would change if interest rates change according to the scenario;
• Sensitivity of net interest income – which measures the impact of the interest rate change on future net interest income structure.

NLB Group regularly measures interest rate risk exposure in the banking book under various standardized and additional scenarios of changes in the level and shape of interest rates and modelling assumptions. Part of non-maturing deposits, which is considered as a core part, is allocated long-term by using a replicating portfolio approach. Optionality risk is mainly embedded options such as caps and floors. Moreover, considering expected cash flows, non-performing exposures, as well as off-balance sheet items are considered when measuring interest rate risk.

The Group manages interest rate positions and stabilizes its interest rate margin primarily with the pricing policy and a fund transfer pricing system. The banking book securities portfolio, whose primary purpose is to maintain adequate liquidity reserves, while it also contributes to the stability of the interest rate margin. NLB Group also uses various derivatives (interest rate swaps, overnight index swaps, cross currency swaps, and forward rate agreements), most of which are treated according to hedge accounting rules. Each member of NLB Group is in line with the parent Bank’s guidelines and standards, as well as with the local regulatory requirements. NLB regularly monitors the interest rate risk exposure of each individual entity.

Interest Rate Risk Management Guidelines

The document comprises guidelines for uniform and effective interest rate risk management within individual NLB Group members. Interest rate risk in the banking book is managed by Financial Markets. Exposure to interest rate risk is discussed on ALCO monthly on NLB’s individual level and quarterly on Group level.

Analysis of Financial Instruments According to the Exposure to Interest Rate Risk

Open Net Interest Rate Risk Positions by Currency as of 31 Dec 2024

Currency	1 - 3 years	3 - 5 years	5 - 10 years	Over 10 Years
EUR	(3,828,183)	2,408,757	2,706,607	1,548,118
RSD	285,895	280,810	275,857	(33)
MKD	198,485	110,367	16,844	(20,024)
Other	(316,582)	195,638	140,147	14,937

Open Net Interest Rate Risk Positions by Currency as of 31 Dec 2023

Currency	1 - 3 years	3 - 5 years	5 - 10 years	Over 10 Years
EUR	(2,109,587)	1,278,722	1,519,103	756,545
RSD	573,943	195,097	69,386	5
MKD	253,734	25,929	(5,110)	5,960
Other	(206,743)	130,171	87,324	3,970

Summary of Interest Rate Risk Positions

Currency	1 - 3 years	3 - 5 years	5 - 10 years	Over 10 Years
EUR	(3,233,482)	1,883,525	2,183,790	1,462,043
Other	(100,720)	21,856	33,753	7,337

Additional Information

As of 31 Dec 2023, the positions were as follows:

Currency	1 - 3 years	3 - 5 years	5 - 10 years	Over 10 Years
EUR	(1,772,291)	1,004,157	1,436,836	645,084
Other	(176,222)	19,729	20,418	-

---

NLB Group Annual Report 2024

Overview

Net Interest Income Sensitivity

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Net interest income sensitivity	38,643	19,626	57,595	33,281
as % of Equity	1.35%	0.90%	2.22%	1.84%

Net Interest Income Sensitivity Analysis

The ‘EVE’ (Economic Value of Equity) method is a measure of the sensitivity of changes in market interest rates on the economic value of financial instruments. The EVE represents the present value of net future cash flows and provides a comprehensive view of the possible long-term effects of changing interest rates at points for other currencies. The analysis assumes that the positions used remain unchanged.

The assessment of the impact of a change in interest rates of 50/100 basis points on the amount at least under the six prescribed standardized interest rate shock scenarios or more if necessary, according to the situation on financial markets. Calculations are considering behavioral and automatic options, as well as the allocation of non-maturing deposits.

Interest Risk in Banking Book - EVE

in EUR thousands	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Interest risk in banking book - EVE	144,400	97,643	108,489	60,747
as % of Equity	5.04%	4.47%	4.19%	3.36%

The applied sudden parallel interest rate shock up is by 200 basis points, which represents a "worst case" scenario for NLB Group. The calculation takes into account the allocation of the core part of non-maturing deposits and other behavioral assumptions.

514 NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Liquidity risk

Liquidity risk is the risk of the NLB Group being unable to fulfil current or future expected and unexpected cash requirements, across all time horizons. The risk may stem from funding liquidity risk (the NLB Group’s liquidity on the liabilities-side) and market liquidity risk (counterbalancing capacity on the assets-side). From a liabilities perspective, liquidity risk arises when the Bank, because of its incapacity to provide sufficient funds to settle its obligations, is forced to raise the necessary funds at a cost which significantly exceeds the liquidity value of the counterbalancing capacity. This may occur in case of significant reduction of market value of an individual financial instrument and may result in insufficient value of counterbalancing capacity required during the business day to enable financial institutions to make payments and settle obligations.

In the risk identification process, first the reasons for the realisation of each identified risk are considered. Material risks are then classified into three groups based on what part of liquidity is affected by the realisation of the material risks: liabilities, assets, and intraday liquidity risk. The origin of these risks can be internal (meaning it originates within the Bank) or external (meaning it comes from outside the Bank – e.g., a major macroeconomic event, physical or transition drivers).

Key risk drivers of the liquidity position are factors that are expected to trigger a substantial deterioration of the Group’s liquidity position. This deterioration may take the form of a significant reduction in the liquidity value of the counterbalancing capacity. Liquidity risk is defined as an important risk type for NLB Group, and one which must be managed carefully. NLB Group has a liquidity risk management framework in place.

NLB Group formulated a set of liquidity risk metrics and limits to manage liquidity position within the requirements set by the regulator. By maintaining a smooth long-term liquidity reserve, the NLB Group maintains a sound and robust liquidity position, even under severely adverse conditions. The Management Board approves the Liquidity Risk Management strategy, while ALCO receives a regular report on the liquidity position and the performance against approved limits and targets. ALCO oversees the development of the Bank’s funding and liquidity policies.

Given that liquidity risk is low, NLB Group must be able to provide sufficient funds for settling its liabilities at all times, even if a specific stress scenario is realised. NLB Group measures liquidity risk through monitoring and stress-testing. The objectives of monitoring and managing liquidity risk in NLB Group are as follows:

• Ensuring a sufficient amount of liquidity for the settlement of all NLB Group obligations;
• Ensuring an adequate amount of counterbalancing capacity and optimal liquidity management;
• Ensuring an adequate control environment;
• Ensuring an appropriate level of liquidity for different situations.

---

Implementing Contingency Plans

Implementing contingency plans in the event of extraordinary circumstances; ensuring regular projections of future cash flows and stress-testing of liquidity risk; preparing proposals to ensure that climate-related and environmental risks which could have a material impact on net cash outflows or liquidity reserves, are incorporated into liquidity risk management and assessed in the Internal Liquidity Adequacy Assessment Process (ILAAP) at least once per year for NLB Group. It includes a clear formal statement on liquidity adequacy, support frameworks and is aligned with the NLB Group’s risk appetite which is consistent with the business model and approved by the management board.

Based on the Risk Appetite, the NLB internal capital needs (the ICAAP process) and an internal liquidity assessment (ILAAP process). Both processes are conducted from the normative and economic perspectives and support a basis for a variety of bank-specific and market-wide stress scenarios (individually and in combination) to identify sources of potential liquidity strain and to ensure that current exposure test outcomes are used to adjust its liquidity risk management strategies, policies, and positions, define minimum amount of counterbalancing capacity, and to develop effective contingency plans. The plan outlines procedures for addressing liquidity shortfalls in stressed situations. The plan outlines procedures to manage a range of stress environments, establish clear lines of responsibility and ensure that it is operationally robust.

NLB Group maintains a sufficient amount of liquidity reserves in the form of high credit quality debt securities that are eligible for refinancing via...

Liquidity Reserves

	NLB Group	NLB	31 Dec 2024	31 Dec 2023
Cash, cash balances at central banks	2,764,196	1,801,602	4,958,969	4,142,013
Trading book securities	9,424		9,424
Banking book securities	6,133,196	4,368,400	4,569,721
ECB eligible loans	380,678	380,678	678,445	678,445
Total available liquidity reserves	9,287,494	6,560,104	10,207,135
Encumbered liquidity reserves	41,685	41,685	41,502	41,502

NLB Group regularly performs stress tests with the aim of testing the liquidity situation. Special attention is given to the fulfilment of the liquidity regulation (CRR/CRD), with monitoring and reporting of the liquidity coverage ratio (LCR) according to the Delegated Act.

As at 31 December 2024, 72.0% (31 December 2023: 79.5%) of debt securities in the banking book of NLB Group were government securities (including government guaranteed bonds – GGB), and 11.3% (31 December 2023: 11.9%) were bank senior unsecured bonds. The purpose of banking book securities is to provide liquidity, along with stabilisation of the interest margin and the intraday liquidity.

NLB Group uses conservative principles, particularly with respect to the portfolio’s structure in terms of issuers’ ratings and asset class. The general rules and principles for managing the banking book securities are laid in the NLB Group Investment Strategy: Investment Portfolio and stressed circumstances. Liquidity risk management in NLB Group is under strict monitoring by NLB as a parent bank. Reporting to NLB by all Group members is performed daily.

The ECB-eligible credit claims comprise loans which fulfil the high eligibility criteria set by the ECB itself and for domestic loans are specified in the General terms about execution of monetary policy framework (Part 4) adopted by the Bank of Slovenia. NLB is the only member of NLB Group that classifies as an eligible counterparty to the Eurosystem. As such, these ECB credit claims are included among liquidity reserves.

NLB Group has liquidity reserves available to cover liabilities that fall or may become due. Liquidity reserves must become available on short notice. Liquidity reserves are composed of debt securities valued at market value, and loans eligible as collateral for the Eurosystem’s liquidity providing operations on the basis of which the Bank may generate the requisite liquidity required balances for the continuous performance of payment transactions, encumbered securities, and/or credit claims for different purposes (secured funding).

Encumbered/unencumbered assets

in EUR thousands	NLB Group	NLB
31 Dec 2024	Carrying amount	Fair value of encumbered assets	Fair value of unencumbered assets	31 Dec 2023	Carrying amount	Fair value of encumbered assets	Fair value of unencumbered assets
Loans on demand	1,330,862	-	2,168,436	-	1,241,906	-	4,390,753	-
	Equity instruments	1,210	1,210	111,812	111,812	1,002	1,002	95,048	95,048
		Debt securities	42,357	41,685	6,160,185	6,142,628	42,739	41,502	4,649,171	4,568,776
Loans and advances other than loans on demand	8,254	-	16,951,170	-	15,171	-	14,433,032	-
	Other assets	-	-	1,261,081	-	-	-	1,073,163	-
		Total	1,382,683	26,652,684	168,653	16,806,438	1,300,818	24,641,167	169,162	15,845,614

Collateral received – unencumbered

in EUR thousands	NLB Group	NLB
31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
	Equity instruments	267,819	293,343	197,925	265,757
Loans and advances other than loans on demand		163,534	175,307	44,352	51,190
Other assets	17,670,493	13,599,848	6,877,572	6,408,890
	Total	18,101,846	14,068,498	7,119,849	6,725,837

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Collateralised Assets given as liability collateral

	NLB Group		NLB
	31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
Derivatives	1,119	4,862	2,486	9,638
Other sources of encumbrance	3,435	1,377,821	2,861	1,291,179
Total	4,554	1,382,683	5,347	1,300,817

As at 31 December 2024, NLB Group and NLB had a large share of unencumbered assets. Other sources of encumbrance mostly relate to the obligatory reserve. On the NLB Group level, the amount of encumbered assets equalled EUR 1,383 million (31 December 2023: EUR 1,301 million).

