NLB

Interim / Quarterly Report • Aug 2, 2024

Building on advantages of our homecourt

NLB Group Interim Report for the First Half of 2024

Contents

Key Members Overview	4
NLB Group at a Glance	6
Key Highlights	6
Key Figures	8
Key Financial Indicators	9
Key Events	10
Macroeconomic Environment	11
BUSINESS REPORT	14
Strategy	15
Leasing and Asset Management Operations Expansion in SEE	17
Overview of Financial Performance	19
Income Statement	20
Statement of Financial Position	28
Liquidity, Capital and MREL	34
Liquidity Position	34
Capital	35
Wholesale Funding Strategy and MREL	38
NLB Shareholders Structure	41
Segment Analysis	42
Retail Banking in Slovenia	43
Corporate and Investment Banking in Slovenia Financial Markets in Slovenia	46 49
Strategic Foreign Markets	51
Non-Core Members	54
Risk Factors and Outlook	55
Risk Factors	55
Outlook	58
Risk Management	60
Sustainability	67
Related-Party Transactions	69
Corporate Governance	70
Management Board	70
Supervisory Board	70
General Meeting	70
Events After 30 June 2024	72
Alternative Performance Indicators	73
Reconciliation of Financial Statements in Business and Financial Part of the Report	91
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS OF NLB GROUP AND NLB 93

We are building our success on the home court advantage.

Key Members Overview

NLB Group and banks

		Slovenia	Serbia	N. Macedonia		BiH	Kosovo	Montenegro
	NLB Group	NLB, Ljubljana	NLB Komercijalna Banka, Beograd	NLB Banka, Skopje	NLB Banka, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Banka, Podgorica
Result after tax (million EUR)	292.0	192.9	82.2	37.4	16.7	8.0	20.1	14.3
Total assets (million EUR)	26,613.7	16,658.5	5,222.2	1,888.6	1,107.3	926.0	1,233.1	932.2
RoE a.t.	19.4%	16.6%	18.8%	26.1%	29.5%	16.1%	27.6%	23.6%
Net interest margin	3.68%	2.95%	4.83%	4.12%	3.70%	3.21%	4.28%	5.18%
CIR (cost/income ratio)(i)	42.8%	35.5%	40.3%	36.6%	38.4%	53.2%	29.4%	42.9%
LTD	69.6%	62.9%	72.2%	84.4%	66.8%	81.7%	94.3%	84.5%
NPL ratio	1.5%	1.3%	0.7%	2.9%	0.9%	2.0%	1.9%	2.5%
Branches (#)	410	69	163	48	41	34	34	21
Active clients (#)	2,918,033	722,388	1,048,440	467,254	214,370	132,559	238,540	94,482
Market share by total assets(ii)	-	31.1%	9.9%	15.8%(iv)	20.2%(iv)	6.1%(iv)	16.6%	13.9%(iii)

(i) Tax on balance sheet excluded from NLB Group and NLB calculation.

(ii) Market share in the Republic of Srpska for NLB Banka, Banja Luka; market share in the Federation of Bosnia and Herzegovina for NLB Banka, Sarajevo.

(iii) Data on market share as of 31 May 2024.

(iv) Data on market share as of 31 March 2024.

Leasing companies

	Slovenia	Serbia	N. Macedonia
	NLB Lease&Go, leasing, Ljubljana	NLB Lease&Go Leasing Beograd	NLB Lease&Go Skopje
Result after tax (million EUR)	1.6	0.0	-0.3
Total assets (million EUR)	323.7	105.1	16.5
Market share by total assets	10.0%(i)	5.1%(ii)	n.a.

(i) Market share of leasing portfolio as of 31 March 2024.

(ii) Data on market share as of 31 December 2023.

Asset Management companies

	Slovenia	Serbia	N. Macedonia
	NLB Skladi, Ljubljana	KomBank Invest, Beograd	Generali Investments, Skopje
Result after tax (million EUR)	5.8	-0.1	0.0
Assets under management (million EUR)	2,742.5	10.9	53.0
Market share of assets under management in mutual funds	40.2%	2.7%	17.5%

NLB Group at a Glance

Key Highlights

Financial Performance Interest income and fee income-generating products support the pre-provision result.	• In the first half of 2024, the Group generated EUR 292.0 million in profit after tax, a 20% YoY increase. • Net interest income rose by 21% YoY but decreased by 2% QoQ. The YoY rise in interest income was driven by a robust combination of volume growth and margin. Net interest margin rose by 0.38 p.p. YoY to 3.68%. • NII sensitivity YtD improved by EUR 22.0 million or 86 bps, mainly as a result of the increased share of fixed interest rate loans, interest rate hedges, and changed liquidity reserve structure. • The YtD increase in the Group's gross loans to customers by EUR 663.1 million was distributed between individuals (EUR 397.2 million or 5% YtD) and corporate (EUR 265.8 million or 4% YtD) clients. However, YoY dynamics show a EUR 979.4 million or 7% rise in gross loans to customers, with a higher share of growth deriving from loans to individuals (EUR 686.7 million or 10%). • The decrease in the deposit base of EUR 39.0 million YtD was marked by a reduction in the balance of corporate deposits (EUR 502.4 million). After the substantial decrease in deposits from corporates in Q1, the decline in Q2 was less severe, amounting to EUR 147.5 million. On the other hand, the deposit base from individuals rose in both quarters, with an impressive EUR 345.2 million growth recorded in Q2. • An 11% YoY increase in the net fee and commission income benefitted from the favourable impact of economic activity, increased engagement in investment funds and bancassurance, and renegotiated conditions with the service providers. • Total costs grew by EUR 18.1 million or 8% YoY (without the inclusion of EUR 16.2 million deriving from the tax on the balance sheet), with an increase of EUR 12.1 million due to higher employee costs. • Net release of impairments and provisions for credit risk of EUR 11.7 million was influenced by
	regular revision of risk parameters, portfolio development and written-off repayments.
Business Overview	• A robust and sustainable universal business model with an increased focus on digitalisation and ESG.
The leading player in SEE.	• Striving to be the regional champion. • Higher availability and use of digital channels – a comprehensive range of 24/7 digital solutions offered to clients. • The strategic launch of leasing is being finalised with a presence established in three major markets of the Group (Slovenia, Serbia, and North Macedonia), supported by an ambitious business plan. The acquisition of the SLS Group, including its leasing subsidiaries in Slovenia (Summit Leasing Slovenija – SLS) and Croatia (Mobil Leasing – MBL), is underway. Additionally, in May 2024, a new acquisition in asset management in North Macedonia was completed, further strengthening the Group's strategic operations.
Asset Quality Good asset quality trends with a well-diversified portfolio, prudent credit standards and a decisive workout approach.	• A well-diversified, stable, and robust credit portfolio quality. A substantial share of the retail segment and no large concentration in any specific industry or client segment. • The portfolio quality remains stable, with a dominant share of Stage 1 exposures. Low NPEs (EBA def.) of 1.1% with a very comfortable NPL coverage ratio 2 of 66.7%. The Group carefully monitors potentially vulnerable segments to detect any significant increase in credit risk at a very early stage. • The cost of risk was negative (-18 bps) as a result of changes in risk parameters, portfolio development and written-off repayments.

Capital, Liquidity & Funding Capital and liquidity position ensuring capital return and continued growth opportunities.	• The capital position remained solid and exceeded all regulatory requirements (CET1 stood at 15.8%, Tier 1 at 16.3%, and TCR at 19.7%). • The Bank issued EUR 300 million subordinated Tier 2 notes to optimise and strengthen its capital position and EUR 500 million senior preferred notes for building MREL capacity. • The liquidity position of the Group remained very strong, with a high level of unencumbered liquid assets in total assets (38.8%). • The Group's deposits from private individuals represent the major and most stable funding source. 81% of retail deposits and 68% of total deposits are insured by deposit guarantee schemes. Despite the turbulent business environment, deposits from private individuals were growing (a 3% YtD and 5% YoY growth), demonstrating strong client confidence in the Group. • A very comfortable level of LTD at 69.6% gives the Group plenty of growth potential.
Strategy Aiming for sustainable growth through balanced revenue generation and transformation into the region's leading operating platform.	• In May 2024, the Group introduced its new Group Strategy 2030, key performance indicators and expected future development. • The Group aims to create sustainable growth to support individuals and businesses. Overall, the new strategy foresees 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 more than EUR 1 billion by 2030. • The Group's strategy equally balances revenue generation based on best practices and the transformation of NLB into the leading operating platform in the region through rigorous simplification and digitalisation while maintaining its prudent risk practices.
Outlook The strong performance of the NLB Group in the second quarter justifies revision of the previously communicated outlook for 2024.	• Strong private consumption as a consequence of the growth of real wages, near or at record-low unemployment, and healthy corporate fundamentals should support healthy loan production both in retail and corporate and state segments going forward. This leads to a new loan growth guidance of high single-digit growth in 2024. • In Q2, changes in models/risk parameters importantly impacted the net impairments and provisions in the first half of the year. The cost of risk in the same period was negative, standing at -18 bps. This gives the Bank comfort that with expected asset quality trends in the second half of the year, the cost of risk should not exceed 20 bps. • Improved CoR guidance and increased confidence in the underlying business momentum support revised ROE a.t. expectations. The Bank now expects ROE a.t. to exceed 15%.

Key Figures

Profit a.t. - quarterly (in EUR millions) ROE a.t. (in %)

Cost to income ratio - CIR (in %)(i) Cost of risk net (in bps)

NPE ratio - EBA def. (in %) Total capital ratio (in %)

(i) Tax on balance sheet excluded from the calculation for the year 2024.

Net interest margin (in %) Operational business margin (in %)

Key Financial Indicators

Table 1: Key Financial Indicators of NLB Group

							in EUR millions / % / bps
	1-6 2024	1-6 2023	Change YoY	Q2 2024	Q1 2024	Q2 2023	Change QoQ
Key Income Statement Data
Net operating income	604.0	511.7	18%	305.9	298.1	269.7	3%
Net interest income	460.4	380.0	21%	228.3	232.2	201.0	-2%
Net non-interest income	143.6	131.7	9%	77.7	65.9	68.7	18%
Total costs	-275.0	-240.7	-14%	-142.7	-132.4	-123.6	-8%
Result before impairments and provisions	329.0	270.9	21%	163.2	165.8	146.1	-2%
Impairments and provisions	10.4	17.8	-41%	15.1	-4.7	5.4	-
Impairments and provisions for credit risk	11.7	29.9	-61%	16.0	-4.4	11.5	-
Other impairments and provisions	-1.3	-12.1	90%	-1.0	-0.3	-6.2	-
Result after tax	292.0	242.7	20%	152.0	140.0	122.6	9%
Key Financial Indicators
Return on equity after tax (ROE a.t.)	19.4%	19.4%	-0.1 p.p.
Return on equity after tax (ROE a.t.) normalized(i)	30.1%	26.0%	4.1 p.p.
Return on assets after tax (ROA a.t.)	2.2%	2.0%	0.2 p.p.
Net interest margin (on interest bearing assets)	3.68%	3.30%	0.38 p.p.
Net interest margin (on total assets - BoS ratio)	3.54%	3.17%	0.37 p.p.
Operational business margin(ii)	4.99%	4.56%	0.43 p.p.
Cost to income ratio (CIR)(iii)	42.8%	47.0%	-4.2 p.p.
Cost of risk net (bps)(iv)	-18	-38	20

		30 Jun 2024 31 Mar 2024 31 Dec 2023 30 Jun 2023			Change YtD	Change YoY	Change QoQ
Key Financial Position Statement Data
Total assets	26,613.7	26,025.7	25,942.0	24,701.5	3%	8%	2%
Gross loans to customers	14,726.7	14,197.1	14,063.6	13,747.3	5%	7%	4%
Net loans to customers	14,399.3	13,859.9	13,734.6	13,431.8	5%	7%	4%
Deposits from customers	20,693.8	20,471.5	20,732.7	19,924.9	0%	4%	1%
Equity (w ithout non-controlling interests)	3,081.3	3,035.6	2,882.9	2,586.1	7%	19%	2%
Other Key Financial Indicators
LTD(v)	69.6%	67.7%	66.2%	67.4%	3.3 p.p.	2.2 p.p.	1.9 p.p.
Common Equity Tier 1 Ratio	15.8%	16.3%	16.4%	14.7%	-0.6 p.p.	1.1 p.p.	-0.6 p.p.
Tier 1 Ratio	16.3%	16.9%	16.9%	15.3%	-0.6 p.p.	1.0 p.p.	-0.6 p.p.
Total capital ratio	19.7%	20.7%	20.3%	18.7%	-0.6 p.p.	1.0 p.p.	-1.0 p.p.
Total risk exposure amount (RWA)	16,017.2	15,427.8	15,337.2	14,838.4	4%	8%	4%
NPL volume(vi)	303.4	306.6	300.5	312.9	1 %	1 %	-1 %
NPL coverage ratio 1(vii)	108.4%	110.5%	110.0%	101.0%	-1.6 p.p.	7.4 p.p.	-2.1 p.p.
NPL coverage ratio 2(viii)	66.7%	64.8%	64.6%	61.8%	2.1 p.p.	4.9 p.p.	1.9 p.p.
NPL ratio (internal def.)(ix)	1.5%	1.6%	1.5%	1.6%	0.0 p.p.	-0.1 p.p.	0.0 p.p.
Net NPL ratio (internal def.)(x)	0.5%	0.6%	0.5%	0.6%	0.0 p.p.	-0.1 p.p.	0.0 p.p.
NPL ratio (EBA def.)(xi)	2.1%	2.2%	2.1%	2.3%	0.0 p.p.	-0.2 p.p.	-0.1 p.p.
NPE ratio (EBA def.)(xii)	1.1%	1.1%	1.1%	1.2%	0.0 p.p.	-0.1 p.p.	0.0 p.p.
Employees
Number of employees	8,049	7,999	7,982	8,154	67	-105	50

International credit ratings NLB	30 Jun 2024	31 Mar 2024	Outlook
Standard & Poor's	BBB	BBB	Stable
Moody's(xiii)	A 3	A 3	Stable

(i) Result a.t. divided by average risk adjusted capital. Average risk adjusted capital computed as Tier 1 requirement of average Risk Weighted Assets (RWA) reduced for minority shareholder capital contribution.

(ii) Operational business net income annualised / average assets.

(iii) Tax on the balance sheet excluded from the calculation for the year 2024.

(iv) CoR = credit impairments and provisions (annualised level) / average net loans to customers. Credit impairments and provisions include impairments on loans from customers and provisions for off balance. Due to the annualisation of credit impairments and provisions, the calculation of CoR is strongly influenced by the release of credit impairment and provisions related to the changes in risk parameters in Q2 2024. Without the annualisation of the effect of changes in risk parameters, the CoR for the period 1-6 2024 would stand at -1 bps.

(v) Loan-to-Deposit Ratio (LTD) = net loans to customers / deposits from customers.

(vi) Non-performing loans include loans to D- and E-rated clients, i.e. loans at least 90 days past due or loans unlikely to be repaid without recourse to collateral (before deduction of loan loss allowances).

(vii) Coverage of gross non-performing loans with impairments for all loans.

(viii) Coverage of gross non-performing loans with impairments for non-performing loans.

(ix) Non-Performing Loans (NPL) ratio as per internal definition is calculated as follows: (i) Numerator: total gross non-performing loans; (ii) Denominator: total gross loans.

(x) Net NPL ratio as per internal definition is calculated as follows: (i) Numerator: net non-performing loans; (ii) Denominator: total net loans.

(xi) NPL ratio as per EBA definition is calculated as follows: (i) Numerator: gross volume of non-performing loans and advances in Finrep 18 without loans held for sale, cash balances at central banks and other demand deposits; (ii) Denominator: gross volume of loans and advances in Finrep 18 without loans held for sale, cash balances at central banks and other demand deposits.

(xii) Non-Performing Exposures (NPE) ratio as per EBA definition is calculated as follows: (i) Numerator: total non-performing exposure in Finrep 18; (ii) Denominator: total exposures in Finrep 18.

(xiii) Unsolicited rating.

Key Events

Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
January	•	Tier 2 Notes: The Bank issued 10NC5 subordinated Tier 2 notes in the amount of EUR 300 million. In parallel, the
			Bank conducted a liability management exercise (LME) repurchasing EUR 219.6 million of its two outstanding 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	•		Apple Pay: Apple Pay became available to NLB customers in Slovenia.
March	•	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 Management Company over a three and ten-year period: the
		financial magazine Moje Finance awarded NLB Skladi, Ljubljana the Best Management Company over a three and
		ten-year period in the category Naj Skladi 2023.
	•	Apple Pay: Apple Pay became available to NLB customers in Montenegro.
May	•	Early redemption of notes: The Bank executed early redemption of subordinated Tier 2 notes in the aggregate
	•	nominal amount of EUR 45 million (ISIN: SI0022103855).
		New Group Strategy 2030: NLB Group revealed its new Group Strategy until 2030 at NLB Investor Day in Ljubljana on 9 May 2024.
	•		Announcement 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 control over Addiko Bank AG for all issued and
		outstanding Addiko shares for a consideration of EUR 20.00 per Addiko Bank AG share on a cum dividend basis.
	•	Issuance of senior preferred notes: NLB issued senior preferred notes in the aggregate amount of EUR 500
		million for MREL purposes (ISIN: XS2825558328).
	•		Early redemption of notes: NLB announced the redemption of senior preferred notes in the aggregate nominal
		amount of EUR 300 million, issued on 19 July 2022 and with a maturity date of 19 July 2025	1
		(ISIN: XS2498964209).
	•		Acquisition of Generali Investments, Skopje by NLB Skladi, Ljubljana: NLB Skladi, Ljubljana has expanded
			into the North Macedonian market by acquiring Generali Investments, Skopje. The acquisition was completed after receiving all relevant approvals.
	•	Award from the Slovenian Marketing Association: NLB received the leading award from the Slovenian
		Marketing Association for Excellence in NLB Brand Management.
June	•	Addiko Bank AG 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 10 June 2024. Further
		information on the improved voluntary public takeover offer is available in the chapter Events After 30 June 2024.
	•	NLB General Meeting: On 17 June, NLB GM confirmed, among other things, the payment of EUR 110 million in
		dividends and appointed three members to the Supervisory Board.
	•	New NLB website: NLB successfully renovated its website (nlb.si).
	• •	Google Pay: Google Pay became available to NLB customers in Kosovo. The merger of NLB Leasing, Ljubljana – in liquidation with NLB Lease&Go, leasing, Ljubljana: NLB Leasing,
		Ljubljana – in liquidation ceased to exist2					, its assets and liabilities were transferred to NLB Lease&Go, leasing,
		Ljubljana.
	•	The merger of PRIVATINVEST, Ljubljana with NLB Real Estate, Ljubljana: Company PRIVATINVEST,
		Ljubljana ceased to exist3				, and its assets and liabilities were transferred to NLB Real Estate, Ljubljana.

¹ Further information is available in the chapter Events After 30 June 2024.

² The company was removed from the court register on 1 July 2024.

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

Macroeconomic Environment

Macroeconomic Summary

The global economies are growing at a pace similar to that in H2 of the previous year. The US economy expanded by 2.9% YoY in Q1 of 2024 (3.1% in Q4 2023). Compared to Q4, the deceleration primarily reflected decelerations in consumer spending, as personal consumption expenditure grew softer than in Q4. In contrast, gross private domestic investment grew notably, with residential and non-residential structures as the main drivers. Within foreign trade, export growth softened slightly on the account of goods but not services, while import growth gained steam.

The FED chairman Powell commented the payroll employment growth as "overstated" as it thrived compared to the GDP growth. It appears the growth derived from foreign-born (not native) workers and part-time job creation as full-time jobs contract in scope. The latter does support the latest unemployment rate's relatively incremental, albeit slow, growth. At the same time, the uptick in inflation from March has been slow to come down, although the underlying momentum has moderated. Oil prices have declined from April till June but have risen steadily since then. Also, the EU parliamentary elections and US presidential elections campaign seem to have exacerbated the fiscal deficit problems, as debt service costs are an upward trend as the debt that was issued at lower rates gets rolled over. The elections also caused the euro to decline in value compared to the US dollar, while the political uncertainty (in France) and EU trade spat with China (tariffs on EVs) could impair corporate earnings. The Chinese economy grew at a faster YoY rate than in Q4 of 2023, supported mainly by growth in exports, while the government propped the crumbling real-estate market with the central bank facilitating 1 trillion yuan in extra funding while easing mortgage rules and mandating the local governments to buy empty apartments.

Eurozone

Household consumption and net exports were the major growth drivers, as the Q1 2024 GDP grew by 0.4% YoY and 0.3% QoQ, while gross fixed capital and changes in inventories contributed negatively. Employment increased by 1.0% YoY, while labour productivity measured with hours worked increased by 0.2% YoY and decreased by 0.6% YoY when measured per employed person. GDP growth reaccelerated on a QoQ and YoY basis. However, the pace remains sluggish and driven by private consumption, despite households becoming more mindful of their means, which is reflected in the household savings rate rising to 14.6% in Q4 2023, up from 13.9% in Q3 2024, while the household investment rate decreased from 9.8% to 9.7%. NFC's investment rate also diminished marginally in the respective quarter. The increase in households' saving rate is explained by gross disposable income increasing by 1.2% QoQ faster than consumption (+0.4%). This is confirmed by the labour cost index accelerating to 5.1% YoY in Q1 2024, up from 3.4% in Q4 2023, while the ECB's negotiated wages indicator also accelerated to 4.7% YoY, up from 4.5% YoY in the same comparison, despite the central bank being rather confident in predicting the indicator to subside in H2 of 2024. Foreign demand improved during the quarter as exports contracted at a softer YoY pace in Q1 2024 than in Q4 2023, as did imports.

The HICP maintained the same pace of growth from March to April (+2.4% YoY) and accelerated to 2.6% YoY in May and 2.5% YoY in June. Services inflation has reaccelerated and is acting as by far the most prominent driver of the growth of prices, a move due to upward base effects from the euro area's public transport policy measures last year and the pass-through of wages to services price. The energy that experienced deflationary trends throughout 2024 turned back to growth in May and June, while core inflation reaccelerated for the first time in 2024 from 2.7% YoY in April to 2.9% YoY in May and held that level in June due to solid services inflation, in part driven by the pass-through of (higher) wages. Industrial production maintained its weak momentum, contracting in March and April (1.2% and 3.0% YoY, respectively, as capital goods registered a steeper fall), albeit with a milder pace than in January-February 2024. In what now seems like a structural problem for the euro area, the divergence between industry and services is to be exacerbated by the increases in energy costs, which have, due to the "green deal", caused the euro area's comparative competitiveness to deteriorate concerning the US and even more so China. The volume of retail trade escaped the contractionary momentum from the first two months of the year but was still, at best, slow in March and stagnant in April (compared YoY). The ESI was quite consistent during the Q2 of 2024, clocking in at 96.3 in March, from where it swung upward to 96.6 in May to close the quarter with 96.4 in June, with construction, industrial and retail confidence indicators deteriorating during the quarter, while services and consumer confidence indicators improved. The composite PMI stood at 51.7 in April, grew to 52.2 in May and descended to 50.8 in June, staying above the contractionary line, however (thanks to its services component).

In June, the ECB cut key interest rates by 25 bps (3.75%) in a telegraphed yet surprising move. As they did so in the moment when inflation reaccelerated (and services inflation remained very sticky), the CB revised its inflation forecast for 2024 and 2025 by increasing each by 0.2 p.p., and when the wage growth is rising (according to their and Eurostat's metrics). Their forward-looking proxy for wage growth is projecting the growth to subside in H2 of 2024, however, according to the CB. ECB also tweaked their growth forecasts. GDP was revised upwards by 0.3 p.p. for 2024 and downwards by 0.1 p.p. for 2025. ECB officials communicated that this year and next year's interest rate cuts may be data dependent, looking for data confirmation of baseline scenario realisation and weighing still existing risks regarding the disinflation process. ECB had another reason to hesitate over further interest rate cuts after the FED pared back its own (cutting) cycle. The euro area triple-A government bond yields maintained their upward movement from Q1 also in Q2 of 2024, albeit experiencing a turbulent period during the EU parliamentary elections, which saw yields drop, but also recover after that, closing the quarter nearing the yield posted on its opening day for the 2Y maturity, while surpassing it at later (older) date maturities. The STOXX Europe 600 index saw its lowest point of the quarter on 16 April, while its highest point was reached on 15 May, as it grew by 0.5% inside the quarter.

The euro area household loans seem to have bottomed out, as their growth marginally reaccelerated in May, increasing their stock, which appears to have plateaued during the last year. However, loan growth to the NFCs has been very weak throughout 2024, as it has been rather asymptotical after the contraction in October 2023, and the net demand was broadly stable during that period. Likewise, the stock of NFC loans plateaued in 2024, only reaching and surpassing the December 2023 value in May 2024. The household deposits have seen constant and increasing growth over the year, and the same goes for their stock (suggesting that households preferred to save than to consume during Q2). However, NFC loans overturned the negative trend. They burst into a positive growth rate from March to May of 2024 with the slow return of foreign demand, as previous contractions resulted from the negative industrial production momentum. Their stock, however, has been more susceptible to the retreat of demand due to the high interest rates, as net demand was still noticeably declining during Q1 when the general level of interest rates and declining fixed investment remained the main drivers of the net decrease in loan demand.

Slovenia and Markets of the NLB Region

In Slovenia, GDP expanded 2.1% YoY in Q1 2024, slowing slightly from Q4 2023's 2.2% rise. On a QoQ comparison, GDP recorded a flat reading in Q1, compared to the previous period's 0.9% growth. Domestically, households felt the pinch of still-elevated inflation and tight monetary policy as private consumption growth slowed to 0.9% in Q1 2024 (Q4 2023: 1.2% YoY). Moreover, fixed investment growth fell to 0.6% in Q1. The external sector added 0.2 p.p. to GDP (deteriorating from Q4's 2.8 p.p. contribution). Industrial output grew by 7.4% YoY in April 2024 after it nosedived by 6.9% YoY in March (February: +2.5%). Retail sales momentum remained subdued as it contracted by 5.6% YoY in February, with the (negative) momentum softening in March and April, contracting by 0.4% and 0.3%, respectively. HICP decelerated from 3.0% in April to 2.5% in May (when prices of food started contracting in YoY terms), with a clear divergence between the growth of prices of goods and that of services – which, albeit decelerating slowly remained rather sticky, while the pace of growth decreased further to 1.6% YoY in June (6.6% YoY in June 2023). Services remained very sticky at 4.7% YoY. The unemployment rate remained at 3.4% in Q1 2024, while the monthly ILO unemployment rate decreased from 3.3% in March and April to 3.2% in May 2024.

Serbia's GDP growth accelerated to 4.7% in Q1 2024 from 3.8% in Q4 2023. Q1's improvement was driven by faster expansions in private consumption, fixed investment, and exports. On the flip side, public spending lost steam. Inflation fell within the upper bound of the targeted tolerance band in May. Momentum was softening in Q2, according to early data. Industrial output rose slightly slower in April than Q1's average but contracted again in May. Additionally, economic sentiment fell below the prior quarter average from April to May, dented by fading sentiment in the construction and industrial sectors. Wage growth has been substantial in 2024 so far.

After decelerating YoY in Q4 2023 in North Macedonia, GDP growth gained some steam in Q1, growing by 1.2% YoY. Merchandise exports fell steeply in Q1 compared to Q4, while household final consumption rose less than in Q4. Additionally, industrial output swung into contraction in the period due to a sharp fall in March as well as in May and, to a lesser degree, in April. More positively, retail sales rebounded timidly in Q1 from Q4, and tourist arrivals continued to

expand at a healthy pace. Data for Q2 suggest a slightly less downbeat economic sentiment in April–May, insinuating that the economy is gaining traction.

In Bosnia and Herzegovina, annual economic growth accelerated in Q1 2024 to 2.7% YoY, up from 1.7% YoY in Q4 2023. Domestic demand strengthened as retail sales grew at a faster annual clip in Q1, while industrial production fell at a softer pace in the same period. On the other hand, foreign demand weakened, tourist arrivals expanded significantly slower in Q1 than in Q4, and the downturn in merchandise exports intensified. Merchandise exports rebounded in April but contracted again in May, and the indices of industrial production deteriorated further from Q1's average in April and May.

In Kosovo, GDP growth accelerated YoY in Q1 2024 from Q4 2023 due to more robust private consumption and export expansions. The inflation averaged below Q4's level, boding well for household spending. In addition, tourist arrivals rose significantly faster in Q1 than in Q4. Moreover, the downturn in merchandise exports softened in Q1 from Q4. Early data for Q2 are mixed, as merchandise exports rebounded in April, while in the same month, remittances inflow growth softened relative to Q1's average.

In Montenegro, the economy expanded slightly faster annually in Q1 2024 than in Q4 2023. The acceleration was due to weaker expansions in imports and changes in inventories. Industrial production growth decelerated in Q1 compared with the prior quarter. Moreover, tourist arrivals swung into contraction (YoY) in Q1, and merchandise exports fell at a pronounced rate (YoY) in the period. On the flip side, retail sales grew faster in Q1 than in Q4. Shifting to Q2, available data indicates that the economy is strengthening slightly. Economic sentiment averaged above Q1's level in April–May. Moreover, tourist arrivals rebounded in April and May from Q1's fall, and merchandise exports fell at a softer rate in the same two months than in the prior quarter.

Table 2: Movement of key macroeconomic indicators in the Euro area and NLB Group region

	GDP (growth rate in %)						Average inflation (in %, aop)						Unemployment rate (in %, aop)
	YoY			QoQ		YoY			MoM
		Q1 2024 Q4 2023 Q3 2023			Q1 2024 Q4 2023 Q3 2023			Jun 2024 May 2024 Apr 2024			Jun 2024 May 2024 Apr 2024		Q1 2024	Q4 2023	Q3 2023
Euro area	0.4	0.2	0.2	0.3	-0.1	0.0	2.5	2.6	2.4	0.2	0.2	0.6	6.8	6.5	6.5
Slovenia	1.8	2.4	1.8	0.0	0.9	-0.1	1.6	2.5	3.0	0.0	0.4	0.7	3.4	3.4	3.9
BiH	2.7	1.7	1.9	0.9	0.6	0.7	-	2.0	2.0	-	-0.2	0.1	13.5	13.5	12.7
Montenegro	4.4	4.3	6.6	-	-	-	-	4.9	5.4	-	0.1	0.1	11.9	12.2	11.8
N. Macedonia	1.3	1.0	1.0	0.5	0.4	0.3	-	4.5	4.0	-	0.9	0.7	12.9	13.0	12.8
Serbia	4.7	3.8	3.6	0.8	1.0	1.4	-	4.5	5.0	-	0.4	0.7	9.5	9.2	9.0
Kosovo	5.6	4.0	3.0	-	-	-	-	-	-	-	-	-	-	-	10.6

Source: Statistical offices, NLB ALM.

Note: Real GDP growth rates are seasonally adjusted; HICP inflation is for the euro area and Slovenia.

14 NLB Group Interim Report for the First Half of 2024

Business Report

Strategy

The Group has continued implementing its medium-term strategy, protecting and strengthening its market position in its home region, actively participating in market growth and consolidation, and promoting the Environmental, Social, and Governance (ESG) agenda.

In May 2024, the Group introduced its new Group Strategy 2030, key performance indicators, and expected future development. With the new Group Strategy 2030, 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 individuals and businesses. Overall, the new strategy foresees 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 more than EUR 1 billion by 2030 (combining organic growth with selected M&A).

Table 3: NLB Group's Strategy 2030 key financial indicators

	Impact ambition towards
	2023	2030
Recurring revenues, in EURbn	1.1bn	>2bn
Recurring profits, in EURbn	0.5bn	>1bn
CIR, in %	46%	<45%
RoE, in %	21%	>15% (1-2 p.p. upside from strategic plays)
Normalized RoE, in %	29%	>20%
RTSR, in %		> Banking peer group(1)
Payout ratio, in %	~40%	towards 50-60%
PB	0.8x	>1
Tier 1 capital ratio, in %	16.9%	~15%
CET1 ratio	16.4%	>13%
Cost of Risk	-7 bps	30-50 bps

(i) UniCredit, OTP, RBI (Raiffeisen Bank International), Erste Group, Intesa, Addiko.

The new strategy equally balances revenue generation based on best practices (housing financing, bancassurance, consumer finance, trade finance, transition finance, and payments) and the transformation of NLB into the leading operating platform in the region through rigorous simplification and digitalisation while maintaining its prudent risk practices. Going forward, the Group will consciously include additional success markers, such as customer experience, digital enrolment, digital payments, and green/transition finance.

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 80% digital penetration. The Group's strategy is built on three lines of attack: better 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 include additional success markers, digitise its franchise, and move to a customer-centric delivery model with mobile as the core channel. The Group will move to an advisory-driven branch model, offering a market-leading customer experience at par with international best practices. The Group aims to positively contribute to the societies it serves, with a solid 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 banking partner for corporations across the SEE region, making it the leading local corporate and investment banking bank and achieving profitable growth across markets while keeping close control of risk (with CoR lower than 50 bps). The Group's strategy is based on three lines of attack: being consistently better in its existing core, becoming the transition finance 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 end-to-end, digitising and streamlining processes, especially in onboarding 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 finance in SEE by 2030 – leveraging NLB's balance sheet and providing attractive 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 with best practices across customer and operating models, introducing digital payment solutions, 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 80%. The Group's strategy builds on the solid basis of the existing payments strategy 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 the Group serves – by actively driving the markets' cash transition. The Group will help the societies prosper, increase financial inclusion, and combat the shadow economy.

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

Leasing and Asset Management Operations Expansion in SEE

The Group is consolidating its strategically important position in its home SEE region with new acquisitions in leasing and asset management, both of which are strategic operations of the NLB Group.

Summit Leasing

In November 2023, NLB entered into a sale and purchase agreement to acquire a 100% shareholding in SLS HOLDCO, holdinška družba, 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 EBRD. The high-level integration timeline is presented below.

SLS Group, with its two leasing subsidiaries (Summit Leasing Slovenia – SLS and Mobil Leasing (Croatia) – MBL), is the no. 1 leasing provider for new and used passenger cars in Slovenia, a growing leasing provider for new and used passenger cars in Croatia, as well as a leading provider of insured point-of-sale consumer finance in Slovenia.

SLS is the largest leasing and consumer finance player in Slovenia, with an approximately 30% local overall leasing market share (measured by net financed value).

Source: The Bank Association of Slovenia (ZBS).

NLB Skladi

Since the end of May 2024, the NLB Group has been enriched with a new member in the field of asset management. NLB Skladi, Ljubljana, Slovenia's largest mutual fund management company and the largest asset management company by total assets under management, entered the North Macedonian asset management market by acquiring Generali Investments, Skopje. Generali Investments, Skopje, is the third-largest asset manager in the North Macedonian market, holding a 17.5% market share. The company manages around EUR 53 million of client assets in different investment funds and portfolios. After obtaining all relevant approvals, NLB Skladi, Ljubljana, completed the acquisition on 23 May 2024.

To consolidate the ownership of the Asset Management companies in the NLB Group, the ownership of the Serbian asset management company KomBank Invest, Beograd, will be transferred from NLB Komercijalna Banka, Beograd, to the company NLB Skladi, Ljubljana. On 6 May 2024, NLB Skladi, Ljubljana, signed a Shares Purchase Agreement with NLB Komercijalna Banka, Beograd, to acquire a 100% stake of KomBank Invest, Beograd. Completion of this transaction is subject to the fulfillment of certain conditions precedent, including obtaining the consent of the Serbian regulator.

Overview of Financial

Performance

The Group's profit after tax reached EUR 292.0 million, EUR 49.3 million or 20% higher YoY, mostly due to a favourable economic environment and high interest rates. A good result of EUR 329.0 million was also recorded in the profit before impairments and provisions, marking a EUR 58.1 million or 21% YoY increase.

The following key factors drove the Group's half-year result:

• The Group's gross loans to customers increased by EUR 979.4 million YoY, of which EUR 686.7 million were loans to individuals.
• The deposit base increased by EUR 768.9 million YoY, of which EUR 731.2 million were deposits from individuals.
• A healthy loan demand from individuals, higher interest rates on loans and central bank balances, increased securities portfolio as well as increased yields contributed to a higher interest income by 33% YoY. On the other hand, the elevated cost of funding due to raised wholesale funding and higher interest rates on deposits (positively impacting the volume of deposits, especially those from individuals) resulted in a substantial 106% YoY increase in interest expenses. The deposit beta (the cumulative change of the average customer deposit interest rate compared with the cumulative change of the average ECB deposit facility rate) remains low at around 11% on the Group level (its level in the last quarter was impacted by the decreased ECB deposit facility rate by 25 bps in June 2024). Consequently, the annual net interest margin improved by 0.38 p.p. YoY to 3.68%.
• NII sensitivity YtD improved by EUR 22.0 million or 86 bps, mainly as a result of the increased share of fixed interest rate loans, interest rate hedges, and changed liquidity reserves structure.
• The net fee and commission income increased by 11% YoY, benefitting from the favourable impact of economic activity, increased engagement in investment funds and bancassurance, and renegotiated conditions with the service providers.
• Total costs grew by EUR 18.1 million, or 8% YoY (without the inclusion of EUR 16.2 million deriving from the tax on the balance sheet), with a EUR 12.1 million increase due to employee costs.
• The net release of impairments and provisions for credit risk of EUR 11.7 million was mainly driven by regular revision of risk parameters, portfolio development and written-off repayments.

