NLB

M&A Activity • Mar 7, 2022

NLB Group Webcast

Acquisition of Sberbank banka d.d.

March 4 th, 2022

Disclaimer

This presentation has been prepared by Nova Ljubljanska banka d.d., Ljubljana (the "Company"). This presentation has been prepared solely for the purpose of informative presentation of the business conduct of the Company. This presentation has not been approved by any regulatory authority and does not constitute or form part of any offer to sell or issue or invitation to purchase, or any solicitation of any offer to purchase, any securities of the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

This presentation should not be considered as a recommendation that any recipient of this presentation should purchase or sell any of the Companies financial instruments or groups of financial instruments or assets. This presentation does not include all necessary information, which should be considered by the recipient of this presentation when making a decision on purchasing any of the the Companies financial instruments or assets. Each recipient of this presentation contemplating purchasing any of the Companies financial instruments or assets should make its own independent investigation of the financial condition and affairs, and its own appraisal of the Companies creditworthiness. Any corporate body or natural person interested in investing into Companies financial instruments or assets should consult well-qualified professional financial experts and thus obtain additional information. The information and opinions contained in this presentation are provided as at the date of the presentation and are subject to change. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.

The presentation has not been independently verified and no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of their respective parent or subsidiary undertakings or associated companies, or any of such person's respective directors, officers, employees, agents, affiliates or advisers, as to, and no reliance should be placed for any purpose whatsoever on the truth, fullness, accuracy, completeness or fairness of the information or opinions contained in this presentation or any other information relating to the Company, its subsidiary undertakings or, associated companies or affiliates, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available and no responsibility or liability whatsoever is assumed by any such persons for any such information or opinions or for any errors or omissions or for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information in this presentation is subject to correction, completion and change without notice..

This presentation does not purport to contain all information that may be required to evaluate the Company. In giving this presentation, none of the Company or any of their respective parent or subsidiary undertakings or associated companies, or any of such person's respective directors, officers, employees, agents, affiliates or advisers, or any other party undertakes or is under any obligation to amend, correct or update this presentation or to provide the recipient with access to any additional information that may arise in connection with it. None of the foregoing persons accepts any responsibility whatsoever for the contents of this presentation, and no representation or warranty, express or implied, is made by any such person in relation to the contents of this presentation. To the fullest extent permissible by law, such persons disclaim all and any responsibility or liability, whether arising in tort, contract or otherwise, which they might otherwise have in respect of this presentation. Recipients should not construe the contents of this presentation as legal, tax, regulatory, financial or accounting advice and are urged to consult with their own advisers in relation to such matters.

To the extent available, the industry, market and competitive position data contained in this presentation come from official or third party sources. Third industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company reasonably believes that each of these publications, studies and surveys has been prepared by a reputable source, the Company have not independently verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the markets in which the Company operates. While the Company reasonably believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation.

This presentation may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior, written consent of the Company. The manner of distributing this presentation may be restricted by law or regulation in certain countries, including (but not limited to) the United States, Canada, Australia or Japan. Persons into whose possession this presentation may come are required to inform themselves about and to observe such restrictions. By accepting this presentation, a recipient hereof agrees to be bound by the foregoing limitations. NLB is regulated by The Bank of Slovenia i.e. "Banka Slovenije, Slovenska 35, 1505 Ljubljana, Slovenia" and by The Securities Market Agency i.e. "Agencija za trg vrednostnih papirjev, Poljanski nasip 6, 1000 Ljubljana, Slovenia.

Executive Summary NLB acting in a measured and value accretive manner for the shareholders

• The Single Resolution Board (SRB) determined on 27 February that Sberbank Europe AG in Austria and its subsidiaries in Croatia (Sberbank d.d.) and Slovenia (Sberbank banka d.d.) were failing or likely to fail due to a rapid deterioration in their liquidity situation, confirming the European Central Bank's assessment. The SRB applied suspension of payments, enforcement and termination rights, known as a moratorium, to the three banks.
• On 1 March 2022, the Bank of Slovenia issued a decision, to issue a resolution tool in respect of the sale of 100% shares issued by Sberbank banka d.d.
• On the same day SRB decided to transfer all shares of the Slovenian subsidiary Sberbank banka d.d. to NLB d.d. for the consideration of EUR 5.11 million, payable to the SRB.
• On 2 March 2022 NLB acquired all the necessary approvals and immediately provided material liquidity support. By that NLB removed uncertainty for Sberbank banka d.d.'s customers and strengthened the stability of the Slovenian banking sector.
• Pursuant to the provisions of the ZRPPB-1 in case an independent valuation of the bank that was subject to resolution, made after the conclusion of the resolution (e.g. sale of the bank), establishes previous shareholders were deprived by the measure of the regulator, they shall be compensated through the means of The Single Resolution Fund.