NLB Group

31 Dec 2024

Carrying amount	Total	Up to 1 Month	1 Month to 3 Months	3 Months to 1 Year	1 Year to 5 Years	Over 5 Years
Cash, cash balances at central banks, and other demand deposits at banks	4,039,581	4,039,581	-	-	-	-
Financial assets held for trading	9,424	13,141	-	401	74	1,395
Non-trading financial assets mandatorily at fair value through profit or loss	17,429	17,429	847	-	16,475	107
Financial assets measured at fair value through other comprehensive income	2,563,516	2,725,607	134,287	125,895	540,803	-
Financial assets measured at amortised cost - debt securities	3,725,195	4,459,687	174,388	107,314	332,185	1,892,931
Loans and advances to banks	458,921	458,929	448,107	8,769	1,979	74
Loans and advances to customers	16,363,649	19,736,359	768,137	854,857	3,520,519	8,571,720
Other financial assets	136,854	136,854	75,114	607	28,313	7,119
Total financial assets	27,314,569	31,587,587	5,640,461	1,097,482	4,440,448	12,199,921
Financial liabilities measured at fair value through profit or loss	9,633	9,633	-	-	2,850	6,028
Financial liabilities measured at amortised cost - deposits from banks and central banks	136,000	136,259	131,570	-	4,470	218
Borrowings from banks and central banks	120,612	126,208	1,732	2,079	18,731	51,342
Due to customers	22,206,310	22,328,118	18,830,640	544,091	1,930,638	970,629
Borrowings from other customers	104,519	118,640	994	1,645	6,909	51,035
Debt securities issued	1,608,939	2,231,966	20,629	357	82,220	849,107
Other financial liabilities	296,725	301,066	204,928	9,133	13,551	32,251
Credit risk related commitments	3,392,507	3,392,507	3,392,507	-	-	-
Non-financial guarantees	1,110,863	1,110,863	62,646	113,859	317,075	538,658
Total financial liabilities and credit-related commitments	28,986,108	29,755,260	22,645,646	671,164	2,376,444	2,499,268

---

NLB Group

31 Dec 2023

Carrying amount	Total	Up to 1 Month	1 Month to 3 Months	3 Months to 1 Year	1 Year to 5 Years	Over 5 Years
Cash, cash balances at central banks, and other demand deposits at banks	6,103,561	6,103,561	-	-	-	-
Non-trading financial assets mandatorily at fair value through profit or loss	14,175	1,009	707	11,586	873	-
Financial assets measured at fair value through other comprehensive income	2,251,556	283,269	222,258	434,430	1,212,748	256,002
Financial assets measured at amortised cost - debt securities	2,522,229	64,238	115,969	273,677	1,310,387	1,061,126
Loans and advances to banks	547,640	500,739	43,829	1,572	1,502	4
Loans and advances to customers	13,734,601	691,501	622,566	3,068,830	7,109,179	5,326,305
Other financial assets	165,962	132,368	1,150	1,732	6,705	24,007
Total financial assets	25,339,724	7,776,685	1,006,479	3,791,827	9,641,394	6,667,444
Financial liabilities measured at fair value through profit or loss	4,482	-	-	-	4,144	338
Financial liabilities measured at amortised cost - deposits from banks and central banks	95,283	75,818	-	15,330	4,332	246
Borrowings from banks and central banks	140,419	1,198	1,417	11,311	16,181	117,412
Due to customers	20,732,722	17,921,304	258,812	1,661,298	928,654	87,002
Borrowings from other customers	99,718	1,101	1,835	8,261	9,021	94,169
Debt securities issued	1,338,235	-	4,079	84,166	871,459	892,459
Other financial liabilities	357,116	274,348	6,915	9,111	26,557	40,185
Credit risk related commitments	3,196,771	3,196,771	-	-	-	-
Non-financial guarantees	963,321	76,594	97,262	338,287	380,994	70,184
Total financial liabilities and credit-related commitments	26,928,067	21,547,134	370,320	2,127,764	2,241,342	1,301,995

---

NLB Group Annual Report 2024

Overview

Financial Position as of 31 Dec 2024 (in EUR thousands)

Carrying amount	Total	Up to 1 Month	1 Month to 3 Months	3 Months to 1 Year	1 Year to 5 Years	Over 5 Years
Cash, cash balances at central banks, and other demand deposits at banks	1,973,113	1,973,113	-	-	-	-
Financial assets held for trading	9,424	13,141	-40	174	1,395	11,532
Non-trading financial assets mandatorily at fair value through profit or loss	19,135	19,529	-	111	5,364	4,154
Financial assets measured at fair value through other comprehensive income	1,665,019	1,778,178	26,960	34,083	211,135	1,378,866
Financial assets measured at amortised cost - debt securities	2,846,779	3,436,842	16,043	36,398	271,024	1,411,754
- loans and advances to banks	193,172	276,377	40,930	2,641	16,175	91,930
- loans and advances to customers	8,653,348	10,113,955	430,462	327,451	1,511,475	4,603,080
- other financial assets	81,518	81,518	23,598	504	27,720	5,368
Total financial assets	15,441,508	17,692,653	2,511,106	401,128	2,053,067	7,496,547
Financial liabilities measured at fair value through profit or loss	5,597	5,597	637	-1,699	3,261	-
Financial liabilities measured at amortised cost - deposits from banks and central banks	220,120	220,389	215,921	-	4,468	-
- borrowings from banks and central banks	51,106	51,258	-	1,473	5,816	43,969
- due to customers	12,293,708	12,326,162	11,253,264	226,523	612,041	227,619
- debt securities issued	1,608,939	2,231,966	20,629	357	82,220	849,107
- other financial liabilities	145,802	146,226	97,353	7,131	7,882	6,258
Credit risk related commitments	2,341,597	2,341,597	2,341,597	-	-	-
Non-financial guarantees	738,702	738,702	35,939	74,545	184,329	373,653
Total financial liabilities and credit-related commitments	17,405,571	18,061,897	13,965,340	308,556	894,112	1,465,714

---

NLB Group Annual Report 2024

Overview

Financial Position as of 31 Dec 2023 (in EUR thousands)

Carrying amount	Total	Up to 1 Month	1 Month to 3 Months	3 Months to 1 Year	1 Year to 5 Years	Over 5 Years
Cash, cash balances at central banks, and other demand deposits at banks	4,318,032	4,318,032	-	-	-	-
Non-trading financial assets mandatorily at fair value through profit or loss	16,643	17,515	4	43	12,714	154
Financial assets measured at fair value through other comprehensive income	1,023,012	1,063,468	11,640	38,854	241,365	632,002
Financial assets measured at amortised cost - debt securities	1,966,169	2,202,821	6,764	30,167	154,110	1,057,182
- loans and advances to banks	149,011	201,826	5,933	6,719	15,928	42,789
- loans and advances to customers	7,148,283	8,487,918	405,580	212,509	1,284,363	3,621,788
- other financial assets	101,596	101,597	70,972	1,131	1,583	5,035
Total financial assets	14,722,746	16,393,177	4,818,925	289,423	1,710,063	5,358,950
Financial liabilities measured at fair value through profit or loss	3,210	3,210	1,234	-	-	1,976
Financial liabilities measured at amortised cost - deposits from banks and central banks	147,002	147,442	127,726	-	15,330	4,142
- borrowings from banks and central banks	82,797	83,851	-	-	1,654	1,967
- due to customers	11,881,563	11,919,187	10,985,068	97,176	540,607	278,051
- debt securities issued	1,338,235	1,852,163	-	4,079	84,166	871,459
- other financial liabilities	198,020	198,020	-	-	-	-
Credit risk related commitments	2,239,479	2,239,479	2,239,479	-	-	-
Non-financial guarantees	625,095	625,095	29,712	68,768	196,286	265,632
Total financial liabilities and credit-related commitments	16,515,401	17,068,447	13,532,820	176,504	844,914	1,433,129

When determining the gap between the financial liabilities and financial assets in the maturity bucket of up to one month, it is necessary to be aware of the fact that financial liabilities include total demand deposits, although from an economic perspective, they are stable and present long term funding source.

NLB Group

31 Dec 2024

in EUR thousands	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over 5 Years	Total
Cash, cash balances at central banks, and other demand deposits at banks	4,039,581	-	-	-	-	4,039,581
Financial assets held for trading	8,914	-	-	9,424	-	18,338
Non-trading financial assets mandatorily at fair value through profit or loss	847	-	16,475	-	-	17,322
Financial assets measured at fair value through other comprehensive income	128,419	110,383	512,080	1,632,016	180,618	2,563,516
Financial assets measured at amortised cost - debt securities	165,058	86,544	259,565	1,550,966	1,663,062	3,725,195
- loans and advances to banks	448,106	8,768	1,976	71	-	458,921
- loans and advances to customers	714,525	734,669	3,003,291	7,045,144	4,866,020	16,363,649
- other financial assets	75,114	607	28,313	7,119	25,701	136,854
Derivatives - hedge accounting	77,771	-	-	-	-	77,771
Fair value changes of the hedged items in portfolio hedge of interest rate risk	(6,353)	-	-	-	-	(6,353)
Total financial assets	5,651,982	940,971	3,821,700	10,235,423	6,744,825	27,394,901
Financial liabilities held for trading	6,995	-	-	-	-	6,995
Financial liabilities measured at fair value through profit or loss	-	-	2,850	6,028	755	9,633
Financial liabilities measured at amortised cost - deposits from banks and central banks	131,555	-	4,226	218	1	136,000
- borrowings from banks and central banks	1,688	1,857	16,663	48,258	52,146	120,612
- due to customers	18,821,506	530,206	1,874,878	931,456	48,264	22,206,310
- borrowings from other customers	917	1,468	6,016	43,185	52,933	104,519
- debt securities issued	-	-	-	524,638	1,084,301	1,608,939
- other financial liabilities	204,834	8,949	12,726	29,561	40,655	296,725
Derivatives - hedge accounting	3,592	-	-	-	-	3,592
Credit risk related commitments	3,392,507	-	-	-	-	3,392,507
Non-financial guarantees	62,646	113,859	317,075	538,658	78,625	1,110,863
Total financial liabilities and credit-related commitments	22,626,240	656,339	2,234,434	2,122,002	1,357,680	28,996,695

---

NLB Group

31 Dec 2023

in EUR thousands	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over	Total
Cash, cash balances at central banks, and other demand deposits at banks	6,103,561	-	-	-	-	6,103,561
Financial assets held for trading	15,718	-	-	-	-	15,718
Non-trading financial assets mandatorily at fair value through profit or loss	1,009	707	11,586	873	-	14,175
Financial assets measured at fair value through other comprehensive income	273,593	213,671	416,536	1,202,599	145,157	2,251,556
Financial assets measured at amortised cost - debt securities	61,505	108,615	236,639	1,279,633	835,837	2,522,229
- loans and advances to banks	500,738	43,828	1,568	1,502	4	547,640
- loans and advances to customers	646,236	537,884	2,594,804	6,883,875	3,071,802	13,734,601
- other financial assets	132,368	1,150	1,732	6,705	24,007	165,962
Derivatives - hedge accounting	47,614	-	-	-	-	47,614
Fair value changes of the hedged items in portfolio hedge of interest rate risk	(10,207)	-	-	-	-	(10,207)
Total financial assets	7,772,135	905,855	3,262,865	9,375,187	4,076,807	25,392,849
Financial liabilities held for trading	13,217	-	-	-	-	13,217
Financial liabilities measured at fair value through profit or loss	-	-	4,144	338	-	4,482
Financial liabilities measured at amortised cost - deposits from banks and central banks	75,815	-	15,134	4,332	2	95,283
- borrowings from banks and central banks	1,065	1,210	9,820	15,602	112,722	140,419
- due to customers	17,916,339	252,769	1,602,706	926,396	34,512	20,732,722
- borrowings from other customers	940	1,456	6,229	8,260	82,833	99,718
- debt securities issued	-	-	828,840	509,395	-	1,338,235
- other financial liabilities	280,669	6,498	7,318	21,482	41,149	357,116
Derivatives - hedge accounting	3,540	-	-	-	-	3,540
Credit risk related commitments	3,196,771	-	-	-	-	3,196,771
Non-financial guarantees	76,594	97,262	338,287	380,994	70,184	963,321
Total financial liabilities and credit-related commitments	21,564,950	359,195	1,979,494	2,190,050	851,135	26,944,824