Income Statement

Table 4: Income statement of NLB Group

									in EUR millions
		1-6 2024 1-6 2023	Change YoY		Q2 2024	Q1 2024	Q2 2023	Change QoQ
Net interest income	460.4	380.0	80.5	21%	228.3	232.2	201.0	-3.9	-2%
Net fee and commission income	150.0	134.6	15.4	11%	78.9	71.1	68.5	7.8	11%
Dividend income	0.0	0.1	-0.1	-65%	0.0	0.0	0.0	0.0	6%
Net income from financial transactions	12.8	14.9	-2.1	-14%	3.0	9.8	6.0	-6.7	-69%
Net other income	-19.3	-17.9	-1.3	-7%	-4.3	-15.0	-5.8	10.6	71%
Net non-interest income	143.6	131.7	11.9	9%	77.7	65.9	68.7	11.7	18%
Total net operating income	604.0	511.7	92.4	18%	305.9	298.1	269.7	7.8	3%
Employee costs	-149.5	-137.4	-12.1	-9%	-77.3	-72.2	-70.6	-5.1	-7%
Other general and administrative expenses	-98.8	-79.8	-19.0	-24%	-51.7	-47.1	-41.1	-4.7	-10%
Depreciation and amortisation	-26.7	-23.5	-3.2	-14%	-13.6	-13.1	-11.8	-0.6	-4%
Total costs	-275.0	-240.7	-34.3	-14%	-142.7	-132.4	-123.6	-10.3	-8%
Result before impairments and provisions	329.0	270.9	58.1	21%	163.2	165.8	146.1	-2.5	-2%
Impairments and provisions for credit risk	11.7	29.9	-18.3	-61%	16.0	-4.4	11.5	20.4	-
Other impairments and provisions	-1.3	-12.1	10.9	90%	-1.0	-0.3	-6.2	-0.7	-
Impairments and provisions	10.4	17.8	-7.4	-41%	15.1	-4.7	5.4	19.7	-
Share of profit from investments in associates and joint ventures	1.7	0.6	1.1	178%	0.7	1.0	0.3	-0.3	-27%
Result before tax	341.1	289.3	51.8	18%	179.0	162.1	151.8	16.9	10%
Income tax	-40.5	-39.8	-0.6	-2%	-21.8	-18.7	-25.9	-3.2	-17%
Result of non-controlling interests	8.5	6.8	1.8	26%	5.2	3.4	3.3	1.8	52%
Result after tax	292.0	242.7	49.3	20%	152.0	140.0	122.6	12.0	9%

Figure 3: Profit after tax of NLB Group – evolution YoY (in EUR millions)

All banks recorded a profit and positively contributed to the Group's result. The most significant contribution of EUR 113.3 million came from NLB, followed by NLB Komercijalna Banka, Beograd, with EUR 81.5 million. The YoY contribution of NLB was higher, primarily due to elevated net interest income. The SEE banks contributed 58% to the Group result, with increases recorded in all banks.

Figure 4: Profit a.t. by a company – contribution (in EUR millions)

⁽i) Merger of NLB and N Banka on 1 September 2023.

Net Interest Income

The Group's net interest income constituted 76% of the total net revenues (1-6 2023: 74%) and reached EUR 460.4 million.

An increase in the net interest income was recorded in all the Group banking members, supported by loan volume growth from healthy demand for loans coupled with prevailing higher interest rates. The growth mainly came from loans to customers, with EUR 81.1 million (EUR 37.5 million allocated to individuals and EUR 43.6 million to corporate and state), balances at banks and central banks (EUR 27.2 million), and securities (EUR 29.7 million). At the same time, interest expenses increased due to higher expenses incurred from wholesale funding raised for the minimum requirement for own funds and eligible liabilities (MREL) and capital requirement (EUR 26.3 million), as well as higher expenses for customer deposits (EUR 30.2 million).

On a QoQ basis, interest income from loans to customers and securities increased by EUR 4.8 million and EUR 7.1 million, respectively, while income from balances at banks and central banks was lower by EUR 9.3 million (evenly distributed between lower volumes and lower interest rates). The increase in interest expenses resulted from higher expenses incurred from wholesale funding (EUR 2.8 million) and higher expenses for customer deposits (EUR 1.0 million). Profitability stabilisation 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 of EUR 1,070.0 million in H1 2024. In Q2, this resulted in EUR 2.3 million negative effects on income and EUR 0.8 million positive effects on expenses. Assuming interest rate dynamics are in line with market expectations, these hedges should positively impact net interest income in the coming years.

Net interest income sensitivity, simulated by a 100 bps immediate parallel downward shift in interest rates, yields a net interest income sensitivity of EUR -79.4 million or -3.04% of T1 capital, driven mainly by the cash (EUR -36.5 million) and floating rate loan positions (EUR -59.2 million). The focus on stabilising net interest income includes ongoing increased fixed interest rate loan stock, active management of funding mix, liabilities hedging activities, and increasing duration and volume of banking book securities portfolio. NII sensitivity YtD improved by EUR 22.0 million or 86 bps, mainly as a result of the increased volume of fixed interest rate loans (EUR 489.6 million), interest rate hedges (EUR 1,070.0 million), the reduction in central bank balances (EUR 868.9 million), and the increase of investments in high-quality debt securities (EUR 1,117.4 million).

Figure 6: NII sensitivity to various rate shocks (NLB Group, in EUR millions)

The cost of funding grew at a much slower pace than interest rates on assets and as a result, the Group's net interest margin improved by 0.38 p.p. to 3.68% YoY. However, the quarterly interest margin decreased following the ECB's key interest rate cut by 25 bps at the beginning of June, which was the first reduction in the last five years. On the other hand, the operational business margin reached 4.99%, marking a 0.43 p.p. increase YoY, with an increase also recorded quarterly due to a rise in net fee and commission income in Q2.

-100 -80 -60 -40 -20 0 20 40 60 80

Net Non-Interest Income

Figure 8: Net non-interest income of NLB Group (in EUR millions)

The Group experienced a 9% YoY increase in net non-interest income. Recurring other net non-interest income was lower YoY as a result of lower expenses for regulatory costs in NLB since there will be no payments in SRF this year, as the quota was already achieved (last year, EUR 2.0 million payment in SRF for NLB and N Banka).

The QoQ comparison shows increased net fee and commission income due to the renegotiated conditions with the service providers. The recurring net non-interest income in Q1 was notably affected by the accrual of one-off expenses for regulatory costs in NLB.

Payment transactions, Basic accounts, Cards and ATM operations Other

Figure 9: Net fee and commission income of NLB Group (in EUR millions)

Net fee and commission income, a significant component of the net non-interest income, increased by 11% YoY. This growth can be attributed to the positive impact of heightened economic activity and consumption, resulting in increased fees across banking members and due to increased activity in investment funds and bancassurance. Notably, NLB Skladi, Ljubljana, recorded an exceptional sale of investment funds, with EUR 190.2 million gross inflows in H1 2024, compared to EUR 114.4 million in the same period last year. Additionally, the renegotiated conditions with the service providers improved net fee results in payment transactions and card operations in Q2.

Total Costs

Figure 10: Total costs of NLB Group (in EUR millions)

Total costs grew by EUR 18.1 million or 8% YoY (without the inclusion of EUR 16.2 million deriving from the tax on the balance sheet) with the increase noted in all banking members. The growth was primarily driven by a rise in employee costs (EUR 12.1 million). Other general and administrative expenses were kept under control despite strong inflationary pressures and marked only a 3% increase, while a 14% increase in depreciation and amortisation was a result of new investments in last year.

On a QoQ basis, costs increased by 8% due to higher salaries and other general and administrative costs, mainly deriving from consulting, sponsorships, advertising, and events in NLB.

The Group is actively pursuing several strategic initiatives (channel strategy, digitalisation, paperless, lean process, branch network optimisation, etc.) to maintain cost efficiency. However, the prevailing economic situation and significant inflationary pressures have affected all cost categories, offsetting many successful efficiency measures across the Group.

The Cost-to-Income Ratio (CIR) stood at 42.8% (excluding the tax on the balance sheet from the calculation), representing a 4.2 p.p. reduction YoY. This improvement was driven by strong net operating income growth, which outpaced the increase in total costs.

Impairments and Provisions

Figure 12: NLB Group impairments and provisions (in EUR millions)

The Group net released EUR 11.7 million impairments and provisions for credit risk, mainly due to EUR 23.2 million release from regular revision of risk parameters, mostly impacted by subsidiary banks. Overlays connected to the risks of the Russia/Ukraine conflict and related electricity crisis and inflation pressures became less relevant, representing the key factor for the release. In addition, improved macroeconomic expectations attributed to an additional impact on the level of impairments and provisions. Furthermore, there were repayments of written-off receivables in the amount of EUR 10.1 million due to a favourable environment for NPLs resolution. On the other hand, provisions were net established in the amount of EUR 21.7 million for portfolio development, mainly in the retail segment.

The CoR was negative and stood at -18 bps. Without the annualisation of the effect of changes in risk parameters, the CoR for the period 1-6 2024 would stand at -1 bp.

Other impairments and provisions were established in the amount of EUR 1.3 million, mainly to address legal risk.

Income Tax

The effective tax rate (calculated as income tax divided by profit before tax) for the first half of 2024 for the NLB Group was 11.87%, and for NLB, 7.57%. A global minimum tax for multinationals, first applied in 2024, is included in the income tax. The contribution rate, which also includes the tax on the balance sheet (recognised in other general and administrative expenses), for the first half of 2024 for the NLB Group was 16.62% and for NLB, 15.34%.

For further information, please refer to the Note 4.14. in the financial part of the report.

Statement of Financial Position

Table 5: Statement of financial position of NLB Group

										in EUR millions
		30 Jun 2024 31 Mar 2024 31 Dec 2023 30 Jun 2023			Change YtD		Change YoY		Change QoQ
ASSETS										#REF!
Cash, cash balances at central banks, and other demand deposits at banks	5,116.3	5,481.1	6,103.6	5,760.4	-987.2	-16%	-644.1	-11%	-364.8	-7%
Loans to banks	410.7	416.3	547.6	304.7	-137.0	-25%	105.9	35%	-5.6	-1%
Net loans to customers	14,399.3	13,859.9	13,734.6	13,431.8	664.7	5%	967.5	7%	539.4	4%
Gross loans to customers	14,726.7	14,197.1	14,063.6	13,747.3	663.1	5%	979.4	7%	529.6	4%
- Corporate	6,703.6	6,412.8	6,437.8	6,454.4	265.8	4%	249.2	4%	290.8	5%
- Individuals	7,632.5	7,394.8	7,235.3	6,945.8	397.2	5%	686.7	10%	237.7	3%
- State	390.6	389.5	390.4	347.1	0.1	0%	43.5	13%	1.1	0%
Impairments and valuation of loans to customers	-327.4	-337.2	-329.0	-315.5	1.6	0%	-11.9	-4%	9.8	3%
Financial assets	5,919.9	5,485.9	4,803.7	4,553.7	1,116.2	23%	1,366.2	30%	434.0	8%
- Trading book	14.6	15.0	15.8	21.1	-1.2	-7%	-6.5	-31%	-0.3	-2%
- Non-trading book	5,905.3	5,470.9	4,787.9	4,532.6	1,117.4	23%	1,372.7	30%	434.3	8%
Investments in subsidiaries, associates, and joint ventures	12.3	13.5	12.5	12.3	-0.2	-2%	0.0	0%	-1.2	-9%
Property and equipment	280.9	276.0	278.0	254.3	2.9	1%	26.6	10%	4.9	2%
Investment property	25.8	30.0	31.1	34.5	-5.3	-17%	-8.7	-25%	-4.2	-14%
Intangible assets	64.9	60.5	62.1	56.1	2.8	4%	8.7	16%	4.3	7%
Other assets	383.6	402.5	368.7	293.6	14.9	4%	89.9	31%	-18.9	-5%
TOTAL ASSETS	26,613.7	26,025.7	25,942.0	24,701.5	671.7	3%	1,912.2	8%	587.9	2%
LIABILITIES
Deposits from customers	20,693.8	20,471.5	20,732.7	19,924.9	-39.0	0%	768.9	4%	222.3	1%
- Corporate	5,356.8	5,504.3	5,859.2	5,363.7	-502.4	-9%	-7.0	0%	-147.5	-3%
- Individuals	14,899.9	14,554.6	14,460.3	14,168.6	439.6	3%	731.2	5%	345.2	2%
- State	437.1	412.6	413.2	392.5	23.9	6%	44.6	11%	24.6	6%
Deposits from banks and central banks	94.3	134.7	95.3	107.4	-1.0	-1%	-13.1	-12%	-40.4	-30%
Borrow ings	218.8	209.4	240.1	220.0	-21.3	-9%	-1.2	-1%	9.4	4%
Subordinated debt securities	558.7	597.3	509.4	520.0	49.3	10%	38.7	7%	-38.6	-6%
Other debt securities in issue	1,315.3	838.0	828.8	814.5	486.5	59%	500.8	61%	477.3	57%
Other liabilities	586.8	674.7	587.6	469.3	-0.8	0%	117.5	25%	-87.9	-13%
Equity	3,081.3	3,035.6	2,882.9	2,586.1	198.4	7%	495.2	19%	45.7	2%
Non-controlling interests	64.7	64.4	65.1	59.2	-0.5	-1%	5.4	9%	0.2	0%
TOTAL LIABILITIES AND EQUITY	26,613.7	26,025.7	25,942.0	24,701.5	671.7	3%	1,912.2	8%	587.9	2%

The Group's total assets amounted to EUR 26,613.7 million, an increase of EUR 671.7 million YtD and EUR 1,912.2 million YoY. The LTD ratio (net) was 69.6% at the Group level, a 3.3 p.p. YtD increase as deposit volume stayed on the same level while loan volume increased.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Figure 14: Balance sheet structure of NLB Group on 30 June 2024 (in EUR millions)

Loans to Customers

In Q2, the growth in loan volume accelerated due to declining interest rates. YtD loan growth was higher in SEE banks compared to NLB, especially in loans to individuals. In Slovenia, business activity picked up strongly in the second quarter, with notably high new production in both short and long-term loans. A similar but less noticeable increase was observed in the new production of housing and consumer loans to individuals. In SEE banks, the growth of gross loans continued, with YtD growth achieved in loans to individuals, as well as loans to corporate and state across all bank members.

(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.

Figure 16: Interest rates for loans to customers (quarterly, in %)

(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.

Financial Assets – Banking Book

Subordinated debt

The banking book debt securities portfolio increased by EUR 1,119 million (book value) YtD, constituting 21.8% of the Group's total assets compared to 18.1% in 2023. At the end of H1, the portfolio's average duration was 3.32 years (compared to 2.8 years in 2023), with an average yield of 2.40% in H1, 0.73 p.p. higher than in 2023. The ESG portfolio represented 9.5% of the whole portfolio.

Two business models are implemented, dividing the portfolio into securities valued at fair value through other comprehensive income (FVOCI) and securities valued at amortised cost (AC). At the end of H1, the FVOCI portfolio represented 45.91% of the total Group debt securities portfolio, remaining practically unchanged compared to the end of 2023, with an average duration of 2.26 years. The negative valuation of the Group's FVOCI debt securities portfolio during H1 amounted to EUR 73 million (the net of hedge accounting effects and related deferred taxes).

The AC portfolio amounted to 54.09% of the total Group debt securities portfolio at the end of H1, with an average duration of 4.22 years. Unrealised losses of the Group's AC debt securities portfolio during H1 amounted to EUR 84 million.

0.0

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

0.5

1.0

Deposits from Customers

The Group's deposit base remained on the same level YtD due to a decline in corporate deposits, particularly notable in NLB, which experienced a 12% drop in the first half of the year. A generally noticeable downturn in corporate deposits was observed in the entire Slovenian banking system, with a 7.5% drop in H1 2024. However, the Bank is preserving its market share in sight deposits while remaining conservative with its pricing policy due to a strong liquidity position, resulting in a lower market share in term deposits. Similarly, but to a lesser extent, the corporate and state deposit base in SEE banks also contracted, with decreases observed across all banking members except NLB Banka, Banja Luka and NLB Komercijalna Banka, Beograd.

Deposits from individuals increased YtD in NLB and were influenced by holiday payments in June. However, the growth slowed as clients' preferences shifted towards higher-yielding financial products such as investment funds and bancassurance. Higher interest rates for term deposits resulted in high growth in term deposit volume in H1 2024 (EUR 227.1 million), with a shift from sight to term deposits. Consequently, the share of term and savings accounts in total deposits from individuals gradually rose to 49% at the end of June (compared to 44% on 30 June 2023).

A stable growth of 3% was also recorded in deposits from individuals in SEE banks, with an increase recorded in most of the bank members.

(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.

Figure 19: Interest rates for deposits from customers (quarterly, in %)

Sight deposits Term deposits

(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.

Off-Balance Sheet Items

At the end of June, the majority of the Group's off-balance sheet items were derivatives (42%), followed by loan commitments (34%).

The Group's off-balance sheet items increased on both YoY and YtD. The increase was primarily driven by higher derivatives, mainly due to hedging issued NLB securities (EUR 1,070.0 million in H1 and EUR 1,520.0 million YoY). Additionally, guarantees increased by 11% YoY, which drove the guarantee fee income up by 5% YoY. Loan commitments remained flat YtD, with a significant portion representing loans (60%) and the rest divided between overdrafts and cards.

Liquidity, Capital and MREL

Liquidity Position

The Group's liquidity position remains strong, with liquidity indicators high above the regulatory requirements, indicating the Group's low tolerance for liquidity risk.

In H1, the Group's unencumbered liquidity reserves increased by 9% YoY, comprising of cash, balances with CB without the minimum reserve requirement, the debt securities portfolio, and credit claims eligible for CB-secured funding operations. Among others, these liquidity reserves provided the basis for future strategic growth. The growth of unencumbered liquidity reserves can largely be attributed to the increase in banking book debt securities, while the values of other categories stayed at similar levels. Encumbered liquidity reserves, used for operational and regulatory purposes, decreased by 56% YoY to EUR 40.8 million (excluding obligatory reserves) and were excluded from the liquidity reserves portfolio.

Figure 21: Evolution of NLB Group unencumbered liquidity reserves (in EUR millions)

Capital

Capital Requirements

At the end of June 2024, the Bank's Overall Capital Requirement (OCR) on a consolidated basis was 14.23%, which is lower than at the end of 2023. Capital requirements have not changed in the second quarter of 2024, and the composition is as follows:

• The Total SREP Capital Requirement (TSCR) is 10.12%, which includes 8.00% Pillar 1 and 2.12% Pillar 2 Requirements (P2R). As of 1 January 2024, the Pillar 2 Requirement decreased by 0.28 p.p. to 2.12% due to an improved overall SREP assessment.
• The second component is the Combined Buffer Requirement (CBR), which is 4.11%. The CBR consists of a 2.50% Capital Conservation Buffer, a 1.25% O-SII Buffer, a 0.26% Countercyclical Buffer0F⁴ and a 0.10% Systemic Risk Buffer1F⁵ .

In addition to the above requirements, the Pillar 2 Guidance (P2G) is 1.0% of Common Equity Tier 1 (CET1).

Figure 22: NLB Group capital requirements as at 30 June 2024

Effective 1 January 2025, there will be some changes in the capital buffer rates for Slovenia. The countercyclical capital buffer rate for exposures in Slovenia will increase from 0.5% to 1.0%. At the same time, the sectoral systemic risk buffer for retail exposures to natural persons secured by residential real estate will decrease from 1.0% to 0.5%.

⁴ The Bank of Slovenia has increased the countercyclical capital buffer for exposures in Slovenia from 0% to 0.5%. The Bank had to meet the required buffer from 31 December 2023 onwards.

⁵ Starting from 1 January 2023, the Bank of Slovenia has made it mandatory for banks to maintain a systemic risk buffer for sectoral exposures. The required rates are 1.0% for all retail exposures to natural persons secured by residential real estate and 0.5% for all other exposures to natural persons.

Capital Adequacy

Table 6: Capital realisation YtD and surplus over the regulatory requirement of NLB Group as of 30 June 2024

				in EUR millions
	30 Jun 2024	31 Dec 2023	Change YtD	Surplus over regulatory requirement 30 Jun 2024
Common Equity Tier 1 capital	2,523	2,510	13	793
Tier 1 capital	2,611	2,598	13	577
Total capital	3,158	3,109	49	719
Total risk exposure amount (RWA)	16,017	15,337	680
Common Equity Tier 1 Ratio	15.75%	16.36%	-0.61 p.p.	4.95 p.p.
Tier 1 Ratio	16.30%	16.94%	-0.64 p.p.	3.60 p.p.
Total Capital Ratio	19.72%	20.27%	-0.55 p.p.	4.49 p.p.

As at 30 June 2024, the TCR for the Group stood at 19.7% (or 0.6 p.p. decrease YtD), and the CET1 ratio stood at 15.8%, well above requirements. The lower total capital adequacy resulted from higher RWA (EUR 680.0 million YtD), although capital increased by EUR 49.3 million YtD. The Group's capital increase was mainly due to a higher volume of T2 instruments (EUR 35.8 million) and revaluation adjustments of EUR 16.3 million.

Figure 23: Capital (in EUR millions) and capital ratios of NLB Group – YoY development

Total Risk Exposure Dynamic

Figure 24: RWA structure (in EUR millions)

In the first half of 2024, the RWA of the Group for credit risk increased by EUR 651.8 million due to lending activity, which was more predominant in the retail segment. New production in the corporate segment was partially offset by repayments provided by corporate clients in NLB, NLB Banka, Skopje, and NLB Banka, Sarajevo. Additionally, RWA for high-risk exposures increased due to new project financing loans given, mainly in NLB and NLB Komercijalna Banka, Beograd, and withdrawals of project finance loans approved in the previous periods. However, the decrease in RWA for liquidity assets resulted from reduced exposures towards central governments and central banks, partially offset by higher RWA due to purchasing subordinated bonds.

The increase in RWAs for market risks and Credit Value Adjustments (CVA) in the amount of EUR 28.2 million YtD during the first six months of 2024 was driven by higher RWA for FX risk of EUR 23.8 million (mainly due to more opened positions in domestic currencies of non-euro subsidiary banks), higher RWA for CVA risk of EUR 6.2 million, and lower RWA for TDI risk of EUR 5.2 million (due to closed net positions from IRS) and higher RWA for EQU of EUR 3.4 million (due to the inclusion of a collective investment unit (CIU) of the new member Generali Investments, Skopje).

Wholesale Funding Strategy and MREL

Wholesale Funding

Wholesale funding activities in the Group aim to achieve diversification, improve structural liquidity and capital position, and fulfil regulatory requirements, especially compliance with the MREL requirements.

The Bank was active in capital markets, issuing 10NC5 subordinated Tier 2 notes in January to improve the capital position and 6NC5 senior preferred notes in May for MREL purposes.

						in EUR millions
Type of bond	ISIN code	Issue Date	Maturity	First call date	Interest	Nominal Value
					Rate
Senior Preferred	XS2825558328	29 May	29 May	29 May	4.500% p.a.	500
		2024	2030	2029
Senior Preferred	XS2641055012	27 June	27 June	27 June		500
		2023	2027	2026	7.125% p.a.
		19 July	19 July	19 July		300(ii)
Senior Preferred	XS2498964209	2022	2025	2024	6.000% p.a.
					Total SP:	1,300
		24 January	24 January	24 January	6.875% p.a.
Tier 2	XS2750306511	2024	2034	2029		300
		28 November	28 November	28 November	10.750%
Tier 2	XS2413677464	2022	2032	2027	p.a.	225
		5 February	5 February	5 February		10.5(i)
Tier 2	XS2113139195	2020	2030	2025	3.400% p.a.	(issued amount: 120)
		19 November	19 November	19 November		9.9(i)
Tier 2	XS2080776607	2019	2029	2024	3.650% p.a.	(issued amount: 120)
					Total Tier 2:	545.4
				between 23
Additional	SI0022104275	23 September	Perpetual	September 2027	9.721% p.a.	82
Tier 1		2022		and 23 March 2028
					Total AT1:	82
					Total outstanding:	1,927.4

Table 7: Overview of outstanding NLB notes as at 30 June 2024

(i) Issued amount of notes was EUR 120 million. Due to liability management exercise the amount reduced on 26 January 2024. (ii) Further information is available in the chapter Events After 30 June 2024.

Overall funding cost remains low thanks to a reliable deposit base and the stability of sight deposit pricing, which remains unaffected by market fluctuations.

Total average cost of funding Average interest rate for deposits from customers Average cost of wholesale funding

MREL Compliance

The Preferred Resolution Strategy (PRS) for the NLB Group is based on the Multiple Point of Entry (MPE) strategy. Bailin 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 in the Banking Union is headed by NLB, and the remaining six resolution groups are 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 legislation).

Figure 26: Resolution groups within NLB Group

The NLB Resolution Group consists of NLB as the only banking member and other non-banking members, the latter representing 5% in TREA. The entities and their contribution to TREA of the NLB Resolution Group are presented in the table below.

Table 8: Contribution to NLB Resolution Group's TREA

	in EUR millions
Entity	30 Jun 2024
NLB d.d.	8,287
NLB Lease&Go, leasing, Ljubljana	248
NLB Skladi, Ljubljana	55
Other	136
TREA total	8,726

NLB has to ensure a linear build-up of its own funds and eligible liabilities towards the MREL requirement applicable as of 1 January 2024, which amounts to:

• 30.66% of TREA + applicable CBR (4.35% on 30 June 2024),
• 10.69% of LRE.

On 30 June 2024, the MREL ratio amounted to 44.62% TREA and 22.47% LRE, which was well above the required level.

Figure 27: Evolution of MREL eligible funding (in EUR millions), MREL requirement and realised MREL ratio

NLB Shareholders Structure

The Bank has issued share capital divided into 20,000,000 shares. The shares are listed on the Prime Market of the Ljubljana Stock Exchange (ISIN SI0021117344, Ljubljana Stock Exchange trading symbol: NLBR), and the Global Depositary Receipts (GDRs), representing ordinary shares of NLB, are listed on the Main Market of the London Stock Exchange (ISIN: US66980N2036 and US66980N1046, London Stock Exchange GDR trading symbol: NLB and 55VX). Five GDRs represent one NLB share.

Table 9: NLB's main shareholders as at 30 June 2024(i)

Shareholder	Number of shares	Percentage of shares
Bank of New York Mellon on behalf of the GDR holders(ii)	10,076,353	50.38
• of which European Bank for Reconstruction and Development (EBRD)(iii)	n.a.	>5 and <10
Republic of Slovenia (RoS)	5,000,001	25.00
Other shareholders	4,923,646	24.62
Total	20,000,000	100.00

(i) Information is sourced from the NLB shareholders book available at the web services of CSD (Central Security Depository, Slovenian: KDD – Centralna klirinško depotna družba) to the CSD members. Information on major holdings is based on self-declarations by individual holders under the applicable provisions of the Slovenian legislation, which require that the holders of shares in a listed company notify the company whenever their direct and or indirect holdings go over the present thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50% or 75%. The table provides all self-declared major holders whose notifications have been received. In reliance on this obligation vested in the holders of major holdings, the Bank postulates that no other entities nor any natural persons hold directly and or indirectly ten or more per cent of the Bank's shares.

(ii) The Bank of New York Mellon holds shares as the depositary (the GDR Depositary) for the GDR holders and is not the beneficial owner of such shares. The GDR holders have the right to convert their GDRs into shares. The rights under the deposited shares can only be exercised by the GDR holders through the GDR Depositary. Individual GDR holders do not have any direct right to either attend the shareholders' meeting or to exercise any voting rights under the deposited shares.

(iii) The information on GDR ownership is based on self-declarations made by individual GDR holders as required under the applicable provisions of Slovenian law.

Segment Analysis

Core Segments⁶

• Retail Banking in Slovenia covers individuals and micro companies, asset management (NLB Skladi, Ljubljana), and the part of NLB Lease&Go, leasing, Ljubljana, operating with retail clients, as well as the part of the result contributed by the associated company Bankart.
• Corporate and Investment Banking in Slovenia covers Key Corporate Clients, SMEs, Cross-Border Corporate Financing, Investment Banking and Custody, Restructuring and Workout, and the part of NLB Lease&Go, leasing, Ljubljana operating with corporate clients.
• Financial Markets in Slovenia include treasury activities and trading with financial instruments while also presenting the results of asset and liability management (ALM).
• 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 company KomBank Invest, Beograd, NLB DigIT, Beograd, NLB Lease&Go Skopje, NLB Lease&Go Leasing Beograd, and newly acquired Generali Investments, Skopje.
• Other activities include categories whose operating results cannot be allocated to specific segments, NLB Cultural Heritage Management Institute and Real Estate entities from 2024 (previously in the non-core segment).

Non-Core Segment

Table 10: Segments of NLB Group

Non-Core Members include the operations of non-core NLB Group members, namely entities in liquidation, NLB Srbija, and NLB Crna Gora.

	NLB Group		Non-Core Segment
		Retail Banking in Slovenia	Corporate and Investment Banking in Slovenia	Financial Markets in Slovenia	Strategic Foreign Markets	Other	Non-Core Members
Profit b.t. (in EUR millions)	341	118	64	- 8	191	-24	0
Contribution to Group's profit b.t.	100%	35%	19%	-2%	56%	-7%	0%
Total assets (in EUR millions)	26,614	3,915	3,469	7,568	11,163	469	30
% of total assets	100%	15%	13%	28%	42%	2%	0%
CIR(i)	42.8%	37.1%	38.8%	/	43.3%	/	/
Cost of risk (bps)	-18	89	-54	/	-55	/	/

(i) Tax on the balance sheet excluded from NLB Group calculation.

NLB Group's main indicator of a segment's efficiency is the net profit before tax. No revenues were generated from transactions with a single external customer that would amount to 10% or more of the Group's revenues.

⁶ 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.

Retail Banking in Slovenia

Highlight

• Significantly increased net interest income, primarily due to higher volumes and margins on client deposits.
• Continued with excellent new loan production of consumer loans and inflows to mutual funds.
• Introduction of the NLB Visa prepaid card CeKR.
• Implemented Apple Pay, Garmin Pay and push notifications in NLB Pay wallet.
• New functionalities (change of credit card limits and personal account overdrafts) added to NLB Klik, boosting digital sales.

Financial and Business Performance

Table 11: Key financials of Retail Banking in Slovenia segment

								in EUR millions consolidated
	1-6 2024	1-6 2023	Change YoY		Q2 2024	Q1 2024		Q2 2023 Change QoQ
Net interest income	159.4	110.4	49.1	44%	79.4	80.1	61.1	-1%
Net interest income from Assets(i)	45.6	43.6	2.0	5%	23.0	22.6	21.0	2%
Net interest income from Liabilities(i)	113.8	66.8	47.1	71%	56.3	57.5	40.1	-2%
Net non-interest income	51.6	48.5	3.1	6%	31.3	20.2	27.4	55%
o/w Net fee and commission income	61.2	56.7	4.5	8%	31.0	30.2	28.6	2%
Total net operating income	211.0	158.9	52.1	33%	110.7	100.3	88.5	10%
Total costs	-78.2	-72.6	-5.6	-8%	-43.4	-34.8	-36.7	-25%
Result before impairments and provisions	132.8	86.3	46.5	54%	67.3	65.5	51.8	3%
Impairments and provisions	-16.7	-15.4	-1.3	-9%	-11.2	-5.5	-3.8	-103%
Share of profit from investments in associates and joint ventures	1.7	0.6	1.1	178%	0.7	1.0	0.3	-27%
Result before tax	117.7	71.5	46.2	65%	56.8	60.9	48.2	-7%
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Jun 2023		Change YtD		Change YoY	Change QoQ
Net loans to customers	3,818.9	3,744.9	3,694.2	3,613.4	124.7	3%	205.6	6%	2%
Gross loans to customers	3,900.6	3,817.3	3,760.8	3,670.6	139.8	4%	230.0	6%	2%
Housing loans	2,537.2	2,495.6	2,483.5	2,437.9	53.7	2%	99.3	4%	2%
Interest rate on housing loans (ii)	3.22%	3.26%	3.07%	2.93%		0.15 p.p.		0.29 p.p.	-0.04 p.p.
Consumer loans	892.9	856.4	818.5	756.5	74.3	9%	136.4	18%	4%
Interest rate on consumer loans (ii)	8.38%	8.36%	8.14%	8.01%		0.24 p.p.		0.37 p.p.	0.02 p.p.

NLB Lease&Go, leasing, Ljubljana	120.2	108.7	98.2	83.7	22.1	22%	36.5	44%	11 %
Other	350.3	356.7	360.6	392.5	-10.2	-3%	-42.2	-11%	-2%
Deposits from customers	9,590.2	9,369.1	9,357.8	9,265.9	232.4	2%	324.3	4%	2%
Interest rate on deposits (ii)	0.49%	0.47%	0.32%	0.25%	0.17 p.p.		0.24 p.p.		0.02 p.p.
Non-performing loans (gross)	81.6	85.2	77.3	66.8	4.3	5%	14.8	22%	-4%

	1-6 2024		1-6 2023 Change YoY
Cost of risk (in bps)	89	22	67
CIR	37.1%	45.7%	-8.6 p.p.
Net interest margin(ii)	4.84%	3.54%	1.29 p.p.

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

(ii) Net interest margin and interest rates before the merger of NLB and N Banka are only for NLB. The segment's net interest margin is calculated as the ratio between annualised net interest income (i) and the sum of average interest-bearing assets and liabilities divided by 2.

Net interest income saw a substantial YoY increase of 44%, primarily attributed to higher volumes and the key ECB interest rate hikes that positively affected the segment's income from clients' deposits. The average interest rate on deposits increased by 24 bps YoY. The Bank offered more attractive interest rates for term deposits and savings accounts for individuals, which customers have percieved positively.

Net fee and commission income increased by 8% YoY, driven by higher consumption, increased fees from investment funds, and bancassurance client engagement.

The segment's total costs increased by 8% YoY, primarily due to higher employee costs.

Impairments and provisions were net established for credit risks related to portfolio development.

The market shares of the segment slightly increased in retail lending to 29.6% (compared to 26.5% as at 30 June 2023) and in deposit-taking to 33.8% (compared to 32.1% as at 30 June 2023). The retail part of NLB Lease&Go, leasing, Ljubljana, continued its steady growth and recorded a 44% portfolio increase YoY.

The segments' market share of housing and consumer loans reached 30.3% and 29.8%, respectively, compared to 27.1% and 26.9% as at 30 June 2023. Additionally, the Bank has launched a housing loan campaign called "Your chance for a quick move" to reward 100 young loan borrowers by reimbursing their three instalments of up to EUR 1,000. The Bank has launched a new mortgage loan offer that includes a property appraisal and an energy performance certificate with no approval fees. This initiative underscores the Bank's commitment to sustainability while simplifying the process for an improved customer experience.

Figure 28: Market share of net loans to individuals and market share of deposits from individuals

The deposit base increased YoY and YtD, with YtD growth mainly driven by holiday payments in June. However, growth slowed as clients shifted their preferences towards higher-yielding financial products such as investment funds and bancassurance. Higher interest rates for term deposits led to an evident increase in term deposit volume in H1 2024, reaching EUR 227.1 million, with a noticeable shift from sight to term deposits. By the end of June, the share of term and savings accounts in total deposits from individuals had risen to 49%, compared to 44% on 30 June 2023.

After a significant period, a new branch office was opened, where the Bank is offering advanced and high-quality services aimed at providing the best user experience. However, the shift to digital and self-service banking is becoming more pronounced as clients actively use NLB Klik and ATMs as their primary channels for payment transactions. NLB Klik, an omnichannel solution, now includes daily banking features such as credit card orders, changes to credit card limits, and changes to personal account overdrafts. A differentiated price with discounted approval costs for quick loans concluded through NLB Klik has been introduced to encourage clients to go digital. Additionally, NLB Klik experienced a 12% YoY increase in active digital users, a 4.5 p.p. rise in active digital penetration, and, with the added functionalities, an increase in the share of digital sales across relevant product groups.