Transaction rationale The transaction is consistent NLB's strategic ambitions to consolidate in its core markets

Strategic Rationale

Financial Rationale

Overview of the acquired entity NLB regaining leading market position in Slovenia

Market shares of total assets as at 30 Sep 2021 Pro-forma market shares of total assets as at 30 Sep 2021

Overview of the acquired entity

					in EURm
					2021
INCOME STATEMENT	2017	2018	2019	2020	Unaudited
Net interest income	33	33	35	30	26
Net fee and commission income	8	9	10	12	14
Other income	0	0	1	-1	2
Total income	41	42	47	43	43
Expenses	-26	-28	-29	-29	-30
Pre-provision income	15	14	17	13	13
Provisions and impairments	-11	-4	-4	-11	1
Profit before tax	4	10	13	1	13
Net income	3	8	10	1	10
					in EUR m
					2021
BALANCE SHEET	2017	2018	2019	2020	Unaudited
Loans and advances to customers	1,311	1,278	1,314	1,200	1,153
Total assets	1,741	1,748	1,871	1,839	1,721
Deposits from non-bank customers	1,212	1,271	1,368	1,340	1,274
Shareholders' equity	172	173	183	184	195
					in %
					2021
RATIOS	2017	2018	2019	2020	Unaudited
Net interest margin (1)	1.84	1.89	1.92	1.61	1.49
Business operating margin (1)	2.27	2.38	2.54	2.29	2.49
ROE a.t.	1.77	4.85	5.85	0.52	5.4
NPL ratio (2)	11.7	8.3	4.1	5.5	4.4
CET1 ratio	14.9	14.3	14.5	18.8	18.7

(1) Based on total assets (2) Non-performing loans and other financial assets / classified loans and other financial assets (excluding balances with central bank accounts and sight deposits with banks)

Sberbank's assets Complementary loan book focused on Slovenian SMEs and retail

Assets (31 Dec 2021 Unaudited, EURm)

Unaudited

Acquisition of Sberbank Banka d.d. is funded from existing excess capital Capital position well above regulatory requirements after acquisition, not accounting for negative goodwill

			in EURm
NLB Group	YE 2021	Sberbank*	Pro-forma YE 2021
CET1 capital	1,960		1,960
Tier 1 capital	1,966		1,966
Total capital	2,252		2,252
TOTAL RWA	12,667	1,011	13,678
CET 1 Ratio	15.47%	-1.14%	14.33%
Tier 1 Ratio	15.52%	-1.15%	14.37%
Total Capital Ratio	17.78%	-1.31%	16.47%

Buffer to Regulatory Requirement

CET1 Capital Surplus	4.92%	3.78%
Tier1 Capital Surplus	2.95%	1.81%
Total Capital Surplus	2.53%	1.22%

* RWA as at 31.12.2020 (Annual Report 2020)

As at 31. December 2021, the CET1 ratio of the NLB Group stood at 15.47% (4.92 p.p. above regulatory requirements) and the total capital ratio for the Group stood at 17.78% (2.53 p.p. above regulatory requirements).

Capital simulation show that the capital position of the NLB Group will remain stable and will be sufficient to fully absorb Sberbank Banka d.d. acquisition.

Acquisition will be reflected in RWA increase by approximately 1 bilion EUR which corresponds to decrease of CET1 ratio and Total capital ratio by 1.14 p.p. and 1.31 p.p., respectively.

The capital ratios will be maintained above all regulatory prescribed levels (including P2G) also after acquiring Sberbanka banka d.d. Capital position is expected to be further strengthened when the effect from negative Goodwill will be accounted into capital.

Evaluation of assets and liabilities of Sberbank banka d.d. is subject to further analysis and detailed due dilligence. NLB currently assesses potential fair value adjustements (with potential impact from CHF law included) in an amount between EUR 50 million and EUR 80 million, having an impact on negative goodwill.

NLB Investor Day

We are pleased to invite investors, analysts and financial media to the first NLB Investor Day, which will be held on Thursday, 12 May 2022, in Belgrade, Serbia.

For further details please visit our homepage: https://www.nlb.si/investorday

Investor Relations details

For any further questions please refer to Investor Relations.

Nova Ljubljanska banka, d.d., Ljubljana, Trg republike 2, 1000 Ljubljana E: IR@nlb.si

W:https://www.nlb.si/investor-relations

Contacts:

Valerija Pešec, Head of Investor Relations

T: +386 1 476 91 22 E: valerija.pesec@nlb.si

Peter Jenčič, Investor Relations T: +386 1 476 26 20 E: peter.jencic@nlb.si