---

NLB Group Annual Report 2024

Overview

Financial Position as of 31 Dec 2024

in EUR thousands	Up to 1 Month	1 Month to 3 Months	3 Months to 1 Year	1 Year to 5 Years	Over 5 Years	Total
Cash, cash balances at central banks, and other demand deposits at banks	1,973,113	-	-	-	-	1,973,113
Financial assets held for trading	11,649	-	-	9,424	-	21,073
Non-trading financial assets mandatorily at fair value through profit or loss	-	-	15,247	3,888	-	19,135
Financial assets measured at fair value through other comprehensive income	25,238	21,639	194,082	1,308,678	115,382	1,665,019
Financial assets measured at amortised cost - debt securities	10,091	21,104	218,825	1,154,075	1,442,685	2,846,779
- loans and advances to banks	40,908	2,386	7,252	52,747	89,879	193,172
- loans and advances to customers	411,030	283,321	1,295,486	3,942,796	2,720,715	8,653,348
- other financial assets	23,598	504	27,720	5,368	24,328	81,518
Derivatives - hedge accounting	77,771	-	-	-	-	77,771
Fair value changes of the hedged items in portfolio hedge of interest rate risk	(8,761)	-	-	-	-	(8,761)
Total financial assets	2,564,637	328,954	1,758,612	6,467,552	4,402,413	15,522,167
Financial liabilities held for trading	9,977	-	-	-	-	9,977
Financial liabilities measured at fair value through profit or loss	637	-	1,699	3,261	-	5,597
Financial liabilities measured at amortised cost - deposits from banks and central banks	215,896	-	4,224	-	-	220,120
- borrowings from banks and central banks	-	1,429	5,714	43,963	51,106	-
- due to customers	11,250,468	220,898	596,360	220,960	5,022	12,293,708
- debt securities issued	-	-	-	524,638	1,084,301	1,608,939
- other financial liabilities	97,210	6,855	6,660	5,873	29,204	145,802
Derivatives - hedge accounting	1,261	-	-	-	-	1,261
Credit risk related commitments	2,341,597	-	-	-	-	2,341,597
Non-financial guarantees	35,939	74,545	184,329	373,653	70,236	738,702
Total financial liabilities and credit-related commitments	13,952,985	302,298	794,701	1,134,099	1,232,726	17,416,809

---

NLB Group Annual Report 2024

Overview

Financial Position as of 31 Dec 2023 (in EUR thousands)

Category	Up to 1 Month	1 Month to 3 Months	3 Months to 1 Year	1 Year to 5 Years	Over 5 Years	Total
Cash, cash balances at central banks, and other demand deposits at banks	4,318,032	-	-	-	-	4,318,032
Financial assets held for trading	17,957	-	-	-	-	17,957
Non-trading financial assets mandatorily at fair value through profit or loss	-	3,579	138	12,926	16,643	-
Financial assets measured at fair value through other comprehensive income	11,142	36,942	235,185	630,105	109,638	1,023,012
Financial assets measured at amortised cost - debt securities	5,003	24,216	125,394	1,033,656	777,900	1,966,169
Loans and advances to banks	5,912	6,409	8,999	35,329	92,362	149,011
Loans and advances to customers	389,935	185,727	1,076,136	3,519,655	1,976,830	7,148,283
Other financial assets	70,971	1,131	1,583	5,035	22,876	101,596
Derivatives - hedge accounting	47,614	-	-	-	-	47,614
Fair value changes of the hedged items in portfolio hedge of interest rate risk	(12,514)	-	-	-	-	(12,514)
Total financial assets	4,854,052	254,425	1,450,876	5,223,918	2,992,532	14,775,803
Financial liabilities held for trading	17,510	-	-	-	-	17,510
Financial liabilities measured at fair value through profit or loss	1,234	-	1,976	-	-	3,210
Financial liabilities measured at amortised cost - deposits from banks and central banks	127,726	-	15,134	4,142	-	147,002
Borrowings from banks and central banks	-	1,430	1,945	79,422	82,797	-
Due to customers	10,983,368	95,065	521,103	277,829	4,198	11,881,563
Debt securities issued	-	-	828,840	509,395	1,338,235	-
Other financial liabilities	149,456	6,224	5,736	10,078	26,526	198,020
Derivatives - hedge accounting	1,420	-	-	-	-	1,420
Credit risk related commitments	2,239,479	-	-	2,239,479	-	-
Non-financial guarantees	29,712	68,768	196,286	265,632	64,697	625,095
Total financial liabilities and credit-related commitments	13,549,905	170,057	739,689	1,390,442	684,238	16,534,331

---

NLB Group

31 Dec 2024

	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Foreign exchange derivatives	Total
- Forwards - Outflow	(16,067)	(16,933)	(11,967)	-	-	(44,967)
- Inflow	16,083	16,951	11,991	-	-	45,025
- Swaps - Outflow	(205,990)	(61,926)	(40,455)	-	-	(308,371)
- Inflow	226,748	61,369	40,136	-	-	328,253

Derivative cash flows

The table below illustrates cash flows from derivatives, broken down into the relevant maturity buckets based on residual maturities. The amounts disclosed in the reporting date.

Interest rate derivatives

- Interest rate swaps and cross-currency swaps - Outflow	(3,671)	(6,379)	(40,775)	(103,678)	(20,035)	(174,538)
- Inflow	9,411	3,741	49,102	161,730	31,048	255,032
- Caps and floors - Outflow	(84)	(35)	(195)	(296)	(2)	(612)
- Inflow	97	171	72	185	2	473

Total

Total outflow	(225,812)	(85,273)	(93,392)	(103,974)	(20,037)	(528,488)
Total inflow	252,339	82,078	101,401	161,915	31,050	628,783

31 Dec 2023

Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over 5 Years	Total
- Foreign exchange derivatives - Forwards - Outflow	(52,767)	(12,024)	(15,874)	(250)	-	(80,915)
				- Inflow	52,821	12,035	15,890	250	-	80,996
					- Swaps - Outflow	(264,488)	(150,003)	(77,229)	-	-	(491,720)
					- Inflow	264,597	150,432	78,250	-	-	493,279

Interest rate derivatives

- Interest rate swaps and cross-currency swaps - Outflow	(1,000)	(5,613)	(27,240)	(51,905)	(22,798)	(108,556)
- Inflow	3,250	4,043	34,172	79,633	37,296	158,394
- Caps and floors - Outflow	(211)	(51)	(768)	(586)	(6)	(1,622)
- Inflow	179	376	29	416	3	1,264

Total

Total outflow	(318,466)	(167,691)	(121,111)	(52,741)	(22,804)	(682,813)
Total inflow	320,847	166,547	128,941	80,299	37,299	733,933

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Foreign Exchange Derivatives

in EUR thousands	NLB	31 Dec 2024	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over Total
Forwards	Outflow	(15,131)	527	(16,840)	(11,583)	--	(43,554)
	Inflow	15,147	16,857	11,604	-	-	43,608
Swaps	Outflow	(293,177)	(102,241)	(69,072)	-	-	(464,490)
	Inflow	293,653	102,183	69,154	-	-	464,990

Interest Rate Derivatives

in EUR thousands	NLB	31 Dec 2024	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over Total
Interest rate swaps and cross-currency swaps	Outflow	(3,749)	(6,724)	(41,751)	(107,834)	(20,606)	(180,664)
	Inflow	9,486	4,133	50,525	167,836	31,725	263,705
Caps and floors	Outflow	(84)	(35)	(195)	(296)	(2)	(612)
	Inflow	97	171	72	185	2	473

Total

in EUR thousands	NLB	31 Dec 2024	Total Outflow	Total Inflow
			(312,141)	318,383
			(125,840)	123,190
			(122,601)	131,455
			(108,130)	168,021
			(20,608)	31,727
			(689,320)	772,776

Foreign Exchange Derivatives

in EUR thousands	NLB	31 Dec 2023	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over Total
Forwards	Outflow	(50,861)	(11,715)	(15,874)	(250)	-	(78,700)
	Inflow	50,894	11,726	15,890	250	-	78,760
Swaps	Outflow	(310,781)	(279,104)	(131,949)	-	-	(721,834)
	Inflow	310,647	278,819	132,095	-	-	721,561

Interest Rate Derivatives

in EUR thousands	NLB	31 Dec 2023	Up to 1 Month	to 3 Months	to 1 Year	to 5 Years	Over Total
Interest rate swaps and cross-currency swaps	Outflow	(1,455)	(5,763)	(29,050)	(57,044)	(23,651)	(116,963)
	Inflow	3,605	4,162	35,869	87,326	38,276	169,238
Caps and floors	Outflow	(211)	(51)	(768)	(586)	(6)	(1,622)
	Inflow	179	37	629	4163	1,264

Total

in EUR thousands	NLB	31 Dec 2023	Total Outflow	Total Inflow
			(363,308)	365,325
			(296,633)	294,744
			(177,641)	184,483
			(57,880)	87,992
			(23,657)	38,279
			(919,119)	970,823

---

528 NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Management of non-financial risks

a) Operational risk

When assuming operational risks, NLB Group follows the guideline that such risks may not materially impact its operations and, gradually decreasing due to the reduced complexity of operations in NLB Group, with the disinvestment process of non-core activities and optimisation of internal processes.

NLB Group management of operational risks, all with the aim of ensuring quality management of operational risks. This is particularly valid in strategic banking members. All NLB Group banking defined as the limit amount of net loss that an individual member still allows in its operations. If the sum of net loss exceeds the tolerance limit, a special treatment of major loss events the same or similar loss events are taken.

The warning and critical limit of loss events are also defined, which in case of exceeding require escalation procedures and acceptance of possible risks in its business – for them a so-called ‘zero tolerance’ was defined.

For monitoring, some specific more important key risk indicators that could show a possible increase of operational risks are periodically monitored in different business areas, and the results are discussed at the Operational Risk Committee. The latter was named as the highest decision-making authority were also appointed at other NLB Group banks. The Management Board serves in this role at other subsidiaries.

The main task of the aforementioned bodies is to discuss the most significant management of operational risks including their mitigation within an individual entity. All NLB Group entities, which are included in the consolidation, have adopted relevant documents in line with the development of operational risk management and regularly updated.

The whole NLB Group uses uniform software support, which is also regularly upgraded. In NLB Group, previous year and remained within the set tolerance limits for operational risk. Certain litigation costs mainly occurred due to systemic issues such as litigation risk (e.g., cases related to operational losses, banking members of the Group performed a comprehensive analysis and defined adequate mitigation measures to prevent or minimise such events in the future.

In general, and defining operational risks in all segments. To treat major loss events appropriately and as soon as possible, the Bank introduced an escalation scale for reporting bigger or more important NLB. Additional attention is paid to the reporting of potential loss events in order to improve the internal controls, and thus minimise those and similar events.

Furthermore, the methodology warningsystem. The aim is to improve business and supporting processes, as well enabling prompt response. Through comprehensive identification of operational risks, possible future loss events can be addressed effectively.

placed on current risks as a result of the risk identification process, including ESG risks. For the later key risk indicators (KRIs) have been also addressed for ESG risks, serving as an e taken to reduce them. An operational risk profile is prepared once a year based on the operational risk identification. Special emphasis is put on the most topical risks, among which in influence. For this purpose, the Bank has developed the methodology of stress-testing for operational risk. The methodology is a combination of modelling loss event data and scenario experience and knowledge of experts from various critical areas. The most significant loss could be derived from the following potential events: possible difficulties operating electronic scenarios, existent controls were additionally revised, while for identifying potential deficiencies, mitigation measures were defined. The capital requirement for operational risk is calculated using the standardised approach at the NLB level.

5. Business Continuity Management (BCM)

In NLB Group, business continuity management is carried out to protect lives, goods, and reputation from disasters, epidemic/pandemic, and the undesired effects of the environment to mitigate their consequences. The concept of the action plan that is prepared each year is such that the action is testing. In 2024, NLB tested Manual Procedures, backup locations, and the IT Disaster Recovery Plan and external. No major deviations were identified. In NLB Group, know-how and documents which are in line with standards of NLB and revised in accordance with the development of business continuity management. The activity of the members is monitored throughout the year, and expert assistance is provided.

With regards to natural disasters (floods) and IT failures, the Bank successfully used the business continuity plans and instructions for manual procedures, and thus also ensured business continuity – strategic risks, reputation risk, and profitability risk. Risks not included in the regulatory capital requirements (standardised approach) but have or might have an important influence on addition, they are integrated into the internal capital adequacy assessment process (ICAAP). NLB Group established internal methodologies for identifying and assessing specific types of circumstances. If a certain risk is assessed as a materially important risk, relevant disposable preventive and mitigation measures are applied, including regular monitoring of their effectiveness.

6. Fair value hierarchy of financial and non-financial assets and liabilities

Fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. NLB Group uses various valuation techniques to determine fair value. IFRS 13 specifies a fair value hierarchy with respect to the inputs and assumptions used to measure financial and non-financial assets and liabilities. This hierarchy gives the highest priority to observable market data when available, and the lowest priority to unobservable inputs.