Figure 29: Digital penetration (i)

⁽i) Share of active digital users in # of clients with an active transactional account.

The Contact Centre (CC), a 24/7 contact point for the Bank's clients, is also well-accepted as a virtual bank for contracting new products, as 11% of key retail product group sales were made through the CC in H1 2024.

In cooperation with the Municipality of Kranj, a new NLB Visa prepaid card CeKR was introduced, which, in addition to identifying the user, enables payment of services and goods worldwide, both in-store and online. The Group's mobile wallet NLB Pay has undergone a significant overhaul with the integration of Google Pay in June 2023 and Apple Pay in March 2024. It has been transformed into an app allowing users to easily confirm their e-commerce purchases and Flik payments. The recent implementation of Garmin Pay also enables contactless payments using watches. Push notifications have been included within the app to make NLB Pay even more convenient.

NLB Skladi, Ljubljana, Slovenia's largest asset management company, completed the acquisition of Generali Investments, Skopje and entered another strategically important market for the Group. NLB Skladi, Ljubljana has further increased its market share of assets under management (AuM) in mutual funds to 40.2%, with net inflows in H1 2024 amounting to EUR 133.7 million, accounting for 54.6% of all net inflows in the market. Gross inflows in mutual funds for the same period reached EUR 190.2 million (EUR 114.4 million in H1 2023). The company's total assets under management grew by 27.2% YoY to EUR 2,742.5 million, of which EUR 2,284.3 million consisted of mutual funds and EUR 458.2 million of the discretionary portfolio.

Corporate and Investment Banking in Slovenia

Highlight

• Increased net interest income is driven by higher loan volumes and margins on client deposits.
• An increase in market share in loans, alongside maintaining a significant market share in guarantees.
• The Bank's active role in raising awareness and supporting clients in ESG development and sustainable finance is reflected in increased volumes of sustainable finance.
• The trade finance business remained stable, allowing the Bank to preserve high market shares.

Financial and Business Performance

Table 12: Key financials of Corporate and Investment Banking in Slovenia segment

								in EUR millions consolidated
	1-6 2024	1-6 2023	Change YoY		Q2 2024	Q1 2024		Q2 2023 Change QoQ
Net interest income	65.3	45.2	20.1	44%	32.9	32.4	24.0	2%
Net interest income from Assets(i)	37.4	28.4	9.0	32%	19.6	17.8	14.2	10%
Net interest income from Liabilities(i)	27.9	16.8	11.1	66%	13.3	14.6	9.8	-8%
Net non-interest income	23.7	21.6	2.1	10%	11.4	12.4	11.5	-8%
o/w Net fee and commission income	20.2	19.5	0.7	3%	9.6	10.6	9.9	-10%
Total net operating income	89.1	66.8	22.2	33%	44.3	44.7	35.5	-1%
Total costs	-34.6	-34.4	-0.2	-1%	-18.9	-15.7	-16.5	-21%
Result before impairments and provisions	54.5	32.5	22.0	68%	25.4	29.1	19.0	-13%
Impairments and provisions	9.1	6.9	2.2	33%	6.3	2.7	2.4	131%
Result before tax	63.6	39.3	24.2	62%	31.7	31.8	21.5	0%
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Jun 2023		Change YtD		Change YoY	Change QoQ
Net loans to customers	3,440.9	3,289.3	3,360.2		3,389.8	80.7 2%		51.1 2%	5%
Gross loans to customers	3,492.6	3,341.2	3,413.2		3,440.5	79.4 2%		52.1 2%	5%
Corporate	3,392.2	3,237.7	3,306.7		3,341.5	85.5 3%		50.7 2%	5%
Key/SME/Cross Border Corporates	3,106.1	2,966.0	3,049.5		3,137.8	56.6 2%		-31.7 -1%	5%
Interest rate on Key/SME/Cross Border Corporates loans (ii)	5.21%	5.21%	4.54%		3.98%	0.67 p.p.		1.23 p.p.	0.00 p.p.
Investment banking	0.1	0.1	0.1		0.1	0.0 -15%		0.0 -15%	0 %
Restructuring and Workout	112.8	109.7	97.7		59.3	15.1 15%		53.5 90%	3%
NLB Lease&Go, leasing, Ljubljana	173.2	161.9	159.4		144.3	13.8 9 %		28.9 20 %	7%
State	99.3	102.4	105.6		98.9	-6.4 -6%		0.4 0%	-3%
Interest rate on State loans (ii)	6.01%	6.06%	5.95%		5.96%	0.06 p.p.		0.05 p.p.	-0.05 p.p.
Deposits from customers	2,089.9	2,202.8	2,471.8		2,263.5	-381.9 -15%		-173.6 -8%	-5%
Interest rate on deposits (ii)	0.36%	0.38%	0.28%		0.08 p.p. 0.20%			0.16 p.p.	-0.02 p.p.
Non-performing loans (gross)	59.6	61.7	61.8		60.3	-2.2 -4%		-0.7 -1%	-3%
	1-6 2024		1-6 2023 Change YoY

	1-6 2024		1-6 2023 Change YoY
Cost of risk (in bps)	-54	-64	10
CIR	38.8%	51.4%	-12.6 p.p.
Net interest margin(ii)	4.24%	3.12%	1.13 p.p.

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

(ii) Net interest margin and interest rates before the merger of NLB and N Banka only for NLB. The segment's net interest margin is calculated as the ratio between annualised net interest income (i) and the sum of average interest-bearing assets and liabilities divided by 2.

The Corporate and Investment Banking segment cooperates with over 11,000 corporate clients and holds 26.5% of the market share in loans and 21.9% in deposits. The business's principal is customer centricity and a focus on actual client needs, with comprehensive and tailor-made financial solutions to support our economy.

The net interest income showed a substantial increase of 44% YoY, primarily due to the rise in loan volume and the key ECB rate hike positively affecting the net interest income from clients' deposits. Deposit interest rates, less sensitive to market rate volatility, demonstrated a higher segment income.

Net fee and commission income increased 3% YoY, primarily due to the fees from the RoS bond issue, brokerage services, and guarantees.

Impairments and provisions were net released in the amount of EUR 9.1 million due to changes in risk parameters and the portfolio development.

The volume of gross loans increased by EUR 85.5 million YtD, driven by a EUR 56.6 million portfolio increase from Key and Cross-Border corporates. Business activity showed strong momentum in the second quarter, with significant new production in short and long-term loans (EUR 424.2 million of new short and long-term loans in Q2, compared to EUR 154.0 million in Q1).

As a key and important systemic player in the financial market, the Bank raises awareness and supports clients in the region's development of ESG and sustainable finance through its proactive approach and advisory services. In this way, it increases its share in financing the green transformation of companies in Slovenia and the wider region.

At the end of H1 2024, the loan outstanding portfolio of cross-border financing reached EUR 449.0 million, with additional approved and still unutilised loans amounting to EUR 122.4 million in the same period. A significant part of respective financing activities has been focused on green and sustainable projects within the home region while supporting other key industries such as telecommunications, energy, and real estate. Outside the home, region activities are concentrated on Schuldschein loans, approved to big international investment-grade rated companies, mainly located in the Nordics and Western Europe. A further focus is being put into exploring options to enter international syndication deals, especially on the secondary market.

A generally noticeable downturn in corporate deposits is observed in the entire Slovenian banking system and NLB, with the volume of deposits decreased by 15% YtD.

The trade finance business remained stable, with a high market share of 37.6%. A strong focus was given to Slovenian exporters and all different versions of invoice financing.

Figure 30: Market share in Corporate Banking in Slovenia

The Bank remains among the top Slovenian players in custodian services for both Slovenian and international clients. The total value of assets under custody increased YtD, mostly on domestic markets, and amounted to EUR 20.1 billion at the end of H1 2024 (compared to EUR 18.6 billion as at 31 December 2023).

In H1 2024, the Bank executed clients' buy-and-sell orders of EUR 1.69 billion through its brokerage services. In dealing with financial instruments, the Bank conducted foreign exchange spot deals amounting to EUR 1.033 billion, and transactions involving derivatives reached EUR 71.6 million.

The Bank has been actively involved in financial advisory business. In addition to mergers and acquisitions (M&A) and advisory business, it was engaged in the organisation of bond issues (as a sole lead manager or joint lead manager) in the nominal amount of EUR 1.166 billion. NLB was also a joint lead manager and distributor of the RoS's first retail bond in the nominal amount of EUR 258 million.

With regard to acquiring business, NLB Smart POS, a new app solution primarily for micro and small businesses, has been upgraded with a POS slip print option and the ability to connect to a merchant's cash register. The partnership with Lab4Pay (Elly POS) and especially with Billy POS to acquire new merchants is already yielding the first results. Additionally, the Bank signed a contract with an important business partner to promote and expand the use of NLB Smart POS further.

Intermediary business for NLB Lease&Go, leasing, Ljubljana has also been the focus of the Bank's commercial activities, providing clients with the best possible financing solutions for financing vehicles and equipment.

Financial Markets in Slovenia

Highlights

• The Bank successfully issued subordinated Tier 2 notes in the amount of EUR 300 million and senior preferred notes in the amount of EUR 500 million.
• For NII stabilisation, the Bank increased investments in banking book securities, mainly funded from balances with CB.
• Further diversification of the banking book securities portfolio resulted in more ESG debt securities.
• Negative ALM result in 2024 is a consequence of the FTP policy adjustment, which burdens the ALM result for surpluses of MREL and Tier 2 instruments above the optimal level.

Financial and Business Performance

Table 13: Key Financials of Financial Markets in Slovenia segment

								in EUR millions consolidated
	1-6 2024	1-6 2023	Change YoY		Q2 2024	Q1 2024		Q2 2023 Change QoQ
Net interest income	-0.9	27.7	-28.6	-	-3.0	2.1	13.0	-
/o ALM(i) Net interest income w	12.8	11.3	1.5	14%	5.2	7.7	4.7	-33%
o/w ALM	-13.7	16.4	-30.2	-	-8.2	-5.5	8.2	-48%
Net non-interest income	0.3	0.0	0.3	-	-2.6	2.9	0.9	-
Total net operating income	-0.6	27.7	-28.3	-	-5.6	5.1	13.9	-
Total costs	-6.4	-4.7	-1.7	-36%	-3.5	-2.9	-2.4	-23%
Result before impairments and provisions	-6.9	23.0	-30.0	-	-9.1	2.2	11.5	-
Impairments and provisions	-0.8	4.2	-5.0	-	-0.3	-0.5	-0.1	40%
Result before tax	-7.7	27.3	-35.0	-	-9.4	1.7	11.4	-
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Jun 2023		Change YtD		Change YoY
Balances w ith Central banks	3,335.2	3,684.6	4,153.2	3,901.8	-818.0	-20%		-566.7 -15%
Banking book securities	4,143.7	3,655.7	2,981.1	2,954.4	1,162.6	39%		1,189.3 40%
Interest rate (ii)	1.87%	1.68%	1.17%	0.97%		0.70 p.p.		0.90 p.p.
Borrow ings	56.4	52.5	82.8	95.5	-26.4	-32%		-39.1 -41%
Interest rate (ii)	2.36%	2.33%	1.66%	2.26%		0.70 p.p.		0.10 p.p.
Subordinated liabilities (Tier 2)	558.7	597.3	509.4	520.0	49.3	10%		38.7 7%
Interest rate (ii)	8.04%	7.64%	6.89%	6.80%		1.15 p.p.		1.24 p.p.
		838.0	828.8	814.5	486.5	59%		500.8 61%
Other debt securities in issue Interest rate (ii)	1,315.3

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

(ii) Interest rates only for NLB.

The primary mission of this segment continued to be the Group's activities on the international financial markets, including treasury operations. The market is constantly observed for the Group's investment and funding purposes. The former intends to diminish further possible defaults of issuers included in the banking book securities portfolio and to manage the portfolio according to the market moves (yield movement) / economic data (inflation, recession). The latter gives the Group an overview of market conditions for future bond issuances.

The net interest income was EUR 28.6 million lower YoY and EUR 5.1 million lower QoQ due to ALM results being transferred to Retail Banking and Corporate and Investment Banking segments, and with 2024 additionally being burdened with MREL and T2 instruments costs above optimal levels.

The Bank 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 May. Both issuances also count towards meeting the MREL requirement.

There was a decrease of EUR 818.0 million YtD in balances with the central bank, as they were transferred to banking book securities, resulting in a YtD increase of EUR 1,162.6 million. This transformation was undertaken with the aim of stabilising net interest income in 2024.

Approximately 13% or EUR 531 million of the banking book securities portfolio consists of the ESG debt securities issued by governments, multilateral organisations, or financial institutions, of which EUR 251 million were bought in 2024.

At the end of H1, the duration of the Bank securities portfolio was 3.8 years, with an average yield of 1.87% in H1 2024. The negative valuation of the FVOCI portfolio as at 30 June 2024 amounted to EUR 42 million (net of hedge accounting effects and related deferred taxes).

Strategic Foreign Markets

Highlights

• Sustained growth and robust financial outlook.
• All subsidiary banks robustly profitable and earning Cost of Capital (CoC) with NLB Komercijalna Banka, Beograd, contributing 48% to the segment's pre-tax profit.
• Double-digit net interest income growth with increasing net interest margins across all banking members.
• Retail lending activities have grown robustly, outpacing local market dynamics.
• Increased deposit base reflected the overall confidence in the banking members.
• Remarkable growth of the leasing portfolio in Serbia.
• Continuous sustainable financing and operations improving the carbon footprint of the banks.
• Regional central banks' regulatory changes new combined buffer capital requirements across the countries of the Group's operations.
• Acquisition of the company Generali Investments, Skopje by NLB Skladi, Ljubljana.

Financial and Business Performance

Table 14: Key Financials of the Strategic Foreign Markets segment

								in EUR millions consolidated
	1-6 2024	1-6 2023	Change YoY		Q2 2024	Q1 2024		Q2 2023 Change QoQ
Net interest income	237.8	196.4	41.4	21%	119.0	118.8	102.5	0%
Interest income	276.7	215.6	61.1	28%	139.0	137.7	113.2	1%
Interest expense	-38.9	-19.2	-19.7	-102%	-20.0	-18.9	-10.6	-6%
Net non-interest income	67.3	64.5	2.8	4%	38.1	29.2	30.8	30%
o/w Net fee and commission income	69.2	58.8	10.4	18%	38.5	30.8	30.3	25%
Total net operating income	305.1	260.9	44.2	17%	157.1	148.0	133.3 6%
Total costs	-132.1	-117.9	-14.2	-12%	-68.2	-63.9	-60.8	-7%
Result before impairments and provisions	173.1	143.0	30.0	21%	88.9	84.1	72.5	6%
Impairments and provisions	18.1	16.9	1.1	7%	20.6	-2.5	5.9	-
Result before tax	191.1	160.0	31.2	19%	109.6	81.6	78.3	34%
o/w Result of minority shareholders	8.5	6.8	1.8	26%	5.2	3.4	3.3	52%
		30 Jun 2024 31 Mar 2024 31 Dec 2023 30 Jun 2023			Change YtD		Change YoY		Change QoQ
Net loans to customers	7,110.6	6,794.8	6,648.1	6,394.5	462.5	7%	716.2	11%	5%
Gross loans to customers	7,288.3	6,992.1	6,839.8	6,581.6	448.5	7%	706.8	11%	4%
Individuals	3,788.9	3,631.0	3,525.6	3,388.7	263.3	7%	400.2	12%	4%
Interest rate on retail loans	7.02%	7.06%	6.63%	6.40%		0.39 p.p.	0.62 p.p.		-0.05 p.p.
Corporate	3,222.0	3,087.8	3,042.9	2,958.2	179.1	6%	263.8	9%	4%
Interest rate on corporate loans	5.90%	5.96%	5.37%	4.99%		0.53 p.p.	0.91 p.p.		-0.06 p.p.
State	277.4	273.3	271.4	234.7	6.0	2%	42.8	18%	2%
Interest rate on state loans	7.78%	7.79%	7.13%	6.54%		0.65 p.p.		1.24 p.p.	-0.01 p.p.
Deposits from customers	8,981.0	8,872.5	8,878.3	8,355.6	102.6	1%	625.4	7%	1%
Interest rate on deposits	0.64%	0.63%	0.38%	0.28%	0.26 p.p.		0.36 p.p.		0.01 p.p.
Non-performing loans (gross)	136.9	134.6	134.0	156.0	2.9	2%	-19.1	-12%	2%
	1-6 2024		1-6 2023 Change YoY

Cost of risk (in bps)	-55	-57	3
CIR	43.3%	45.2%	-1.9 p.p.
Net interest margin	4.43%	4.01%	0.42 p.p.

The first half of 2024 has seen the Southeast Europe (SEE) region experiencing sustained growth and a robust financial outlook. Key factors contributing to this positive economic performance include increased foreign direct investment (FDI), strong export growth, moderate inflation and significant improvements in the business environment.

In H1 2024, NLB Skladi, Ljubljana entered the North Macedonian market by successfully completing the transaction of acquiring 100% of the company Generali Investments, Skopje and by that NLB Group is enriched with the new member in the field of asset management.

The banking members of the Group are key financial institutions in the SEE markets, demonstrating robust liquidity and capital and serving various business segments of clients with a full range of banking products and services.

The market shares by total assets of banking members reach or exceed 10% in five out of six markets. Most of the Group members experienced higher growth in retail loans compared to the growth of the local banking sector. Amid the high-interest rate environment, pricing pressures, and regulatory changes, despite the economic slowdown, the banking members of the Group continued to grow, which resulted in strong H1 2024 results.

In the first half of 2024, the demand for loans has shown a positive trend, reflecting the overall economic growth and increased business activity in the region by marking a solid 11% YoY and 7% YtD increase in lending activities. The most significant increase in gross loans to customers was achieved by NLB Banka, Podgorica (16% YoY) and NLB Banka, Prishtina (15% YoY). High performance in new business production continued in the corporate and retail segments as several products and services were upgraded, which included streamlining and modernising their distribution network and improving their digital offering.

NLB Lease&Go Leasing Beograd realised a remarkable growth in new leasing financing of EUR 43 million YtD.

The higher interest rate environment affected customers' behaviour. The overall confidence remained strong in the banking members and the total customer deposit base increased by 7% YoY.

In the still high interest rate market environment, the net interest income increased by 21% YoY on the segment level due to higher volumes. All banking members recorded a double-digit percentage increase in net interest income YoY, with the highest absolute impact in an interest rate increase in NLB Komercijalna Banka, Beograd of EUR 19.6 million YoY.

Net fee and commission income increased by EUR 10.4 million in large part driven by the renegotiated conditions with the service providers that improved net fee results in payment transactions and card operations in Q2, but also due to the positive impact of increased economic activity and higher volumes of payments and card operations.

Total costs increased by EUR 14.2 million YoY due to higher operating costs resulting from still persistent inflationary pressures.

Impairments and provisions were net released in EUR 18.1 million due to changes in risk parameters.

(i) On stand-alone basis as included in the consolidated financial statements of the NLB Group.

Despite the strong pricing competitive pressure on interest rates on assets and liabilities, the banking members realised a net interest margin between 3.2% (NLB Banka, Sarajevo) and 5.2% (NLB Banka, Podgorica) in H1 2024.

Retail Banking

The banking members realised robust new retail loan production YoY and YtD. The increase in the loan portfolio to individuals was seen in all banking members. New loan production significantly outperforms the local markets, especially in consumer loans. The gross loans to individuals marked a 12% YoY growth and 7% YtD. The highest YoY increase was achieved by NLB Banka, Prishtina (25%), NLB Banka, Banja Luka (15%) and NLB Banka, Podgorica (14%).

Most of the banks in the Group increased their market share in loans to individuals in various sub-segments from 10 to 55 bps YtD. Retail loans market share increased the most in NLB Banka, Prishtina, by 33 bps YtD. New production in ESG loans accelerated in H1 2024 with the offering of various NLB Green Loans through partners – Eco mortgage loans through business partners, Eco home appliance loans, electric and hybrid vehicles, etc.

In deposit dynamics, the Group banks retained customer confidence as the total SEE bank deposits from individuals increased by 3% YtD and 8% YoY.

Corporate Banking

The banking members maintained a positive trend in approving new financing and attracting new corporate clients. The banks recorded a 7% YoY and a 5% YtD growth in the corporate segment, with the highest levels achieved in NLB Banka, Podgorica (18.5% YoY), NLB Komercijalna Banka, Beograd (8.3% YoY) and NLB Banka, Prishtina (8.2% YoY). The banks continued sustainable financing by supporting green investments, focusing particularly on solar power plants and energy efficiency.

The SEE banks attracted corporate deposits by increasing the balances from corporates by 8% YoY.

Non-Core Members⁷

Highlights

• Non-core companies continued to monetise assets in line with the divestment plans.

Financial and Business Performance

Table 15: Key Financials of Non-Core Members

			in EUR millions consolidated
	1-6 2024	1-6 2023	Change YoY		Q2 2024	Q1 2024		Q2 2023 Change QoQ
Net interest income	0.5	0.5	0.1	13%	0.2	0.4	0.5	-49%
Net non-interest income	0.4	-1.9	2.3	-	-0.1	0.4	-0.9	-
Total net operating income	0.9	-1.4	2.3	-	0.1	0.8	-0.4	-86%
Total costs	-2.4	-6.4	4.0	62%	-0.4	-2.0	-3.5	81%
Result before impairments and provisions	-1.5	-7.8	6.3	81%	-0.3	-1.2	-3.9	77%
Impairments and provisions	1.4	1.6	-0.2	-11%	0.3	1.1	1.1	-76%
Result before tax	-0.1	-6.3	6.2	98%	0.0	-0.1	-2.9	98%
	30 Jun 2024	31 Mar 2024	31 Dec 2023		30 Jun 2023	Change YtD		Change YoY		Change QoQ
Segment assets	29.5	35.4	47.1		40.8	-17.6	-37%	-11.3	-28%	-17%
Net loans to customers	9.0	10.4	10.9		11.2	-1.9	-18%	-2.2	-20%	-13%
Gross loans to customers	25.3	26.0	28.6		31.7	-3.3	-11%	-6.4	-20%	-3%
Investment property and property & equipment	5.7	9.6	20.1		21.7	-14.5	-72%	-16.0	-74%	-41%
received for repayment of loans
Other assets	14.8	15.4	16.0		7.9	-1.2	-7%	6.9	88%	-4%
Non-performing loans (gross)	25.3	25.1	27.4		29.9	-2.1	-8%	-4.6	-15%	1%

The wind-down has remained the main objective of the non-core segment in all the non-core portfolios, followed by a reduced operating income. The divestment process has been running with thoughtful cost management and wellestablished collection procedures. On 30 June 2024, the segment's total assets amounted to EUR 29.5 million.

⁷ REAM entities are from 2024 on the part of the Core segment.

Risk Factors and Outlook

Risk Factors

Risk factors affecting	• Economy's sensitivity to a potential slowdown in the euro area or globally
the business outlook	• Potential liquidity outflows
are (among others):	• Widening credit spreads
	• Worsened interest rate outlook / Persistence of high inflation
	• Energy and commodity price volatility
	• Increasing unemployment
	• Geopolitical uncertainties
	• Potential cyber-attacks
	• Litigation risks
	• Regulatory, other legislative, and tax measures impacting the banks

In 2024, growth in the Group's region is expected to remain moderate, whereby anticipated interest rate cuts and the disinflation process are expected to contribute positively to loan growth. Additional geopolitical uncertainties pose downside risks that could potentially result in a slowdown, affecting investment growth and private consumption.

Credit risk usually increases considerably in times of an economic slowdown. The Group has thoroughly analysed and adjusted the potential impact on the credit portfolio in light of inflationary pressures and potential decreases in economic growth. The lending growth in the corporate and retail segments is expected to grow at around high single-digit rate. Regarding the credit portfolio quality, the Group carefully monitors the potentially most affected segments to detect any significant increase in credit risk at a very early stage. The aforementioned adverse developments and geopolitical uncertainties could affect the cost of risk and NPLs. Notwithstanding the established procedures in the Group's credit risk management, there can be no certainty that they will be sufficient to ensure the Group's credit portfolio quality or the corresponding impairments remain adequate.

The investment strategy of the Group, referring to the Group's bond portfolio kept for liquidity purposes, adapts to the expected market trends in accordance with the set risk appetite. Given that market interest rates in 2024 are expected to decrease, the Group is focusing on stabilising net interest income and reducing its sensitivity. Geopolitical uncertainties have increased volatility in the financial markets, particularly shifts in credit spreads, rising interest rates, and foreign exchange rate fluctuations. The Group closely monitors its prominent bond portfolio positions, mostly sovereign, and carefully manages them by incorporating adequate 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, market observations, and potential mitigations are closely monitored and 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 movements on the markets or a variety of factors, such as competitive pressures, 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 continuous provision of services to clients, their monitoring, and the prevention of cyberattacks and potential fraud events. The Group has established internal controls and other measures to facilitate adequate management. However, these measures may only sometimes entirely prevent possible adverse effects.

With regards to litigation risk, in recent years, and even more so in recent periods, the Bank has seen a shift in the case law that is generally becoming more favourable to consumers. The Bank has noticed an increase in the number of proceedings against the Bank in the consumer protection area, which was expected. The current litigations against the Bank referring to CHF are less material, but the Bank is closely monitoring the latest developments.

The Group is subject to various regulations and laws relating to banking, insurance, and financial services. Consequently, it faces the risk of significant interventions by several regulatory and enforcement authorities in each jurisdiction in which it operates, including any changes in the tax treatment of the banking business and changes in the interpretation of legislation. A comparable materialisation level of such risks may also be expected in future periods.

The SEE region is the Group's most significant geographic area of operations outside Slovenia, and the economic conditions in this region are, therefore, crucial to the Group's operations and financial condition results. The Group's financial condition could be adversely affected by 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 sentiment,
• Unemployment rate,
• Consumer confidence,
• Construction sentiment,
• 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,
• Other relevant market indicators.

In H1 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 established multiple scenarios (i.e., baseline, optimistic, and severe) for the Expected Credit Losses (ECL) 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 development in the SEE. The Group formed three probable scenarios with an associated probability of occurrence for forward-looking assessment of risk provisioning in the context of IFRS 9. These IFRS 9 macroeconomic scenarios incorporate the forward-looking and probability-weighted aspects of the 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.

The baseline scenario presents an expected forecast macroeconomic view for all the countries of the Group. This scenario is based on recent official and professional forecasts, with specific adjustments for individual countries of the Group. Key characteristics include decreasing inflation as energy-related impact on goods and services prices abate, a slightly less tight labour market, GDP growth supported by 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 spillover effects of financial system issues / major trading partners growth slowdown on the 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 positive developments. Supply chains adapt swiftly and support an optimistic economic stance - keeping a lid on inflation pressures. Labour skill mismatches are addressed through targeted training programs. Automation and technology adoption create new job opportunities, offsetting any displacement. In the short-term, financing conditions ease, and 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 scenario, the ECB maintains a dovish stance, easing aggressively until the inflation rebounds towards the ECB target.

The severe alternative scenario paints a picture of bleak economic developments, where supply constraints, geopolitical tensions, technological shifts, and labour market disruption hinder economic recovery. Moreover, high public debt diverts funds from productive 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 levels needed to achieve sustainable development goals in the mid-term. The ECB carefully considers demand and supply factors when setting interest rates to prevent abrupt economic shifts.

The Bank considers these scenarios when calculating expected credit losses in the context of IFRS 9. On this basis, the Group revised scenario weights in H1 2024. 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 and early warning systems in various risk areas with built-in risk factors relevant to the Group's business model. The stress-testing framework is integrated into the Risk Appetite, Internal Capital Adequacy Assessment Process (ICAAP), Internal Liquidity Adequacy Assessment Process (ILAAP), and the Recovery Plan to determine how severe and unexpected changes in the business and macro environment might affect the Group's capital adequacy or liquidity position. The stress-testing framework and recovery plan indicators support proactive management of the Group's overall risk profile in these 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 and applied when necessary. Moreover, the selection and application of mitigation measures follow a three-layer approach, considering the measure's feasibility analysis, its impact on the Group's business model, and the strength of the available measure.

Outlook

The indicated Outlook constitutes forward-looking statements that are subject to several risk factors and are 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, given the adaptive monetary policy of the ECB and local central banks to the general economic sentiment.

Reconstruction efforts from 2023's historic floods will buttress faster government spending in Slovenia and, in turn, GDP growth in 2024. Exports will rebound on a recovering automotive industry and EU demand, and private consumption will be braced by slower inflation. Deepening political instability is a downside risk, while a stronger-than-expected EU economy is an upside risk. GDP growth in Slovenia is expected to be 2.4% in 2024 and 2.5% in 2025. While banks benefited from higher interest rates in 2023, elevated rates started to weigh on demand in NLB Group's region (in some countries more than in others), albeit key rate cuts should lessen the interest rate strain during the course of the year. They will also negatively affect net interest margins in the banking industry. Most economies of the NLB Group's region are seen expanding at faster clips due to cooling inflation and monetary easing. Additional spillover from the wars in Ukraine and Gaza and increased ethno-nationalist tensions pose downside risks. The Group's region is expected to grow by 2.9% in 2024 and 3.2% in 2025.

			Average inflation			Unemployment rate
			(in %)					(in %)
	2022	2023	2024	2025	2026	2022	2023	2024	2025	2026	2022	2023	2024	2025	2026
Euro area	3.4	0.4	0.8	1.5	1.6	8.4	5.4	2.5	2.2	2.0	6.8	6.5	6.7	6.7	6.5
Slovenia	2.5	1.6	2.4	2.5	2.8	9.3	7.2	2.8	2.8	2.2	4.0	3.7	3.7	4.2	4.0
Serbia	2.5	2.5	3.3	3.7	3.7	12.0	12.1	4.7	3.2	3.0	9.6	9.5	9.0	8.8	8.6
N. Macedonia	2.2	1.0	2.6	3.2	3.2	14.1	9.4	4.0	2.6	1.8	14.4	13.1	12.7	12.4	12.2
BiH	4.2	1.6	2.5	3.0	3.5	14.0	6.1	2.5	2.4	1.9	15.4	13.2	12.5	12.0	11.5
Kosovo	4.3	3.3	3.7	4.0	4.0	11.6	4.9	2.8	2.7	2.5	12.6	11.0	10.5	10.0	9.5
Montenegro	6.4	6.0	3.5	3.2	3.3	13.0	8.6	4.7	2.8	2.4	14.7	13.1	13.0	12.7	12.5

Table 16: Movement of key macroeconomic indicators in the euro area and the NLB Group region

Note: NLB Forecasts are highlighted in grey.

Source: Statistical offices, Focus Economics.

The strong performance of the NLB Group in the second quarter, namely on the cost of risk and loan growth and consequently on ROE a.t., justifies revision of the previously communicated outlook for 2024.

In the first half of 2024, the Group recorded a 5% growth in gross loans to customers. The Bank previously communicated expectations that loan growth in 2024 would be at around mid-single-digit levels. A pick-up in economic growth momentum supports expectations for the continuation of loan growth. Strong private consumption as a consequence of the growth of real wages, near or at record-low unemployment and healthy corporate fundamentals should support healthy loan production both in retail and corporate and state segments. Thus, the new guidance for loan growth is high single-digit growth in 2024.

In Q2, changes in models/risk parameters importantly impacted the net impairments and provisions in the first half of the year. The cost of risk in the same period was negative, standing at -18 bps. This gives the bank comfort that with expected asset quality trends in the second half of the year, the cost of risk should not exceed 20 bps.

Improved CoR guidance and increased confidence in the underlying business momentum support revised ROE a.t. expectations. The Bank now expects ROE a.t. to exceed 15%.

Other KPIs are reaffirmed at the previous level, and the Bank shall closely monitor business trends, monetary policies, risks, and opportunities, among others; apply a healthy level of conservativism within the forecasting process and, on an ongoing basis, guide investors and analysts of what the Bank expects short- and near-term for the key selected KPIs.

	Last Outlook	Revised Outlook	Revised Outlook
	for 2024	for 2024	for 2025
Regular income	~ EUR 1,200 million	~ EUR 1,200 million	~ EUR 1,200 million
CIR	~ 45%	~ 45%	~ 45%
Cost of risk	20-40 bps	Below 20 bps	30-50 bps
Loan growth	Mid single-digit	High single-digit	High single-digit
	EUR 220 million	EUR 220 million	More than 40%
Dividends	(40% of 2023 profit)	(40% of 2023 profit)	of 2024 profit
ROE a.t.	~ 15%	> 15%	~ 15%
ROE a.t. normalised(i)	> 20%	> 20%	> 20%
			M&A capacity of
M&A potential

Table 17: Market performance and outlook for the period 2024-2025

up to EUR 4 billion RWA(ii)

(i) ROE a.t. normalised = result a.t. divided by the average risk-adjusted capital. An average risk-adjusted capital is calculated as a Tier 1 requirement of average RWA reduced by minority shareholder capital contribution.

(ii) Possibly assisted with the capital from issuing AT1 notes and/or modifications to the dividend guidance.

Risk Management

The Bank emphasises the risk culture and awareness across the entire Group. Efficient management of risks and capital is crucial for the Group to sustain long-term profitable and sustainable operations. The main risk principles are set forth by the Group's Risk Appetite and Risk Strategy, designed in accordance with the Group Strategy. The Group's Risk Management framework is forward-looking and tailored to its business model and corresponding risk profile. A particular focus is placed on including risk analysis and the ESG risk factors in the decision-making process at strategic and operating levels, diversification to avoid large concentration, optimal capital usage and allocation, appropriate riskadjusted pricing, and overall compliance with the internal rules and regulations.

Risk Management in the Group manages, assesses, and monitors risks within the Bank as the main entity in Slovenia and the competence centre for all banking subsidiaries and leasing companies. Management and control of risks are performed through a clear organisational structure with clearly defined roles and responsibilities. The organisation and delineation of competencies are designed to prevent conflicts of interest and ensure a transparent and documented decision-making process subject to the relevant upward and downward flow of information.

As a systemically important institution, the Group is included in two ECB stress test exercises – the 2024 EBA Fit-for-55 Climate Risk Scenario Analysis and the 2024 ECB Cyber Resilience Stress Test Exercise, which started in Q4 2023 and was concluded in H1 2024. By performing this exercise, the ECB assessed how banks are prepared to deal with financial and economic shocks from climate and cyber risk.

Maintaining a high credit portfolio quality is the most important goal, focusing on cautious risk-taking and the quality of new loans, leading to a diversified portfolio of customers. The Group is constantly developing a wide range of advanced approaches in the credit risk assessment segment that align with the best banking practices to enhance the existing risk management tools further while enabling greater customer responsiveness. The restructuring approach in the Group is focused on the early detection of clients with potential financial difficulties and their proactive treatment.

The Group is actively present on the SEE markets by financing existing and new creditworthy clients. The Group's lending strategy focuses on its core markets of retail, SME, and selected corporate business activities. The Slovenian market focuses on providing appropriate solutions for the retail, medium-sized companies, and small enterprise segments. In contrast, in the corporate segment, the Bank established cooperation with selected corporate clients (through different lending or investment instruments). Other Group banking members are universal banks, mainly focused on the segments of retail, medium, and small enterprises. Their primary goal is to provide comprehensive services to clients by applying prudent risk management principles.

Figure 32: NLB Group structure of the corporate and retail credit portfolio (gross loans) by segment and geography (in EUR millions)

Figure 30: NLB Group structure of the corporate and retail credit portfolio (gross loans) by segment and geography (in EUR millions)

(i) The largest part represents EU members.

The current structure of the credit portfolio (gross loans) consists of loans given to non-financial clients, where retail clients represent 52.6%, large corporate clients 20.9%, and SMEs, including micro companies 26.6%. The credit portfolio remains well diversified, and no significant concentration exists in any specific industry or client segment. The share of the retail portfolio in the whole credit portfolio is quite substantial, with the segment of mortgage loans prevailing. Compared to lower portfolio growth in 2023, in H1 2024, the new financing activity has improved, and the trend is expected to continue throughout 2024. Most of the loan portfolio refers to the euro currency, while the rest originates from the local currencies of the SEE banking members.