The fair value hierarchy comprises the following levels:

• Level 1 – Quoted prices (unadjusted) on active markets. This level includes listed unadjusted market prices of assets and liabilities. When an asset or liability may be exchanged in multiple active markets, the principal market for the asset or liability must be determined.
• Level 2 – A valuation technique where inputs are observable, either directly (i.e., prices) or indirectly (i.e., derived from prices). Level 2 includes prices quoted for similar assets, and liabilities in markets that are not active. The sources of input parameters for financial instruments, such as yield curves, credit spreads, foreign exchange rates, and the like.
• Level 3 – A valuation technique where inputs are not based on observable market data. Unobservable inputs are used to the extent that relevant observable inputs are not available. Unobservable inputs reflect the assumptions of NLB Group. This level includes non-tradable shares and bonds, and derivatives associated with these investments and other assets and liabilities for which fair value cannot be determined.

---

observable market price in an active market for an identical asset or liability. An active market is a market in which transactions for an asset or liability are executed with sufficient frequency.

liabilities measured at fair value in active markets are determined as the market price of a unit (e.g., a share) at the measurement date, multiplied by the quantity of units owned by NLB using valuation techniques. These techniques bear a different intensity level of estimates and assumptions, depending on the availability of observable market inputs associated with the estimates and assumptions that other market participants would use when pricing the asset or liability. For non-financial assets measured at fair value and not classified at Level 1, fair values are prepared in accordance with the International Valuation Standards (IVS).

in EUR thousands 31 Dec 2024

NLB Group	NLB Total	Total Financial assets	Level 1	Level 2	Level 3	fair value
Financial instruments held for trading	9,424	530
Debt instruments	9,424	-	9,424		-	9,424
Derivatives	-	8,891	23	8,914	-	11,649
Derivatives - hedge accounting	-	77,771	-	77,771	-
Financial and non-financial assets and liabilities measured at fair value in the financial statements	77,771	-	77,771
Financial assets measured at fair value	2,004,786	557,464	1,266	2,563,516	1,598,780	65,869
through other comprehensive income	Debt instruments	2,004,463	462,460	-	2,466,923	1,598,780
Equity instruments	323	95,004	1,266	96,593	-	62,774
Non-trading financial assets mandatorily at fair value through profit and loss	2,258	-	15,171	17,429	-	19,135
Debt instruments	1,000	-	-	1,000	-	-
Equity instruments	1,258	-	15,171	16,429	-	15,171
Loans	-	-	-	-	-	3,964
Financial liabilities
Financial instruments held for trading	-	6,995	-	6,995	-	9,977
Derivatives	-	6,995	-	6,995	-	9,977
Derivatives - hedge accounting	-	3,592	-	3,592	-	1,261
Financial liabilities measured at fair value through profit or loss	-	9,633	-	9,633	-	4,960
Non-financial assets	Investment properties	-	6,918	19,214	26,132	-
Non-current assets held for sale	-	2,849	8,187	11,036	-	2,849
Non-financial assets impaired during the year	Recoverable amount of property and equipment	-	10,491	10,491	-	-
Recoverable amount of investments in subsidiaries, associates and joint ventures	-	-	-	1,466	1,466

---

in EUR thousands

31 Dec 2023

NLB Group	NLB Level 1	Level 2	Level 3	Total fair value
Financial assets	Financial instruments held for trading	-	531
NLB Group	Annual Report 2024	Overview	MB Statement	SB Statement
Key Highlights	Business Report	Strategy	Risk Factors & Outlook	Performance Overview
Segment Analysis	15,698	20	15,718	-
17,937	20	17,957	Derivatives	-
15,698	20	15,718	-	17,937
20	17,957	Derivatives - hedge accounting	-	47,614
-	47,614	-	47,614	Financial assets measured at fair value
1,452,046	798,154	1,356	2,251,556	955,638
67,071	303	1,023,012	through other comprehensive income
Debt instruments	1,451,824	712,570	702,164	464
955,638	6,446	-	962,084
Equity instruments	222	85,584	1,286	87,092
-	60,625	303	60,928	Non-trading financial assets mandatorily at fair value through profit and loss
Debt instruments	5,317	-	8,858	14,175
-	-	16,643	16,643	fair value through profit and loss
Equity instruments	100	-	8,858	8,958
-	-	7,785	7,785	Loans
Financial liabilities	Financial instruments held for trading	-	13,217	-
17,510	-	17,510	Derivatives	-
13,217	-	13,217	-	17,510
-	17,510	Derivatives - hedge accounting	-	3,540
-	3,540	-	1,420	-
1,420	Financial liabilities measured at fair value through profit or loss	-	4,482	-
-	1,976	1,234	3,210	Non-financial assets
Investment properties	-	10,927	20,189	31,116
-	7,640	-	7,640	Non-current assets held for sale
-	4,048	801	4,849	-
4,048	-	4,048	Non-financial assets impaired during the year
Recoverable amount of property and equipment	-	8989	-	-
Recoverable amount of investments in	-	-	-	1,646
subsidiaries, associates and joint ventures	-	-	-

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Significant transfers of financial instruments between levels of valuation

NLB Group’s policy of transfers of financial instruments between levels of valuation is illustrated in the table below:

Transfers from level 1 to 3	from level 1 to 2	from level 2 to 3	equity excluded fund management	debt securities instrument
from exchange market	from level 1 to 3	from level 3 to 1	from level 1 to 2	from level 3 to 2
companies fund management	debt securities not underlying in insolvency	company starts liquid (not trading for 6 months)	included in valuation	exchange market
from level 1 to 3	from level 1 to 3	and from 2 to 3	equity not liquid companies (not trading for 2 months)	proceedings from level 2 to 1
from level 3 to 1	and from 3 to 1	equity included in start trading with exchange market	debt securities on exchange market	from level 3 to 2 until valuation parameters are confirmed on ALCO (at least on quarterly basis)

Transfers between levels of valuation of financial instruments measured at fair value in financial statements:

in EUR thousands 31 Dec 2024 NLB Group

From 1. level	To 2. level	From 1. level	To 2. level
Transfer of assets and liabilities between levels of valuation	Financial assets measured at fair value through other comprehensive income	Debt instruments	(43,080) 43,080
		(3,091)	3,091

---

533 NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Financial and non-financial assets and liabilities at Level 2 regarding the fair value hierarchy

Financial instruments on Level 2 of the fair value hierarchy at NLB Group and NLB include:

• Derivatives: derivatives except forward derivatives and options on equity instruments that are not quoted on active markets;
• The National Resolution Fund.
• Non-financial properties and non-current assets held for sale.

When valuing bonds classified on Level 2, NLB Group primarily uses the income approach based on an estimation of future cash flows, risk-free yield curve and the spread over the yield curve (i.e., credit, liquidity, country). Fair values for derivatives are determined using a discounted cash flow model based on the risk- (the Garman and Kohlhagen model, the binomial model, and the Black-Scholes model). At least one of the three valuation methods are used for the valuation of investment property. The value of future expected returns is assessed. When valuing an investment property, average rents at similar locations and capitalisation ratios such as: the risk-free yield, risk premium, locations are generated from various sources, like data from lessors and lessees, web databases, and own databases. NLB Group has observable data for all investment property at its disposal from wider locations and adjusts it appropriately.

d) Financial and non-financial assets and liabilities at Level 3 of the fair value hierarchy

Financial instruments on Level 3 of the fair value hierarchy include:

• Debt instruments: bonds not quoted on active markets and valuated by valuation model with inputs which are not based on observable market data;
• Derivatives that are not quoted on an active organised market.

Fair values for forward derivatives are determined using the discounted cash flow model. Fair values for equity options are determined using the Black-Scholes model. Unobservable inputs include the fair values of underlying instruments determined using valuation models. The source of observable market inputs is the Bloomberg terminal. Fair value is calculated on the basis of the discounted expected future cash flows with the required rate of return. In defining the expected cash flows for loans, the Level 3 of the fair value hierarchy at NLB Group include investment properties and non-current assets held for sale. NLB Group uses three valuation methods for the valuation of equity. The Group selects valuation model and values of unobservable input data within a reasonable possible range, but uses model and input data that other market participants would use. The majority of investment property is valued using the income approach where the present value of future expected returns is assessed. When valuing an investment property, average rents at similar locations and capitalisation ratios such as: the risk-free yield, risk premium, locations are generated from various sources, like data from lessors and lessees, web databases, and own databases.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Financial Assets and Liabilities

in EUR thousands	Non-trading Financial assets	Financial instruments measured at fair value mandatorily at fair value	Total financial assets held for trading	through OCI	through profit or loss
Balance as at 1 January 2023	17	2,236	1,256	7,519	11,028
Valuation:	- through profit or loss	3	-	-	-
Movements of financial assets and liabilities at Level 3	1,362	1,365	- recognised in other comprehensive income	-	5,768
Foreign exchange differences	-	21	- (173)	-	(152)
Increases	-	-	150	150	-
Decreases	-	(6,418)	(19)	-	(6,437)
Write-offs	-	(1,537)	-	-	(1,537)
Balance as at 31 December 2023	20	701,286	8,858	10,234	-
Valuation:	- through profit or loss	3	-	3,043	3,046
- recognised in other comprehensive income	-	-	-	(45)	-
Increases	-	-	543,270	3,324	-
Decreases	-	(70)	(29)	-	(99)
Balance as at 31 December 2024	23	-1,266	15,171	16,460	-

Financial Liabilities

in EUR thousands	Financial assets	Non-trading financial assets	measured at fair value	mandatorily at fair value	through profit or loss
Balance as at 1 January 2023	17	2,026	269	7,519	7,892
Valuation:	- through profit or loss	3	-	1,362	705
- recognised in other comprehensive income	-	5,768	19	-	5,787
Foreign exchange differences	-	21	- (173)	-	(152)
Increases	-	-	150	492	642
Decreases	-	(6,278)	-	(1,304)	(7,582)
Write-offs	-	(1,537)	-	-	(1,537)
Merger of subsidiary	-	-	15	-	15
Balance as at 31 December 2023	20	-303	8,858	7,785	16,966
Valuation:	- through profit or loss	3	-	3,043	60
- recognised in other comprehensive income	-	13	-	-	13
Increases	-	-	54	3,270	423
Decreases	-	-	-	(4,304)	(4,304)
Balance as at 31 December 2024	23	-	370	15,171	3,964

---

NLB Group Financial Assets

Financial assets measured at fair value through profit or loss

in EUR thousands	2024	2023
Non-trading financial assets	535	-
Financial assets held for trading	-	-
Financial assets measured at fair value through OCI	-	-

Items of Income Statement

Gains less losses from financial assets and liabilities held for trading	3	-
Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss	-	3,043
Foreign exchange translation gains less losses	-	(173)

Item of Other Comprehensive Income

Financial assets measured at fair value through other comprehensive income	-	49

Accumulated Other Comprehensive Income

In 2024 and in 2023, NLB Group and NLB recognised the effects from valuation of trading instruments in income statement line item ‘Gains less losses from financial assets and liabilities held for trading,’ and the effects from valuation of financial assets mandatorily at fair value through profit or loss in the income statement line item ‘Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss,’ and the effects from valuation in the accumulated other comprehensive income line item ‘Financial assets measured at fair value through other comprehensive income.’

NLB Group Annual Report 2024

Overview

Financial Assets and Liabilities

in EUR thousands	Financial assets	Financial liabilities	Financial assets held for measured at fair value	Non-trading financial assets mandatorily at fair value	NLB trading
	through OCI	value through profit or loss	through profit or loss	Loans and other	Loans and other
2024	Derivatives	Equity instruments	Equity instruments	financial assets	financial liabilities
Items of Income statement	Gains less losses from financial assets	3	-	-	and liabilities held for trading
	Gains less losses from non-trading assets	-	-	3,043	60
	597	mandatorily at fair value through profit or loss
Item of Other comprehensive income	Financial assets measured at fair value	-13	-	-	through other comprehensive income
in EUR thousands	Financial assets	Financial liabilities	NLB Financial assets held for measured at fair value	Non-trading financial assets mandatorily at fair value	trading
	through OCI	value through profit or loss	through profit or loss	Loans and other	Loans and other
2023	Derivatives	Equity instruments	Equity instruments	financial assets	financial liabilities
Items of Income statement	Gains less losses from financial assets	3	-	-	and liabilities held for trading
	Gains less losses from non-trading assets	-	-	1,362	705
	552	mandatorily at fair value through profit or loss
Foreign exchange translation gains less losses	-	-	(173)	-	-
Item of Other comprehensive income	Financial assets measured at fair value	-19	-	-	through other comprehensive income

Movements of Non-Financial Assets at Level 3

in EUR thousands	Investment property	Non-current assets held for sale	NLB Group
2024	2023	2024	2023
Balance as at 1 January	20,189	23,447	801	11,201
Effects of translation of foreign operations to presentation currency	65	(14)	6	11
Disposals	(1,329)	(1,954)	(150)	(10,206)
Transfer from/(to) property and equipment	70	(86)	7,441	-
Transfer from/(to) non-current assets held for sale	(81)	-	-	-
Transfer from/(to) other assets	-	86	-	-
Transfer from/(to) investment property	-	-	81	-
Net valuation to fair value	300	(1,290)	8	(205)
Balance as at 31 December	19,214	20,189	8,187	801

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

in EUR thousands	NLB Group	NLB
		31 Dec 2024	31 Dec 2023	31 Dec 2024	31 Dec 2023
			Carrying value	Fair value	Carrying value	Fair value	Carrying value	Fair value	Carrying value	Fair value
		Financial assets measured at amortised cost - debt securities	3,725,195	3,706,958	2,522,229	2,440,596	2,846,779	2,808,210	1,966,169	1,889,481
				- loans and advances to banks	458,921
Fair value of financial instruments not measured at fair value in financial statements	458,651	547,640	547,555	193,172	185,768	149,011	149,011
			- loans and advances to customers	16,363,649	15,697,133	13,734,601	13,256,192	8,653,348	8,242,067	7,148,283	6,895,232
- other financial assets	136,854	136,854	165,962	165,962	81,518	81,518	101,596	101,596
				Financial liabilities measured at amortised cost - deposits from banks	136,000	135,957	95,283	95,657	220,120	220,096	147,002	147,379
		- borrowings from banks	120,612	120,065	140,419	134,020	51,106	50,813	82,797	75,152
- due to customers	22,206,310	22,194,577	20,732,722	20,746,603	12,293,708	12,292,632	11,881,563	11,892,641
			- borrowings from other customers	104,519	106,912	99,718	101,649
- debt securities issued		1,608,939	1,699,477	1,338,235	1,363,301	1,608,939	1,699,477	1,338,235	1,363,301
			- other financial liabilities	296,725	296,725	357,116	357,116	145,802	145,802	198,020	198,020

Loans and advances to banks: The estimated fair value of deposits is based on discounted cash flows using prevailing market interest rates for instruments with similar credit risk and residual maturities. The fair value of overnight deposits equals their carrying value.

Loans and advances to customers: The estimated fair value of loans and advances represents the discounted amount of estimated future cash flows expected to be received. Expected cash flows are discounted at current market rates for debts with similar credit risk and residual maturities to determine their fair value.

Deposits and borrowings: The fair value of sight deposits and overnight deposits equals their carrying value. However, their actual value for NLB Group depends on the timing and amounts of cash flows, current market rates, and the credit risk of the depository institution itself. A portion of sight deposits is stable, similar to term deposits. Therefore, their economic value for NLB Group differs from the carrying amount. The estimated fair value of other deposits and borrowings from customers is based on discounted cash flows using interest rates for new deposits with similar residual maturities.

Debt securities measured at amortised cost and debt securities issued: The fair value of debt securities measured at amortised cost and debt securities issued is based on their quoted market price or value calculated by using a discounted cash flow method and the prevailing money market interest rates.

Loan commitments: For credit facilities that are drawn soon after the NLB Group grants loans (drawn at market rates) and loan commitments to those clients that...

Financial Instruments Not Measured at Fair Value

For loan commitments to clients that are impaired, fair value represents the amount of the recognised provisions. Other financial assets and liabilities The carrying amount of other financial assets and liabilities is a reasonable approximation of their fair value as they mainly relate to short-term receivables and payables.

in EUR thousands

31 Dec 2024

	NLB Group	Level 1	Level 2	Level 3	Total fair value
Financial assets measured at amortised cost	- debt securities	3,067,440	632,269	7,249	3,706,958
		- loans and advances to banks	-	458,651	-	458,651
- loans and advances to customers	-	15,697,133	15,697,133	-
		- other financial assets	-	136,854	136,854	-
Financial liabilities measured at amortised cost	- and central banks	-135,957	-	135,957
- deposits from banks		- borrowings from banks	-120,065	-	120,065
- due to customers	-22,194,577	-	22,194,577
	- borrowings from other customers	-	106,912	106,912	-
- debt securities issued	1,699,477	-	1,699,477
- other financial liabilities	-	296,725	296,725

31 Dec 2023

		NLB Group	Level 1	Level 2	Level 3	Total fair value
Financial assets measured at amortised cost		- debt securities	2,030,120	403,255	7,221	2,440,596
- loans and advances to banks	-547,555	-	547,555
		- loans and advances to customers	-	13,256,192	13,256,192	-
			- other financial assets	-	165,962	165,962	-
Financial liabilities measured at amortised cost		- and central banks	-95,657	-	95,657
- deposits from banks			- borrowings from banks	-134,020	-	134,020
- due to customers	-20,746,603	-	20,746,603
			- borrowings from other customers	-	101,649	101,649	-
- debt securities issued	1,363,301	-	1,363,301
- other financial liabilities	-	357,116	357,116

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Environmental and Climate-Related Risks

The NLB Group is engaged in contributing to sustainable finance by incorporating environmental, social, and governance (ESG) risks into its business model. With the adoption of the NLB Group Sustainability programme, NLB Group implemented sustainability elements into its business model. Thus, sustainable finance integrates ESG criteria into the Group’s clients and society.

The NLB Group Sustainability Committee oversees the integration of the ESG factors to the NLB Group business model. ESG risks represent one of the risks established in the risk management framework in the areas of credit, liquidity, market, and operational risk. The management of ESG risks follows ECB and EBA guidelines, following the tenets of sustainable finance.

ESG risks are incorporated into the Group’s overall credit approval process, collateral management, and the related credit portfolio management. Sustainable financing is implemented in addition to addressing ESG risks in all relevant stages of the credit-granting process; relevant ESG criteria were also considered in the collateral evaluation process.

NLB Group conducts assessments of the level of transitional and physical risk to which the Group is exposed. In this process, the identification of environmental risk factors, relevant transmission channels, and their material periods are assessed. From the perspective of physical risk, the most relevant natural disasters are floods, landslides, and drought, while hail and windstorms are also frequent, but less impactful.

It is crucial that adequate policy changes are implemented in a timely manner. Chronic risk is not determined as a material risk. On the portfolio level, the Group does not face any large concentration to transitional risk being more prevalent. Based on the industry segmentation of the portfolio and corresponding emissions, the Group has a relatively low exposure to emission-intensive sectors that extract fossil fuels or operate coal-fired power plants as part of its strategy.

Moreover, as a UN Net-Zero Banking Alliance member, the Bank pledged to align its lending and investment strategies with sustainable practices. The Group has focused on fossil fuel-based and highly energy-intensive sectors (power generation and iron and steel) and other sectors where the Bank has substantial emissions and/or exposure.

Activities for setting a second round of NZBA targets for sectors such as transport and agriculture are underway. An internal ESG stress-testing concept to identify the most relevant financial risks has been established, which was further revised and enhanced by considering disposable ESG-related data. The results of the climate stress tests showed no material impacts on the Group’s capital.

Stress test exercise – the 2024 EBA Fit-for-55 climate risk scenario analysis. By performing this exercise, the ECB assessed how banks are prepared to deal with financial and economic challenges.

Group has entered into bilateral foreign exchange netting arrangements with certain banks and corporates. Cash flows from such transactions that are due on the same day in the same currency are netted. The netting of all interest rates derivatives is also carried out by netting of both legs of the transaction. Assets and liabilities related to these netting arrangements are not presented in a net amount in the entire financial instrument. NLB Group also holds certain standardised derivatives (some interest rate swaps) with a clearing house or central counterparty. A system of daily margins assures cash flows for each currency. All derivatives are conducted under the conditions of signed Master Agreements (MA), with international banks. The ISDA MA is in place along with CSA for the exchange of margining.

540 in EUR thousands

NLB Group 31 Dec 2024

Amounts not set off in the statement of financial position	Financial assets/liabilities	Gross amounts of recognised financial assets/master netting instruments	Net amount	Impact of Financial liabilities agreements collateral
Derivatives - assets	86,653	5,359	79,335	1,958
Derivatives - liabilities	10,583	5,014	518	5,051

NLB Group 31 Dec 2023

Amounts not set off in the statement of financial position	Financial assets/liabilities	Gross amounts of recognised financial assets/master netting instruments	Net amount	Impact of Financial liabilities agreements collateral
Derivatives - assets	63,283	4,992	52,103	6,188
Derivatives - liabilities	16,714	4,992	1,563	10,159

NLB 31 Dec 2024

Amounts not set off in the statement of financial position	Financial assets/liabilities	Gross amounts of recognised financial assets/master netting instruments	Net amount	Impact of Financial liabilities agreements collateral
Derivatives - assets	89,397	5,681	79,335	4,381
Derivatives - liabilities	11,238	5,336	518	5,384

NLB 31 Dec 2023

Amounts not set off in the statement of financial position	Financial assets/liabilities	Gross amounts of recognised financial assets/master netting instruments	Net amount	Impact of Financial liabilities agreements collateral
Derivatives - assets	65,551	5,013	54,346	6,192
Derivatives - liabilities	18,929	5,013	1,563	12,353

NLB Group and NLB have no financial assets/liabilities set off in the statement of financial position.

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Analysis by Segment for NLB Group

in EUR thousands	NLB Group 2024
		Corporate and Strategic	Financial	Retail Banking	Investment Banking	Foreign Markets in Non-Core	Other
		Total net income	448,318	178,806	619,035	(823)	1,282	10,917	-	1,257,535
Net income from external customers	275,938	222,584	627,179	105,582	565	12,962	-	1,244,810
		Intersegment net income	172,380	(43,778)	(8,144)	(106,405)	717	(2,045)	-	12,725
			Net interest income	325,249	131,729	483,131	(4,064)	924	(2,808)	-	934,161
	Net interest income from external customers	157,483	180,490	492,294	104,083	407	(596)	-	934,161
			Intersegment net interest income	167,766	(48,761)	(9,163)	(108,147)	517	(2,212)	-	-
Administrative expenses	(160,250)	(69,651)	(252,733)	(12,043)	(7,355)	(53,417)	-	(555,449)
			Depreciation and amortisation	(15,600)	(6,397)	(32,417)	(818)	(237)	(4,019)	-	(59,488)
		Reportable segment profit/(loss) before impairment and provision charge	272,468	102,758	333,885	(13,684)	(6,310)	(46,519)	-	642,598
Other net gains/(losses) from equity investments in associates and joint ventures	2,990	-	-	-	-	2,990
		Impairment and provisions charge	(28,118)	(7,576)	4,073	(706)	2,174	(7,286)	-	(37,439)
Profit/(loss) before income tax		247,340	95,182	337,958	(14,390)	(4,136)	(53,805)	-	608,149
		Owners of the parent	247,340	95,182	322,277	(14,390)	(4,136)	(53,805)	-	592,468
			Non-controlling interests	-	-	15,681	-	-	-	15,681
Income tax	(77,916)			-	-	-	-	-	-	(77,916)
	Profit for the year	514,552
		Reportable segment assets	4,748,021	3,911,138	12,454,973	6,390,862	28,658	487,054	-	28,020,706
Investments in associates and joint ventures	14,661	-	-	-	-	14,661
		Reportable segment liabilities	9,879,695	2,428,556	10,407,559	1,789,151	2,312	230,049	-	24,737,322
Additions to non-current assets	35,099	11,939	41,496	807	2	4,048	-	93,391