Table 18: Overview of NLB Group corporate loan portfolio by industry as at 30 June 2024

	Credit porfolio	in EUR thousands
Corporate sector by industry	NLB Group	%	∆ Q2 2024	∆ YtD 2024
Accommodation and food service activities	190,315		3% 1,345	-8,514
Act. of extraterritorial org. and bodies	3	0%	-5	0
Administrative and support service activities	119,173		2% 5,993	7,862
Agriculture, forestry and fishing	349,254		5% 5,767	4,572
Arts, entertainment and recreation	19,915	0%	802	-116
Construction industry			667,071 10% 113,900	110,132
Education	15,315	0%	92	360
Electricity, gas, steam and air conditioning	554,683		8% 44,445	11,383
Finance	143,500		2% -5,882	-868
Human health and social w ork activities	40,263		1% -1,664	2,892
Information and communication	252,216		4% -9,357	-39,405
Manufacturing	1,615,746		23% 79,641	90,889
Mining and quarrying	44,871		1% -1,004	-1,200
Professional, scientific and techn. act.	225,917		3% 4,236	-8,955
Public admin., defence, compulsory social.	191,303		3% -1,839	-8,203
Real estate activities	376,629		5% 9,407	-791
Services	11,657		0% -2,605	-2,293
Transport and storage	603,926		9% -1,476	-15,116
Water supply	62,553		1% 2,807	5,411
Wholesale and retail trade	1,404,844		20% 45,818	114,594
Other	77	0%	-692	-2,717
Total Corporate sector	6,889,231 100% 289,727			259,918

Credit porfolio				in EUR thousands
Main manufacturing activities	NLB Group	%	∆ Q2 2024	∆ YtD 2024
Manufacture of food products	262,963		4% -5,553	-19,042
Manufacture of electrical equipment	221,163		3% 44,942	30,375
Manufacture of fabricated metal products, except machinery and equipment	191,018		3% 6,337	-2,328
Manufacture of basic metals	162,750		2% 3,981	6,736
Manufacture of other non-metallic mineral products	117,472		2% 6,936	19,541
Manufacture of motor vehicles, trailers and semi-trailers	91,322		1% -2,486	5,348
Manufacture of machinery and equipment n.e.c.	85,858		1% -5,693	6,423
Manufacture of rubber and plastic products	73,728		1% -1,718	-1,102
Other manufacturing activities	409,473		6% 32,894	44,939
Total manufacturing activities	1,615,746		23% 79,641	90,889
Credit porfolio				in EUR thousands
Main wholesale and retail trade activities	NLB Group	%	∆ Q2 2024	∆ YtD 2024
Wholesale trade, except of motor vehicles and motorcycles	770,515	11%	4,663	52,079
Retail trade, except of motor vehicles and motorcycles	462,453		7% 18,761	34,200
Wholesale and retail trade and repair of motor vehicles and motorcycles	171,876		2% 22,395	28,316

Total wholesale and retail trade 1,404,844 20% 45,818 114,594

The corporate credit portfolio is well diversified; no large concentration exists in any specific industry. Companies' financing also includes financing real estate activities (projects), representing a smaller part of the portfolio. Projects are carefully monitored throughout each phase of construction. For income-producing CRE companies in the operating phase, the DSCR is between 1.2 and 1.4, and the LTV is, on average, lower than 60%; a sufficient reserve and repayment to the Bank is not threatened. For most approved loans, an amortisation repayment structure was backed against the background of concluded long-term rental contracts (offices and shopping malls segment). In the

development phase, the Bank requires a minimum of 25% of equity and a pre-lease/pre-sale of 30% for offices, 60% for shopping malls, and 20% for residential real estate before first disbursement. The Bank finances projects sponsored by investors with proven track records. In this portfolio, occupancy rates and rent deterioration have not been observed.

At the end of H1 2024, the specific Commercial Real-estate financing is in the operational phase (95% of Retail shopping centres, 88% of Hotels and 85% of Office and Congress centres).

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 (93.7%), a relatively small portion as Stage 2 (4.7%), and Stage 3 (1.5%). The Stage 2 allocation increased, mainly in the retail segment. The increased Stage 2 exposure in the Retail segment results from improved process and methodological changes in the early detection of SICR. However, the increase remains at low level compared to the entire portfolio volume; in addition, 72% of the Stage 2 exposure has no delays. The loans in stages 1 to 3 are measured at amortised cost, while the remaining minor part (0.002%) represents fair value through profit or loss (FVTPL). The State and Institutions segment outflow results from redistributing excess liquidity into highquality sovereign bonds.

	Credit portfolio							Provisions and FV changes for credit portfolio
		Stage 1 Stage 2					Stage 3 & FVTPL			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	Provision Volume	Provision Coverage	Provision Volume	Provision Coverage	Provisions & FV changes	Coverage with provisions and FV changes
Total NLB Group	18,557.1	93.7%	-682.1	939.2	4.7%	235.1	303.4	1.5%	2.8	76.2	0.4%	50.5	5.4%	202.3	66.7%
o/w Corporate	6,186.7	89.8%	181.1	535.7	7.8%	81.4	166.8	2.4%	-2.6	34.1	0.6%	17.5	3.3%	103.5	62.0%
o/w Retail	7,092.6	92.9%	237.9	403.5	5.3%	153.9	136.4	1.8%	5.4	39.6	0.6%	33.0	8.2%	98.7	72.4%
o/w State	4,986.2	100.0%	-941.8	0.0	0.0%	0.0	0.0	0.0%	0.0	2.3	0.0%	0.0	6.2%	0.0	96.6%
o/w Institutions	291.5	99.9%	-159.3	0.0	0.0%	-0.3	0.2	0.1%	0.0	0.2	0.1%	0.0	0.0%	0.2	100.0%

Table 19: NLB Group loan portfolio by stages as at 30 June 2024 (in EUR millions)

in EUR millions

Figure 34: NLB Group corporate and retail loan portfolio by stages as at 30 June 2024

The portfolio quality remains stable, with increasing Stage 1 exposures and a relatively low percentage of NPLs. The Stage 1 loan portfolio percentage slightly decreased compared to 31 December 2023 but remained relatively high at 92.9% in the retail segment and 89.8% in the corporate segment.

31 Dec 2021 31 Dec 2022 31 Dec 2023 30 Jun 2024

Figure 35: NLB Group corporate and retail loan portfolio (in %) by interest rates as at 30 June 2024

56.4% of the Group corporate and retail loan portfolio is linked to a fixed interest rate, and the rest to a floating rate (mainly the Euribor reference rate). Floating interest rates dominate the corporate segment. In the retail segment, 71.8% of the retail loan portfolio is linked to a fixed interest rate, of which 72.6% is on housing loans, which limits the sensitivity of the retail sector to potential changes in reference rates.

At the end of H1 2024, CoR was negative, standing at -18 bps. A release of net impairments and provisions for credit risk in the amount of EUR 11.7 million was mainly affected by the revised risk parameters (EUR 23.2 million) and repayments of written-off receivables (EUR 10.1 million). On the other hand, additional provisions of EUR 21.7 million were established for portfolio development, mainly in the Retail segment, referring to Stage 2 and Stage 3 exposures.

A change in models/risk parameters in Q2 2024 contributed to the release of EUR 22.5 million, mostly related to NLB Group banking subsidiaries. Overlays connected to the risks of the Russia/Ukraine conflict and related electricity crisis, as well as inflation pressures, became less relevant, representing the key factor for the release. In addition, improved macroeconomic expectations attributed to an additional impact on the level of impairments and provisions.

Figure 37: NLB Group gross NPL formation (in EUR millions)

Positive macroeconomic development led to a moderate cumulative new NPL formation of EUR 73.8 million in the first six months, representing 0.4% of the total loan portfolio. The Group's credit portfolio remains high quality due to cautious lending standards and effective early warning systems.

Figure 38: NLB Group NPL, NPL ratio, NPL collateral coverage and coverage ratio(i)

(i) By internal definition.

The Group's approach to NPL management strongly emphasises restructuring and using other active NPL management tools, such as the sale or foreclosure of collateral, the sale of claims and pledged assets. In H1 2024, the multi-year declining trend of the non-performing credit portfolio stock stopped, primarily for retail clients, as the growth of new NPLs exceeded repayments and recovery of existing NPLs. The non-performing credit portfolio stock in the Group slightly increased since the end of 2023 to EUR 303.4 million (compared to EUR 300.5 million on 31 December 2023). However, EUR 123.0 million of NPLs have no delays. The combined effects of a slight increase in the NPL portfolio and a decrease in the higher quality loan portfolio due to the changed structure of liquid assets resulted in 1.5% of NPLs. The internationally more comparable NPE ratio, based on the EBA methodology, stood at 1.1%. The Group's indicator gross NPL ratio, defined by the EBA, is stable and amounted to 2.1% at the end of Q2 2024.

Due to extensive experience gained in the last few years in dealing with clients with financial challenges resulting primarily from legacy portfolios, the Group has developed an extensive knowledge base in preventing clients' financial difficulties by restructuring receivables and successfully recovering exposures with no realistic recovery prospects. This extensive knowledge base is available throughout the Group, and risk units, as well as restructuring and workout teams, are adequately staffed and have the capacity to deal, if needed, with considerably increased volumes in a professional and efficient manner. Due to this fact, as well as the implemented early warning tools and efficient analysis and reporting mechanisms, the Group can identify and engage with potentially distressed borrowers proactively. The Group monitors the macroeconomic and geopolitical circumstances closely and communicates with key clients to identify any changes in business circumstances.

An important Group's strength is the NPL coverage ratio 1 (coverage of gross NPLs with impairments for all loans), which remains high at 108.4%. Furthermore, the Group's NPL coverage ratio 2 (coverage of gross NPLs with impairments for NPL) improved in Q2 and stood at 66.7%, well above the EU average published by the EBA (compared to 41.8% for March 2024). Furthermore, NPLs are also covered by collaterals, which serve as a secondary source of NPL repayments. At the end of H1, collateral coverage amounts to 56.7%, which, together with impairments, represents the total NPL coverage of 165.1%. As such, it enables a further reduction in NPLs without significantly influencing the cost of risk in the coming years.

The Group strives to ensure the best possible collateral for long-term loans, namely mortgages in most cases. Thus, the real-estate mortgage is the most frequent loan collateral for corporate and retail clients. In corporate loans, it is followed by government and corporate guarantees.

The liquidity position of the Group remains stable. The Group holds a very strong liquidity position at the Group and individual subsidiary bank level, which is well above the risk appetite with the Liquidity Coverage Ratio (LCR) of 256.1% (316.6% in NLB) and unencumbered eligible reserves in the amount of EUR 10,317.2 million (EUR 7,934.7 million in NLB), mainly in the form of placements at the ECB and prime debt securities. Significant attention is given to the structure and concentration of liquidity reserves by incorporating early warning systems. The main funding base of the Group at the Group and individual subsidiary bank level predominately entails customer deposits, namely in the retail segment, representing a very stable and constantly growing base. A very comfortable level of LTD at 69.6% gives the Group the potential for further customer loan placements.

The Group's net open FX position from the transactional risk is low. At the end of Q2 2024, it stood at 0.79% of capital. On the other hand, structural FX positions, recognised in the other comprehensive income (OCI) on the consolidated basis, arising from investments into the Group's non-euro subsidiaries, impact the Group's RWA for market risk.

Regarding market risks in the trading book, the Group pursues a low-risk appetite for market risk in the trading book. The exposure to trading (according to the CRR) is only allowed to the parent Bank as the main entity of the Group and is very limited.

The exposure to interest rate risk is measured in terms of impact on capital (EVE) and net interest income (NII) sensitivity. The Group applies different scenarios when assessing the EVE and NII sensitivity. From the EVE perspective, the estimated capital sensitivity equals -2.50% of the Group's T1 capital.

The majority of the EUR 5,606 million loan portfolio linked to Euribor includes loans with 6M Euribor (50%), followed by 3M Euribor (33%), 1M Euribor (13%) and 12M Euribor (4%).

In the area of operational risk management, where the Group has established a robust operational risk culture, the main qualitative activities refer to reporting loss events and identifying, assessing, and managing operational risks. Constant improvements of control activities, processes, and/or organisation are performed on this basis. In addition, the Group also focuses on proactively mitigating, preventing, and minimising potential damage. However, an evolving legal practice concerning consumer protection regulation might impact the materialisation of operational risk in future periods.

Special attention is dedicated to the stress-testing system based on scenario analysis referring to the potential high severity, low-frequency events and modelling data on loss events. Apart from losses already included in the loss event database, one-off and unpredictable extreme events are also considered. Furthermore, key risk indicators, serving as an early warning system for the broader field of operational risks, are regularly monitored, analysed, and reported to improve the existing internal controls and enable on-time reactions.

The Group contributes to sustainable finances by incorporating ESG risks into its business strategies, risk management framework, and internal governance arrangements. The Group integrates and manages them within the established risk management framework in credit, liquidity, market, and operational risk. The management of ESG risks follows the ECB and EBA guidelines, following the tendency of their comprehensive integration into all relevant processes.

The Group conducts a materiality assessment as part of its overall risk identification process to determine the level of transitional and physical risk to which the Group is exposed. The Group's exposure towards these risks is relatively low. Transition risk is assessed as more material than physical risk. With the implementation of the Net Zero Strategy of the NLB Group, its impacts are expected to diminish gradually. Results of internal climate stress tests showed no material impacts on the Group's capital and liquidity position.

Sustainability

Sustainability

In H1 2024, the Group continued implementing ESG considerations in its Group Strategy, risk management framework, and internal governance across three pillars: sustainable finance, sustainable operations, and contribution to society. The Group follows the legislation and guidelines from the ECB, EBA, UNEP FI, EBRD, and best banking practices. The Group is also intensively preparing to report on CSRD and ESRS standards (which will be transposed into the Slovenian legislation later in 2024) and on ISSB standards following the recommendations of the Financial Conduct Authority. In line with the recommendations by the UNEP FI Principle for Responsible Banking, the Group continues to set priorities and concrete objectives in its impact areas and to align with updated reporting standards. The Group took part in several sustainability-related capacity-building events in the region and conducted activities to further upgrade the sustainabilityrelated culture among employees.

Sustainable finance

• The Group continued with measures to reduce its emissions associated with financing activities and is fully committed to supporting clients in transitioning to a low-carbon economy and society.
• At the end of H1, GHG emissions of the NLB Group Corporate credit portfolio (Scope 1 & 2 & 3, based on actual data and proxies) were at 11,171,064 tonnes CO2e and are disclosed in detail in Pillar III Disclosures.
• H1 realisation from the corporate and retail green finance range of products is aligned with the annual business targets and the commitment to mobilise EUR 1.9 billion of sustainable (green) financing by 2030. NLB has continued to strengthen the ESG culture Group-wide by conducting regular meetings, providing training on recognising effective ESG strategies in companies, and on-site meetings to further promote and educate on green loans.
• On 19 June 2024, NLB published its first Green Bond Allocation and Impact Report, which was prepared in line with the NLB Green Bond Framework (GBF) as of May 2023 and externally reviewed by Morningstar Sustainalytics. The report provides a comprehensive overview of green projects financed by NLB and other Group entities in line with GBF. The report provides transparency for the allocation of green bond proceeds, the measurement of impacts, and the Group's ongoing efforts to enhance its climate (net-zero) strategy. As of 31 March 2024, out of EUR 500 million green bond issuance in June 2023, EUR 341 million proceeds were allocated in line with GBF and 139,008 tonnes of CO² emissions were avoided. In line with GBF, the total allocation is expected by 27 June 2026.
• After setting the targets for reducing financed emissions in the first four carbon-intensive sectors (power generation, iron and steel, commercial real estate, residential real estate) and publishing its first Net Zero Disclosure Report in December 2023, the Group continues its net-zero journey. In H1 2024, the focus was on preparing a transition (and implementation) plan for the first round of targets and developing guides for transaction-level decision-making.
• In line with its strategic orientations and annual plans in risk management, the Group continued with the appropriate implementation of ESG risks in the risk management framework, the decision-making process at strategic and operational levels, including implementation in the credit process and customer/project due diligence. As a systemically important institution, the NLB Group was included in the ECB Stress test exercise – the 2024 EBA Fit- for-55 Climate Risk Scenario Analysis. The results of this exercise were publicly disclosed only on aggregate (whole banking) level. The NLB Group's results were in line with average the peer group results. Throughout H1, regular training courses for the Group employees were provided to enhance awareness of the ESG risks and their appropriate treatment.

Sustainable operations

• In H1, the NLB Group made further progress with implementing the Sustainability Policy and Standard Rulebook for sustainability management in financial core members (banks, asset management, leasing). The Group has also continued to develop and implement measures to improve ESG data management and automation.
• In line with the NLB Group's Human Rights Policy, the Group has continued to develop procedures and mechanisms to mitigate risks and further prevent human rights violations. In H1, no human rights violations were confirmed.
• The Group has also made progress with developing an operational net-zero strategy. It has continued reducing its emissions by optimising energy and resource consumption, transforming the car fleet, and further decreasing paper consumption through digitalisation and automating processes.
• NLB holds the Top Employer certificate (for the 9th consecutive year) and continuously embeds sustainability matters and ESG factors into human resource management. In H1, the focus was on regular initiatives in human capital

development (talent acquisition, talent development and succession plan, promoting local and international development, leadership skills, training and education, career end transition), implementation of diversity, equity and inclusion in NLB Group HR strategy and processes. The Group members also conducted several activities to ensure well-being and work-life balance and continued with initiatives in line with the family-friendly certificate.

• As an active ambassador of the Chapter Zero Slovenia initiative, the Group participated in several activities, enabling members of the Supervisory and Management Boards of the Group's members to strengthen their competencies to address climate change adequately in the Group's business model.

Contribution to society

Contribution to the UN Sustainable Development Goals is the primary strategic guideline for the Group's CSR activities. In this light, the Group has continued to embed sustainability-related activities and requirements in sponsorship and partnership projects. Besides regular contributions to local communities, sports, culture, and education, the Group focused on further development of financial literacy and inclusion activities. In May, the fourth NLB Frame of Help project was concluded. The project focused on the social aspects of ESG, seeking innovative companies and projects that would improve and enrich the Group's society and tackle societal challenges throughout the region. The participating banks in the Group provided the winners with a monetary award that will contribute to the further development of their projects.

Related-Party Transactions

In the normal course of business, several banking transactions have been entered into with related parties. The volume of related-party transactions mainly consists of loans issued and deposits received. NLB Group and NLB also disclose all transactions with the major shareholder that have significant influence. For transactions with other government-related entities, NLB Group discloses individually significant transactions above EUR 40 million and their business accounts balances. No new significant transactions were concluded in the period ended 30 June 2024. Further information on transaction volumes is available in the Financial Part of this report under Note 7.

Corporate Governance

Management Board

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

There were no changes in the composition of the Management Board in H1 2024, which is as follows: Blaž Brodnjak as President & CEO, Archibald Kremser as Deputy CEO and Chief Financial Officer (CFO), Peter Andreas Burkhardt as Chief Risk Officer (CRO), Hedvika Usenik as Chief Marketing Officer (CMO) responsible for Retail Banking and Private Banking, Antonio Argir responsible for Group Governance, Payments and Innovations and Andrej Lasič as Chief Marketing Officer (CMO) responsible for Corporate and Investment Banking.

Supervisory Board

On the date of this report, the Supervisory Board consists of ten members, of which eight represent the interests of shareholders, and two represent the interests of employees. The members of the Supervisory Board representing the interests of shareholders are elected and recalled by the General Meeting from persons proposed by shareholders or the Supervisory Board. The members of the Supervisory Board representing the interests of employees are selected and nominated by the Works Council, taking into account the conditions for members of the Supervisory Board laid down in the regulations and the Articles of Association.

At the 42nd General Meeting of Shareholders, held on 17 June 2024, three members were nominated to the NLB Supervisory Board, as the terms of office of Primož Karpe, David Eric Simon and Verica Trstenjak, were to expire in 2024. A representative of the employees, Sergeja Kočar, whose mandate expired this year, has already been nominated for a second mandate. The General Meeting of Shareholders reappointed Primož Karpe. Also, two new members were appointed: Natalia Olegovna Ansell, a seasoned banker with global experience and detailed knowledge of all technical aspects of corporate banking, retail banking, wealth management, and, above all, payment and card systems, and Luka Vesnaver, Chairman of the Board of Directors of the British-Slovenian Chamber of Commerce with vast knowledge and experience in the field of corporate finance in the region.

The Supervisory Board now also consists of Islam Osama Zekry and employee representative Tadeja Žbontar Rems, whose mandates expire in 2025; and Deputy Chairman Shrenik Dhirajlal Davda, André-Marc Prudent-Toccanier, Mark William Lane Richards, Cvetka Selšek, whose mandates expire two years later.

General Meeting

The shareholders exercise their rights related to the Bank's operations at General Meetings of the Bank. Decisions adopted by the General Meeting include, among others, adopting and amending the Articles of Association, use of distributable profit, granting a discharge from liability to the Management and Supervisory Board, changes to the Bank's share capital, appointing and discharging Supervisory Board members, remuneration and profit-sharing by the members of the Supervisory and Management Board and employees, annual schedules, and characteristics of issues of securities convertible into shares and equity securities of the Bank.

On the 42nd General Meeting held on 17 June 2024, the shareholders took note of the adopted NLB Group Annual Report 2023 and adopted the Report of the Supervisory Board of NLB on the results of the examination of the NLB Group Annual Report 2023. They also adopted the Report on Remuneration in the Business Year 2023, which includes additional information to the Report on Remuneration in the Business Year 2023 based on SSH's Baselines and the Internal Audit Report for 2023.

The General Meeting adopted a decision on the allocation of distributable profit from the previous year to be paid out as dividends in a total amount of EUR 110 million, which is EUR 5.50 gross per share. Shareholders also granted a discharge from liability to both NLB Management and the Supervisory Board. They confirmed the changes to the Remuneration Policy for the NLB Supervisory and Management Board members. As previously mentioned, the General Meeting adopted decisions on the election of the Supervisory Board members.

Events After 30 June 2024

On 5 July 2024, the members of the Supervisory Board of the NLB re-elected Primož Karpe as their Chairman for the third time in a row. Shrenik Dhirajlal Davda remains his deputy.

On 15 July 2024, 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 EUR 20.00 to EUR 22.00 per Addiko share on a cum dividend basis. Following the announcement of the improvement of voluntary public takeover, the Bank published the addendum to the Offering Memorandum and revised Presentation on 22 July 2024. The documentation is available on the Bank's website.

Following the approval from the Croatian Financial Services Supervisory Agency (HANFA) to acquire Mobil Leasing (Croatia) on 28 June 2024, the Bank obtained approval from the Slovenian Competition Protection Agency (AVK) to acquire Summit Leasing Slovenia on 18 July 2024. The Bank is now awaiting the final regulatory clearance from the ECB to successfully complete the transaction as expected in mid-September 2024.

On 19 July 2024, the Bank executed the early redemption of NLB senior preferred notes in the aggregate nominal amount of EUR 300 million (ISIN: XS2498964209).

Alternative Performance Indicators

The Bank has chosen to present these APIs either because they are commonly used within the industry or because investors commonly use them and are suitable for disclosure. The APIs are used internally to monitor and manage 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 definitions.

Cost of risk – Calculated as the ratio between credit impairments and provisions annualised from the income statement and average net loans to customers.

					in EUR millions
			NLB Group
	1-6 2024	1-3 2024	1-12 2023	1-9 2023	1-6 2023
Numerator
Credit impairments and provisions(i)	-24.5	13.5	-8.8	-31.2	-49.8
Denominator
Average net loans to customers(ii)	13,962.7	13,775.1	13,432.3	13,334.3	13,213.9
Cost of risk (bps)	-18	10	-7	-23	-38

(i) NLB internal information. Credit impairments and provisions are annualised, calculated as all established and released impairments on loans to customers and provisions for off-balance (from the income statement) in the period divided by the number of months per reporting period and multiplied by 12. The net established Credit impairments and provisions are shown with a positive sign, net released Credit impairments and provisions are shown with a negative sign.

(ii) NLB internal information. Average net loans to customers are calculated as a sum of balance from the previous year's end (31 December) and monthly balances as of the last day of each month from January to month t divided by (t+1).

Cost to income ratio (CIR)(i) – Indicator of cost efficiency, calculated as the ratio between total costs and total net operating income.

						in EUR millions
	NLB Group
	1-6 2024	1-3 2024	1-12 2023	1-9 2023	1-6 2023	1-6 2024
Numerator
Total costs	258.8	124.3	501.9	361.6	240.7	128.7
Denominator
Total net operating income	604.0	298.1	1,093.3	800.8	511.7	362.4
Cost to income ratio (CIR)	42.8%	41.7%	45.9%	45.2%	47.0%	35.5 %

(i) Tax on the balance sheet excluded from the calculation in NLB Group and NLB for the year 2024.

						in EUR millions
	NLB Komercijalna Banka, Beograd	NLB Banka, Skopje	NLB Banka, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Banka, Podgorica
	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024
Numerator
Total cost	58.6	18.5	10.7	10.8	8.7	11.3
Denominator
Total net operating income	145.6	50.6	27.9	20.3	29.7	26.4
Cost to income ratio (CIR)	40.3%	36.6%	38.4%	53.2%	29.4%	42.9%

Total average cost of funding (quarterly) – Calculated as the ratio between interest expenses annualised and average interest-bearing liabilities.

					in EUR millions
	NLB Group
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest expenses(i)	235.6	219.7	194.1	173.8	123.2
Denominator
Average interest bearing liabilities(ii)	22,552.6	22,361.8	22,083.7	21,828.0	21,097.3
Total average cost of funding (quarterly)	1.04%	0.98%	0.88%	0.80%	0.58%

(i) Interest expenses (quarterly) are annualised, calculated as the sum of 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 interestbearing liabilities also include interest income from negative interest rate on financial liabilities.

(ii) NLB internal information. Average interest-bearing liabilities (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 divided by (t+1).

Average cost of wholesale funding(iii) (quarterly) – Calculated as the ratio between interest expenses on deposits from customers annualised and average wholesale funding.

	in EUR millions
	NLB Group
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
holesale funding(i) Interest expenses from w	119.2	107.8	96.9	94.4	62.9
Denominator
holesale funding(ii) Average w	1,999.4	1,756.9	1,674.7	1,665.8	1,329.1
Average costs of wholesale funding (quarterly)	5.96%	6.13%	5.78%	5.66%	4.73%

(i) Interest expenses from wholesale funding (quarterly) are annualised, calculated as the sum of interest expenses from wholesale funding in the period divided by the number of days in the quarter and multiplied by the number of days in the year.

(ii) NLB internal information. Average wholesale funding (quarterly) for the NLB Group, calculated as the sum of monthly balances (t) for the corresponding quarters and monthly balance at the end of the previous quarter divided by (t+1).

(iii) Wholesale funding includes deposits from banks and central banks, borrowings, debt instruments, and subordinated liabilities.

Average interest rate for loans to customers (quarterly) – Calculated as the ratio between interest income on loans to customers annualised and average loans to customers.

	in EUR millions
	NLB Group
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest income loans to customers(i)	857.4	838.2	815.5	783.7	711.3
Denominator
Average loans to customers(ii)	14,458.2	14,108.0	14,059.7	13,888.8	13,638.7
Average interest rate for loans to customers (quarterly)	5.93%	5.94%	5.80%	5.64%	5.22%

(i) Interest income on loans to customers (quarterly) are annualised, calculated as the sum of interest income on loans to customers in the period divided by the number of days in the quarter and multiplied by the number of days in the year.

(ii) NLB internal information. Average loans to customers (quarterly) for the NLB Group, calculated as the sum of monthly balances (t) for the corresponding quarters and monthly balance at the end of the previous quarter divided by (t+1).

					in EUR millions
			NLB
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest income loans to customers(i)	389.1	377.4	373.2	333.3	277.8
Denominator
Average loans to customers(ii)	7,347.6	7,193.6	7,249.4	6,673.4	6,224.1
Average interest rate for loans to customers (quarterly)	5.29%	5.25%	5.15%	4.99%	4.46%

(i) Interest income on loans to customers (quarterly) are annualised, calculated as the sum of interest income on loans to customers in the period divided by the number of days in the quarter and multiplied by the number of days in the year.

(ii) NLB internal information. Average loans to customers (quarterly) for NLB are calculated as the sum of daily balances in each quarter (from the first day to the last day of the quarter) divided by the number of days in the quarter.

					in EUR millions
	SEE Banks(iii)
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest income loans to customers(i)	458.3	451.2	434.3	415.5	384.4
Denominator
Average loans to customers(ii)	7,030.4	6,825.1	6,711.0	6,621.2	6,488.0
Average interest rate for loans to customers (quarterly)	6.52%	6.61%	6.47%	6.28%	5.92%

(i) Interest income on loans to customers (quarterly) are annualised, calculated as the sum of interest income on loans to customers in the period divided by the number of days in the quarter and multiplied by the number of days in the year.

(ii) NLB internal information. Average loans from customers (quarterly) for the SEE banks, calculated as the sum of monthly balances (t) for the corresponding quarters and monthly balance at the end of the previous quarter divided by (t+1).

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

Average interest rate for deposits from customers (quarterly) – Calculated as the ratio between interest expenses on deposits from customers annualised and average deposits from customers.

					in EUR millions
	NLB Group
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest expenses on deposits from customers(i)	113.9	110.0	94.7	77.2	55.4
Denominator
Average deposits from customers(ii)	20,553.2	20,604.9	20,409.0	20,162.2	19,768.1
Average interest rate for deposits from customers (quarterly)	0.55%	0.53%	0.46%	0.38%	0.28%

(i) 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 and multiplied by the number of days in the year.

(ii) NLB internal information. Average deposits from customers (quarterly) for the NLB Group, calculated as the sum of monthly balances (t) for the corresponding quarters and monthly balance at the end of the previous quarter divided by (t+1).

					in EUR millions
			NLB
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest expenses on deposits from customers(i)	55.8	54.4	49.7	42.4	27.2
Denominator
Average deposits from customers(ii)	11,651.0	11,773.5	11,714.4	11,294.3	10,881.6
Average interest rate for deposits from customers (quarterly)	0.48%	0.46%	0.42%	0.38%	0.25%

(i) 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 and multiplied by the number of days in the year.

(ii) NLB internal information. Average deposits from customers (quarterly) for NLB are calculated as the sum of daily balances in each quarter (from the first day to the last day of the quarter) divided by the number of days in the quarter.

					in EUR millions
	SEE Banks(iii)
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Interest expenses on deposits from customers(i)	58.8	56.2	45.6	37.1	24.6
Denominator
Average deposits from customers(ii)	8,953.3	8,900.5	8,734.8	8,544.1	8,291.4
Average interest rate for deposits from customers (quarterly)	0.66%	0.63%	0.52%	0.43%	0.30%

(i) 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 and multiplied by the number of days in the year.

(ii) NLB internal information. Average deposits from customers (quarterly) for the SEE banks are calculated as the sum of monthly balances (t) for the corresponding quarters and monthly balances at the end of the previous quarter divided by (t+1).

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

			in %, bps
	NLB Group
	Q2 2022	Q2 2024	∆ (in bps)
Numerator
Interest rate on deposits from customers (i)	0.09%	0.55%	46
Denominator
ECB deposit facility interest rate(ii)	-0.5%	3.75%	425
Deposit beta			11%

Deposit beta – Calculated as the ratio between the change of interest rate on deposits from customers and change of ECB deposit facility interest rate over the selected period.

(i) NLB internal information. Interest rate on deposits from customers (quarterly average).

(ii) Data from the ECB. Deposit facility interest rate (quarterly average).

FVTPL – Financial assets measured as a mandatory requirement at fair value through profit or loss are not classified into stages and are therefore shown separately (before deduction of fair value adjustment for credit risk; loans with contractual cash flows that are not solely payments of principal and interest on the principal amount outstanding).

IFRS 9 classification into stages for loan portfolio:

IFRS 9 requires an expected loss model, where allowances for ECL are formed. Loans measured at AC are classified into the following stages (before deduction of loan loss allowances):

• Stage 1 A performing portfolio: no significant increase of credit risk since initial recognition, the Group recognises an allowance based on a 12-month period;
• Stage 2 An underperforming portfolio: a significant increase in credit risk since initial recognition, the Group recognises an allowance for a lifetime period;
• Stage 3 An impaired portfolio: the Group recognises lifetime allowances for these financial assets. The definition of default harmonises with the EBA guidelines.

A significant increase in credit risk is assumed: when a credit rating significantly deteriorates at the reporting date in comparison to the credit rating at initial recognition; when a financial asset has material delays over 30 days (days past due are also included in the credit rating assessment); if the Group expects to grant the client forbearance or if the client is placed on the watch list.

The loan portfolio includes loans to banks, loans to other customers, loans mandatorily measured at FVTPL and balances with central banks and other banks. The majority of the loan portfolio is classified into IFRS 9 stages. The remaining minor part (0.002 per cent at the end of Q2 2024) represents FVTPL. The classification into stages is calculated on the internal data source, by which the Group measures the loan portfolio quality, and is also published in the Business Report of Annual and Interim Reports.

	in EUR millions
	NLB Group
	30 Jun 2024	31 Dec 2023
Numerator
Total (AC) loans in Stage 1 to Retail	7,092.6	6,854.7
Denominator
Total gross loans to Retail	7,632.5	7,235.3
Retail - IFRS 9 classification into Stage 1	92.9%	94.7%

	in EUR millions
	NLB Group
	30 Jun 2024	31 Dec 2023
Numerator
Total (AC) loans in Stage 2 to Retail	403.5	249.6
Denominator
Total gross loans to Retail	7,632.5	7,235.3
Retail - IFRS 9 classification into Stage 2	5.3%	3.4%

in EUR millions

NLB Group

	30 Jun 2024	31 Dec 2023
Numerator
Total (AC) loans in Stage 3 to Retail	136.4	131.0
Denominator
Total gross loans to Retail	7,632.5	7,235.3
Retail - IFRS 9 classification into Stage 3	1.8%	1.8%

in EUR millions

	NLB Group
	30 Jun 2024	31 Dec 2023
Numerator
Total (AC) loans in Stage 1 to Corporates	6,186.7	6,005.6
Denominator
Total gross loans to Corporates	6,889.2	6,629.3
Corporates - IFRS 9 classification into Stage 1	89.8%	90.6%

in EUR millions

	NLB Group
	30 Jun 2024	31 Dec 2023
Numerator
Total (AC) loans in Stage 2 to Corporates	535.7	454.3
Denominator
Total gross loans to Corporates	6,889.2	6,629.3
Corporates - IFRS 9 classification into Stage 2	7.8%	6.9%

in EUR millions

NLB Group

	30 Jun 2024	31 Dec 2023
Numerator
Total (AC & FVTPL) loans in Stage 3 to	166.8	169.4
Corporates
Denominator
Total gross loans to Corporates	6,889.2	6,629.3
Corporates - IFRS 9 classification into Stage 3	2.4%	2.6%

30 Jun 2024 31 Dec 2023 Numerator Total (AC) loans in Stage 1 18,557.1 19,240.8 Denominator Total gross loans 19,799.7 20,245.5 IFRS 9 classification into Stage 1 93.7% 95.0% in EUR millions NLB Group

		in EUR millions
	NLB Group
	30 Jun 2024	31 Dec 2023
Numerator
Total (AC) loans in Stage 2	939.2	704.1
Denominator

Total gross loans 19,799.7 20,245.5 IFRS 9 classification into Stage 2 4.7% 3.5%

in EUR millions

NLB Group

	30 Jun 2024	31 Dec 2023
Numerator
Total (AC + FVTPL) loans in Stage 3	303.4	300.5
Denominator
Total gross loans	19,799.7	20,245.5
IFRS 9 classification into Stage 3	1.5%	1.5%

Liquidity coverage ratio (LCR) – LCR refers to high liquid assets held by the financial institution to cover its net liquidity outflows over a 30-calendar-day stress period.

The LCR requires financial institutions to maintain a sufficient reserve of high-quality liquid assets (HQLA) to withstand a crisis that pressures their cash flows. The assets to hold must be 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 Basel III guidelines. The calculations presented below are based on internal data sources.

						in EUR millions
		NLB Group
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Sep 2023	30 Jun 2023	30 Jun 2024
Numerator
Stock of HQLA	7,270.4	7,197.2	7,011.7	6,687.7	6,505.1	6,118.5
Denominator
Net liquidity outflow	2,839.2	2,865.6	2,853.9	2,799.8	2,657.4	1,932.8
LCR(i)	256.1%	251.2%	245.7%	238.9%	244.8%	316.6%

(i) Based on the EC's Delegated Act on LCR.