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Markets Slovenia

in EUR thousands	NLB Group 2023
	Corporate and Strategic	Financial	Retail Banking	Investment Banking	Foreign Markets in Non-Core	Other
	Total net income	366,988	149,184	541,624	40,437	(131)	5,574
Net income from external customers	246,811	204,868	541,098	95,748	(578)	5,349
Intersegment net income	120,177	(55,684)	526	(55,311)	447	225
	Net interest income	264,707	106,462	423,249	37,752	1,540	(376)
Net interest income from external customers	147,803	161,103	429,464	94,023	1,444	(503)
	Intersegment net interest income	116,904	(54,641)	(6,215)	(56,271)	96	127
Administrative expenses	(141,132)	(63,955)	(223,239)	(9,202)	(13,230)	(12,740)
	Depreciation and amortisation	(12,675)	(6,240)	(27,990)	(689)	(508)	(635)
Reportable segment profit/(loss) before impairment and provision charge	213,181	78,989	290,395	30,546	(13,869)	(7,801)
Other net gains/(losses) from equity investments in associates and joint ventures	1,072	-	-	-	-	1,072
Impairment and provisions charge	(32,592)	7,909	1,124	4,757	3,729	973
	Profit/(loss) before income tax	181,661	86,898	291,519	35,303	(10,140)	(6,828)
Owners of the parent	181,661	86,898	278,896	35,303	(10,140)	(6,828)
	Non-controlling interests	-	12,623	-	-	-	12,623
	Income tax	(15,090)
Profit for the year	550,700
Reportable segment assets	3,778,767	3,376,370	11,058,835	7,232,457	47,097	435,940
	Investments in associates and joint ventures	12,519	-	-	-	-	12,519
Reportable segment liabilities	9,381,016	2,512,801	9,329,079	1,540,000	3,419	227,680
	Additions to non-current assets	19,775	9,826	40,239	505	4	4,099

Segment reporting is presented in accordance with the strategy on the basis of the organisational structure used in management reporting of NLB Group’s results. NLB Group’s segments are business units that focus on different customers and markets. They are managed separately because each business unit requires different strategies and service levels. The business activities of the parent bank (NLB) are divided into several segments. Interest income and expenses are reallocated between segments on the basis of fund transfer prices (FTP). Other NLB Group members are, based on their business activity, included in only one segment except NLB Lease&Go, leasing, Ljubljana and Summit Leasing Slovenija, which are according to their business activities divided into two segments. N Banka is included as an independent legal entity in segment analysis for the year 2023 until 1 September 2023, when the legal and operational merger between N Banka and NLB was successfully completed. The segments of NLB Group are divided into core and non-core segments. The core segments are the

NLB Group Annual Report 2024

Overview

Retail Banking in Slovenia covers individuals and micro companies, asset management (NLB Skladi, Ljubljana), and the part of NLB Lease&Go, leasing, Ljubljana and Summit Leasing Slovenija, Ljubljana operating with retail clients, as well as the part of the result of the associated company Bankart.

Corporate and Investment Banking in Slovenia covers Key Corporate Clients, SMEs, Cross-Border Corporate Financing, Investment Banking and Custody, Trade finance, Restructuring and Workout, and the part of NLB Lease&Go, leasing, Ljubljana, and Summit Leasing Slovenija, Ljubljana operating with corporate clients.

Strategic Foreign Markets consist of strategic banks in the Group operating in the strategic markets (Serbia, North Macedonia, Bosnia and Herzegovina, Kosovo, and Montenegro), as well as the investment companies NLB Fondovi, Skopje and NLB Fondovi, Beograd, NLB DigIT, Beograd, and leasing companies NLB Lease&Go Skopje, NLB Lease&Go leasing Beograd, and Mobil Leasing, Zagreb.

Financial Markets in Slovenia include treasury activities and trading with financial instruments, while also presenting the results of asset and liability management (ALM).

Other activities include categories whose operating results cannot be allocated to specific segments, as well as NLB Cultural Heritage Management Institute, Real Estate entities from 2024 (the latter were previously in the non-core segment) and newly established company NLB Car&Go, Ljubljana.

Non-Core Members include the operations of non-core NLB Group members, i.e. entities in liquidation, LHB, NLB Srbija, NLB Crna Gora, and SLS HOLDCO, Ljubljana.

NLB Group is primarily a financial group, and net interest income represents the majority of its net revenues. NLB Group’s main indicator of a segment’s efficiency is net profit before tax. No revenues were generated from transactions with a single external customer that would amount to 10% or more of NLB Group’s revenues.

Financial Overview

in EUR thousands	Revenues	Net income	Profit/(loss) before income tax	Income tax
			2024	2023	2024	2023	2024	2023	2024	2023
NLB Group	872,734	729,170	617,297		556,854	250,734	275,533	(35,689)	19,447
	South East Europe	770,095	663,042	626,954	538,752	356,653	305,507	(42,196)	(34,525)
				Bosnia and Herzegovina	119,925	104,460	100,789	85,158	47,928	40,677	(3,913)	(3,467)
Croatia	2,914		3,039	(557)	189	(527)	(336)
		Kosovo	78,396	68,279	61,730	56,374	40,786	39,797	(3,924)	(3,995)
				Montenegro	68,936	62,625	56,720	51,658	33,562	32,032	(4,989)	(5,502)
North Macedonia	126,627	111,599	105,436	90,233	76,479	49,895	(9,903)	(4,910)
			Serbia	373,297	316,079	299,240	255,886	157,709	143,633	(19,131)	(16,651)

---

NLB Group Annual Report 2024

Overview

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Region	Revenues	Net Income	Profit/(loss) before income tax	Income tax
Western Europe	209,103	559	(2,310)	762
Germany	-	-	2,951	(160)
Switzerland	209,103	530	(2,361)	922
Total	1,643,038	1,392,315	1,244,810	1,093,296

The column ‘Revenues’ includes interest and similar income, dividend income, and fee and commission income. The column ‘Net Income’ includes net interest income, dividend income, net fee and commission income, the net effect of financial instruments, foreign exchange translation, the effect on the derecognition of assets, net operating income, cash contribution to resolution funds and deposit guarantee schemes, gains less losses from modification of financial assets, and gain less losses from non-current assets held for sale.

Financial Overview

Non-current assets	Total assets	Number of employees
Slovenia	212,961	15,554
South East Europe	238,335	12,462,052
Bosnia and Herzegovina	40,195	2,156,231
Croatia	4,490	125,708
Kosovo	13,571	1,426,811
Montenegro	24,522	956,080
North Macedonia	36,567	2,168,629
Serbia	118,990	5,628,593
Western Europe	1,027	19,064
Germany	10	27
Switzerland	-	18,548
Total	451,306	28,035,367

Financial Performance

Region	Revenues	Net Income	Profit/(loss) before income tax	Income tax
Slovenia	1,155,998	860,643	525,573	(34,802)
South East Europe	780,300	621,072	359,168	(42,497)
Bosnia and Herzegovina	121,307	98,514	83,567	(3,913)
Croatia	2,914	1,672	(385)	277
Kosovo	78,654	59,608	40,952	(3,924)
Montenegro	71,505	56,360	33,557	(4,989)
North Macedonia	127,080	102,660	77,081	(9,903)
Serbia	378,840	302,258	159,494	(19,416)
Western Europe	216	490	(2,467)	766
Germany	-	29	(160)	-
Switzerland	216	118	(2,518)	926
Total	1,936,514	1,482,205	885,507	(77,330)

---

Related-Party Transactions

A related party is a person or entity that is related to NLB Group in such a manner that it has control or joint control, has a significant influence, or is a member of the Management Board, other key management personnel and their family members; the Supervisory Board; companies in which members of the Management Board and other management personnel or their family members have control, joint control, or a significant influence.

in EUR thousands						2024	2023
		Loans issued	Deposits received	Loans issued	Deposits received
						Balance at 1 January	1,855	2,367	2,173	2,556
					Increase	1,663	4,742	1,214	2,617
						Decrease	(1,456)	(4,476)	(1,532)	(2,806)
Balance at 31 December	2,062	2,633	1,855			2,367
				Interest income	65	-	57	-
					Deposits received	1,153	1,057	926	476
						Interest expenses	(33)	-	(33)	(7)
		Other financial assets	1	-	-	-
					Other financial liabilities	1	-	-	6
Other financial liabilities measured at fair value through profit or loss (note 2.32.)						4,960	-	2,075	-
Other operating liabilities		15,028	-	11,066	-
					Guarantees issued and loan commitments	302	79	287	64
						Fee income	22	8	199	3
						Other income	21	-	16	-
Other expenses	(122)	(1)	(94)	(1)

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Companies in which members of the NLB Management Board and other Key Family members of the Management Board, key management personnel or their family members have control, joint control or a significant influence

	2024	2023
	Loans issued	Deposits received	Interest income	Interest expenses
	Balance at 1 January	1,854	2,357	655	(33)
	2,172	2,536	7	(33)
Increase	1,648	4,672	18	(7)
	1,203	2,555	17	(6)
	Decrease	(1,440)	(4,396)
	(1,521)	(2,734)
Balance at 31 December	2,062	2,633	655	(33)
	1,854	2,357	7	(6)

Key management compensation

The remuneration for the 2024 for the members of the Supervisory Board of NLB d.d. and the Management Board of NLB d.d. is regulated in Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d. The remuneration for the identified employees and other employees is regulated in Remuneration Policy for employees of NLB d.d. and NLB Group.

In the Remuneration Policy and based thereon and in accordance with Commission Delegated regulation (EU) 2021/923, the Bank designates identified employees. In designating identified employees, the internal organisation and the nature, scope, and complexity of the Bank’s activities are taken into account. The criteria fully take into account the risks that the Bank or the NLB Group is or could be exposed to its given risk profile and risk appetite.

As identified employees under the Remuneration Policy are identified members of the Bank’s Supervisory Board, members of the Bank’s Management Board, senior management, and other identified employees identified as identified employees on the basis of the Bank’s annual self-assessment. Members of the Supervisory Board may, in relation to their function of a member of the Supervisory Board, receive only remuneration that is compliant with the relevant resolutions of the Bank’s General Meeting. The Supervisory Board members are entitled to a remuneration for performing their function for their membership in the.

Supervisory Board of the Bank and the committees of the Supervisory Board of the Bank, which are determined in accordance with respective applicable resolution by the General Meeting of the Bank, and to reimbursement of travel expenses and accommodation costs up to the amount provided by the regulations governing reimbursement of costs related to work and other income not included in the tax base. The Bank’s General Meeting may determine and change the remuneration of the members of the Supervisory Board independently from the Remuneration Policy, and may change, repeal, or replace any of its resolutions in relation to the remuneration of the Supervisory Board members at any time, or adopt a new resolution in relation to the remuneration of the Supervisory Board members. The last changes of the remuneration of members of the Supervisory Board were adopted at the General Meeting of NLB d.d. 19 June 2023.

The performance of Management Board Members is defined by financial and non-financial criteria. In addition to the salary determined in their employment contract, other income and reimbursement of costs and other benefits, they are also entitled to a Performance Bonus which is divided into a short-term incentive (hereinafter: ‘STI’) and a long-term incentive (hereinafter: ‘LTI’).

Short-term Performance Criteria for STI and LTI

Consists of the financial goals of NLB in EUR thousands

NLB Group	NLB Management Board	Other key management personnel
2024	2023	2024	2023	2024	2023
Short-term benefits	3,678	3,076	7,550	547
NLB Group Annual Report	2024	Overview	MB Statement	SB Statement	Key Highlights
Business Report	Strategy	Risk Factors & Outlook	Performance Overview	Segment Analysis	N
6,604	775	728	Cost refunds	9	9
115	112	89	104	Long-term bonuses:	- severance pay
-	-	189	120	- other benefits	1753
178	163	- variable part of payments	901	299	2,346
1,252	-	Total	Group	the goals in the areas covered by the individual Management Board Member, and the personal goals.

To determine the performance of an individual member of the Management Board of the Bank’s annual business plan. Also, the Supervisory Board of NLB d.d. confirms the objectives of the heads of control or supervisory functions and financial targets of NLB d.d. determined by the Management Board. Management Board members are entitled to a STI in the amount of a maximum of nine average gross monthly salaries of each member of the Management Board.

Other identified employees are entitled to a variable part of remuneration according to the category entitled to a variable part of the performance benefit only in proportional part to the actual period of employment (duration of the term of office) of the Bank during the period to which.

remuneration is paid no later than three months after the adoption of the Annual Report of NLB Group for the business year to which the variable remuneration relates. Variable remuneration deferral, provided that the amount does not exceed EUR 50 thousand or/and is higher than one-third of his/her total remuneration for each financial year, and if this is permissible in accordance with the relevant regulations.

The part of the variable remuneration of an identified employee consisting of instruments shall be awarded and paid under the terms and conditions in the valid Remuneration Policy in accordance with the relevant regulations. The deferred part of the variable part of the salary must be deferred for a period of at least five years or paid in proportional shares (in fifths), according to the relevant legislation. The table below shows payments in presented periods:

NLB Group Annual Report 2024

Payments to individual members of the Management Board

Member/Mandate	2024	2023
Blaž Brodnjak 01.12.2012	* Short-term benefits:
* * - gross salary and holiday allowance: 753,098
* - benefits and other short-term bonuses: 14,405
* Costs refunds: 1,452
Long-term bonuses:
* - other benefits: 2,904
* - variable part of payments: 241,055
Total: 1,012,914	- Short-term benefits:
- * - gross salary and holiday allowance: 662,159
* - benefits and other short-term bonuses: 9,040
* Costs refunds: 1,490
Long-term bonuses:
* - other benefits: 2,904
* - variable part of payments: 92,854
Total: 768,447
Peter Andreas Burkhardt	* Short-term benefits:
* * - gross salary and holiday allowance:
* - benefits and other short-term bonuses:
* Costs refunds:
Long-term bonuses:
* - other benefits:
* - variable part of payments:
Total:	- Short-term benefits:
- * - gross salary and holiday allowance:
* - benefits and other short-term bonuses:
* Costs refunds:
Long-term bonuses:
* - other benefits:
* - variable part of payments:
Total:
---
# 18.09.2013

- gross salary and holiday allowance	678,405	552,167
- benefits and other short-term bonuses	48,283	46,318
Costs refunds	1,504	1,540
Long-term bonuses:
- other benefits	2,904	3,364
- variable part of payments	210,292	83,480
Total	941,387	686,869

Archibald Kremser

31.07.2013

- gross salary and holiday allowance	718,973	632,159
- benefits and other short-term bonuses	35,699	33,364
Costs refunds	1,434	1,324
Long-term bonuses:
- other benefits	2,904	3,364
- variable part of payments	229,865	88,539
Total	988,875	758,750

Antonio Argir

28.04.2022

- gross salary and holiday allowance	453,128	352,909
- benefits and other short-term bonuses	56,206	64,854
Costs refunds	1,431	1,515
Long-term bonuses:
- other benefits	2,904	37,140
- variable part of payments	73,114	34,047
Total	586,783	490,465

Andrej Lasič

28.04.2022

- gross salary and holiday allowance	453,128	352,909
- benefits and other short-term bonuses	1,364	3,756
Costs refunds	1,387	1,469
Long-term bonuses:
- other benefits	2,904	3,364
- variable part of payments	73,114	34,047
Total	531,897	395,545

Hedvika Usenik

28.04.2022

- gross salary and holiday allowance	453,128	352,909
- benefits and other short-term bonuses	12,336	13,234
Costs refunds	1,325	1,507
Long-term bonuses:
- other benefits	2,904	2,904
- variable part of payments	73,114	34,047
Total	542,807	404,601

Payments to individual members of the Supervisory Board

Member/Mandate		2024	2023
Primož Karpe	Annual compensation	110,400	103,680
	Other bonuses - benefit	292	279
	Costs refunds	12,364	9,300
David Eric Simon	Annual compensation	43,211	87,480
	Other bonuses - benefit	-	279
	Costs refunds	9,534	13,162
Shrenik Dhirajlal Davda	Annual compensation	103,500	83,683
	Other bonuses - benefit	292	279

---

Costs refunds

Name	Annual compensation	Other bonuses - benefit	Costs refunds
Mark William Lane Richards	93,150	292	13,300
			19,444
Verica Trstenjak	38,410	-	11,984
		279	18,141
Sergeja Kočar	34,572	292	1,048
		279	3,490
Islam Osama Bahgat Zekry	82,800	292	4,115
		279	1,017
Tadeja Žbontar Rems	54,265	292	10,621
		279	17,656
Cvetka Selšek	86,020	292	1,292
		279	309
André Marc Richard Prudent Toccanier	93,150	292	2,431
		279	2,580
Luka Vesnaver	20,930	292	11,126
		-	6,773
Natalia Olegovna Ansell	12,190	-	1,463
		-	-
Gregor Rok Kastelic	-	-	9,660
		38,025	-
Andreas Klingen	-	-	-
		42,250	4,527

in EUR thousands

NLB Group

Associates

Joint ventures

2024	2023
Loans issued	Balance at 1 January	101,057	-
Increase	119	1,161	-
Decrease	(117)	(2,208)	-
Balance at 31 December	550	NLB Group

Annual Report 2024 Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Interest income	Impairment
-63	-
-	825

Deposits received

Balance at 1 January	Effects of translation of foreign operations to presentation currency
6,168	-
5,375	-4
Increase	6,753
Decrease	(2,588)
Balance at 31 December	10,333

Interest expenses

-	(48)	(36)

Other financial assets

7	7	-	1

Other financial liabilities

1,642	1,460	-	-

Guarantees issued and loan commitments

2830	-

Income/(expenses) provisions for guaranties and commitments

-	2	-

Fee income

8	8	-

Fee expenses

(18,891)	(16,167)	-

Other income

42	53	5	5

Other expenses

(827)	(1,174)	-

---

in EUR thousands

	NLB	Subsidiaries	Associates	Joint ventures	2024	2023	2024	2023	2024	2023
				Loans issued	Balance at 1 January	458,684	337,900	10	982	-	201
					Increase	1,466,812	660,088	551	-	-	-	-
NLB Group		Annual Report 2024	Overview	MB Statement	SB Statement	Key Highlights	Business Report	Strategy	Risk Factors & Outlook	Performance Overview	Segment Analysis
	Decrease	(575,225)	(539,304)	(117)	(2,133)	-	(203)
				Balance at 31 December	1,350,271	458,684	12	10	-	-
					of which at amortised cost	1,345,680	450,213	12	10	-	-
of which at fair value through profit or loss		4,591	8,471	-	-	-	-
			Interest income	38,472	19,938	-	63	-	1
				Impairment	(1,651)	11	-	861	-	6
					Valuation	658	1,231	-	-	-	-
					Deposits	Balance at 1 January	21,762	223,492	-	-	-
Increase	1,646,007	1,120,256	-	-	-	-
			Decrease	(1,605,441)	(1,321,986)	-	-	-	-
				Balance at 31 December	62,328	21,762	-	-	-	-
					Interest income	1,337	985	-	-	-	-
					Impairment	-	43	-	-	-	-
Other equity instruments					Balance at 1 January	-	-	-	-	-
			Increase	19,930	-	-	-	-	-
				Balance at 31 December	19,930	-	-	-	-	-
					Loans received	Balance at 1 January	-	13,001	-	-	-
			Increase		330,057	36,887	-	-	-	-
Decrease	(330,057)	(49,888)	-	-	-	-
				Balance at 31 December	-	-	-	-	-	-
				Interest expenses	(1,924)	(24)	-	-	-	-
					Deposits received	Balance at 1 January	104,949	165,778	6,168	5,375	395	40
Increase	93,033	722	87,107	211	6,753	10,378	94	418
			Decrease	(92,978)	(89,168)	(2,588)	(9,585)	(56)	(63)
					Balance at 31 December	160,582	104,949	10,333	6,168	433	395
					Interest expenses	(6,136)	(5,205)	-	-	-	-
			Derivatives	Fair value	2,090	54	-	-	-
				Contractual amount	206,739	298,290	-	-	-	-
					Interest income	101	25	-	-	-	-
					Interest expenses	(474)	(208)	-	-	-	-
Other financial assets	3,092	2,058	7	7	-	-
				Impairment	-	3	-	-	-	-
				Other financial liabilities	4,545	4,615	1,394	1,340	-	-
					Guarantees issued and loan commitments	100,348	87,094	2830	-	-	-
		Income/(expenses) provisions for guaranties and commitments		120	(76)	-	2	-	-
					Received loan commitments and financial guarantees	11,103	10,741	-	-	-	-
					Fee income	15,309	10,632	8	8	-	-
Fee expenses	(4)	(5)	(15,240)	(12,698)	-	-
			Other income	2,366	1,959	42	43	2	2
				Other expenses	(6,352)	(5,087)	(820)	(1,137)	-	-
Gains less losses from financial assets and liabilities held for trading	2,811	(1,898)	-	-	-	-

---

NLB Group

in EUR thousands

Loans issued

	NLB Group	NLB	2024	2023
Balance at 1 January	13,384	17,595	13,384	17,595
Increase	2,670	2,731	2,670	2,731
Decrease	(1,941)	(6,942)	(1,941)
Balance at 31 December	14,113	13,384	14,113	13,384

Interest income

-	713

Investments in securities

	NLB Group	NLB	2024	2023
Balance at 1 January	577,529	564,287	516,926	473,389
Exchange difference on opening balance	103	(27)	-	-
Acquisition of subsidiaries	-	-	-	33,617
Increase	448,959	550,561	393,686	409,682
Decrease	(287,713)	(548,065)	(209,996)	(410,346)
Valuation	9,583	10,773	8,341	10,584
Balance at 31 December	748,456	577,529	708,957	516,926

Interest income

12,825	7,131	11,543	5,692

Interest expenses

-	(21)	-	(21)

Other financial assets

113	65

Other financial liabilities

60	20

Guarantees issued and loan commitments

1,681	1,466	1,681	1,466

Fee income

1,174	574	1,174	574

Fee expenses

(27)	(28)	(27)	(28)

Other income

250	272	250	272

Other expenses

(5)	(5,009)	(5)	(5,009)

Gains less losses from financial assets and liabilities not measured at fair value through profit or loss

-	(656)	-	(656)

Gains less losses from financial assets and liabilities held for trading

19	-	19	-

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Amount of Significant Transactions

in EUR thousands	NLB Group	Number of significant transactions concluded during the year	2024	2023
Guarantees issued and loan commitments	-	50,000	-	1

Year-end Balance of All Significant Transactions

in EUR thousands	NLB Group	at year-end	2024	2023
Loans	386,762	406,005	6	10
Debt securities measured at amortised cost	63,912	64,132	1	1
Borrowings, deposits and business accounts	40,159	30,399	1	3

Effects in Income Statement During the Year

in EUR thousands	NLB Group	2024	2023
Interest income from loans	16,364	18,489
Fees and commissions income	55	51
Interest income from debt securities measured at amortised cost and net valuation effects from hedge accounting	2,151	2,411

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Events After the Reporting Date

Senior Preferred Bonds

On January 21, 2025, NLB issued senior preferred bonds in a total nominal value of EUR 500 million, 4NC3 tenor, and ISIN code X for the repurchase of outstanding Tier 2 subordinated bonds, with approaching call dates and ISIN code XS2113139195, in the amount of EUR 10.5 million.

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Group Directory

Nova Ljubljanska banka d.d., Ljubljana

Trg republike 2

1000 Ljubljana, Slovenia

Tel: +386 1 476 39 00, +386 1 477 20 00

E-mail: info@nlb.si

www.nlb.si

Slovenian network

Northwest and Central Slovenia

Ljubljanska cesta 62

1230 Domžale, Slovenia

Area Branch East Slovenia

Titova cesta 2

2000 Maribor, Slovenia

Area Branch Northeast Slovenia

Rudarska

Novo mesto, Slovenia

Area Branch Southwest Slovenia

Cesta Zore Perello - Godina 7

6000 Koper, Slovenia

Private Banking

Trg republike 2

1000 Ljubljana, Slovenia

Micro Enterprises

Slovenia

Small and Mid-Corporates

Central Slovenia

Trg republike 2

1000 Ljubljana, Slovenia

Northwest region

Ljubljanska cesta 62

1230 Domžale, Slovenia

Primorsko-Goriška region

Cesta Zore Perello - Godina 7

2000 Maribor, Slovenia

Savinjsko-Koroška region

Kocenova 1

3000 Celje, Slovenia

Dolenjsko-Posavska region

Seidlova cesta 3

8000 Novo mesto, Slovenia

CSA & Cross-Border Finance

Trg republike 2

1000 Ljubljana, Slovenia

Large Corporates

Trg republike 2

1000 Ljubljana, Slovenia

Investment Banking and Custody

Trg republike 2

1000 Ljubljana, Slovenia

Trade Finance Services

Banka AD Beograd

Bulevar Mihajla Pupina 165v

11070 New Belgrade, Serbia

E-mail: kontakt.centar@nlbkb.rs

www.nlbkb.rs

NLB Banka AD Skopje

Vodnjanska 1

1000 Skopje, North Macedonia

78000 Banja Luka, Republic of Srpska, Bosnia and Herzegovina

E-mail: nlbinfo@nlb-rs.ba

www.nlb-rs.ba

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Banka d.d., Sarajevo

Ul. Koševo br. 3

71000 Sarajevo, Bosnia and Herzegovina

E-mail: info@nlb.ba

www.nlb.ba

NLB Banka sh.a., Prishtina

Rr. Ukshin Hoti nr. 124

10000 Prishtina, Kosovo

Podgorica

Bulevar Ivana Crnojevića 171

81000 Podgorica, Montenegro

E-mail: info@nlb.me

www.nlb.me

NLB DigIT d.o.o., Beograd

Omladinskih brigada 90b

11070 New Belgrade, Serbia

NLB Lease&Go, d.o.o., Skopje

Vodnjanska 1

1000 Skopje, North Macedonia

E-mail: info@nlbleasego.si

www.nlbleasego.si

NLB Car&Go d.o.o., Ljubljana

Šlandrova ulica 2

1231 Ljubljana - Črnuče, Slovenia

Leasing Slovenija d.o.o., Ljubljana

Flajšmanova ulica 3

1000 Ljubljana, Slovenia

E-mail: info@summit-leasing.si

www.summit-leasing.si

Mobil Leasing d.o.o.