Net Stable Funding Ratio (NSFR) – NSFR compares a bank's available stable funding (ASF) with its required stable funding (RSF). The ratio aims to ensure that banks maintain a stable funding profile in relation to their assets and activities. A ratio of 100% or more indicates that a bank's stable funding is sufficient to cover its longer-term assets and activities. The parameters are defined under Basel III guidelines.

						in EUR millions
			NLB Group			NLB
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Sep 2023	30 Jun 2023	30 Jun 2024
Numerator
Available stable funding	22,412.0	21,717.8	21,868.5	21,155.5	20,872.4	14,026.0
Denominator
Required stable funding	12,356.1	11,902.6	11,677.6	11,499.2	11,347.4	7,971.8
NSFR	181.4%	182.5%	187.3%	184.0%	183.9%	175.9%

Net loan to deposit ratio (LTD) – Calculated as the ratio between net loans to customers and deposits from customers. There is no regulatory LTD limit. However, this measure aims to restrict the extensive growth of the loan portfolio.

in EUR millions
	NLB Group	NLB
	30 Jun	31 Mar	30 Jun	30 Jun
	2024	2024	2023	2024
Numerator
Net loans to customers	14,399.3	13,859.9	13,431.8	7,391.8
Denominator
Deposits from customers	20,693.8	20,471.5	19,924.9	11,744.1
Net loan to deposit ratio (LTD)	69.6%	67.7%	67.4%	62.9%

						in EUR millions
	NLB Komercijalna Banka, Beograd	NLB Banka, Skopje	NLB Banka, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Banka, Podgorica
	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024
Numerator
Net loans to customers	2,993.4	1,255.4	591.5	611.3	924.9	643.4
Denominator
Deposits from customers	4,148.4	1,487.4	885.3	748.6	981.2	761.6
Net loan to deposit ratio (LTD)	72.2%	84.4%	66.8%	81.7%	94.3%	84.5%

Leverage ratio - 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 the exposures from individual derivatives, exposures from transactions of security funding, and other off-balance sheet items are especially pointed out. Leverage ratio is non-risk based supplementary measure to the risk-based capital requirements. A minimum leverage ratio requirement is determined as of 3%. The purpose of the leverage ratio is to limit the size of bank balance sheets, and with a special emphasis on exposures which are not weighted within the framework of the existing capital requirement calculations.

	in EUR millions
	NLB Group
	30 Jun 2024
Numerator
Tier I	2,611.2
Denominator
Total Leverage Ratio exposure measure	27,647.5
Leverage ratio	9.4%

					in EUR millions
	NLB Group
	1-6 2024	1-3 2024	1-12 2023	1-9 2023	1-6 2023
Numerator
Net interest income(i)	925.9	933.9	833.3	804.1	766.2
Denominator
Average interest bearing assets(ii)	25,155.2	25,011.7	23,782.7	23,524.9	23,219.3
Net interest margin on interest-bearing assets	3.68%	3.73%	3.50%	3.42%	3.30%

Net interest margin based on interest-bearing assets (cumulative) – Calculated as the ratio between net interest income annualised and average interest-bearing assets.

(i) Net interest income is annualised, calculated as the sum of interest income and interest expenses in the period divided by the number of days in the period and multiplied by the number of days in the year.

(ii) NLB internal information. Average interest-bearing assets for the NLB Group are calculated as the sum of the balance from the previous year's end (31 December) and monthly balances of the last day of each month from January to the reporting month t divided by (t+1).

							in EUR millions
	NLB	NLB Komercijalna Banka, Beograd	NLB Banka, Skopje	NLB Banka, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Banka, Podgorica
	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024
Numerator
Net interest income(i)	439.0	234.4	77.3	38.1	28.4	51.6	45.8
Denominator
Average interest bearing assets(ii)	14,861.2	4,856.6	1,877.5	1,028.9	882.6	1,206.3	884.0
Net interest margin on interest-bearing assets	2.95%	4.83%	4.12%	3.70%	3.21%	4.28%	5.18%

(i) Net interest income is annualised and calculated as the sum of interest income and interest expenses in the period divided by the number of days in the period and multiplied by the number of days in the year. (ii) NLB internal information. Average interest-bearing assets for NLB are calculated as daily balances in the current period (from the first day of the period to the last day of the period) divided by the number of days in the period. Average interest-bearing assets for individual bank members are calculated as the sum of the balance of the previous year's end (31 December) and monthly balances of the last day of each month from January to reporting month t divided by (t+1).

Net interest margin based on interest-bearing assets (quarterly) – Calculated as the ratio between net interest income annualised and average interest-bearing assets.

					in EUR millions
	NLB Group
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Net interest income(i)	918.0	933.9	920.0	878.7	806.2
Denominator
Average interest bearing assets(ii)	25,277.9	25,011.7	24,582.1	24,127.6	23,301.0
Net interest margin on interest-bearing assets (quarterly)	3.63%	3.73%	3.74%	3.64%	3.46%

(i) 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 the year.

(ii) NLB internal information. Average interest-bearing assets (quarterly) for the NLB Group, calculated as the sum of monthly balances (t) for the corresponding quarter and monthly balance at the end of the previous quarter divided by (t+1).

					in EUR millions
			NLB
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Net interest income(i)	430.5	447.4	450.2	394.5	345.9
Denominator
Average interest bearing assets(ii)	14,895.8	14,826.4	14,570.3	13,870.2	12,745.4
Net interest margin on interest-bearing assets (quarterly)	2.89 %	3.02%	3.09%	2.84%	2.71%

(i) Net interest income (quarterly) is annualised, calculated as the sum of interest income and interest expenses in the quarter divided by the number of days in the quarter and multiplied by the number of days in the year. (ii) NLB internal information. Average interest-bearing assets (quarterly) for NLB are calculated as the sum of daily balances in each quarter (from the first day of the quarter to the last day of the quarter) divided by the number of days in the quarter.

					in EUR millions
	SEE Banks(iii)
	Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023
Numerator
Net interest income(i)	476.1	475.0	456.9	439.9	410.6
Denominator
Average interest bearing assets(ii)	10,789.0	10,692.1	10,426.6	10,159.5	9,915.6
Net interest margin on interest-bearing assets (quarterly)	4.41%	4.44%	4.38%	4.33%	4.14%

(i) 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 the year.

(ii) NLB internal information. Average interest-bearing assets (quarterly) for the SEE banks, calculated as the sum of monthly balances (t) for the corresponding quarter and monthly balance at the end of the previous quarter divided by (t+1).

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

Net interest margin on total assets – Calculated as the ratio between net interest income annualised and average total assets.

	in EUR millions
	NLB Group
	1-6 2024 1-6 2023
Numerator
Net interest income(i)	925.9	766.2
Denominator
Average total assets(ii)	26,132.7	24,147.9
Net interest margin on total assets	3.54%	3.17%

(i) Net interest income is annualised, calculated as the sum of interest income and interest expenses in the period divided by the number of days in the period and multiplied by the number of days in the year.

(ii) NLB internal information. Average total assets for the NLB Group are calculated as the sum of the balance from the previous year's end (31 December) and monthly balances of the last day of each month from January to month t divided by (t+1).

Non-Performing Exposures (NPE) – NPE includes risk exposure to D- and E-rated clients (includes loans and advances, debt securities and off-balance exposures, which includes in report Finrep 18; before deduction of allowances for the expected credit losses). NPE, measured by fair value loans through P&L, is considered to be at fair value, increased by the amount of negative fair value changes for credit risk.

NPE (EBA def) per cent (on-balance and off-balance) / Classified on-balance and off-balance exposures – NPE per cent under the EBA methodology: NPE as a percentage of all exposures to clients in Finrep 18 before deduction of allowances for the expected credit losses; the ratio in gross terms.

NPE includes risk exposure to D- and E-rated clients (includes loans and advances, debt securities, and off-balance exposures, which are included in report Finrep 18; before the deduction of allowances for the expected credit losses). The share of NPEs is calculated based on internal data sources, which the Group uses to monitor the portfolio quality.

The calculations presented below are based on internal data sources.

						in EUR millions
	NLB Group
	30 Jun	31 Mar	31 Dec	30 Jun	31 Dec	31 Dec
	2024	2024	2023	2023	2022	2021
Numerator
Total Non-Performing on-balance and off-balance
Exposure in Finrep18	337.7	342.7	333.8	344.4	373.6	415.5
Denominator
Total on-balance and off-balance exposures in Finrep18	30,863.4	30,286.6	30,122.3	28,729.2	28,133.2	24,328.0
NPE (EBA def.) per cent.	1.1 %	1.1%	1.1%	1.2%	1.3%	1.7%

Non-Performing Loans (NPL) – 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 without recourse to collateral (before deduction of loan loss allowances).

NPL per cent – Share of non-performing loans in total loans: non-performing loans as a percentage of total loans to clients before deduction of loan loss allowances; the ratio in gross terms. Where non-performing loans are defined as loans to D- and E-rated clients, namely loans at least 90 days past due or loans unlikely to be repaid without recourse to collateral (before deduction of loan loss allowances). The share of non-performing loans is calculated based on internal data sources, by which the Group monitors the loan portfolio quality.

						in EUR millions
	NLB Group
	30 Jun	31 Mar	31 Dec	30 Jun	31 Dec	31 Dec
	2024	2024	2023	2023	2022	2021
Numerator
Total Non-Performing Loans	303.4	306.6	300.5	312.9	328.3	367.4
Denominator
Total gross loans	19,799.7	19,695.6	20,245.5	19,359.2	18,403.9	15,541.8
NPL per cent.	1.5%	1.6%	1.5%	1.6%	1.8%	2.4%

							in EUR millions
	NLB, NLB, Ljubljana		Komercijalna NLB Banka, Banka, Banja Luka Beograd		NLB Banka, Prishtina	NLB Banka, Podgorica	NLB Banka, Skopje
	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024	30 Jun 2024
Numerator
Total Non-Performing Loans	139.1	26.6	7.3	16.2	20.8	20.3	44.5
Denominator
Total gross loans	11,041.8	4,045.1	847.4	794.7	1,103.0	807.6	1,557.1
NPL per cent.	1.3%	0.7%	0.9%	2.0%	1.9%	2.5%	2.9%

NPL coverage ratio 1 – The coverage of the gross non-performing loans portfolio with loan loss allowances on the entire loan portfolio - loan impairment in respect of non-performing loans. It shows the level of credit impairments and provisions the entity has already absorbed into its profit and loss account regarding the total impaired loans. NPL coverage ratio 1 is calculated based on internal data sources, by which the Group monitors the quality of the loan portfolio.

						in EUR millions
	NLB Group
	30 Jun	31 Mar	31 Dec	30 Jun	31 Dec	31 Dec
	2024	2024	2023	2023	2022	2021
Numerator
Loan loss allow ances entire loan portfolio	328.9	338.7	330.5	316.1	324.8	316.5
Denominator
Total Non-Performing Loans	303.4	306.6	300.5	312.9	328.3	367.4
NPL coverage ratio 1 (NPL CR 1)	108.4%	110.5%	110.0%	101.0%	98.9%	86.1%

NPL coverage ratio 2 – Covers the gross non-performing loans portfolio with loan loss allowances on the non-performing loans portfolio. NPL coverage ratio 2 is calculated based on internal data sources, by which the Group monitors the loan portfolio quality.

						in EUR millions
	NLB Group
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Jun 2023	31 Dec 2022	31 Dec 2021
Numerator
Loan loss allow ances non-performing loan portfolio	202.3	198.5	194.2	193.3	187.4	212.9
Denominator
Total Non-Performing Loans	303.4	306.6	300.5	312.9	328.3	367.4
NPL coverage ratio 2 (NPL CR 2)	66.7 %	64.8%	64.6%	61.8%	57.1%	57.9%

Net NPL Ratio – Share of net non-performing loans in total net loans: non-performing loans after deduction of loss allowances on the non-performing loans portfolio as a percentage of total loans to clients after the deduction of loan loss allowances; ratio in net terms. The calculations presented below are based on internal data sources.

						in EUR millions
	NLB Group
	30 Jun 31 Mar 31 Dec 30 Jun				31 Dec	31 Dec
	2024	2024	2023	2023	2022	2021
Numerator
Net volume of non-performing loans	101.0	108.0	106.4	119.5	140.9	154.5
Denominator
Total Net Loans	19,470.7	19,356.9	19,914.9	19,043.1	18,079.1	15,225.4
Net NPL ratio per cent. (%Net NPL)	0.5%	0.6%	0.5%	0.6%	0.8%	1.0%

Non-performing loans and advances (EBA def.) – Non-performing loans include loans and advances under the EBA Methodology that are classified as D or E, namely loans at least 90 days past due or loans unlikely to be repaid without recourse to collateral (before deduction of loan loss allowances).

NPL ratio (EBA def.) – The gross NPL ratio is the ratio of the gross carrying amount of non-performing loans and advances to the total gross carrying amount of loans and advances under the EBA methodology (report Finrep 18). For this calculation, loans and advances classified as held for sale, cash balances at central banks and other demand deposits at banks are excluded from the denominator and the numerator. The calculations presented below are based on internal data sources.

						in EUR millions
	NLB Group
	30 Jun	31 Mar	31 Dec	30 Jun	31 Dec	31 Dec
	2024	2024	2023	2023	2022	2021
Numerator
Gross volume of Non-Performing Loans and
advances w ithout loans held for sale, cash balances	315.5	318.9	310.8	322.2	337.2	375.1
at CBs and other demand deposits
Denominator
Gross volume of Loans and advances in Finrep18
w ithout loans held for sale, cash balances at CBs and	15,314.9	14,804.2	14,780.1	14,192.3	13,796.0	11,128.8
other demand deposits
NPL ratio (EBA def.) per cent.	2.1%	2.2%	2.1%	2.3%	2.4%	3.4%

EVE (Economic Value of Equity) method – The measure of 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 view of the possible long-term effects of changing interest rates, at least under the six prescribed standardised interest rate shock scenarios or more, if necessary, according to the situation in financial markets. Calculations take into account behavioural and automatic options as well as the allocation of non-maturing deposits.

The assessment of the impact of a change in interest rates of 200 bps on the economic value of the banking book position:

	in EUR thousands
	NLB Group
	30 Jun 2024
Numerator
Interest risk in banking book – EVE	-65,211.8
Denominator
Equity (Tier I)	2,611,160.0
EVE as % of Equity	-2.50%

Operational business margin (OBM) (cumulative) – Calculated as the ratio between operational business net income annualised and average assets.

	in EUR millions
	NLB Group
	1-6 2024	1-3 2024	1-12 2023	1-9 2023	1-6 2023
Numerator
Operational business net income(i)	1,303.1	1,292.5	1,174.7	1,141.8	1,100.2
Denominator
Average total assets(ii)	26,132.7	25,972.0	24,706.3	24,448.2	24,147.9
OBM (cumulative)	4.99%	4.98%	4.75%	4.67%	4.56%

(i) Operational business net income (cumulative) is annualised, calculated as operational business income in the period divided by the number of days in the period and multiplied by the number of days in the year. 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 foreign exchange trading.

(ii) NLB internal information. Average total assets is calculated as a sum of balance as at the end of the previous year's end (31 December) and monthly balances of the last day of each month from January to month t divided by (t+1).

Operational business margin (OBM) (quarterly) – Calculated as the ratio between operational business net income annualised and average assets.

					in EUR millions
	NLB Group
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Operational business net income(i)	1,313.8	1,292.5	1,272.4	1,223.6	1,145.3
Denominator
Average total assets(ii)	26,266.6	25,972.0	25,494.3	25,037.1	24,211.9
OBM (quarterly)	5.00%	4.98%	4.99%	4.89%	4.73%

(i) Operational business net income (quarterly) is annualised, calculated as operational business income in the period divided by the number of days in the quarter and multiplied by the number of days in the year. 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 foreign exchange trading.

(ii) NLB internal information. Average total assets (quarterly) for the NLB Group are calculated as the sum of monthly balances (t) for the corresponding quarter and monthly balances at the end of the previous quarter divided by (t+1).

	in EUR millions
			NLB
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Operational business net income(i)	622.1	637.5	629.2	559.6	511.6
Denominator
Average total assets(ii)	16,383.4	16,159.7	15,831.9	14,995.9	14,130.3
OBM (quarterly)	3.80%	3.94%	3.97%	3.73%	3.62%

(i) Operational business net income (quarterly) is annualised, calculated as operational business income in the period divided by the number of days in the quarter and multiplied by the number of days in the year. 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 foreign exchange trading.

(ii) NLB internal information. Average total assets (quarterly) for the NLB are calculated as the sum of monthly balances (t) for the corresponding quarter and monthly balance at the end of the previous quarter divided by (t+1).

	in EUR millions
	SEE banks(iii)
	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023
Numerator
Operational business net income(i)	654.9	620.3	610.7	592.1	556.4
Denominator
Average total assets(ii)	11,209.9	11,101.8	10,850.6	10,603.8	10,347.8
OBM (quarterly)	5.84%	5.59%	5.63%	5.58%	5.38%

(i) Operational business net income (quarterly) is annualised, calculated as operational business income in the period divided by the number of days in the quarter and multiplied by the number of days in the year. 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 foreign exchange trading.

(ii) NLB internal information. Average total assets (quarterly) for the SEE banks are calculated as the sum of monthly balances (t) for the corresponding quarter and monthly balance at the end of the previous quarter divided by (t+1). (iii) Sum of data on a stand-alone basis as included in the consolidated financial statements of the NLB Group.

						in EUR millions
NLB Group						NLB
	1-6 2024	1-3 2024	1-12 2023	1-9 2023	1-6 2023	1-6 2024
Numerator
Result after tax(i)	584.1	560.1	550.7	515.9	485.4	385.8
Denominator
Average equity(ii)	3,017.0	2,959.9	2,623.0	2,558.9	2,499.2	2,323.9
ROE a.t.	19.4%	18.9%	21.0%	20.2%	19.4%	16.6%

Return on equity after tax (ROE a.t.) – Calculated as the ratio between the result after tax annualised and average equity.

(i) Result after tax is annualised, calculated as a result after tax in the period divided by the number of months for the reporting period and multiplied by 12.

(ii) NLB internal information. Average equity is calculated as a sum of the balance at the end of the previous year's end (31 December) and monthly balances of the last day of each month from January to month t divided by (t+1).

						in EUR millions
	NLB Komercijalna Banka, Beograd	NLB Banka, Skopje	NLB Banka, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Banka, Podgorica
	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024	1-6 2024
Numerator
Result after tax(i)	164.3	74.8	33.3	16.0	40.1	28.5
Denominator
Average equity(ii)	873.6	286.5	113.2	99.7	145.3	121.0
ROE a.t.	18.8%	26.1%	29.5%	16.1%	27.6%	23.6%

(i) Result after tax is annualised, calculated as a result after tax in the period divided by the number of months for the reporting period and multiplied by 12.

(ii) NLB internal information. Average equity is calculated as a sum of the balance at the end of the previous year's end (31 December) and monthly balances of the last day of each month from January to month t divided by (t+1).

Return on equity after tax (ROE a.t.) normalised(iii) – Calculated as the ratio between the result after tax annualised and average risk adjusted capital.

		in EUR millions
	NLB Group
	1-6 2024	1-6 2023
Numerator
Result after tax(i)	584.1	485.4
Denominator
Average risk adjusted capital (ii)	1,938.8	1,866.3
ROE a.t.	30.1 %	26.0%

(i) Result after tax is annualised, calculated as a result after tax in the period divided by the number of months for the reporting period and multiplied by 12.

(ii) NLB internal information. Average risk adjusted capital is calculated as a sum of Risk Weighted Assets (RWA) balance as at the end of the previous year-end (31 December) and monthly Risk Weighted Assets (RWA) balances of the last day of each month from January to month t divided by (t+1), multiplied by Tier 1 regulatory capital requirement and decreased by minority shareholder capital.

(iii) Result a.t. w/o negative goodwill divided by Average risk adjusted capital. Average risk adjusted capital calculated as Tier 1 requirement of average Risk Weighted Assets (RWA) reduced for minority shareholder capital contribution

		in EUR millions
		NLB Group
	1-6 2024	1-6 2023
Numerator
Result after tax(i)	584.1	485.4
Denominator
Average total assets(ii)	26,132.7	24,147.9
ROA a.t.	2.2%	2.0%

Return on assets (ROA a.t) – Calculated as the ratio between the result after tax annualised and average total assets.

(i) Result after tax is annualised, calculated as the result after tax in the period divided by the number of months per reporting period and multiplied by 12.

(ii) NLB internal information. Average total assets are calculated as the sum of balance at the previous year's end (31 December) and monthly balances on the last day of each month from January to month t divided by (t+1).

RWA to total assets – The RWA to total assets is the institution's RWA expressed as a percentage of the total assets.

				in EUR millions
	NLB Group
	30 Jun 2024	31 Dec 2023	31 Dec 2022	31 Dec 2021
Numerator
Total risk exposure Amount (RWA)	16,017	15,337	14,653	12,667
Denominator
Total assets	26,614	25,942	24,160	21,577
RWA to total assets	60%	59%	61%	59%

Total capital ratio (TCR) – The total capital ratio is the institution's own funds expressed as a percentage of the total risk exposure amount.

							in EUR millions
	NLB Group						NLB
	30 Jun 2024	31 Mar 2024	31 Dec 2023	30 Sep 2023	30 Jun 2023	31 Mar 2023	30 Jun 2024
Numerator
Total capital (Ow n funds)	3,158.5	3,199.4	3,109.2	2,791.4	2,780.1	2,765.2	2,492.4
Denominator
Total risk exposure Amount (Total RWA)	16,017.2	15,427.8	15,337.2	14,919.0	14,838.4	14,622.3	9,640.1
Total capital ratio	19.7%	20.7%	20.3%	18.7%	18.7%	18.9%	25.9%

Reconciliation of Financial Statements in Business and Financial Part of the Report

Table 20: Unaudited Condensed Income Statement of NLB Group for period ended 30 June 2024

Business report	in EUR millions	Financial report	in EUR thousands	Notes
		Interest and similar income	584,694	4.1.
Net interest income	460.4	Interest and similar expenses	(124,251)	4.1.
Net fee and commission income	150.0	Fee and commission income	206,091	4.3.
		Fee and commission expenses	(56,089)	4.3.
Dividend income	0.0	Dividend income	33	4.2.
		Gains less losses from financial assets and liabilities not
		measured at fair value through profit or loss	1,339	4.4.
		Gains less losses from financial assets and liabilities held
		for trading	12,709	4.5.
		Gains less losses from non-trading financial assets
Net income from financial transactions	12.8	mandatorily at fair value through profit or loss	1,250	4.6.
		Gains less losses from financial liabilities measured at fair
		value through profit or loss	(1,914)
		Fair value adjustments in hedge accounting	(1,342)
		Foreign exchange translation gains less losses	1,046
		Gains less losses from modification of financial assets	(274)
		Gains less losses on derecognition of non-financial
		assets
Net other income	(19.3)	Other net operating income	4,494	4.8.
		Cash contributions to resolution funds and deposit
		guarantee schemes	(25,252)	4.10.
		Gains less losses from non-current assets held for sale	568
Net non-interest income	143.6		143,585
Total net operating income	604.0		604,028
Employee costs	(149.5)	Administrative expenses	(248,333)	4.9.
Other general and administrative expenses	(98.8)
Depreciation and amortisation	(26.7)	Depreciation and amortisation	(26,696)	4.11.
Total costs	(275.0)		(275,029)
Result before impairments and provisions	329.0		328,999
Impairments and provisions for credit risk	11.7	Provisions for credit losses	7,031	4.12.
		Impairment of financial assets	4,628	4.13.
Other impairments and provisions	(1.3)	Provisions for other liabilities and charges	(1,396)	4.12.
		Impairment of non-financial assets	145	4.13.
Impairments and provisions	10.4		10,408
Gains less losses from capital investment in		Share of profit from investments in associates and joint
subsidiaries, associates, and joint ventures	1.7	ventures (accounted for using the equity method)	1,666
Result before tax	341.1	Profit before income tax	341,073
Income tax	(40.5)	Income tax	(40,493)	4.14.
Result of non-controlling interests	8.5	Attributable to non-controlling interests	8,547
Result after tax	292.0	Attributable to owners of the parent	292,033

Table 21: Unaudited Condensed Statement of Financial Position of NLB Group as at 30 June 2024

Business report		in EUR millions Financial report	in EUR thousands	Notes
ASSETS
Cash, cash balances at central banks, and other demand deposits at banks		5,116.3 Cash, cash balances at central banks, and other demand deposits at banks	5,116,321	5.1.
Loans to banks		410.7 Financial assets measured at amortised cost - loans and advances to banks	410,678	5.5.b)
Net loans to customers	14,399.3	Financial assets measured at amortised cost - loans and advances to customers	14,399,307	5.5.c)
Financial assets	5,919.9		5,919,901
- Trading book		14.6 Financial assets held for trading	13,692	5.2.a)
		Non-trading financial assets mandatorily at fair value through profit or loss - part (w ithout loans)	12,688	5.3.a)
- Non-trading book	5,905.3	Financial assets measured at fair value through other comprehensive income	2,753,959	5.4.
		Financial assets measured at amortised cost - debt securities	3,139,562	5.5.a)
Investments in subsidiaries, associates, and joint ventures		12.3 Investments in associates and joint ventures	12,302
Property and equipment		280.9 Property and equipment	280,934	5.7.
Investment property		25.8 Investment property	25,774	5.8.
Intangible assets		64.9 Intangible assets	64,872
		Financial assets measured at amortised cost - other financial assets	170,663	5.5.d)
		Derivatives - hedge accounting	45,032
		Fair value changes of the hedged items in portfolio hedge of
Other assets	383.6	interest rate risk	(15,128)
		Current income tax assets	77
		Deferred income tax assets	117,852	5.14.
		Other assets	60,941	5.10.
		Non-current assets held for sale	4,138	5.6.
TOTAL ASSETS		26,613.7 Total assets	26,613,664
LIABILITIES
Deposits from customers		20,693.8 Financial liabilities measured at amortised cost - due to customers	20,693,767	5.12.
Deposits from banks and central banks		94.3 Financial liabilities measured at amortised cost - deposits from banks and central banks	94,283	5.12.
		Financial liabilities measured at amortised cost - borrow ings
		from banks and central banks	116,060	5.12.
Borrow ings	218.8	Financial liabilities measured at amortised cost - borrow ings from other customers	102,766	5.12.
Subordinated debt securities	558.7	Financial liabilities measured at amortised cost -
Other debt securities in issue	1,315.3	debt securities issue	1,874,041	5.12.
		Financial liabilities held for trading	10,585	5.2.b)
		Financial liabilities measured at fair value through profit or	8,521	5.3.b)
		loss Financial liabilities measured at amortised cost - other financial liabilities	356,144	5.12.c)
Other liabilities	586.8	Derivatives - hedge accounting	2,646
		Provisions	99,273	5.13.
		Current income tax liabilities	11,213
		Deferred income tax liabilities	14,008	5.14.
		Other liabilities	84,451	5.16.
Equity		3,081.3 Equity and reserves attributable to ow ners of the parent	3,081,253
Non-controlling interests		64.7 Non-controlling interests	64,653
TOTAL LIABILITIES AND EQUITY		26,613.7 Total liabilities and equity	26,613,664

Unaudited Condensed Interim Financial Statements of NLB Group and NLB as at 30 June 2024

Prepared in accordance with International accounting standard 34 'Interim financial reporting'

andard 34 'Interim Financial Reporting'

Contents

	Condensed income statement for the period ended 30 June	95
Condensed income statement for the three months ended 30 June
Condensed statement of other comprehensive income for the period ended 30 June
	Condensed statement of other comprehensive income for the three months ended 30 June	97 97
	Condensed statement of financial position as at 30 June and as at 31 December	98
	Condensed statement of changes in equity for the period ended 30 June	99
	Condensed statement of cash flows for the period ended 30 June	100
	Statement of management's responsibility	101
	Notes to the condensed interim financial statements	102
1.	General information	102
2.	Summary of significant accounting policies	102
2.1.	Statement of compliance	102
2.2.	Accounting policies	102
3.	Changes in the composition of the NLB Group	103
4.	Notes to the condensed income statement	105
4.1.	Interest income and expenses	105
4.2.	Dividend income	105
4.3.	Fee and commission income and expenses	105
4.4.	Gains less losses from financial assets and liabilities not measured at fair value through profit or loss	106
4.5.	Gains less losses from financial assets and liabilities held for trading	106
4.6.	Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss	106
4.7.	Disposal of subsidiaries	106
4.8.	Other net operating income	107
4.9.	Administrative expenses	107
4.10.	Cash contributions to resolution funds and deposit guarantee schemes	107
4.11.	Depreciation and amortisation	107
4.12.	Provisions	107
4.13.	Impairment charge	108
4.14.	Income tax	108
5.	Notes to the condensed statement of financial position	109
5.1.	Cash, cash balances at central banks and other demand deposits at banks	109
5.2.	Financial instruments held for trading	109
5.3.	Non-trading financial instruments mandatorily at fair value through profit or loss	109
5.4.	Financial assets measured at fair value through other comprehensive income	110
5.5.	Financial assets measured at amortised cost	110
5.6.	Non-current assets held for sale	111
5.7.	Property and equipment	111
5.8.	Investment property	111
5.9.	Acquisition of subsidiaries	112
5.10.	Other assets	112
5.11.	Movements in allowance for the impairment of financial assets	113
5.12.	Financial liabilities measured at amortised cost	115
5.13.	Provisions	116
5.14.	Deferred income tax	117
5.15.	Income tax relating to components of other comprehensive income	117
5.16.	Other liabilities	118
5.17.	Other equity instruments issued	118
5.18.	Book value per share	118
5.19.	Capital adequacy ratio	119
5.20.	Off-balance sheet liabilities	120
5.21.	Fair value hierarchy of financial and non-financial assets and liabilities	120
6.	Analysis by segment for NLB Group	128
7.	Related-party transactions	130
8.	Subsidiaries	133
9.	Events after the end of the reporting period	134

Condensed income statement for the period ended 30 June

					in EUR thousands
		NLB Group		NLB 6 months ended
		6 months ended
		June June		June	June
		2024	2023	2024	2023
	Notes	unaudited	unaudited	unaudited	unaudited
Interest income calculated using the effective interest method		556,010	425,931	301,110	198,949
Other interest and similar income		28,684	14,321	14,754	7,244
Interest and similar income	4.1.	584,694	440,252	315,864	206,193
Interest expenses calculated using the effective interest method		(112,659)	(55,983)	(85,986)	(43,340)
Other interest and similar expenses		(11,592)	(4,304)	(11,578)	(3,207)
Interest and similar expenses	4.1.	(124,251)	(60,287)	(97,564)	(46,547)
Net interest income		460,443	379,965	218,300	159,646
Dividend income	4.2.	3 3	9 5	77,221	130,168
Fee and commission income	4.3.	206,091	190,145	91,652	81,372
Fee and commission expenses	4.3.	(56,089)	(55,500)	(22,626)	(18,953)
Net fee and commission income		150,002	134,645	69,026	62,419
Gains less losses from financial assets and liabilities not measured at fair
value through profit or loss	4.4.	1,339	(696)	2,570	(788)
Gains less losses from financial assets and liabilities held for trading	4.5.	12,709	13,866	4,491	2,235
Gains less losses from non-trading financial assets mandatorily at fair value	4.6.	1,250	1,055	1,615	1,376
through profit or loss
Gains less losses from financial liabilities measured at fair value through
profit or loss		(1,914)	(448)	(998)	(228)
Fair value adjustments in hedge accounting		(1,342)	(57)	(1,410)	(332)
Foreign exchange translation gains less losses		1,046	1,372	(1,158)	3,303
Net gains or losses on derecognition of investments in subsidiaries,	4.7.
associates and joint ventures		-	(467)	-	(105)
Gains less losses on derecognition of non-financial assets		926	117	121	2 0
Other net operating income	4.8.	4,494	3,281	2,890	3,483
Administrative expenses	4.9.	(248,333)	(217,232)	(133,569)	(101,473)
Cash contributions to resolution funds and deposit guarantee schemes	4.10.	(25,252)	(25,956)	(10,793)	(11,383)
Depreciation and amortisation	4.11.	(26,696)	(23,479)	(11,361)	(8,373)
Gains less losses from modification of financial assets		(274)	(202)	-	-
Provisions for credit losses	4.12.	7,031	7,202	3,770	2,088
Provisions for other liabilities and charges	4.12.	(1,396)	(11,807)	(686)	(5,742)
Impairment of financial assets	4.13.	4,628	22,711	(11,804)	4,392
Impairment of non-financial assets	4.13.	145	(327)	-	-
Share of profit from investments in associates and joint ventures		1,666	600	-	-
(accounted for using the equity method)
Gains less losses from non-current assets held for sale		568	5,084	481	123
Profit before income tax		341,073	289,322	208,706	240,829
Income tax	4.14.	(40,493)	(39,845)	(15,807)	(17,524)
Profit for the period		300,580	249,477	192,899	223,305
Attributable to owners of the parent		292,033	242,700	192,899	223,305
Attributable to non-controlling interests		8,547	6,777	-	-
Earnings per share (in EUR per share)		14.60	12.14	9.64	11.17
Diluted earnings per share (in EUR per share)		14.60	12.14	9.64	11.17

Condensed income statement for the three months ended 30 June

					in EUR thousands
		NLB Group		NLB
		3 months ended		3 months ended
		June 2024	June 2023	June 2024	June 2023
	Notes	unaudited	unaudited	unaudited	unaudited
Interest income calculated using the effective interest method		271,634	221,405	150,806	106,203
Other interest and similar income		20,293	13,228	6,167	5,920
Interest and similar income	4.1.	291,927	233,243	156,973	110,733
Interest expenses calculated using the effective interest method		(58,225)	(33,913)	(44,609)	(27,142)
Other interest and similar expenses		(5,449)	(2,864)	(5,315)	(1,875)
Interest and similar expenses	4.1.	(63,674)	(32,247)	(49,924)	(24,487)
Net interest income		228,253	200,996	107,049	86,246
Dividend income	4.2.	1 7	4 6	47,690	121,754
Fee and commission income	4.3.	105,972	98,460	46,352	41,823
Fee and commission expenses	4.3.	(27,068)	(29,920)	(11,978)	(10,319)
Net fee and commission income		78,904	68,540	34,374	31,504
Gains less losses from financial assets and liabilities not measured at fair value	4.4.	(705)	8 5	(12)	-
through profit or loss Gains less losses from financial assets and liabilities held for trading	4.5.	10,216	7,937	3,241	745
Gains less losses from non-trading financial assets mandatorily at fair value through
profit or loss	4.6.	(331)	478	3 7	898
Gains less losses from financial liabilities measured at fair value through profit or loss		(1,000)	(165)	(539)	(84)
Fair value adjustments in hedge accounting		(1,991)	7	(2,019)	(289)
Foreign exchange translation gains less losses		(2,899)	(2,282)	(1,937)	1,086
Net gains or losses on derecognition of investments in subsidiaries, associates and
joint ventures	4.7.	-	(467)	-	(105)
Gains less losses on derecognition of non-financial assets		664	911	116	(2)
Other net operating income	4.8.	2,298	1,075	1,575	1,789
Administrative expenses	4.9.	(129,036)	(111,774)	(70,660)	(52,383)
Cash contributions to resolution funds and deposit guarantee schemes	4.10.	(7,514)	(7,774)	(234)	(1,670)
Depreciation and amortisation	4.11.	(13,637)	(11,825)	(5,719)	(4,191)
Gains less losses from modification of financial assets		(249)	(64)	-	-
Provisions for credit losses	4.12.	7,177	5,019	3,189	1,014
Provisions for other liabilities and charges	4.12.	(1,099)	(5,880)	(686)	(1)
Impairment of financial assets	4.13.	8,842	6,524	(7,996)	767
Impairment of non-financial assets	4.13.	148	(289)	-	-
Share of profit from investments in associates and joint ventures		704	293	-	-
(accounted for using the equity method)
Gains less losses from non-current assets held for sale		242	411	166	(65)
Profit before income tax		179,004	151,802	107,635	187,013
Income tax	4.14.	(21,838)	(25,903)	(8,617)	(14,948)
Profit for the period		157,166	125,899	99,018	172,065
Attributable to owners of the parent		152,012	122,559	99,018	172,065
Attributable to non-controlling interests		5,154	3,340	-	-

Condensed statement of other comprehensive income for the period ended 30 June

					in EUR thousands
		NLB Group 6 months ended		NLB 6 months ended
		June 2024	June 2023	June 2024	June 2023
	Notes	unaudited	unaudited	unaudited	unaudited
Net profit for the period after tax		300,580	249,477	192,899	223,305
Other comprehensive income after tax		16,222	32,943	4,948	12,149
Items that will not be reclassified to income statement
Fair value changes of equity instruments measured at fair value through other comprehensive income		1,671	3,122	634	510
Income tax relating to components of other comprehensive income	5.15.	(241)	(451)	(140)	(97)
Items that have been or may be reclassified subsequently to income statement
Foreign currency translation		1,193	1,151	-	-
Translation gains/(losses) taken to equity		1,193	1,151	-	-
Debt instruments measured at fair value through other comprehensive income		16,481	30,695	5,710	10,379
Valuation gains/(losses) taken to equity		15,270	36,073	5,224	14,319
Transferred to income statement		1,211	(5,378)	486	(3,940)
Income tax relating to components of other comprehensive income	5.15.	(2,882)	(1,574)	(1,256)	1,357
Total other comprehensive income for the period after tax		316,802	282,420	197,847	235,454
Attributable to owners of the parent		308,403	275,495	197,847	235,454
Attributable to non-controlling interests		8,399	6,925	-	-