Kovinska ulica 5

10000 Z

Heritage Management Institute, Ljubljana

Čopova ulica 3

1000 Ljubljana, Slovenia

www.nlb-muza.si

Prvi faktor d.o.o., v likvidaciji, Ljubljana

Slovenska cesta 17

1000 Ljubljana, Slovenia

New Belgrade, Serbia

Prvi faktor d.o.o. u likvidaciji, Zagreb

Miramarska cesta 24

10000 Zagreb, Croatia

E-mail: info@prvifaktor.hr

NLB InterFinanz AG in Liquidation, Zürich

Beethovenstrasse 14

d.o.o., Beograd – u likvidaciji

Bulevar Mihajla Pupina 165v

11070 New Belgrade, Serbia

NLB Skladi, upravljanje premoženja, d.o.o., Ljubljana

Tivolska cesta 48

1000 Ljubljana, Slovenia

11000 Belgrade, Serbia

E-mail: info@nlbfondovi.rs

www.nlbfondovi.rs

NLB Fondovi AD Skopje

Blvd. Partizanski odredi 14A-1/2

1000 Skopje, North Macedonia

E-mail: info@nlbfondovi.rs

Slovenia

E-mail: info@bankart.si

www.bankart.si

LHB Aktiengesellschaft, Frankfurt am Main

Silberbornstrasse 14

D-60320 Frankfurt, Germany

PRO-REM d.o.o., Ljubljana – v likvidaciji

NLB REAL ESTATE d.o.o., Podgorica

Bul. Džordža Vašingtona br. 102, I. sprat/20

81000 Podgorica, Montenegro

E-mail: info@nlb-re.com

www.nlbrealestate.com

OL Nekretnine d.o.o. u

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

REAL ESTATE d.o.o., Beograd Bulevar Mihajla Pupina 165v 11070 New Belgrade, Serbia E-mail: office@nlbre.rs www.nlbrealestate.com

NLB Srbija d.o.o., Beograd Bulevar Mihajla Pupina 165v 11070 New Belgrade, Serbia

NLB Crna Gora d.o.o., Podgorica Bulevar Džordža Vašingtona 102, II sprat/38 81000 Podgorica, Montenegro

NLB REAL ESTATE d.o.o., Ljubljana Čopova 3 1000 Ljubljana, Slovenia E-30 1354 Horjul, Slovenia

Branches and Representative Offices of NLB Group members outside their country of residence

NLB InterFinanz AG in Liquidation Ljubljana Branch in liquidation

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Definitions and Glossary of Selected Terms

AC	Amortised Costs
AIB	Associations of Issuing Bodies
AJPES	Agency of the Republic of Slovenia for Public Legal Records and Related Services
ALMM	Additional Liquidity Monitoring Metrics
AML/CTF	Anti-Money Laundering and Counter-Terrorism Financing
AMLD	Anti-Money Laundering Directive
Articles of Association
Additional Tier 1 capital
AuM	Assets under Management
AVA	Additional Valuation Adjustments
BAM	Bosnian Convertible Mark
BCM	Business Continuity Management
BCP	Business Continuity Planning
BMR	Benchmarks Regulation
BoS	Bank of Slovenia
bps	Basis Points
BPV	Basis Point Value
BSCC	British-Slovenian Chamber of Commerce
CAPEX	Capital Expenditure
CBR	Combined Buffer Requirement
CCF	Credit Conversion Factor
CCYB	Countercyclical Capital Buffer
CEE	Central Eastern Europe
CEO	Chief Executive Officer
CER	Sustainability Efficiency Centre
CFO	Chief Financial Officer
CGU	Cash-Generating Units
CGPO	Chief Group Governance, Payments and Innovations Officer
CIR	Cost-to-Income Ratio
CISO	Chief Information Security Officer

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Abbreviations

CRE	Commercial Real Estate
CRM	Customer Relationship Management
CRO	Chief Risk Officer
CRR	Capital Requirements Regulation
CSA	Credit Support Annex
CSR	Corporate Social Responsibility
CSRD	Corporate Sustainable Reporting Directive
CTO	Chief Transformation Officer
CVA	Credit Value Adjustments
DAC 6	EU Council Directive 2011/16
DGS	Deposit Guarantee Scheme
DMA	Double Materiality Assessment
DORA	Digital Operational Resilience Act
DPO	Data Protection Officer
DT	Deferred Tax
DTA	Deferred Tax Asset
EaR	Earnings at Risk
EBA	European Banking Authority
EBRD	European Bank for Reconstruction and Development
ECB	European Central Bank
ECL	Expected Credit Losses
ECRA	European Credit Risk Assessment
EEA	European Economic Area
EF	Emission factor
EFRAG	European Financial Reporting Advisory Group
EIB	European Investment Bank
EPC	Energy Performance Certificate
EPS	Earn
ESG	Environmental, Social and Governance
ESMS	Environmental and Social Management System
ESRS	European Sustainability Reporting Standards
EU	European Union
EURIBOR
EV	Economic Value of Equity
EVS	European Valuation Standards

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Early Warning System

EYK

Education Camp for Financial Literacy

FATCA

Foreign Account Tax Compliance Act

FCA

Financial Conduct Authority

FDI

Foreign Direct Investment

FTE

Republic of Slovenia

FVOCI

Fair Value Through Other Comprehensive Income

FVTPL

Fair Value Through Profit or Loss

FX

Foreign Exchange

FY

Financial Year

GAR

Green Asset Ratio

Protection Regulation

GDR

Global Depositary Receipts

GenAI

Generative Artificial Intelligence

General Meeting

General Meeting of Shareholders of NLB d.d.

GFANZ

Glasgow Financial Alliance for Net Zero

GLWF

Green Light World Flight

GPA

General Provisions of the Agreement

GRI

Global Reporting Initiative – Sustainability Reporting Standards

GWP AR5

Global warming potential – Fifth Assessment Report

Human Resources

HQ

Headquarters

HQLA

High-quality liquid assets

HVAC

Heating, ventilation and air conditioning

IAS

International Accounting Standard

IASB

International Accounting Standards Board

Assessment Process

ICAO

The International Civil Aviation Organization

ICE

Internal Combustion Engine Vehicle

ICMA

International Capital Market Association

ICT

Information and Communication Technology

Reporting Interpretations Committee

IFRS

International Financial Reporting Standard

IJS

Institute Jožef Stefan

ILAAP

Internal Liquidity Adequacy Assessment Process

ILO

International Labour Organization

ratings-based

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

IRRBB

Interest Rate Risks for Banking Book

IRO

Impacts, risks and opportunities

IRS

Interest Rate Swaps

ISDA

International Swaps and Derivatives Association

ISIN

International Securities Identification Number

Team

KB Komercijalna Banka

KDD Central Securities Clearing Corporation

KPI Key Performance Indicator

KRI Key Risk Indicators

KYC Know Your Client

LCP Liquidity Contingency Plan

Given Default

LIBOR London Interbank Offered Rate

LJSE Ljubljana Stock Exchange

LPD Lifetime Probability of a Default

LRE Leverage Ratio Exposure

LSE London Stock Exchange

Regulation on land, land use change and forestry (EU) 2018/841

M&A Mergers and Acquisitions

MA Master Agreements

Management Board or MB

Management Body of NLB d.d.

MDA Markets in Financial Instruments Directive

MIGA Multilateral Investment Guarantee Agency

MPM Management-Defined Performance Measures

MREL Minimum Requirement of Own Funds

Activities in the European Community

NBRNM National Bank of the Republic of North Macedonia

NCV Net caloric value

NFC Non-Financial Corporation

NFRD Non-Financial Report

NII Net Interest Income

NLB or the Bank NLB d.d.

NLB Group The Group or Group

NPE Non-Performing Exposures

NPL Non-Performing Loans

NPS Net Promoter Score

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Abbreviations

N	Net Present Value
NSFR	Net stable funding ratio
NZBA	Net-Zero Banking Alliance
NZE	Net zero emissions
OBM	Operational Business Margin
OCI	Other Comprehensive Income
OECD	Organisation for Economic Co-operation and Development
CRS	OECD Common Reporting Standards
OEM	Original Exposure Method
OHS	Occupational health and safety management system
OPEX	Operational Expenditure
PCAF	Partnering Against Corruption Initiative
PHEV	Plug-in hybrid electric vehicle
p.p.	Percentage Point(s)
PPA	Power Purchase Agreement
PD	Probability of Default
PeP	Politically Exposed Person
POCI	Purchased or Originated Credit-Impaired
POS	Point of Sale
PSD2	Payments
RES	Renewable Energy Sources
RFP	Request for proposal
RFR	Risk-Free Rates
RICO	Risk Committee
RICS	Royal Institution of Chartered Surveyors
RO	Republic of Slovenia
RRE	Residential Real Estate
RSD	Serbian dinar
RTSR	Relative Total Shareholder Return
RWA	Risk Weighted Assets
SASB	Renewable Energy Sources
SBITOP	Slovenian Stock Exchange Index

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

Abbreviations

NLB	Nova Ljubljanska banka
SDK	Standardna klasifikacija dejavnosti (Standard Classification of Activities – Slovenia)
SEE	South-Eastern Europe
SEPA	Single Euro Payment Area
SME	Small and Medium-sized Enterprises
SPPI	Solely Payment of Principal and Interest
SREP	Supervisory Review and Single Supervisory Mechanism
SB	Supervisory Board or SB
T1	Tier 1
TCR	Total Capital Ratio
tCO2 eq	tonnes of CO2 equivalent
TCFD	Task force on Climate-related Financial Disclosures
TNPS	transactional Net Promoter Score
TRC	Total Rental Costs
TREA	Total Risk exposure Amount
TSCR	Total SREP Capital Requirement
UN	United Nations
UNEP FI	United Nations Environment Programme Finance Initiative
UN PRI	United Nations Principles for Responsible Investment
UN SDG	United Nations Sustainable Development Goals
VaR	Value-at-Risk
VAT	Value Added Tax
W	Workers’ Council of NLB d.d.
WTT	Well-to-tank emissions
ZBan-3	Slovenian Banking Act
ZEO	Zero-energy building
ZGD-1	Companies Act (Zakon o gospodarskih družbah)
ZGD-1M	Instruments Market Act
ZVKN	NLB Slovenian Act for Value Protection of Republic of Slovenia’s Capital Investment in Nova Ljubljanska banka d.d., Ljubljana

---

NLB Group Annual Report 2024

Overview

MB Statement

SB Statement

Key Highlights

Business Report

Strategy

Risk Factors & Outlook

Performance Overview

Segment Analysis

d.d., Ljubljana nlb.si

NLB d.d.

Production: Saatchi & Saatchi Ljubljana

Photographs: Barbara Zajc, Iztok Lazar, Matko Mioč, iStock Archive of NLB and Archives of Sports Associations

Committed to safeguarding the environment and to reducing printing and paper usage in our every process. Leading by example, this report is prepared in digital form only. We invite our stakeholders to...