Condensed statement of other comprehensive income for the three months ended 30 June

				in EUR thousands
	NLB Group 3 months ended		NLB 3 months ended
	June 2024	June 2023	June 2024	June 2023
	unaudited	unaudited	unaudited	unaudited
Net profit for the period after tax	157,166	125,899	99,018	172,065
Other comprehensive income/(loss) after tax	3,591	10,987	912	2,948
Items that will not be reclassified to income statement
Fair value changes of equity instruments measured at fair value through other comprehensive income	(1,244)	1,639	340	226
Income tax relating to components of other comprehensive income	160	(231)	(75)	(43)
Items that have been or may be reclassified subsequently to income statement
Foreign currency translation	314	(692)	-	-
Translation gains/(losses) taken to equity	314	(692)	-	-
Debt instruments measured at fair value through other comprehensive income	5,198	11,211	829	2,574
Valuation gains/(losses) taken to equity	4,806	12,103	739	2,681
Transferred to income statement	392	(892)	9 0	(107)
Income tax relating to components of other comprehensive income	(837)	(940)	(182)	191
Total comprehensive income for the period after tax	160,757	136,886	99,930	175,013
Attributable to owners of the parent	155,654	133,492	99,930	175,013
Attributable to non-controlling interests	5,103	3,394	-	-

Condensed statement of financial position as at 30 June and as at 31 December

			in EUR thousands
		NLB Group		NLB
		30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
	Notes	unaudited	audited	unaudited	audited
Cash, cash balances at central banks, and other demand deposits at banks	5.1.	5,116,321	6,103,561	3,489,704	4,318,032
Financial assets held for trading	5.2.a)	13,692	15,718	15,463	17,957
Non-trading financial assets mandatorily at fair value through profit or loss	5.3.a)	12,688	14,175	18,882	16,643
Financial assets measured at fair value through other comprehensive income	5.4.	2,753,959	2,251,556	1,728,912	1,023,012
Financial assets measured at amortised cost
- debt securities	5.5.a)	3,139,562	2,522,229	2,427,803	1,966,169
- loans and advances to banks	5.5.b)	410,678	547,640	192,341	149,011
- loans and advances to customers	5.5.c)	14,399,307	13,734,601	7,383,708	7,148,283
- other financial assets	5.5.d)	170,663	165,962	130,926	101,596
Derivatives - hedge accounting		45,032	47,614	45,032	47,614
Fair value changes of the hedged items in portfolio hedge of interest rate risk		(15,128)	(10,207)	(16,136)	(12,514)
Investments in subsidiaries		-	-	975,757	975,757
Investments in associates and joint ventures		12,302	12,519	4,823	4,823
Tangible assets
Property and equipment	5.7.	280,934	278,034	83,479	85,970
Investment property	5.8.	25,774	31,116	5,413	7,640
Intangible assets		64,872	62,117	40,109	37,379
Current income tax assets		7 7	4 2	-	-
Deferred income tax assets	5.14.	117,852	111,305	108,129	109,449
Other assets	5.10.	60,941	49,154	20,852	13,907
Non-current assets held for sale	5.6.	4,138	4,849	3,323	4,048
Total assets		26,613,664	25,941,985	16,658,520	16,014,776
Financial liabilities held for trading	5.2.b)	10,585	13,217	12,047	17,510
Financial liabilities measured at fair value through profit or loss	5.3.b)	8,521	4,482	5,327	3,210
Financial liabilities measured at amortised cost
- deposits from banks and central banks	5.12.	94,283	95,283	236,249	147,002
- borrowings from banks and central banks	5.12.	116,060	140,419	132,154	82,797
- due to customers	5.12.	20,693,767	20,732,722	11,744,113	11,881,563
- borrowings from other customers	5.12.	102,766	99,718	-	-
- debt securities issued	5.12.	1,874,041	1,338,235	1,874,041	1,338,235
- other financial liabilities	5.12.c)	356,144	357,116	221,061	198,020
Derivatives - hedge accounting		2,646	3,540	1,887	1,420
Provisions	5.13.	99,273	113,305	41,442	48,456
Current income tax liabilities		11,213	35,879	2,079	14,762
Deferred income tax liabilities	5.14.	14,008	1,426	-	-
Other liabilities	5.16.	84,451	58,653	50,822	32,350
Total liabilities		23,467,758	22,993,995	14,321,222	13,765,325
Equity and reserves attributable to owners of the parent
Share capital		200,000	200,000	200,000	200,000
Share premium		871,378	871,378	871,378	871,378
Other equity instruments	5.17.	88,142	84,178	88,142	84,178
Accumulated other comprehensive income		(59,806)	(76,118)	(31,368)	(36,316)
Profit reserves		13,522	13,522	13,522	13,522
Retained earnings		1,968,017	1,789,890	1,195,624	1,116,689
		3,081,253	2,882,850	2,337,298	2,249,451
Non-controlling interests		64,653	65,140	-	-
Total equity		3,145,906	2,947,990	2,337,298	2,249,451
Total liabilities and equity		26,613,664	25,941,985	16,658,520	16,014,776

Condensed statement of changes in equity for the period ended 30 June

											in EUR thousands
				Accumulated other comprehensive income
NLB Group	Share capital	Share premium	Other equity instruments	Fair value reserve of financial assets measured at FVOCI	Foreign currency translation reserve	Other	Profit reserves	Retained earnings	Equity attributable to owners of the parent	Equity attributable to non-controlling interests	Total equity
Note			5.17.
Balance as at 1 Jan 2024	200,000	871,378	84,178	(60,019)	(14,588)	(1,511)	13,522	1,789,890	2,882,850	65,140	2,947,990
- Net profit for the period	-	-	-	-	-	-	-	292,033	292,033	8,547	300,580
- Other comprehensive income	-	-	-	15,052	1,318	-	-	-	16,370	(148)	16,222
Total comprehensive income after tax	-	-	-	15,052	1,318	-	-	292,033	308,403	8,399	316,802
Dividends	-	-	-	-	-	-	-	(110,000)	(110,000)	(8,886)	(118,886)
Transfer of fair value reserve	-	-	-	(58)	-	-	-	5 8	-	-	-
Other	-	-	3,964	-	-	-	-	(3,964)	-	-	-
Balance as at 30 Jun 2024	200,000	871,378	88,142	(45,025)	(13,270)	(1,511)	13,522	1,968,017	3,081,253	64,653	3,145,906

											in EUR thousands
				Accumulated other comprehensive income
NLB Group	Share capital	Share premium	Other equity instruments	Fair value reserve of financial assets measured at FVOCI	Foreign currency translation reserve	Other	Profit reserves	Retained earnings	Equity attributable to owners of the parent	Equity attributable to non-controlling interests	Total equity
Note			5.17.
Balance as at 1 Jan 2023	200,000	871,378	84,184	(142,909)	(16,485)	(1,194)	13,522	1,357,089	2,365,585	56,740	2,422,325
- Net profit for the period	-	-	-	-	-	-	-	242,700	242,700	6,777	249,477
- Other comprehensive income	-	-	-	31,620	1,175	-	-	-	32,795	148	32,943
Total comprehensive income after tax	-	-	-	31,620	1,175	-	-	242,700	275,495	6,925	282,420
Dividends	-	-	-	-	-	-	-	(55,000)	(55,000)	(4,411)	(59,411)
Transfer of fair value reserve	-	-	-	(63)	-	-	-	6 3	-	-	-
Other	-	-	3,952	-	-	-	-	(3,957)	(5)	-	(5)
Balance as at 30 Jun 2023	200,000	871,378	88,136	(111,352)	(15,310)	(1,194)	13,522	1,540,895	2,586,075	59,254	2,645,329

								in EUR thousands
				Accumulated other comprehensive income
NLB	Share capital	Share premium	Other equity instruments	Fair value reserve of financial assets measured at FVOCI	Other	Profit reserves	Retained earnings	Total equity
Note			5.17.
Balance as at 1 Jan 2024	200,000	871,378	84,178	(35,111)	(1,205)	13,522	1,116,689	2,249,451
- Net profit for the period	-	-	-	-	-	-	192,899	192,899
- Other comprehensive income	-	-	-	4,948	-	-	-	4,948
Total comprehensive income after tax	-	-	-	4,948	-	-	192,899	197,847
Dividends	-	-	-	-	-	-	(110,000)	(110,000)
Other	-	-	3,964	-	-	-	(3,964)	-
Balance as at 30 Jun 2024	200,000	871,378	88,142	(30,163)	(1,205)	13,522	1,195,624	2,337,298

								in EUR thousands
					Accumulated other comprehensive income
NLB	Share capital	Share premium	Other equity instruments	Fair value reserve of financial assets measured at FVOCI	Other	Profit reserves	Retained earnings	Total equity
Note			5.17.
Balance as at 1 Jan 2023	200,000	871,378	84,184	(79,743)	(1,934)	13,522	515,463	1,602,870
- Net profit for the period	-	-	-	-	-	-	223,305	223,305
- Other comprehensive income	-	-	-	12,149	-	-	-	12,149
Total comprehensive income after tax	-	-	-	12,149	-	-	223,305	235,454
Dividends	-	-	-	-	-	-	(55,000)	(55,000)
Other	-	-	3,952	-	-	-	(3,952)	-
Balance as at 30 Jun 2023	200,000	871,378	88,136	(67,594)	(1,934)	13,522	679,816	1,783,324

Condensed statement of cash flows for the period ended 30 June

		in EUR thousands
		NLB Group		NLB
		6 months ended		6 months ended
		June	June	June	June
		2024	2023	2024	2023
	Notes	unaudited	unaudited	unaudited	unaudited
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received		586,650	457,651	320,967	209,448
Interest paid		(86,661)	(31,567)	(80,673)	(24,094)
Dividends received		2 9	7 1	61,973	116,990
Fee and commission receipts		205,879	190,477	89,105	79,093
Fee and commission payments		(58,472)	(55,237)	(22,975)	(19,504)
Realised gains from financial assets and financial liabilities not at fair value through profit or loss		184	9 2	-	-
Net gains/(losses) from financial assets and liabilities held for trading		13,957	12,250	3,500	449
Payments to employees and suppliers		(248,713)	(237,252)	(129,617)	(111,313)
Other receipts		9,083	10,617	5,887	6,739
Other payments		(33,502)	(34,007)	(14,101)	(13,466)
Income tax (paid)/received		(57,953)	(21,565)	(24,805)	(5,689)
Cash flows from operating activities before changes in operating assets and liabilities		330,481	291,530	209,261	238,653
(Increases)/decreases in operating assets		(1,131,225)	292,896	(968,970)	(75,199)
Net (increase)/decrease in trading assets		(1,951)	(800)	(1,951)	(800)
Net (increase)/decrease in non-trading financial assets mandatorily at fair value through profit or loss		3,520	138	(700)	(90)
Net (increase)/decrease in financial assets measured at fair value through other comprehensive income		(489,646)	545,395	(697,597)	246,750
Net (increase)/decrease in loans and receivables measured at amortised cost		(637,326)	(249,900)	(268,849)	(320,635)
Net (increase)/decrease in other assets		(5,822)	(1,937)	127	(424)
Increases/(decreases) in operating liabilities		(73,965)	(174,164)	31,088	71,393
Net increase/(decrease) in deposits and borrowings measured at amortised cost		(77,981)	(182,491)	27,317	66,167
Net increase/(decrease) in other liabilities		4,016	8,327	3,771	5,226
Net cash flows from operating activities		(874,709)	410,262	(728,621)	234,847
CASH FLOWS FROM INVESTING ACTIVITIES
Receipts from investing activities		353,330	194,160	80,419	81,147
Proceeds from sale of property, equipment, and investment property		5,487	1,605	2,504	8 7
Proceeds from sale of subsidiaries, net of cash and cash equivalents	3., 4.7.	-	13,019	-	1,655
Proceeds from non-current assets held for sale		1,286	12,290	1,206	710
Proceeds from maturity/disposals of debt securities measured at amortised cost		346,557	167,246	76,709	78,695
Payments from investing activities		(996,708)	(408,390)	(558,309)	(293,894)
Purchase of property, equipment, and investment property		(14,179)	(10,833)	(5,518)	(3,829)
Purchase of intangible assets		(14,339)	(7,501)	(11,354)	(5,499)
Purchase of subsidiaries, net of cash acquired and increase in subsidiaries' equity	3., 5.9.	(2,342)	-	-	-
Purchase of debt securities measured at amortised cost		(965,848)	(390,056)	(541,437)	(284,566)
Net cash flows from investing activities		(643,378)	(214,230)	(477,890)	(212,747)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from financing activities		795,958	497,708	795,958	497,708
Issuance of subordinated bonds	5.12.b)	298,611	-	298,611	-
Issuance of senior preferred notes	5.12.b)	497,347	497,708	497,347	497,708
Payments from financing activities		(383,210)	(63,553)	(371,495)	(55,528)
Dividends paid		(118,498)	(59,456)	(110,000)	(55,000)
Repayments of subordinated debt	5.12.b)	(260,759)	-	(260,759)	-
Lease payments		(3,953)	(4,097)	(736)	(528)
Net cash flows from financing activities		412,748	434,155	424,463	442,180
Effects of exchange rate changes on cash and cash equivalents		1,999	(2,142)	(1,373)	(372)
Net increase/(decrease) in cash and cash equivalents		(1,105,339)	630,187	(782,048)	464,280
Cash and cash equivalents at beginning of period		6,637,139	5,500,222	4,323,499	3,494,435
Cash and cash equivalents at end of period		5,533,799	6,128,267	3,540,078	3,958,343

					in EUR thousands
			NLB Group		NLB
			30 Jun 2024 31 Dec 2023		30 Jun 2024 31 Dec 2023
	Notes	unaudited	audited	unaudited	audited
Cash and cash equivalents comprise:
Cash, cash balances at central banks, and other demand deposits at banks	5.1.	5,117,529	6,104,851	3,490,078	4,318,499
Loans and advances to banks with original maturity up to 3 months		390,257	506,266	50,000	5,000
Debt securities measured at fair value through other comprehensive income with original
maturity up to 3 months		26,013	26,022	-	-
Total		5,533,799	6,637,139	3,540,078	4,323,499

Statement of management's responsibility

The Management Board hereby confirms and approves the release of the condensed interim financial statements of NLB Group and NLB for the 6 months ending 30 June 2024, the accompanying accounting policies, and notes to the financial statements.

The Management Board is responsible for the preparation and presentation of these condensed interim financial statements in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union in order to give a true and fair view of the financial position of NLB Group and NLB as at 30 June 2024, and their financial results and cash flows for the period then ended.

The Management Board also confirms that appropriate accounting policies were consistently applied, and that the accounting estimates were prepared in accordance with the principles of prudence and good management. The Management Board further confirms that the condensed interim financial statements of NLB Group and NLB have been prepared on a going-concern basis for NLB Group and NLB and are in line with valid legislation and IAS 34 'Interim financial reporting.'

The Management Board is also responsible for appropriate accounting practices, the adoption of appropriate measures for the safeguarding of assets, and the prevention and identification of fraud and other irregularities or illegal acts.

Management Board

Peter Andreas Burkhardt Antonio Argir Blaž Brodnjak Member Member Chief executive officer

Hedvika Usenik Andrej Lasič Archibald Kremser

Member Member Member

Ljubljana, 1 August 2024

Notes to the condensed interim financial statements

1. General information

Nova Ljubljanska banka d.d. Ljubljana (hereinafter: 'NLB' or 'the Bank') is a Slovenian joint-stock entity providing universal banking services. NLB Group consists of NLB and its subsidiaries located in nine countries. Information on the NLB Group's structure is disclosed in note 8. Information on other related party relationships of NLB Group is provided in note 7.

NLB is incorporated and domiciled in Slovenia. The address of its 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 are listed on the London Stock Exchange. Five GDRs represent one share of NLB.

As at 30 June 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.

All amounts in the condensed interim financial statements and in the notes to the condensed interim financial statements are expressed in thousands of euros unless otherwise stated.

2. Summary of significant accounting policies

2.1. Statement of compliance

These condensed interim financial statements have been prepared in accordance with IAS 34 'Interim financial reporting' and should be read in conjunction with the annual financial statements of NLB Group and NLB for the year ended 31 December 2023, which have been prepared in accordance with the International Financial Reporting Standards (hereinafter: 'IFRS') as adopted by the European Union (hereinafter: 'EU').

2.2. Accounting policies

The same accounting policies and methods of computation were followed in the preparation of these consolidated condensed interim financial statements as for the year ended 31 December 2023, except for accounting standards and other amendments effective for annual periods beginning on 1 January 2024 that were endorsed by the EU.

Accounting standards and amendments to existing standards that were endorsed by the EU and adopted by NLB Group from 1 January 2024

• IAS 1 (amendment and deferral of effective date) 'Presentation of Financial Statements' (effective for annual periods beginning on or after 1 January 2024:
  • Classification of Liabilities as Current or Noncurrent (amendment and deferral of effective date);
  • Non-current Liabilities with Covenants (amendment);
• IFRS 16 (amendment) 'Leases: Lease Liability in a Sale and Leaseback' (effective for annual periods beginning on or after 1 January 2024);
• IAS 7 and IFRS 7 (amendment) 'Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements' (effective for annual periods beginning on or after 1 January 2024).

Accounting standards and amendments to existing standards issued but not endorsed by the EU

• IAS 21 (amendment) 'The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability' (effective for annual periods beginning on or after 1 January 2025);
• IFRS 9 and IFRS 7 (amendment) 'Amendments to the Classification and Measurement of Financial Instruments' (effective for annual periods beginning on or after 1 January 2026);
• IFRS 18 (new standard) 'Presentation and Disclosure in Financial Statements' (effective for annual periods beginning on or after 1 January 2027);
• IFRS 19 (new standard) 'Subsidiaries without Public Accountability: Disclosures' (effective for annual periods beginning on or after 1 January 2027).

3. Changes in the composition of the NLB Group

Changes in the period ended 30 June 2024

Capital changes:

• In May 2024, NLB Skladi d.o.o., Ljubljana become an owner 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 5.9.).

Other changes:

• In January 2024, according to the new NLB Group Governance Policy, three real estate companies S-REAM d.o.o., Ljubljana, REAM d.o.o., Beograd and REAM d.o.o., Podgorica were transferred from non-core members to core members.
• In May 2024, company S-REAM d.o.o., Ljubljana was renamed to NLB Real Estate d.o.o., Ljubljana, company REAM d.o.o., Podgorica was renamed to NLB Real Estate d.o.o., Podgorica and company REAM d.o.o., Beograd was renamed to 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. Ljubljana – v likvidaciji ceased to exist. All its assets and liabilities were transferred to NLB Lease&Go, leasing, d.o.o., Ljubljana which became after merger its universal legal successor.
• On 1 July 2024, after merging with NLB Real Estate d.o.o., Ljubljana, subsidiary Privatinvest d.o.o., Ljubljana ceased to exist. All its assets and liabilities were transferred to NLB Real Estate d.o.o., Ljubljana which became after merger its universal legal successor.

Changes in year 2023

Capital changes:

• In January 2023, NLB Lease&Go, leasing, d.o.o., Ljubljana increased share capital in the form of a cash contribution in the amount of EUR 2,100 thousand in company Zastava Istrabenz Lizing, d.o.o., Beograd. Ownership interest increased from 95.20% to 99%. In January 2023, the company was renamed to 'NLB Lease&Go leasing d.o.o. Beograd.'
• In June 2023, NLB Lease&Go, leasing, d.o.o., Ljubljana increased share capital in the form of a cash contribution in the amount of EUR 1,195 thousand in company NLB Lease&Go leasing d.o.o. Beograd. Ownership interest increased from 99% to 99.30%.
• In September 2023, NLB Komercijalna banka a.d. Beograd increased share capital in the form of a cash contribution in the amount of EUR 767 thousand in company KomBank Invest a.d. Beograd.
• In September 2023, NLB Lease&Go, leasing, d.o.o., Ljubljana and NLB Banka a.d., Skopje increased share capital in the form of a cash contribution in the total amount of EUR 1,571 thousand in company NLB Lease&Go, d.o.o. Skopje.
• In December 2023, NLB Komercijalna banka a.d. Beograd increased share capital in the form of a cash contribution in the amount of EUR 3,804 thousand in company NLB Lease&Go leasing d.o.o. Beograd. After that, NLB Lease&Go, leasing, d.o.o., Ljubljana ownership of NLB Lease&Go leasing d.o.o. Beograd is 50.73%, meanwhile, NLB Komercijalna banka a.d. 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 ceased to exist. All its assets and liabilities were transferred to REAM d.o.o., Beograd which become after merger its universal legal successor.
• In May 2023, NLB Group sold its subsidiary Tara Hotel d.o.o. Budva.
• In July 2023, a purchase agreement was signed for the sale of NLB Group`s subsidiary Optima Leasing d.o.o., Zagreb – u likvidaciji. The transfer of the ownership was entered into Register of Companies on 13 September 2023.
• In August 2023, NLB received an authorisation of the ECB for the merger of the N Banka. On 1 September 2023, with entry of the merger in the Register of Companies, the process of 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 as a universal successor, took over all of its rights and obligations.
• 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, after cross boarder merging with S-REAM d.o.o., Ljubljana, subsidiary REAM d.o.o, Zagreb ceased to exist. All its assets and liabilities were transferred to S-REAM d.o.o., Ljubljana, which become after merger its universal legal successor.
• On 30 November 2023, NLB concluded a purchase agreement for the acquisition of a 100% stake in the company 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 Bank for Reconstruction and Development. The purchase price for the mentioned deal is equal to the book value of Summit Leasing with an additional small mark-up. Completion of the transaction depends on obtaining regulatory approvals and approvals from competent authorities/institutions for the protection of competition and is expected in the second half of 2024.

4. Notes to the condensed income statement

4.1. Interest income and expenses

Analysis by type of assets and liabilities

										in EUR thousands
			NLB Group					NLB
	3 months ended			6 months ended		3 months ended		6 months ended
	June	June	June	June		June	June	June	June
	2024	2023	2024	2023	Change	2024	2023	2024	2023	Change
Interest and similar income
Interest income calculated using the effective interest method	278,445	224,581	556,010	425,931	31%	150,806	106,203	301,110	198,949	51%
Loans and advances to customers at amortised cost	205,893	173,321	407,511	333,298	22%	96,622	69,457	190,352	134,007	42%
Securities measured at amortised cost	19,973	7,517	37,184	13,369	178%	12,319	4,940	22,746	8,643	163%
Financial assets measured at fair value through other comprehensive income	15,056	9,777	25,771	19,919	29%	7,439	2,391	10,309	4,916	110%
Loans and advances to banks measured at amortised cost	4,347	5,454	9,856	9,693	2 %	2,507	3,416	4,867	6,055	-20%
Deposits with banks and central banks	33,176	28,512	75,688	49,652	52%	31,919	25,999	72,836	45,328	61%
Other interest and similar income	13,482	8,662	28,684	14,321	100%	6,167	4,530	14,754	7,244	104%
Financial assets held for trading	1,556	1,645	3,097	2,726	14%	1,684	1,672	3,452	2,913	19%
Non-trading financial assets mandatorily at fair value through profit or loss	3	1 2	1 4	2 4	-42%	110	101	220	184	20%
Derivatives - hedge accounting	4,502	2,771	11,341	4,161	173%	4,373	2,757	11,082	4,147	167%
Finance leases	7,421	4,234	14,232	7,410	92%	-	-	-	-	-
Total	291,927	233,243	584,694	440,252	33%	156,973	110,733	315,864	206,193	53%
Interest and similar expenses
Interest expenses calculated using the effective interest method	58,223	29,362	112,659	55,983	101%	44,609	22,591	85,986	43,340	98%
Due to customers	28,330	13,490	55,676	25,446	119%	13,864	7,073	27,397	13,548	102%
Borrowings from banks and central banks	516	333	1,171	705	66%	615	171	1,291	342	-
Borrowings from other customers	533	327	1,111	636	75%	-	-	-	-	-
Subordinated liabilities	11,819	8,728	22,737	17,203	32%	11,819	8,728	22,737	17,203	32%
Debt securities issued	15,895	5,030	29,558	9,560	-	15,895	5,030	29,558	9,560	-
Deposits from banks and central banks	889	1,297	1,941	2,130	-9%	2,371	1,562	4,908	2,620	87%
Lease liabilities	241	157	465	282	65%	4 5	2 7	9 5	4 6	107%
Negative interest	-	-	-	2 1	-	-	-	-	2 1	-
Other interest and similar expenses	5,451	2,885	11,592	4,304	169%	5,315	1,896	11,578	3,207	-
Derivatives - hedge accounting	3,638	308	8,149	610	-	3,638	294	8,149	584	-
Financial liabilities held for trading	1,465	1,542	2,902	2,394	21%	1,586	1,503	3,245	2,431	33%
Interest expense on defined employee benefits	181	186	367	362	1 %	8 8	8 9	176	177	-1%
Other	167	849	174	938	-81%	3	1 0	8	1 5	-47%
Total	63,674	32,247	124,251	60,287	106%	49,924	24,487	97,564	46,547	110%
Net interest income	228,253	200,996	460,443	379,965	21%	107,049	86,246	218,300	159,646	37%

4.2. Dividend income

										in EUR thousands
			NLB Group					NLB
	3 months ended 6 months ended						3 months ended 6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Financial assets measured at fair value through other comprehensive income	2	3 3	4	6 9	-94%	-	-	-	-	-
Investments in subsidiaries	-	-	-	-	-	45,793	121,741	75,310	130,142	-42%
Investments in associates, and joint ventures	-	-	-	-	-	1,882	-	1,882	-	-
Non-trading financial assets mandatorily at fair value through profit or loss	1 5	1 3	2 9	2 6	12%	1 5	1 3	2 9	2 6	12%
Total	1 7	4 6	3 3	9 5	-65%	47,690	121,754	77,221	130,168	-41%

4.3. Fee and commission income and expenses

										in EUR thousands
			NLB Group
	3 months ended			6 months ended		3 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Fee and commission income
Fee and commission income relating to financial instruments not at fair
value through profit or loss
Credit cards and ATMs	34,387	33,074	65,216	60,433	8 %	13,847	12,664	26,353	23,603	12%
Customer transaction accounts	24,346	23,611	48,326	45,996	5 %	13,772	13,266	27,462	26,572	3 %
Other fee and commission income
Payments	22,115	21,401	42,728	43,509	-2%	6,656	6,227	12,959	11,975	8 %
Investment funds	10,586	7,816	20,838	15,553	34%	3,220	2,274	6,494	4,461	46%
Investment banking	2,909	2,181	6,811	5,297	29%	2,201	1,803	5,458	4,148	32%
Agency of insurance products	4,575	3,291	8,545	6,160	39%	2,991	2,272	5,892	4,539	30%
Other services	2,380	2,569	4,403	4,417	0 %	1,006	1,021	1,713	1,625	5 %
Total fee and commission income from contracts with customers	101,298	93,943	196,867	181,365	9 %	43,693	39,527	86,331	76,923	12%
Guarantees	4,674	4,517	9,224	8,780	5 %	2,659	2,296	5,321	4,449	20%
Total	105,972	98,460	206,091	190,145	8 %	46,352	41,823	91,652	81,372	13%
Fee and commission expenses
Fee and commission expenses relating to financial instruments not at fair
value through profit or loss
Credit cards and ATMs	19,271	22,459	41,301	41,385	0 %	9,348	8,170	17,799	14,992	19%
Other fee and commission expenses
Payments	3,253	3,542	6,188	6,740	-8%	389	300	729	579	26%
Insurance for holders of personal accounts and golden cards	250	326	718	859	-16%	218	190	536	499	7 %
Investment banking	2,590	2,020	4,779	3,667	30%	1,303	1,099	2,284	1,832	25%
Guarantees	436	467	870	826	5 %	423	427	845	766	10%
Other services	1,268	1,106	2,233	2,023	10%	297	133	433	285	52%
Total	27,068	29,920	56,089	55,500	1 %	11,978	10,319	22,626	18,953	19%
Net fee and commission income	78,904	68,540	150,002	134,645	11%	34,374	31,504	69,026	62,419	11%

4.4. Gains less losses from financial assets and liabilities not measured at fair value through profit or loss

								in EUR thousands
		NLB
	3 months ended	6 months ended		3 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023
Debt instruments measured at fair value through other comprehensive income	(705)	8 5	(1,543)	(696)	(12)	-	(143)	(788)
Debt instruments measured at amortised cost	-	-	169	-	-	-	-	-
Financial liabilities measured at amortised cost	-	-	2,713	-	-	-	2,713	-
Total	(705)	8 5	1,339	(696)	(12)	-	2,570	(788)

4.5. Gains less losses from financial assets and liabilities held for trading

								in EUR thousands
		NLB Group			NLB
	3 months ended		6 months ended			3 months ended	6 months ended
	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023
Foreign exchange trading	7,600	6,991	14,925	13,724	1,434	1,064	3,116	2,370
Debt instruments	5	7	8 7	7 0	5	5	8 6	1 9
Derivatives	2,611	939	(2,303)	7 2	1,802	(324)	1,289	(154)
Total	10,216	7,937	12,709	13,866	3,241	745	4,491	2,235

4.6. Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss

3 months ended June 2024	NLB Group June	6 months ended June		3 months ended	NLB
						6 months ended
			June	June	June	June	June
	2023	2024	2023	2024	2023	2024	2023
Equity securities (341)	464	1,215	1,026	(352)	297	1,198	626
Debt securities 1 0	(10)	3 5	5	-	-	-	-
Loans and advances to customers -	2 4	-	2 4	389	601	417	750
Total (331)	478	1,250	1,055	3 7	898	1,615	1,376

4.7. Disposal of subsidiaries

a) Disposal of subsidiary Tara Hotel d.o.o., Budva

In May 2023, NLB Group sold its subsidiary Tara Hotel d.o.o., Budva. The assets and 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
- borrow ings 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 and cash equivalents in subsidiary sold	2
Cash inflow on disposal	13,021
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.

4.8. Other net operating income

										in EUR thousands
		NLB Group	NLB
	3 months ended			6 months ended			3 months ended	6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Other operating income
Income from non-banking services	2,207	1,964	4,432	3,773	17%	1,767	1,698	3,464	3,323	4 %
Rental income from investment property	303	535	653	911	-28%	7 2	7 9	145	158	-8%
Revaluation of investment property to fair value	-	102	-	157	-	-	102	-	102	-
Sale of investment property	419	-	624	-	-	8 5	-	259	-	-
Other operating income	1,063	1,298	2,551	2,539	0 %	463	686	1,442	1,509	-4%
Total	3,992	3,899	8,260	7,380	12%	2,387	2,565	5,310	5,092	4 %
Other operating expenses
Donations	420	574	633	792	-20%	668	276	872	760	15%
Expenses related to issued service guarantees	-	8	-	2 5	-	-	8	-	2 5	-
Revaluation of investment property to fair value	-	4 1	-	4 1	-	-	4 1	-	4 1	-
Other operating expenses	1,274	2,201	3,133	3,241	-3%	144	451	1,548	783	98%
Total	1,694	2,824	3,766	4,099	-8%	812	776	2,420	1,609	50%
Other net operating income	2,298	1,075	4,494	3,281	37%	1,575	1,789	2,890	3,483	-17%

4.9. Administrative expenses

										in EUR thousands
	NLB Group							NLB
	3 months ended		6 months ended			3 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Employee costs	77,296	70,627	149,539	137,390	9 %	39,565	32,248	75,653	62,904	20%
Other general and administrative expenses	51,740	41,147	98,794	79,842	24%	31,095	20,135	57,916	38,569	50%
Total	129,036	111,774	248,333	217,232	14%	70,660	52,383	133,569	101,473	32%

On 1 January 2024 tax on banks' balance sheet was introduced in Slovenia for a period of five years. Expenses related to tax on banks' balance sheet in the NLB Group and NLB in the first 6 months ended 30 June 2024, amounted to EUR 16,210 thousand and are included in the line item 'Other general and administrative expenses.'

4.10. Cash contributions to resolution funds and deposit guarantee schemes

										in EUR thousands
			NLB Group				NLB
	3 months ended		6 months ended		3 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Cash contributions to deposit guarantee schemes	7,436	8,836	25,123	23,911	5 %	234	2,071	10,793	9,686	11%
Cash contributions to resolution funds	7 8	(1,062)	129	2,045	-94%	-	(401)	-	1,697	-
Total	7,514	7,774	25,252	25,956	-3%	234	1,670	10,793	11,383	-5%

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.

4.11. Depreciation and amortisation

										in EUR thousands
	NLB Group						NLB
	3 months ended		6 months ended			3 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Amortisation of intangible assets	4,734	3,616	9,183	7,368	25%	2,629	1,359	5,126	2,749	86%
Depreciation of property and equipment:
- own property and equipment	7,138	6,139	14,079	11,994	17%	2,712	2,553	5,467	5,101	7 %
- right-of-use assets	1,765	2,070	3,434	4,117	-17%	378	279	768	523	47%
Total	13,637	11,825	26,696	23,479	14%	5,719	4,191	11,361	8,373	36%

4.12. Provisions

								in EUR thousands
		NLB Group				NLB
	3 months ended		6 months ended			3 months ended	6 months ended
	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023
Provisions for credit losses	(7,177)	(5,019)	(7,031)	(7,202)	(3,189)	(1,014)	(3,770)	(2,088)
Guarantees and commitments	(7,177)	(5,019)	(7,031)	(7,202)	(3,189)	(1,014)	(3,770)	(2,088)
Provisions for other liabilities and charges	1,099	5,880	1,396	11,807	686	1	686	5,742
Provisions for legal risks	1,099	4,210	1,396	816	686	1	686	(3,558)
Other provisions	-	1,670	-	10,991	-	-	-	9,300
Total	(6,078)	861	(5,635)	4,605	(2,503)	(1,013)	(3,084)	3,654

4.13. Impairment charge

								in EUR thousands
		NLB Group			NLB
	3 months ended		6 months ended			3 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023	June 2024	June 2023
Impairment of financial assets
Cash balances at central banks, and other demand deposits at banks	(19)	(109)	(81)	(83)	(39)	5 3	(93)	7 0
Loans and advances to customers measured at amortised cost (note 5.10.a)	(8,525)	(7,711)	(5,253)	(17,721)	8,593	(1,030)	12,081	(398)
Loans and advances to banks measured at amortised cost (note 5.10.a)	6 6	2 0	3 4	3 4	4 1	(31)	3 1	3 8
Debt securities measured at fair value through other comprehensive income (note 5.10.b)	(313)	(807)	(332)	(6,074)	7 8	(107)	343	(4,728)
Debt securities measured at amortised cost (note 5.10.b)	645	976	1,764	1,262	221	355	473	449
Other financial assets measured at amortised cost (note 5.10.a)	(696)	1,107	(760)	(129)	(898)	(7)	(1,031)	177
Total impairment of financial assets	(8,842)	(6,524)	(4,628)	(22,711)	7,996	(767)	11,804	(4,392)
Impairment of other assets
Other assets	(148)	289	(145)	327	-	-	-	-
Total	(148)	289	(145)	327	-	-	-	-
Total impairment of non-financial assets	(148)	289	(145)	327	-	-	-	-
Total impairment	(8,990)	(6,235)	(4,773)	(22,384)	7,996	(767)	11,804	(4,392)

4.14. Income tax

										in EUR thousands
			NLB Group			NLB
	3 months ended		6 months ended	3 months ended				6 months ended
	June 2024	June 2023	June 2024	June 2023	Change	June 2024	June 2023	June 2024	June 2023	Change
Current tax	21,215	24,724	35,347	36,701	-4%	8,634	14,944	13,677	16,358	-16%
Global minimum tax	1,103	-	2,206	-	-	1,103	-	2,206	-	-
Deferred tax (note 5.14.)	623	1,179	2,940	3,144	-6%	(17)	4	(76)	1,166	-
Total	21,838	25,903	40,493	39,845	2 %	8,617	14,948	15,807	17,524	-10%
Effective tax rate in % (income tax/profit before income tax)	12.20	17.06	11.87	13.77	-14%	8.01	7.99	7.57	7.28	4 %

NLB's current tax in the first 6 months ended 30 June 2024 includes EUR 2,822 thousand withholding tax suffered in other countries for which no tax credit was available in Slovenia (2023: EUR 5,770 thousand). The main part of this amount in the first 6 months ended 30 June 2024, is withholding tax on distributed dividends.

NLB Group became subject to global minimum top-up tax from 1 January 2024. NLB will be liable to pay the top-up tax concerning subsidiaries in non-EU jurisdictions that have a statutory tax rate below 15% and have not enacted the new legislation on Global minimum tax in domestic legislation. NLB Group recognised current tax expenses of EUR 2,206 thousand related to the top-up-tax in the first 6 months ended 30 June 2024, based on the first estimates for the year 2024.

NLB Group applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up-tax and accounted it as a current tax when it incurred.

5. Notes to the condensed statement of financial position

5.1. Cash, cash balances at central banks and other demand deposits at banks

	in EUR thousand
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Balances and obligatory reserves with central banks	4,566,411	5,435,460	-16%	3,295,554	4,077,399	-19%
Cash	455,606	470,902	-3%	166,897	181,735	-8%
Demand deposits at banks	95,512	198,489	-52%	27,627	59,365	-53%
	5,117,529	6,104,851	-16%	3,490,078	4,318,499	-19%
Allowance for impairment	(1,208)	(1,290)	6 %	(374)	(467)	20%
Total	5,116,321	6,103,561	-16%	3,489,704	4,318,032	-19%

5.2. Financial instruments held for trading

a) Financial assets held for trading

						in EUR thousand
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Derivatives, excluding hedging instruments
Swap contracts	10,642	13,867	-23%	12,419	16,135	-23%
Options	983	1,249	-21%	983	1,249	-21%
Forward contracts	8 2	602	-86%	7 6	573	-87%
Total derivatives	11,707	15,718	-26%	13,478	17,957	-25%
Securities
Bonds	1,985	-	-	1,985	-	-
Total securities	1,985	-	-	1,985	-	-
Total	13,692	15,718	-13%	15,463	17,957	-14%

b) Financial liabilities held for trading

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change	30 Jun 2024 31 Dec 2023		Change
Derivatives, excluding hedging instruments
Swap contracts	9,209	11,139	-17%	10,671	15,440	-31%
Options	1,279	1,573	-19%	1,279	1,573	-19%
Forward contracts	9 7	505	-81%	9 7	497	-80%
Total	10,585	13,217	-20%	12,047	17,510	-31%

5.3. Non-trading financial instruments mandatorily at fair value through profit or loss

a) Financial assets mandatorily at fair value through profit or loss

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Assets
Shares	6,551	6,300	4 %	6,551	6,300	4 %
Investments funds	5,155	2,658	94%	4,205	2,558	64%
Bonds	982	5,217	-81%	-	-	-
Loans and advances to companies	-	-	-	8,126	7,785	4 %
Total	12,688	14,175	-10%	18,882	16,643	13%

b) Financial liabilities measured at fair value through profit or loss

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change	30 Jun 2024 31 Dec 2023		Change
Liabilities
Loans and advances to companies	-	-	-	942	1,234	-24%
Other financial liabilities	8,521	4,482	90%	4,385	1,976	122%
Total	8,521	4,482	90%	5,327	3,210	66%

5.4. Financial assets measured at fair value through other comprehensive income

Analysis by type

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Bonds	2,393,104	1,836,604	30%	1,667,296	962,084	73%
Shares	27,589	26,467	4 %	357	303	18%
National Resolution Fund	61,259	60,625	1 %	61,259	60,625	1 %
Treasury bills	241,228	301,838	-20%	-	-	-
Commercial bills	30,779	26,022	18%	-	-	-
Total	2,753,959	2,251,556	22%	1,728,912	1,023,012	69%
Allowance for impairment (note 5.11.b)	(6,994)	(7,329)	5 %	(2,792)	(2,448)	-14%

5.5. Financial assets measured at amortised cost

Analysis by type

						in EUR thousands
		NLB Group			NLB
	30 Jun 2024 31 Dec 2023		Change		30 Jun 2024 31 Dec 2023	Change
Debt securities	3,139,562	2,522,229	24%	2,427,803	1,966,169	23%
Loans and advances to banks	410,678	547,640	-25%	192,341	149,011	29%
Loans and advances to customers	14,399,307	13,734,601	5 %	7,383,708	7,148,283	3 %
Other financial assets	170,663	165,962	3 %	130,926	101,596	29%
Total	18,120,210	16,970,432	7 %	10,134,778	9,365,059	8 %

a) Debt securities

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Government	2,323,443	1,898,725	22%	1,614,906	1,347,161	20%
Companies	84,000	79,679	5 %	76,760	72,458	6 %
Banks	723,582	536,096	35%	723,582	536,096	35%
Financial organisations	15,830	13,251	19%	15,830	13,251	19%
	3,146,855	2,527,751	24%	2,431,078	1,968,966	23%
Allowance for impairment (note 5.11.b)	(7,293)	(5,522)	-32%	(3,275)	(2,797)	-17%
Total	3,139,562	2,522,229	24%	2,427,803	1,966,169	23%

b) Loans and advances to banks

b) Loans and advances to banks
						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Loans	382	623	-39%	120,797	119,914	1 %
Time deposits	196,383	249,765	-21%	71,227	25,865	175%
Reverse sale and repurchase agreements	213,648	294,069	-27%	-	-	-
Purchased receivables	607	3,482	-83%	607	3,482	-83%
	411,020	547,939	-25%	192,631	149,261	29%
Allowance for impairment (note 5.11.a)	(342)	(299)	-14%	(290)	(250)	-16%
Total	410,678	547,640	-25%	192,341	149,011	29%

c) Loans and advances to customers

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Loans	13,663,805	13,117,311	4 %	7,171,590	6,946,199	3 %
Overdrafts	502,037	449,145	12%	259,876	236,792	10%
Finance lease receivables	401,961	337,610	19%	-	-	-
Credit card business	152,240	154,664	-2%	81,849	82,457	-1%
Called guarantees	6,330	4,498	41%	3,633	2,403	51%
	14,726,373	14,063,228	5 %	7,516,948	7,267,851	3 %
Allowance for impairment (note 5.11.a)	(327,066)	(328,627)	0 %	(133,240)	(119,568)	-11%
Total	14,399,307	13,734,601	5 %	7,383,708	7,148,283	3 %

d) Other financial assets

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Receivables in the course of settlement and other temporary accounts	48,728	43,608	12%	25,296	20,207	25%
Credit card receivables	60,742	54,748	11%	51,079	42,753	19%
Debtors	10,200	9,265	10%	1,187	2,013	-41%
Fees and commissions	10,930	9,734	12%	1,436	2,924	-51%
Receivables to brokerage firms and others for the sale of securities and custody
services	2,069	-	-	2,053	-	-
Accrued income	11,180	7,171	56%	8,799	6,247	41%
Dividends	1,886	-	-	12,465	-	-
Prepayments	3,953	2,176	82%	-	-	-
Other financial assets	33,911	50,065	-32%	29,789	29,066	2 %
	183,599	176,767	4 %	132,104	103,210	28%
Allowance for impairment (note 5.11.a)	(12,936)	(10,805)	-20%	(1,178)	(1,614)	27%
Total	170,663	165,962	3 %	130,926	101,596	29%

5.6. Non-current assets held for sale

As at 30 June 2024 'Non-current assets held for sale' includes business premises and assets received as collateral that are in the process of being sold and amounts to EUR 4,138 thousand (31 December 2023: EUR 4,849 thousand) in the NLB Group and EUR 3,323 thousand (31 December 2023: EUR 4,048 thousand) in NLB.

5.7. Property and equipment

Analysis by type

Analysis by type
						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Own property and equipment	249,174	249,920	0 %	77,914	80,240	-3%
Right-of-use assets	31,760	28,114	13%	5,565	5,730	-3%
Total	280,934	278,034	1 %	83,479	85,970	-3%

5.8. Investment property

						in EUR thousands
	NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Buildings	25,534	30,711	-17%	5,269	7,496	-30%
Land	240	405	-41%	144	144	0 %
Total	25,774	31,116	-17%	5,413	7,640	-29%

5.9. Acquisition of subsidiaries

a) Acquisition of Generali Investments a.d. Skopje

In May 2024, NLB Skladi d.o.o., Ljubljana become an owner of 100% of financial company Generali Investments a.d. Skopje. Generali Investments a.d. Skopje is the third largest asset manager on the Macedonian market with 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.

The purchase price for the company was 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 173 thousand. The net outflow of cash amounted to EUR 2,342 thousand (included in the 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
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

The acquisition of Generali Investments a.d. Skopje, resulted in a goodwill in the amount of EUR 1,403 thousand, which is recognised in the statement of financial position under the line 'Intangible assets.' The main factors that make up the goodwill are the synergies within the NLB Group, the existing distribution channels and the presence on the strategically important market of the NLB Group. Acquisition-related costs were immaterial.

5.10. Other assets

						in EUR thousands
	NLB Group				NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Assets, received as collateral	27,450	27,637	-1%	2,958	3,129	-5%
Deferred expenses	22,395	12,313	82%	14,901	6,915	115%
Inventories	7,317	5,825	26%	2,579	2,943	-12%
Claim for taxes and other dues	1,212	1,599	-24%	270	531	-49%
Prepayments	2,567	1,780	44%	144	389	-63%
Total	60,941	49,154	24%	20,852	13,907	50%

5.11. 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
					NLB Group
	Loans and advances to banks			Loans and advances to customers			Other financial assets
	12-month expected credit losses	Lifetime ECL not credit - impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired
Balance as at 1 Jan 2024	213	-	8 6	90,755	44,829	193,043	624	4 0	10,141
Effects of translation of foreign operations to
presentation currency	-	-	-	3 2	(5)	(403)	3	1	4
Transfers	-	-	-	19,526	(15,768)	(3,758)	4 7	2 2	(69)
Increases/(Decreases) (note 4.13.)	2	3	1	(7,097)	19,939	8,573	(24)	2 1	(672)
Write-offs	-	-	-	(91)	(8)	(19,706)	(14)	(8)	(466)
Changes in models/risk parameters (note 4.13.)	-	-	2 8	(28,388)	3,786	7,956	(83)	(2)	103
Foreign exchange and other movements	-	-	9	2 9	1	13,821	(32)	(3)	3,303
Balance as at 30 Jun 2024	215	3	124	74,766	52,774	199,526	521	7 1	12,344
Repayments of written-off receivables (note 4.13.)	-	-	-	-	-	10,022	-	-	103

									in EUR thousands
					NLB Group
		Loans and advances to banks			Loans and advances to customers			Other financial assets
	12-month expected credit losses	Lifetime ECL not credit - impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired
Balance as at 1 Jan 2023	161		- 108	91,225	45,812	186,961	1,246	3 8	7,750
Effects of translation of foreign operations to
presentation currency	(1)		- -	(15)	(8)	4 9	2	-	(3)
Transfers	-		- -	14,141	(11,213)	(2,928)	133	(22)	(111)
Increases/(Decreases) (note 4.13.)	2 3		- 1 1	(12,306)	8,536	6,351	(328)	6 7	478
Write-offs	-		- -	(25)	(4)	(16,722)	(11)	(1)	(478)
Changes in models/risk parameters (note 4.13.)	-		- -	(12,375)	5,950	512	(107)	(25)	(17)
Foreign exchange and other movements	-		-	1 3	(4)	11,244	123	(7)	1,748
Disposals of subsidiaries	-			-	-	-	-	-	(224)
Balance as at 30 Jun 2023	183		- 119	80,658	49,069	185,467	1,058	5 0	9,143
Repayments of written-off receivables (note 4.13.)	-		- -	-	-	14,389	-	-	197

					NLB				in EUR thousands
		Loans and advances to banks		Loans and advances to customers			Other financial assets
	12-month expected credit losses	Lifetime ECL not credit - impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired
Balance as at 1 Jan 2024	164	-	8 6	21,555	14,042	83,971	9 8	2	1,514
Transfers	-	-	-	10,042	(6,676)	(3,366)	1	1 5	(16)
Increases/(Decreases) (note 4.13.)	2	-	1	(7,322)	13,309	6,991	(18)	(13)	(964)
Write-offs	-	-	-	(86)	(6)	(5,257)	(3)	(1)	(277)
Changes in models/risk parameters (note 4.13.)	-	-	2 8	(4,796)	101	6,190	(16)	(1)	(7)
Foreign exchange and other movements	-	-	9	(17)	(13)	4,578	1	-	863
Balance as at 30 Jun 2024	166	-	124	19,376	20,757	93,107	6 3	2	1,113
Repayments of written-off receivables (note 4.13.)	-	-	-	-	-	2,392	-	-	1 2

									in EUR thousands
		Loans and advances to banks		NLB Loans and advances to customers			Other financial assets
	12-month expected credit losses	Lifetime ECL not credit - impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired	12-month expected credit losses	Lifetime ECL not credit impaired	Lifetime ECL credit impaired
Balance as at 1 Jan 2023	216		- -	21,041	8,185	64,186	203	2	808
Transfers	-		- -	5,836	(3,786)	(2,050)	1	-	(1)
Increases/(Decreases) (note 4.13.)	3 6		- -	(5,236)	4,458	8,093	(131)	1 2	395
Write-offs	-		- -	(1)	(2)	(6,474)	(2)	(1)	(205)
Changes in models/risk parameters (note 4.13.)	2		- -	(3,288)	1,826	(14)	(31)	-	-
Foreign exchange and other movements	-		- -	2	1	743	1	-	(6)
Balance as at 30 Jun 2023	254		- -	18,354	10,682	64,484	4 1	1 3	991
Repayments of written-off receivables (note 4.13.)	-		- -	-	-	6,237	-	-	6 8

b) Movements in allowance for the impairment of debt securities

			NLB Group		in EUR thousands
	Debt securities measured at amortised cost			Debt securities measured at fair value through other comprehensive income
	12-month expected credit losses	Lifetime ECL not credit - impaired	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2024	4,946	576	6,475	5 6	798
Effects of translation of foreign operations to presentation currency	1	1	(3)	(1)	-
Increases/(Decreases) (note 4.13.)	1,531	518	(139)	(8)	-
Changes in models/risk parameters (note 4.13.)	(100)	(185)	(176)	(9)	-
Foreign exchange and other movements	3	2	1	-	-
Balance as at 30 Jun 2024	6,381	912	6,158	3 8	798

					in EUR thousands
			NLB Group
	Debt securities measured at amortised cost			Debt securities measured at fair value through other comprehensive income
	12-month expected credit losses	Lifetime ECL not credit - impaired	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2023	3,519	265	9,029	7 0	6,777
Effects of translation of foreign operations to presentation currency	(2)	(2)	5	-	-
Transfers	(52)	5 2	-	-	-
Increases/(Decreases) (note 4.13.)	652	6 8	(1,511)	(9)	(4,483)
Write-offs	-	-	-	-	(1,537)
Changes in models/risk parameters (note 4.13.)	2 7	515	(73)	2	-
Foreign exchange and other movements	1	-	(1)	-	4 1
Balance as at 30 Jun 2023	4,145	898	7,449	6 3	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.

					in EUR thousands
			NLB
	Debt securities measured Debt securities measured at fair value at amortised cost through other comprehensive income
	12-month expected credit losses	Lifetime ECL not credit - impaired	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2024	2,624	173	1,650	-	798
Increases/(Decreases) (note 4.13.)	554	(47)	351	-	-
Changes in models/risk parameters (note 4.13.)	(34)	-	(8)	-	-
Foreign exchange and other movements	3	2	1	-	-
Balance as at 30 Jun 2024	3,147	128	1,994	-	798

					in EUR thousands
			NLB
	Debt securities measured at amortised cost		Debt securities measured at fair value through other comprehensive income
	12-month expected credit losses	Lifetime ECL not credit - impaired	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2023	1,990	-	2,022	-	6,777
Transfers	(52)	5 2	-	-	-
Increases/(Decreases) (note 4.13.)	294	168	(231)	-	(4,483)
Write-offs	-	-	-	-	(1,537)
Changes in models/risk parameters (note 4.13.)	(13)	-	(14)	-	-
Foreign exchange and other movements	(1)	(1)	(1)	-	4 1
Balance as at 30 Jun 2023	2,218	219	1,776	-	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.

5.12. Financial liabilities measured at amortised cost

Analysis by type

						in EUR thousands
	NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Deposits from banks and central banks	94,283	95,283	-1%	236,249	147,002	61%
- Deposits on demand	64,669	75,756	-15%	194,701	127,726	52%
- Other deposits	29,614	19,527	52%	41,548	19,276	116%
Borrowings from banks and central banks	116,060	140,419	-17%	132,154	82,797	60%
Due to customers	20,693,767	20,732,722	0 %	11,744,113	11,881,563	-1%
- Deposits on demand	17,151,255	17,454,515	-2%	10,377,200	10,674,541	-3%
- Other deposits	3,542,512	3,278,207	8 %	1,366,913	1,207,022	13%
Borrowings from other customers	102,766	99,718	3 %	-	-	-
Debt securities issued	1,874,041	1,338,235	40%	1,874,041	1,338,235	40%
Other financial liabilities	356,144	357,116	0 %	221,061	198,020	12%
Total	23,237,061	22,763,493	2 %	14,207,618	13,647,617	4 %

a) Debt securities issued

							in EUR thousands
				NLB Group and NLB
	Currency Due date		30 Jun 2024		31 Dec 2023
		Interest rate	Carrying amount	Nominal value	Carrying amount	Nominal value
Subordinated bonds
	EUR	6.5.2029	4.20% to 6.5.2024, thereafter 5Y MS + 4.159% p.a.	-	-	45,980	45,000
	EUR	19.11.2029	3.65% to 19.11.2024, thereafter 5Y MS + 3.833% p.a.	10,065	9,900	119,781	120,000
	EUR	5.2.2030	3.40% to 5.2.2025, thereafter 5Y MS + 3.658% p.a.	10,601	10,500	123,176	120,000
	EUR	28.11.2032	10.75% to 28.11.2027, thereafter 5Y MS + 8.298% p.a.	231,314	225,000	220,458	225,000
	EUR	24.1.2034	6.875% to 24.1.2029, thereafter 5Y MS + 4.230% p.a.	306,735	300,000	-	-
Total Subordinated bonds				558,715	545,400	509,395	510,000
Senior Preferred notes
	EUR	19.7.2025	6% to 19.7.2024, thereafter 1Y MS + 4.835% p.a.	316,745	300,000	307,507	300,000
	EUR	27.6.2027	7.125% to 27.7.2026, thereafter 1Y MS + 3.606% p.a.	498,641	500,000	521,333	500,000
	EUR	29.5.2030	4.50% to 29.5.2029, thereafter 1Y MS + 1.650% p.a.	499,940	500,000	-	-
Total Senior Preferred notes				1,315,326	1,300,000	828,840	800,000
Total Debt securities issued				1,874,041	1,845,400	1,338,235	1,310,000

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).

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.

b) Movement of debt securities issued

	in EUR thousand
NLB Group and NLB	Subordinated bonds		Senior Preferred notes
	2024	2023	2024	2023
Balance as at 1 Jan	509,395	508,778	828,840	307,212
Cash flow items:	31,237	(5,970)	461,722	497,708
- new issued	298,611	-	497,347	497,708
- repayments	(260,759)	-	-	-
- repayments of interest	(6,615)	(5,970)	(35,625)	-
Non-Cash flow items:	18,083	17,202	24,764	9,560
- accrued interest	22,737	17,202	29,568	9,560
- other	(4,654)	-	(4,804)	-
Balance as at 30 Jun	558,715	520,010	1,315,326	814,480

c) Other financial liabilities

						in EUR thousands
	NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Items in the course of payment	108,967	93,425	17%	51,413	17,957	186%
Debit or credit card payables	112,302	113,398	-1%	96,178	90,495	6 %
Lease liabilities	32,262	28,944	11%	5,656	5,793	-2%
Accrued expenses	33,354	35,628	-6%	18,080	17,065	6 %
Liabilities to brokerage firms and others for securities purchase and custody services	2,695	288	-	2,550	268	-
Suppliers	8,761	22,872	-62%	3,839	16,614	-77%
Fees and commissions	246	1,242	-80%	117	1,133	-90%
Other financial liabilities	57,557	61,319	-6%	43,228	48,695	-11%
Total	356,144	357,116	0 %	221,061	198,020	12%

5.13. Provisions

a) Analysis by type

						in EUR thousands
		NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Provisions for guarantees and commitments	25,538	32,548	-22%	14,172	17,941	-21%
Stage 1	11,908	18,429	-35%	4,637	7,653	-39%
Stage 2	2,434	1,655	47%	225	319	-29%
Stage 3	11,196	12,464	-10%	9,310	9,969	-7%
Employee benefit provisions	18,695	17,892	4 %	12,209	11,795	4 %
Provisions for legal risks	41,415	44,833	-8%	6,205	6,219	0 %
Restructuring provisions	9,252	12,592	-27%	4,620	7,198	-36%
Other provisions	4,373	5,440	-20%	4,236	5,303	-20%
Total	99,273	113,305	-12%	41,442	48,456	-14%

b) Movements in provisions for guarantees and commitments

			in EUR thousands
	NLB Group
	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2024	18,429	1,655	12,464
Effects of translation of foreign operations to presentation currency	-	1	1
Transfers	528	(7)	(521)
Increases/(Decreases) (note 4.12.)	(426)	784	(1,210)
Changes in models/risk parameters (note 4.12.)	(6,648)	3	466
Foreign exchange and other movements	2 5	(2)	(4)
Balance as at 30 Jun 2024	11,908	2,434	11,196

			in EUR thousands
	NLB Group
	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2023	18,826	1,953	16,830
Effects of translation of foreign operations to presentation currency	1	-	1
Transfers	125	130	(255)
Increases/(Decreases) (note 4.12.)	(1,967)	(420)	(3,017)
Changes in models/risk parameters (note 4.12.)	(2,602)	797	7
Foreign exchange and other movements	(3)	(5)	-
Balance as at 30 Jun 2023	14,380	2,455	13,566

			in EUR thousands
		NLB
	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2024	7,653	319	9,969
Transfers	414	(9)	(405)
Increases/(Decreases) (note 4.12.)	(590)	(60)	(652)
Changes in models/risk parameters (note 4.12.)	(2,840)	(25)	397
Foreign exchange and other movements	-	-	1
Balance as at 30 Jun 2024	4,637	225	9,310

			in EUR thousands
	NLB
	12-month expected credit losses	Lifetime ECL not credit-impaired	Lifetime ECL credit-impaired
Balance as at 1 Jan 2023	8,156	378	11,765
Transfers	105	8 1	(186)
Increases/(Decreases) (note 4.12.)	(522)	(429)	(871)
Changes in models/risk parameters (note 4.12.)	(703)	401	3 6
Balance as at 30 Jun 2023	7,036	431	10,744

5.14. Deferred income tax

				in EUR thousands
		NLB Group	NLB
	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
Deferred income tax assets
Valuation of financial instruments and capital investments	57,617	59,640	54,160	55,098
Impairment of financial assets	10,187	9,704	1,333	1,153
Provisions for liabilities and charges	8,205	9,047	1,562	1,856
Depreciation and valuation of non-financial assets	4,523	4,141	126	123
Fair value adjustments of financial instruments measured at amortised cost	1,580	1,940	1,052	1,412
Tax losses	54,615	54,069	54,615	54,069
Other	339	248	-	-
Total deferred income tax assets	137,066	138,789	112,848	113,711
Deferred income tax liabilities
Valuation of financial instruments	7,906	7,218	3,940	3,556
Depreciation and valuation of non-financial assets	1,285	1,304	167	168
Impairment of financial assets	4,548	3,589	612	538
Fair value adjustments of financial assets measured at amortised cost	7,538	6,651	-	-
Undistributed profit of subsidiaries	11,564	9,626	-	-
Other	381	522	-	-
Total deferred income tax liabilities	33,222	28,910	4,719	4,262
Net deferred income tax assets	117,852	111,305	108,129	109,449
Net deferred income tax liabilities	(14,008)	(1,426)	-	-

				in EUR thousands
	NLB Group		NLB
	6 months ended		6 months ended
	June 2024	June 2023	June 2024	June 2023
Included in the income statement	(2,940)	(3,144)	7 6	(1,166)
- valuation of financial instruments and capital investments	383	406	-	122
- impairment of financial assets	(466)	(949)	180	(1,098)
- provisions for liabilities and charges	(856)	(1,047)	(294)	(201)
- depreciation and valuation of non-financial assets	390	(483)	4	1 1
- fair value adjustments of financial assets measured at amortised cost	(1,232)	(1,330)	(360)	-
- tax losses	546	-	546	-
- undistributed profit of subsidiaries	(1,938)	-	-	-
- other	233	259	-	-
Included in other comprehensive income	(3,123)	(2,025)	(1,396)	1,260
- valuation and impairment of financial assets measured at fair value through other
comprehensive income	(3,123)	(2,025)	(1,396)	1,260

As at 30 June 2024, NLB recognised EUR 112,848 thousand deferred tax assets (31 December 2023: EUR 113,711 thousand). Unrecognised deferred tax assets in NLB amount to EUR 114,991 thousand (31 December 2023: EUR 127,686 thousand) and relates to unrecognised deferred tax assets from tax losses.

5.15. Income tax relating to components of other comprehensive income

in EUR thousands
	NLB Group			NLB
6 months ended June 2024	Before tax	Tax expense	Net of tax	Before tax	Tax expense	Net of tax
Financial assets measured at fair value through other comprehensive income	18,152	(3,123)	15,029	6,344	(1,396)	4,948
Total	18,152	(3,123)	15,029	6,344	(1,396)	4,948

in EUR thousands
	NLB Group			NLB
6 months ended June 2023	Before tax	Tax expense	Net of tax	Before tax	Tax expense	Net of tax
Financial assets measured at fair value through other comprehensive income Total	33,817 33,817	(2,025) (2,025)	31,792 31,792	10,889 10,889	1,260 1,260	12,149 12,149

5.16. Other liabilities

						in EUR thousands
	NLB Group			NLB
		30 Jun 2024 31 Dec 2023	Change		30 Jun 2024 31 Dec 2023	Change
Accrued salaries	39,232	28,228	39%	23,752	19,461	22%
Unused annual leave	7,518	7,657	-2%	2,760	2,761	0 %
Taxes payable	22,146	7,015	-	19,999	4,895	-
Deferred income	11,410	11,376	0 %	3,911	4,376	-11%
Payments received in advance	4,145	4,377	-5%	400	857	-53%
Total	84,451	58,653	44%	50,822	32,350	57%

5.17. Other equity instruments issued

On 23 September 2022, NLB issued subordinated notes intended to qualify as Additional Tier 1 Instruments in the aggregate nominal amount of EUR 82 million. The notes have no scheduled maturity date. The issuer 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 March 2028, the interest on the principal of the notes will accrue at the interest rate of 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 + 7.20% per annum). The coupon payments are discretionary and non-cumulative. The notes 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 nominal amount of the notes. The ISIN code of the notes is SI0022104275. Carrying amount as of 30 June 2024 is EUR 88,142 thousand (31 December 2023: EUR 84,178 thousand).

5.18. Book value per share

				in EUR thousands
		NLB Group	NLB
		30 Jun 2024 31 Dec 2023		30 Jun 2024 31 Dec 2023
Total equity attributable to owners of the parents	3,081,253	2,882,850	2,337,298	2,249,451
Other equity instruments (note 5.17.)	88,142	84,178	88,142	84,178
Total equity attributable to owners of the parents excluding other equity instruments issued	2,993,111	2,798,672	2,249,156	2,165,273
Number of shares (in thousands)	20,000	20,000	20,000	20,000
Book value per share (in EUR)	149.7	139.9	112.5	108.3

Book value per share is calculated as the ratio of net assets' book value excluding other equity instruments issued and the number of shares. NLB Group and NLB do not have any treasury shares.

5.19. Capital adequacy ratio

				in EUR thousands
		NLB Group	NLB
		30 Jun 2024 31 Dec 2023		30 Jun 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	1,561,868	1,235,363	892,725	602,402
Profit eligible - from current year	-	327,398	-	159,833
Accumulated other comprehensive income	(59,356)	(75,662)	(31,368)	(36,316)
Other reserves	13,522	13,522	13,522	13,522
Minority interest	29,101	28,798	-	-
Prudential filters: Additional Valuation Adjustments (AVA)	(2,791)	(2,295)	(1,767)	(1,067)
(-) Goodwill	(4,931)	(3,529)	-	-
(-) Other intangible assets	(37,728)	(37,153)	(22,812)	(20,846)
(-) Deferred tax assets	(46,329)	(47,002)	(52,329)	(54,069)
(-) Insufficient coverage for non-performing exposures	(1,493)	(907)	(161)	(246)
(-) Deduction item related to credit impairments and provisions not included in capital	-	-	(1,575)	-
COMMON EQUITY TIER 1 CAPITAL (CET1)	2,523,241	2,509,911	1,867,613	1,734,591
Capital instruments eligible as AT1 Capital	82,000	82,000	82,000	82,000
Minority interest	5,888	5,907	-	-
Additional Tier 1 capital	87,888	87,907	82,000	82,000
TIER 1 CAPITAL	2,611,129	2,597,818	1,949,613	1,816,591
Capital instruments and subordinated loans eligible as Tier 2 capital	543,321	507,516	543,321	507,516
Minority interest	4,023	3,874	-	-
TIER 2 CAPITAL	547,344	511,390	543,321	507,516
TOTAL CAPITAL	3,158,473	3,109,208	2,492,934	2,324,107
RWA for credit risk	12,819,884	12,168,121	7,872,122	7,449,829
RWA for market risks	1,469,715	1,447,713	823,025	818,113
RWA for credit valuation adjustment risk	20,425	14,200	21,050	15,613
RWA for operational risk	1,707,128	1,707,128	923,943	923,943
TOTAL RISK EXPOSURE AMOUNT (RWA)	16,017,152	15,337,162	9,640,140	9,207,498
Common Equity Tier 1 Ratio	15.8%	16.4%	19.4%	18.8%
Tier 1 Ratio	16.3%	16.9%	20.2%	19.7%
Total Capital Ratio	19.7%	20.3%	25.9%	25.2%

As at 30 June 2024, the total capital ratio (TCR) for the NLB Group stood at 19.7% (or 0.6% p.p. decrease compared to the end of 2023) and the CET1 ratio for the NLB Group stood at 15.8% (or 0.6% p.p. decrease compared to the end of 2023) well above requirements. The lower total capital adequacy derives from higher RWA (EUR 680.0 million compared to the end of 2023), although capital increased by EUR 49.3 million compared to the end of 2023. The Group increased its capital mainly with an increased volume of T2 instruments (EUR 35.8 million) and EUR 16.3 million in revaluation adjustments.

The total capital does not include a part of the 2023 result in the amount of EUR 110 million, which is still envisaged to be paid as a dividend in 2024. Therefore, there will be no effect on the capital once the dividends are paid.

In the first half of 2024, the RWA of the Group for credit risk increased by EUR 451.8 million due to lending activity, which was more predominant in the retail segment. New production in the corporate segment was partially offset by repayments provided by corporate clients in NLB, NLB Banka Skopje, and NLB Banka Sarajevo. Additionally, RWA for high-risk exposures increased due to new project financing loans given, mostly in NLB and NLB Komercijalna Banka, Beograd, and withdrawals of project finance loans approved in the previous periods. However, the decrease in RWA for liquidity assets resulted from reduced exposures towards central governments and central banks, partially offset by higher RWA due to purchasing subordinated bonds.

The increase in RWAs for market risks and Credit Value Adjustments (CVA) in the amount of EUR 28.2 million compared to the end of 2023 during the first six months of 2024 was driven by higher RWA for FX risk of EUR 23.8 million (mainly due to more opened positions in domestic currencies of non-euro subsidiary banks), higher RWA for CVA risk of EUR 6.2 million, and lower RWA for TDI risk of EUR 5.2 million (due to closed net positions from IRS) and higher RWA for Equity of EUR 3.4 million (due to an inclusion of new Collective investment undertakings of new member Generali Investments, Skopje).

5.20. Off-balance sheet liabilities

						in EUR thousands
		NLB Group			NLB
	30 Jun 2024 31 Dec 2023		Change		30 Jun 2024 31 Dec 2023	Change
Loan commitments	2,455,834	2,469,800	-1%	1,755,460	1,822,847	-4%
Non-financial guarantees	1,023,776	963,321	6 %	664,841	625,095	6 %
Financial guarantees	683,667	668,292	2 %	382,472	398,282	-4%
Letters of credit	36,905	41,026	-10%	1,930	10,446	-82%
Other	19,401	17,653	10%	10,058	7,904	27%
	4,219,583	4,160,092	1 %	2,814,761	2,864,574	-2%
Provisions (note 5.13.)	(25,538)	(32,548)	22%	(14,172)	(17,941)	21%
Total	4,194,045	4,127,544	2 %	2,800,589	2,846,633	-2%

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 30 June 2024, these items at the NLB Group level amount to EUR 919,535 thousand (31 December 2023: EUR 915,450 thousand), and at the NLB level EUR 394,360 thousand (31 December 2023: EUR 412,330 thousand).

5.21. 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 at fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the assumptions of NLB Group. This hierarchy gives the highest priority to observable market data when available and the lowest priority to unobservable market data. NLB Group considers relevant and observable market prices in its valuations, where possible.

The fair value hierarchy comprises the following levels:

• Level 1 Quoted prices (unadjusted) on active markets. This level includes listed equities, debt instruments, gold, derivatives, units of investment funds, and other 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. In the absence of a principal market, the most advantageous 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 or liabilities in active markets and prices quoted for identical or 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 volatility of interest rates and foreign exchange rates, is Bloomberg.
• 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 must reflect the assumptions that market participants would use when pricing an asset or liability. 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 with observable market inputs.

Wherever possible, fair value is determined as an 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 and volume to provide pricing information on an ongoing basis. Assets and liabilities measured at fair value in active markets are determined as the market price of a unit (e.g., share) at the measurement date, multiplied by the quantity of units owned by NLB Group. The fair value of assets and liabilities whose market is not active is determined 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 asset or liability that is the subject of the valuation. Unobservable inputs shall reflect 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 value is determined based on valuation reports provided by certified valuators. Valuations are prepared in accordance with the International Valuation Standards (IVS).

a) Financial and non-financial assets and liabilities, measured at fair value in the financial statements

								in EUR thousands
		NLB Group				NLB
30 Jun 2024	Level 1	Level 2	Level 3	Total fair value	Level 1	Level 2	Level 3	Total fair value
Financial assets
Financial instruments held for trading	1,985	11,681	2 6	13,692	1,985	13,452	2 6	15,463
Debt instruments	1,985	-	-	1,985	1,985	-	-	1,985
Derivatives	-	11,681	2 6	11,707	-	13,452	2 6	13,478
Derivatives - hedge accounting	-	45,032	-	45,032	-	45,032	-	45,032
Financial assets measured at fair value through other comprehensive income	2,160,623	592,089		1,247 2,753,959	1,660,737	67,818		357 1,728,912
Debt instruments	2,160,392	504,719	-	2,665,111	1,660,737	6,559	-	1,667,296
Equity instruments	231	87,370	1,247	88,848	-	61,259	357	61,616
Non-trading financial assets mandatorily at fair value through profit or loss	1,932	-	10,756	12,688	-	-	18,882	18,882
Debt instruments	982	-	-	982	-	-	-	-
Equity instruments	950	-	10,756	11,706	-	-	10,756	10,756
Loans	-	-	-	-	-	-	8,126	8,126
Financial liabilities
Financial instruments held for trading	-	10,585	-	10,585	-	12,047	-	12,047
Derivatives	-	10,585	-	10,585	-	12,047	-	12,047
Derivatives - hedge accounting	-	2,646	-	2,646	-	1,887	-	1,887
Financial liabilities measured at fair value through profit or loss	-	8,521	-	8,521	-	4,385	942	5,327
Non-financial assets
Investment properties	-	6,736	19,038	25,774	-	5,413	-	5,413
Non-current assets held for sale	-	3,323	815	4,138	-	3,323	-	3,323

								in EUR thousands
		NLB Group
31 Dec 2023	Level 1	Level 2	Level 3	Total fair value	Level 1	Level 2	NLB Level 3 2 0 2 0 - - 303 - 16,643 - - - 8,858 - 7,785 - - - 1,234	Total fair value
Financial assets
Financial instruments held for trading	-	15,698	2 0	15,718	-	17,937		17,957
Derivatives	-	15,698	2 0	15,718	-	17,937		17,957
Derivatives - hedge accounting	-	47,614	-	47,614	-	47,614		47,614
Financial assets measured at fair value through other comprehensive income	1,452,046	798,154		1,356 2,251,556	955,638	67,071		303 1,023,012
Debt instruments	1,451,824	712,570	7	0 2,164,464	955,638	6,446		962,084
Equity instruments	222	85,584	1,286	87,092	-	60,625		60,928
Non-trading financial assets mandatorily at fair value through profit and loss	5,317	-	8,858	14,175	-			16,643
Debt instruments	5,217	-	-	5,217	-			-
Equity instruments	100	-	8,858	8,958	-			8,858
Loans	-	-	-	-	-			7,785
Financial liabilities
Financial instruments held for trading	-	13,217	-	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	-	4,482	-	1,976		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

b) 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.

Fair value								Derivatives
hierarchy	Equities	Equity stake	Gold	Funds	Debt securities	Loans	Equities	Currency	Interest
1	market value from exchange market		market value from spot market	official price by fund management company	market value from exchange market
2					valuation model		valuation model (underlying instrument in level 1)		valuation model valuation model
3	valuation model	valuation model		valuation model	valuation model	valuation model	valuation model (underlying instrument in level 3)
Transfers
	from level 1 to 3 equity excluded from exchange market from level 1 to 3			from level 1 to 3 fund management company stops publishing regular valuation from level 3 to 1	from level 1 to 2 debt securities excluded from exchange market from level 1 to 2		from level 2 to 3 underlying instrument excluded from exchange market from level 3 to 2
	companies in insolvency proceedings			fund management company starts publishing regular valuation	debt securities not liquid (not trading for 6 months)		underlying instrument included in exchange market
	from level 1 to 3 equity not liquid (not trading for 2 months)				from level 1 to 3 and from 2 to 3 companies in insolvency proceedings
	from level 3 to 1 equity included in exchange market				from level 2 to 1 and from 3 to 1 start trading with debt securities on exchange market
					from level 3 to 2 until valuation parameters are confirmed on ALCO (at least on a quarterly basis)

For the 6 months ended 30 June 2024 and 2023, neither NLB Group nor NLB had any significant transfers between levels of valuation of financial instruments measured at fair value in financial statements.

c) 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:

• debt securities: mostly bonds not quoted on active markets and valuated by a valuation model with inputs which are based on observable market data;
• derivatives: derivatives except forward derivatives and options on equity instruments that are not quoted on active markets;
• the National Resolution Fund.

Non-financial assets on Level 2 of the fair value hierarchy at NLB Group and NLB include investment 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 discounted to the present value.

The input parameters used in the income approach are the risk-free yield curve and the spread over the yield curve (credit, liquidity, country).

Fair values for derivatives are determined using a discounted cash flow model based on the risk-free yield curve. Fair values for options are determined using valuation models for options (the Garman and Kohlhagen model, binomial model, and Black-Scholes model).

At least one of the three valuation methods are used for the valuation of investment property. 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, and the risk premium to account for capital preservation are used. Rents at similar 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. If observable data for similar locations are not available, NLB Group uses data 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 in NLB Group and NLB include:

• equities: mainly financial equities that are not quoted on active markets;
• debt instruments: bonds not quoted on active markets and valuated by valuation model with inputs which are not based on observable market data;
• derivative financial instruments: forward derivatives and options on equity instruments 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 valuation models for options (Garman and Kohlhagen model, binomial model and 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 information system;
• loans measured at fair value, which according to IFRS 9 do not pass SPPI test. 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 value of collateral and other pay off estimates can be used.

Non-financial assets on 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 financial assets mentioned in the first bullet: income, market, and cost approaches.

NLB 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.

At least one of the three valuation methods are used for the valuation of investment property. 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 and the risk premium to account for capital preservation are used. Rents at similar 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. If observable data for similar locations are not available, NLB Group uses data from wider locations and adjusts it appropriately.

Movements of financial assets and liabilities at Level 3

	Financial instruments held for trading	Financial assets measured at fair value through OCI		Non-trading financial assets mandatorily at fair value through profit or loss	in EUR thousands Total financial assets
NLB Group	Derivatives	Debt Equity instruments instruments		Equity instruments
Balance as at 1 Jan 2024	20	70	1,286	8,858	10,234
Valuation:
- through profit or loss	6	-	-	989	995
Exchange differences	-	-	-	209	209
Increases	-	-	54	700	754
Decreases	-	(70)	(93)	-	(163)
Balance as at 30 Jun 2024	26	-	1,247	10,756	12,029

					in EUR thousands
	Financial instruments held for trading	Financial assets measured at fair value through OCI		Non-trading financial assets mandatorily at fair value through profit or loss	Total financial assets
NLB Group	Derivatives	Debt instruments	Equity instruments	Equity instruments
Balance as at 1 Jan 2023	17	2,236	1,256	7,519	11,028
Effects of translation of foreign operations to presentation currency	-	-	2	-	2
Valuation:
- through profit or loss	4	-	-	745	749
- recognised in other comprehensive income	-	5,768	30	-	5,798
Exchange differences	-	20	-	(119)	(99)
Increases	-	-	-	150	150
Decreases	-	(6,347)	(19)	-	(6,366)
Transfers to Level 3	-	(1,537)	-	-	(1,537)
Balance as at 30 Jun 2023	21	140	1,269	8,295	9,725

							in EUR thousands
	Financial instruments held for trading	fair value through OCI	Financial assets measured at	Non-trading financial assets mandatorily at fair value through profit or loss		Total financial	Financial liabilities measured at fair value through profit or loss
NLB	Derivatives	Debt instruments	Equity instruments	Equity instruments	Loans and advances	assets	Loans and other financial liabilities
Balance as at 1 Jan 2024	20	-	303	8,858	7,785	16,966	1,234
Valuation:
- through profit or loss	6	-	-	989	125	1,120	(292)
Exchange differences	-	-	-	209	-	209	-
Increases	-	-	54	700	219	973	-
Decreases	-	-	-	-	(3)	(3)	-
Balance as at 30 Jun 2024	26	-	357	10,756	8,126	19,265	942

							in EUR thousands
	Financial instruments	Financial assets measured at fair value through OCI held for trading		Non-trading financial assets mandatorily at fair value through profit or loss		Total financial assets	Financial liabilities measured at fair value through profit or loss
NLB	Derivatives	Debt instruments	Equity instruments	Equity instruments	Loans and advances		Loans and other financial liabilities
Balance as at 1 Jan 2023	17	2,026	269	7,519	7,892	17,723	1,786
Valuation:						-
- through profit or loss	4	-	-	745	574	1,323	(176)
- recognised in other comprehensive income	-	5,768	18	-	-	5,786	-
Exchange differences	-	20	-	(119)	-	(99)	-
Increases	-	-	-	150	260	410	-
Decreases	-	(6,277)	-	-	(485)	(6,762)	-
Transfers to Level 3	-	(1,537)	-	-	-	(1,537)	-
Balance as at 30 Jun 2023	21	-	287	8,295	8,241	16,844	1,610

In the 6 months ended 30 June 2024 and 2023, NLB Group and NLB recognised the following unrealised gains or losses for financial instruments that were at Level 3 as at 30 June:

				in EUR thousands
6 months ended 30 Jun 2024			NLB Group
	Financial assets held for trading	Financial assets measured at fair value through OCI		Non-trading financial assets mandatorily at fair value through profit or loss
	Derivatives	Debt instruments	Equity instruments	Equity instruments
Items of Income statement
Gains less losses from financial assets and liabilities held for trading	6	-		- -
Gains less losses from non-trading assets mandatorily at fair value through profit or loss	-	-		- 989
Foreign exchange translation gains less losses	-	-		- 209

				in EUR thousands
6 months ended 30 Jun 2023			NLB Group
	Financial assets held for trading	Financial assets measured at fair value through OCI		Non-trading financial assets mandatorily at fair value through profit or loss
	Derivatives	Debt instruments	Equity instruments	Equity instruments
Items of Income statement
Gains less losses from financial assets and liabilities held for trading	4	-		- -
Gains less losses from non-trading assets mandatorily at fair value through profit or loss	-	-		- 745
Foreign exchange translation gains less losses	-	-		- (119)
Item of Other comprehensive income
Financial assets measured at fair value through other comprehensive income	-	-	3	0 -

					in EUR thousands
6 months ended 30 Jun 2024		NLB
	Financial assets held for trading	Financial assets measured at fair value through OCI	Non-trading financial assets mandatorily at fair value through profit or loss		Financial liabilities measured at fair value through profit or loss
	Derivatives	Equity instruments	Equity instruments	Loans and advances	Loans and other financial liabilities
Items of Income statement
Gains less losses from financial assets and liabilities held for trading	6		- -	-	-
Gains less losses from non-trading assets mandatorily at fair value through profit or loss	-		- 989	125	292
Foreign exchange translation gains less losses	-		- 209	-	-

				in EUR thousands
		NLB
Financial assets held for trading	Financial assets fair value through OCI	Non-trading financial assets or loss		Financial liabilities measured at fair value through profit or loss
Derivatives	Equity instruments	Equity instruments	Loans and advances	Loans and other financial liabilities
		-	-	-
-		745	574	176
-		(119)	-	-
-	1	-	-	-
		measured at 4	- - - 8	mandatorily at fair value through profit

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 Jan	20,189	23,447	801	11,201
Effects of translation of foreign operations to presentation currency	4 2	3 6	2	7
Additions	-	8 6	8 1	-
Disposals	(1,193)	(444)	(69)	(5,989)
Balance as at 30 Jun	19,038	23,125	815	5,219

e) Fair value of financial instruments not measured at fair value in financial statements

Financial instruments not measured at fair value in financial statements are not managed on a fair value basis. For respective instruments fair values are calculated for disclosure purposes only and do not impact NLB Group statement of financial position or income statement.

The table below shows estimated fair values of financial instruments not measured at fair value in the statement of financial position.

								in EUR thousands
			NLB Group		NLB
	30 Jun 2024		31 Dec 2023		30 Jun 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	3,139,562	3,055,928	2,522,229	2,440,596	2,427,803	2,337,962	1,966,169	1,889,481
- loans and advances to banks	410,678	410,265	547,640	547,555	192,341	192,341	149,011	149,011
- loans and advances to customers		14,399,307 13,792,108		13,734,601 13,256,192	7,383,708	7,030,925	7,148,283	6,895,232
- other financial assets	170,663	170,663	165,962	165,962	130,926	130,926	101,596	101,596
Financial liabilities measured at amortised cost
- deposits from banks and central banks	94,283	93,968	95,283	95,657	236,249	235,950	147,002	147,379
- borrowings from banks and central banks	116,060	99,467	140,419	134,020	132,154	115,636	82,797	75,152
- due to customers		20,693,767 20,679,558		20,732,722 20,746,603		11,744,113 11,746,699 11,881,563 11,892,641
- borrowings from other customers	102,766	103,932	99,718	101,649	-	-	-	-
- debt securities issued	1,874,041	1,963,419	1,338,235	1,363,301	1,874,041	1,963,419	1,338,235	1,363,301
- other financial liabilities	356,144	356,144	357,116	357,116	221,061	221,061	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 from customers

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 are not impaired, the fair value is close to zero. 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.

Fair value hierarchy of financial instruments not measured at fair value in financial statements

								in EUR thousands
		NLB Group			NLB
30 Jun 2024	Level 1	Level 2	Level 3	Total fair value	Level 1	Level 2	Level 3	Total fair value
Financial assets measured at amortised cost
- debt securities	2,439,638	609,050	7,240	3,055,928	2,224,541	113,421	-	2,337,962
- loans and advances to banks	-	410,265	-	410,265	-	192,341	-	192,341
- loans and advances to customers	-		- 13,792,108 13,792,108		-	-	7,030,925	7,030,925
- other financial assets	-	-	170,663	170,663	-	-	130,926	130,926
Financial liabilities measured at amortised cost
- deposits from banks and central banks	-	93,968	-	93,968	-	235,950	-	235,950
- borrowings from banks and central banks	-	99,467	-	99,467	-	115,636	-	115,636
- due to customers		- 20,679,558		- 20,679,558		- 11,746,699		- 11,746,699
- borrowings from other customers	-	-	103,932	103,932	-	-	-	-
- debt securities issued	1,963,419	-	-	1,963,419	1,963,419	-	-	1,963,419
- other financial liabilities	-	-	356,144	356,144	-	-	221,061	221,061

								in EUR thousands
			NLB Group		NLB
31 Dec 2023	Level 1	Level 2	Level 3	Total fair value	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	1,779,995	109,486	-	1,889,481
- loans and advances to banks	-	547,555	-	547,555	-	149,011	-	149,011
- loans and advances to customers	-			- 13,256,192 13,256,192	-	-	6,895,232	6,895,232
- other financial assets	-	-	165,962	165,962	-	-	101,596	101,596
Financial liabilities measured at amortised cost
- deposits from banks and central banks	-	95,657	-	95,657	-	147,379	-	147,379
- borrowings from banks and central banks	-	134,020	-	134,020	-	75,152	-	75,152
- due to customers		- 20,746,603		- 20,746,603		- 11,892,641		- 11,892,641
- borrowings from other customers	-	-	101,649	101,649	-	-	-	-
- debt securities issued	1,363,301	-	-	1,363,301	1,363,301	-	-	1,363,301
- other financial liabilities	-	-	357,116	357,116	-	-	198,020	198,020

6. Analysis by segment for NLB Group

a) Segments⁸

								in EUR thousands
	NLB Group
6 months ended 30 June 2024	Retail Banking in Slovenia	Corporate and Investment Banking in Slovenia	Strategic Foreign Markets	Financial Markets in Slovenia	Non-Core Members	Other activities	Unallocated	Total
Total net income	211,007	89,061	305,139	(577)	903	4,201		609,734
Net income from external customers	122,761	110,416	310,256	54,384	600	5,611	-	604,028
Intersegment net income	88,246	(21,355)	(5,117)	(54,961)	303	(1,410)	-	5,706
Net interest income	159,416	65,326	237,822	(902)	539	(1,758)	-	460,443
Net interest income from external customers	73,760	91,507	240,567	54,592	275	(258)	-	460,443
Intersegment net interest income	85,656	(26,181)	(2,745)	(55,494)	264	(1,500)	-	-
Administrative expenses	(72,019)	(31,173)	(117,066)	(5,980)	(2,309)	(25,047)	-	(253,594)
Depreciation and amortisation	(6,208)	(3,414)	(15,016)	(377)	(109)	(2,017)	-	(27,141)
Reportable segment profit/(loss) before impairment and provision charge	132,780	54,474	173,057	(6,934)	(1,515)	(22,863)	-	328,999
Other net gains/(losses) from equity instruments in associates
and joint ventures	1,666	-	-	-	-	-	-	1,666
Impairment and provisions charge	(16,714)	9,089	18,078	(784)	1,416	(677)	-	10,408
Profit/(loss) before income tax	117,732	63,563	191,135	(7,718)	(99)	(23,540)	-	341,073
Owners of the parent	117,732	63,563	182,588	(7,718)	(99)	(23,540)	-	332,526
Non-controlling interests	-	-	8,547	-	-	-	-	8,547
Income tax	-	-	-	-	-	-	(40,493)	(40,493)
Profit for the year								292,033
30 Jun 2024
Reportable segment assets	3,902,470	3,468,669	11,163,433	7,568,487	29,543	468,760	-	26,601,362
Investments in associates and joint ventures	12,302	-	-	-	-	-	-	12,302
Reportable segment liabilities	9,605,308	2,160,872	9,383,241	2,069,879	1,989	246,469	-	23,467,758

								in EUR thousands
	NLB Group
6 months ended 30 June 2023	Retail Banking in Slovenia	Corporate and Investment Banking in Slovenia	Strategic Foreign Markets	Financial Markets in Slovenia	Non-Core Members	Other activities	Unallocated	Total
Total net income	158,866	66,824	260,929	27,729	(1,442)	3,302	-	516,208
Net income from external customers	119,960	92,346	261,158	36,709	(1,726)	3,207	-	511,654
Intersegment net income	38,906	(25,522)	(229)	(8,980)	284	95	-	4,554
Net interest income	110,362	45,233	196,383	27,711	476	(200)	-	379,965
Net interest income from external customers	72,897	70,990	199,345	36,615	364	(246)	-	379,965
Intersegment net interest income	37,465	(25,757)	(2,962)	(8,904)	112	46	-	-
Administrative expenses	(67,267)	(31,749)	(104,098)	(4,376)	(6,173)	(8,814)	-	(222,477)
Depreciation and amortisation	(5,337)	(2,619)	(13,809)	(305)	(223)	(495)	-	(22,788)
Reportable segment profit/(loss) before impairment and provision charge	86,262	32,456	143,022	23,048	(7,838)	(6,007)	-	270,943
Other net gains/(losses) from equity instruments in associates
and joint ventures	600	-	-	-	-	-	-	600
Impairment and provisions charge	(15,367)	6,859	16,948	4,214	1,585	3,540	-	17,779
Profit/(loss) before income tax	71,495	39,315	159,970	27,262	(6,253)	(2,467)	-	289,322
Owners of the parent	71,495	39,315	153,193	27,262	(6,253)	(2,467)	-	282,545
Non-controlling interests	-	-	6,777	-	-	-	-	6,777
Income tax	-	-	-	-	-	-	(39,845)	(39,845)
Profit for the year								242,700
31 Dec 2023
Reportable segment assets	3,778,767	3,376,370	11,058,835	7,232,457	47,097	435,940	-	25,929,466
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	-	22,993,995

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, which is according to its business activities divided into two segments.

The segments of NLB Group are divided into core and non-core segments.

⁸ 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 core segments are the following:

• Retail Banking in Slovenia covers individuals and micro companies, asset management (NLB Skladi), and the part of NLB Lease&Go, leasing, Ljubljana operating with retail clients, as well as the part of the result contributed by the associated company Bankart.
• Corporate and Investment Banking in Slovenia covers Key Corporate Clients, SMEs, Cross-border corporate financing, Investment Banking and Custody, Restructuring and Workout, and the part of NLB Lease&Go, leasing, 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 company KomBank Invest, Beograd, NLB DigIT, Beograd, NLB Lease&Go Skopje, NLB Lease&Go Leasing Beograd and newly acquired Generali Investments, Skopje.
• 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 and also Real Estate entities from 2024 (the latter were previously in the non-core segment).

Non-Core Members include the operations of non-core NLB Group members, i.e. entities in liquidation, NLB Srbija, and NLB Crna Gora.

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.

								in EUR thousands
	Revenues		Net income		Non-current assets		Total assets
	6 months ended 6 months ended
NLB Group	June	June	June	June	30 Jun 2024 31 Dec 2023		30 Jun 2024 31 Dec 2023
	2024	2023	2024	2023
Slovenia	417,935	325,373	293,037	253,221	159,530	160,574		15,417,340 14,851,067
South East Europe	372,771	305,119	310,490	260,612	224,342	223,185		11,177,424 11,072,317
Bosnia and Herzegovina	57,804	48,431	49,194	39,321	38,642	38,861	1,993,946	1,934,891
Croatia	-	-	-	(369)	-	-	1,160	1,194
Kosovo	37,757	32,011	30,319	26,941	13,696	13,810	1,233,089	1,229,426
Montenegro	32,715	28,368	27,102	23,193	22,156	23,163	874,199	928,913
North Macedonia	62,471	53,083	52,185	43,696	34,248	34,276	1,886,151	1,895,297
Serbia	182,024	143,226	151,690	127,830	115,600	113,075	5,188,879	5,082,596
Western Europe	112	-	501	(2,179)	1 0	2 7	18,900	18,601
Germany	-	-	2 8	4 7	1 0	2 7	706	552
Switzerland	112	-	473	(2,226)	-	-	18,194	18,049
Total	790,818	630,492	604,028	511,654	383,882	383,786		26,613,664 25,941,985

b) Geographical information

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

7. Related-party transactions

Related-party transactions with Management Board and other key management personnel, their family members and companies these related parties have control, joint control or significant influence

A number of banking transactions are entered into with related parties within regular course of business. The volume of related-party transactions and the outstanding balances are as follows:

								in EUR thousands
	Management Board and other key management personnel			Family members of the Management Board and other key management personnel		Companies in which members of the Management Board, key management personnel, or their family members have control, joint control or a significant influence	Supervisory Board
NLB Group	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
Loans and deposits issued	1,880	1,855	521	444	-	-	1 5	2 4
Deposits received	2,951	2,367	1,123	1,153	440	272	464	417
Other financial liabilities	-	1	-	-	9	1 2	-	-
Other financial liabilities measured at fair value through
profit or loss	4,385	2,075	-	-	-	-	-	-
Other operating liabilities	15,032	11,066	-	-	-	-	-	-
Guarantees issued and loan commitments	305	287	7 1	6 4	-	-	1 5	1 4
NLB	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
Loans and deposits issued	1,879	1,854	521	444	-	-	1 5	2 4
Deposits received	2,936	2,357	1,123	1,153	440	272	464	417
Other financial liabilities	-	1	-	-	9	1 2	-	-
Other financial liabilities measured at fair value through
profit or loss	4,385	1,975	-	-	-	-	-	-
Other operating liabilities	15,046	11,080	-	-	-	-	-	-
Guarantees issued and loan commitments	299	279	7 1	6 4	-	-	1 5	1 4
	6 months ended		6 months ended		6 months ended		6 months ended
NLB Group	June	June	June	June	June	June	June	June
	2024	2023	2024	2023	2024	2023	2024	2023
Interest income	3 0	2 6	1 0	8	-	-	-	1
Interest expenses	(16)	(14)	(3)	(3)	-	-	(2)	(2)
Fee income	1 0	7	5	4	1	1	1	-
Other income	9	6	-	-	-	-	-	-
Other expenses	-	-	-	-	(54)	(45)	-	-
	6 months ended		6 months ended		6 months ended		6 months ended
NLB	June	June	June	June	June	June	June	June
	2024	2023	2024	2023	2024	2023	2024	2023
Interest income	3 0	2 6	1 0	8	-	-	-	1
Interest expenses	(16)	(14)	(3)	(3)	-	-	(2)	(2)
Fee income	1 0	7	5	4	1	1	1	-
Other income	9	6	-	-	-	-	-	-
Other expenses	-	-	-	-	(54)	(45)	-	-

Key management compensation – payments in the period

				in EUR thousands
	Management Board		Other key management personnel
	6 months ended		6 months ended
NLB Group and NLB	June 2024	June 2023	June 2024	June 2023
Short-term benefits	1,809	1,540	3,666	3,322
Cost refunds	4	5	6 0	5 6
Long-term bonuses
- severance pay	-	-	183	120
- other benefits	9	9	9 1	8 1
- variable part of payments	951	299	2,361	1,252
Total	2,773	1,853	6,361	4,831

Short-term benefits include:

• monetary benefits (gross salaries, supplementary insurance, holiday allowances, other bonuses); and
• non-monetary benefits (company cars, health care, residential facilities, etc.).

The reimbursement of cost comprises food allowances, travel expenses and use of own resources.

Related-party transactions with subsidiaries, associates and joint ventures

				in EUR thousands
		NLB Group
		Associates Joint ventures
		30 Jun 2024 31 Dec 2023		30 Jun 2024 31 Dec 2023
Loans and deposits issued	3	1 0	-	-
Deposits received	8,205	6,168	1,469	1,451
Other financial assets	3	7	-	1
Other financial liabilities	263	1,460	-	-
Guarantees issued and loan commitments	3 7	3 0	-	-
		6 months ended		6 months ended
	June	June	June	June
	2024	2023	2024	2023
Interest income	-	2 0	-	1
Interest expenses	-	-	(22)	(17)
Fee income	4	3	-	-
Fee expenses	(8,057)	(6,450)	-	-
Other income	2 1	2 2	2	3
Other expenses	(339)	(345)	-	-

						in EUR thousands
				NLB
		Subsidiaries		Associates		Joint ventures
		30 Jun 2024 31 Dec 2023		30 Jun 2024 31 Dec 2023	30 Jun 2024 31 Dec 2023
Loans and deposits issued	594,376	480,446	3	1 0	-	-
Loans and deposits received	257,603	104,949	8,205	6,168	377	395
Derivatives
Fair value	1,150	5 4	-	-	-	-
Contractual amount	257,636	298,290	-	-	-	-
Other financial assets	12,649	2,058	3	7	-	-
Other financial liabilities	4,296	4,615	5	1,340	-	-
Guarantees issued and loan commitments	54,851	87,094	3 7	3 0	-	-
Received loan commitments and financial guarantees	10,923	10,741	-	-	-	-
	6 months ended		6 months ended		6 months ended
	June	June	June	June	June	June
	2024	2023	2024	2023	2024	2023
Interest income	13,972	10,350	-	2 0	-	1
Interest expenses	(4,746)	(2,923)	-	-	-	-
Fee income	7,023	4,885	4	3	-	-
Fee expenses	(1)	(1)	(6,290)	(4,871)	-	-
Other income	1,064	1,063	2 1	2 2	1	1
Other expenses	(3,081)	(2,451)	(336)	(322)	-	-
Gains less losses from financial assets and liabilities held for trading	(2,479)	(274)	-	-	-	-
Gains less losses from non-trading financial assets mandatorily at fair value through profit or loss	417	725	-	-	-	-

Related-party transactions with major shareholder with significant influence

				in EUR thousands
	NLB Group		NLB
Shareholder	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
Loans and deposits issued	13,836	13,384	13,836	13,384
Investments in securities	720,648	577,529	699,001	516,926
Other financial assets	102	6 5	102	6 5
Other financial liabilities	140	2 0	140	2 0
Guarantees issued and loan commitments	1,419	1,466	1,419	1,466
	6 months ended		6 months ended
	June	June	June	June
	2024	2023	2024	2023
Interest income	5,467	4,033	5,091	3,435
Interest expenses	-	(21)	-	(21)
Fee income	647	260	647	260
Fee expenses	(12)	(11)	(12)	(11)
Other income	124	145	124	145
Other expenses	(1)	(3)	(1)	(3)
Gains less losses from financial assets and liabilities not measured at fair value through
profit or loss	-	(609)	-	(609)

NLB Group discloses all transactions with the major shareholder with significant influence. For transactions with other government-related entities, NLB Group discloses individually significant transactions above EUR 40 million and their business accounts balances.

				in EUR thousands
		Amount of significant transactions concluded during the period	Number of significant transactions concluded during the period
	6 months ended	12 months ended	6 months ended	12 months ended
NLB Group and NLB	June 2024	December 2023	June 2024	December 2023
Guarantees issued and loan commitments	-	50,000	-	1

				in EUR thousands
		Balance of all significant transactions at end of the period		Number of significant transactions at end of the period
NLB Group and NLB	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
Loans	371,548	406,005	7	1 0
Debt securities measured at amortised cost	62,273	64,132	1	1
Borrowings, deposits and business accounts	96,124	30,399	1	3
Guarantees issued and loan commitments	152,500	152,500	2	2

	in EUR thousands
	Effects in the income statement during the period
	6 months ended
NLB Group and NLB	June 2024	June 2023
Interest income from loans	9,177	7,749
Fees and commissions income	18	35
Interest income from debt securities measured at amortised cost and net valuation effects from
hedge accounting	770	456

8. Subsidiaries

NLB Group's subsidiaries as at 30 June 2024:

						in %
	Nature of	Country of	NLB Group		NLB
	Business	Incorporation		Shareholding Voting rights	Shareholding Voting rights
Core members
NLB Banka a.d., Skopje	Banking	North Macedonia	86.97	86.97	86.97	86.97
NLB Banka a.d., Podgorica	Banking	Montenegro	99.87	99.87	99.87	99.87
NLB Banka a.d., Banja Luka	Banking	Bosnia and Herzegovina	99.85	99.85	99.85	99.85
NLB Banka sh.a., Prishtina	Banking	Kosovo	82.38	82.38	82.38	82.38
NLB Banka d.d., Sarajevo	Banking	Bosnia and Herzegovina	97.34	97.35	97.34	97.35
NLB Komercijalna banka a.d. Beograd	Banking	Serbia	100	100	100	100
KomBank Invest a.d. Beograd	Finance	Serbia	100	100	-	-
NLB Skladi d.o.o., Ljubljana	Finance	Slovenia	100	100	100	100
Generali Investments a.d. Skopje	Finance	North Macedonia	100	100	-	-
NLB Lease&Go, leasing d.o.o., Ljubljana	Finance	Slovenia	100	100	100	100
NLB Lease&Go, d.o.o. Skopje**	Finance	North Macedonia	100	100	-	-
NLB Lease&Go leasing d.o.o. Beograd***	Finance	Serbia	99.64	99.64	-	-
NLB Zavod za upravljanje kulturne dediščine, Ljubljana	Cultural heritage management Slovenia		100	100	100	100
NLB DigIT d.o.o., Beograd	IT services	Serbia	100	100	100	100
NLB Real Estate d.o.o., Podgorica	Real estate	Montenegro	100	100	100	100
NLB Real Estate d.o.o., Beograd	Real estate	Serbia	100	100	100	100
NLB Real Estate d.o.o., Ljubljana	Real estate	Slovenia	100	100	100	100
Non-core members
NLB Leasing d.o.o., Ljubljana - v likvidaciji*	Finance	Slovenia	100	100	-	-
NLB Crna Gora d.o.o., Podgorica	Finance	Montenegro	100	100	100	100
NLB InterFinanz AG, Zürich in Liquidation	Finance	Sw itzerland	100	100	100	100
NLB InterFinanz d.o.o., Beograd	Finance	Serbia	100	100	-	-
LHB AG, Frankfurt	Finance	Germany	100	100	100	100
PRO-REM d.o.o., Ljubljana - v likvidaciji****	Real estate	Slovenia	100	100	-	-
OL Nekretnine d.o.o., Zagreb - u likvidaciji	Real estate	Croatia	100	100	-	-
NLB Srbija d.o.o., Beograd	Real estate	Serbia	100	100	100	100
Privatinvest d.o.o., Ljubljana*	Real estate	Slovenia	100	100	100	100
Until 30 June 2024 in 100% ow nership of NLB Lease&Go, leasing, d.o.o., Ljubljana; as at 1 July 2024 ceased to exist due to merged w 51% ow nership of NLB Lease&Go, leasing, d.o.o., Ljubljana and 49% ow 50.73% ow nership of NLB Lease&Go, leasing, d.o.o., Ljubljana and 48.91% ow 100% ow nership of NLB Real Estate d.o.o., Ljubljana. ***On 1 July 2024 ceased to exist due to merged w	nership of NLB Banka a.d., Skopje. ith NLB Real Estate d.o.o., Ljubljana.	nership of NLB Komercijalna banka a.d. Beograd.		ith NLB Lease&Go, leasing, d.o.o., Ljubljana.

NLB Group's subsidiaries as at 31 December 2023:

						in %
	Nature of	Country of	NLB Group		NLB
	Business	Incorporation		Shareholding Voting rights	Shareholding Voting rights
Core members
NLB Banka a.d., Skopje	Banking	North Macedonia	86.97	86.97	86.97	86.97
NLB Banka a.d., Podgorica	Banking	Montenegro	99.87	99.87	99.87	99.87
NLB Banka a.d., Banja Luka	Banking	Bosnia and Herzegovina	99.85	99.85	99.85	99.85
NLB Banka sh.a., Prishtina	Banking	Kosovo	82.38	82.38	82.38	82.38
NLB Banka d.d., Sarajevo	Banking	Bosnia and Herzegovina	97.34	97.35	97.34	97.35
NLB Komercijalna banka a.d. Beograd	Banking	Serbia	100	100	100	100
KomBank Invest a.d. Beograd	Finance	Serbia	100	100	-	-
NLB Skladi d.o.o., Ljubljana	Finance	Slovenia	100	100	100	100
NLB Lease&Go, leasing d.o.o., Ljubljana	Finance	Slovenia	100	100	100	100
NLB Lease&Go, d.o.o. Skopje**	Finance	North Macedonia	100	100	-	-
NLB Lease&Go leasing d.o.o. Beograd***	Finance	Serbia	99.64	99.64	-	-
NLB Zavod za upravljanje kulturne dediščine, Ljubljana	Cultural heritage management Slovenia		100	100	100	100
NLB DigIT d.o.o., Beograd	IT services	Serbia	100	100	100	100
Non-core members
NLB Leasing d.o.o., Ljubljana - v likvidaciji*	Finance	Slovenia	100	100	-	-
NLB Crna Gora d.o.o., Podgorica	Finance	Montenegro	100	100	100	100
NLB InterFinanz AG, Zürich in Liquidation	Finance	Sw itzerland	100	100	100	100
NLB InterFinanz d.o.o., Beograd	Finance	Serbia	100	100	-	-
LHB AG, Frankfurt	Finance	Germany	100	100	100	100
REAM d.o.o., Podgorica	Real estate	Montenegro	100	100	100	100
REAM d.o.o., Beograd - Novi Beograd	Real estate	Serbia	100	100	100	100
S-REAM d.o.o., Ljubljana	Real estate	Slovenia	100	100	100	100
PRO-REM d.o.o., Ljubljana - v likvidaciji	Real estate	Slovenia	100	100	-	-
OL Nekretnine d.o.o., Zagreb - u likvidaciji	Real estate	Croatia	100	100	-	-
NLB Srbija d.o.o., Beograd	Real estate	Serbia	100	100	100	100
Privatinvest d.o.o., Ljubljana	Real estate	Slovenia	100	100	100	100
100% ow nership of NLB Lease&Go, leasing, d.o.o., Ljubljana. 51% ow nership of NLB Lease&Go, leasing, d.o.o., Ljubljana and 49% ow **50.73% ow nership of NLB Lease&Go, leasing, d.o.o., Ljubljana and 48.91% ow	nership of NLB Banka a.d., Skopje.	nership of NLB Komercijalna banka a.d. Beograd.

9. Events after the end of the reporting period

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 million, 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.

Glossary of Terms and Definitions

AC	Amortised Cost
ALCO	Asset-Liability Committee
ALM	Asset and Liability Management
API	Alternative Performance Indicators
AT1	Additional Tier 1 capital
AVA	Additional Valuation Adjustments
BiH	Bosnia and Herzegovina
BoS	Bank of Slovenia
bps	Basis Points
CB	Central Bank
CBR	Combined Buffer Requirement
CC	Contact Centre
CEO	Chief Executive Officer
CET1	Common Equity Tier 1
CFO	Chief Financial Officer
CMO	Chief Marketing Officer
CRO	Chief Risk Officer
CIR	Cost-to-Income Ratio
CoC	Cost of Capital
CoR	Cost of Risk
CRE	Commercial Real Estate
CRR	Capital Requirement Regulation
CSD	Central Security Depository
CSRD	Corporate Sustainable Reporting Directive
CVA	Credit Value Adjustment
DGS	Deposit Guarantee Scheme
DSCR	Debt Service Coverage Ratio
EBA	European Banking Authority
EBRD	European Bank for Reconstruction and Development
ECB	European Central Bank
ECL	Expected Credit Losses
ESI	Economic Sentiment Indicator
ESG	Environmental, Social and Governance
ESRS	European sustainability reporting standards
EVE	Economic Value of Equity
FTP	Fund Transfer Price
FVOCI	Fair Value Through Other Comprehensive Income
FVTPL	Fair Value Through Profit or Loss
FX	Foreign Exchange
GDP	Gross Domestic Product
GDR	Global Depositary Receipts
HICP	Harmonised Index of Consumer Prices
HQLA	High-Quality Liquid Assets
IAS	International Accounting Standard
ICAAP	Internal Capital Adequacy Assessment Process

IFRS	International Financial Reporting Standard
ILAAP	Internal Liquidity Adequacy Assessment Process
IRS	Interest Rate Swaps
IVS	International Valuation Standards
KPI	Key Performance Indicator
LCR	Liquidity Coverage Ratio
LRE	Leverage Ratio Exposure
LTD	Loan-to-Deposit Ratio
LTV	Loan-to-value
M&A	Mergers and Acquisitions
MPE	Multiple Point of Entry
MREL	Minimum Requirement for Own Funds and Eligible Liabilities
MS	Mid-Swap Rate
NBS	National Bank of Serbia
NFC	Non-Financial Corporation
NII	Net Interest Income
NLB or the Bank	NLB d.d., Ljubljana
NPE	Non-Performing Exposures
NPL	Non-Performing Loans
NSFR	Net Stable Funding Ratio
OBM	Operational Business Margin
OCI	Other Comprehensive Income
OCR	Overall Capital Requirement
O-SII	Other Systemically Important Institution
P1R	Pillar 1 Requirements
P2eM	Person to e-Merchant
P2G	Pillar 2 Guidance
P2R	Pillar 2 Requirements
PMI	Purchasing Managers' Index
p.p.	Percentage point(s)
PRS	Preferred Resolution Strategy
P&L	Profit and Loss
ROA	Return on Assets
ROE	Return on Equity
RoS	Republic of Slovenia
RWA	Risk Weighted Assets
SEE	South-Eastern Europe
SEE banking members	NLB Group members in the following countries: Serbia, North Macedonia, Bosnia and Herzegovina, Kosovo, and Montenegro
SICR	Significant increase in Credit Risk
SME	Small and Medium-sized Enterprises
SPPI	Solely Payments of Principal and Interest
SREP	Supervisory Review and Evaluation Process
SRF	Single Resolution Fund
T1	Tier 1 Capital
TCR	Total Capital Ratio
TDI	Traded Debt Instruments
The Group	NLB Group

TREA	Total Risk Exposure Amount
TSCR	Total SREP Capital Requirement
UNEP FI	United Nations Environment Programme Finance Initiative