Coop Pank — Interim / Quarterly Report 2022

Jul 20, 2022

Interim Report 6 months 2022

Management Director´s Statement 3
Overview of financial results 4
Capitalisation 6
Consolidated financial statements 7
Consolidated statement of comprehensive income 7
Consolidated statement of financial position 8
Consolidated statement of cash flows9
Consolidated statement of changes in equity 10
Notes to consolidated financial statements11
Note 1 Accounting principles11
Note 2 Operating segments 12
Note 3 Net interest income 14
Note 4 Net fee and commission income 15
Note 5 Cash and cash equivalents 15
Note 6 Debt securities at fair value through other comprehensive income 15
Note 7 Loans and advances to customers 16
Note 8 Loss allowances of loans and advances 16
Note 9 Allocation of past due loans 16
Note 10 Financial assets and liabilities by residual maturity 17
Note 11 Customer deposits and loans received 18
Note 12 Contingent liabilities 18
Note 13 Related parties 18
Note 14 Basic earnings and diluted earnings per share 19
Shareholders, Supervisory Board and Management Board of Coop Pank AS20
Statement of the Management Board of Coop Pank AS 20

Management Director´s Statement

Business volumes and financial results

By the end of the Q2 2022, Coop Pank had 130,700 customers, during the quarter the number of customers increased by 8,300 (+7%). The bank had 58,700 active customers, during the quarter the number of active customers increased by 4,500 (+8%).

In Q2 2022, volume of deposits in Coop Pank increased by 100 million euros (+9%), reaching total of 1.25 billion euros. Deposits from domestic companies showed the fastest growth, increasing by 87 million euros, of which 31 million were demand deposits and 57 million were term deposits. Deposits from private clients increased by 4 million euros, demand deposits increased by 11 million euros and term deposits decreased by 7 million euros. Deposits from international deposit platform Raisin and other financing increased by 9 million euros. Compared to Q2 2021, volume of Coop Pank's deposits has increased by 357 million euros (+40%). In an annual financing cost was 0.5%, at the same time last year the financing cost was 0.8%.

In Q2 2022, net loan portfolio of Coop Pank increased by 91 million euros (+9%), reaching 1.13 billion euros. Home mortgage loan portfolio showed the fastest growth, increasing the volume by 40 million euros (+10%). Business loans portfolio increased by 36 million euros (+8%), leasing portfolio increased by 10 million euros (+9%) and consumer finance portfolio increased by 6 million euros (+9%). Compared to Q2 2021, total loan portfolio of Coop Pank has grown by 359 million euros (+46%).

In Q2 2022, overdue loan portfolio of Coop Pank remained for the fourth consecutive quarter at the level of 2%. In an annual comparison, overdue loan portfolio decreased from the level of 3% to 2%.

Impairment costs of financial assets in Q2 2022 were 1.2 million euros, which is 0.4 million euros (+57%) more than in Q2 2021.

Net income of Coop Pank in Q2 2022 was 12.8 million euros, having grown 11% over the quarter and 37% over the year. Operating expenses reached 6.6 million euros in Q2 operating expenses increased in the quarterly comparison by 7% and by 24% in the annual comparison.

In Q2 2022, net profit of Coop Pank was 4.6 million euros, which is 31% more than in the previous quarter and 51% more than a year ago. In Q2 2022, cost to income ratio of the bank was 52% and return on equity was 15.8%.

As of 30 June 2022, Coop Pank has ca 30 thousand shareholders, number of shareholders has been stable during the quarter.

Key events and product developments

During Q2 the general meeting of Coop Pank decided to pay dividends to investors for 2021 in the net amount of 3 euro cents per share. This was the first time that the bank has paid dividends to its investors. A total of 2.74 million euros was paid out to almost 30,000 shareholders, of which 98% was received in the bank accounts of Estonian residents. In accordance with the dividend policy approved by the shareholders, Coop Pank will henceforth pay out 25% of its annual net profit as dividends.

Coop Pank successfully carried out its first private placement of Additional Tier 1 (AT1) bonds during Q2, raising 16.1 million euros in capital in support of its growth strategy.

During Q2, Coop Pank raised the interest rates on its term deposits, which in the case of longer deposit periods have doubled on average to up to 2%.

Coop Pank has entered into a cooperation agreement with GreenDice, which designs the ideal consumption used IT equipment.

Margus Rink Chairman of the Management Board

Overview of financial results

Income statement EUR thousand	Q2 2022	Q1 2022	quarterly change	Q2 2021	annual change
Net interest income	11 629	10 595	10%	8 325	40%
Net fee and commissions income	904	796	14%	783	15%
Other income	224	101	122%	233	-4%
Total net operating income	12 757	11 492	11%	9 341	37%
Operating expenses	-6 610	-6 199	7%	-5 336	24%
Impairment costs on financial assets	-1 181	-1 494	-21%	-753	57%
Income tax	-378	-299	26%	-220	72%
Net profit	4 588	3 500	31%	3 032	51%

Business volumes, EUR thousand	Q2 2022	Q1 2022	quarterly change	Q2 2021	annual change
Net loan portfolio	1 131 367	1 040 209	9%	772 516	46%
Cash and bonds	266 790	235 902	13%	225 344	18%
Customer deposits and loans received	1 248 711	1 148 536	9%	891 397	40%
Owner´s equity	117 287	115 261	2%	103 930	13%

Ratios (quarterly ratios, expressed on annualised basis)	Q2 2022	Q1 2022	quarterly change	Q2 2021	annual change
Average equity (attributable to parent company), EUR thousand	116 274	113 502	2 772	102 174	14 100
Return on equity ROE % (net profit / average equity)	15,8	12,3	3,5	11,9	3,9
Average total assets, EUR thousand	1 367 276	1 273 830	93 446	999 642	367 634
Return on assets ROA % (net profit / average total assets)	1,3	1,1	0,2	1,2	0,1
Cash and interest-bearing assets, average, EUR thousand	1 349 361	1 255 611	93 750	984 127	365 234
Net interest margin NIM % (net interest income / interest-bearing assets, average)	3,4	3,4	0,0	3,4	0,0
Cost / income ratio % (total operating costs / total net operating income)	51,8	53,9	-2,1	57,1	-5,3

At 30.06.2022 the Liquidity Coverage Ratio (LCR) was 160% (31.12.2021 was 202%), the regulatory minimum requirement is 100%.

Key financial indicators in last three years as of the date of the interim report

EUR thousand	30.06.2022	30.06.2021	30.06.2020
Net loan portfolio	1 131 367	772 516	559 295
Customer deposits and loans received	1 248 711	891 397	615 153
Subordinated loans	43 164	17 064	7 064
Owner´s equity	117 287	103 930	92 232
Net interest income	22 224	16 368	13 210
Net fee and commission income	1 699	1 431	998
Other income	327	435	373
Total net operating income	24 250	18 234	14 581
Operating expenses	-12 809	-10 459	-8 797
Impairment losses on financial assets	-2 675	-1 524	-2 935
Income tax	-677	-384	-26
Net profit	8 089	5 867	2 823

Capitalisation

Capital base, EUR thousand	30.06.2022	30.06.2022 adjusted *	31.12.2021
Tier 1 capital
Paid-in share capital and share premium	74 493	74 493	74 416
Statutory reserve capital	3 838	3 838	3 165
Retained earnings	30 513	30 513	20 461
Eligible profit of the reporting period	0	6 272	8 012
Other accumulated comprehensive loss	-63	-63	-15
Goodwill accounted for as intangible asset (-)	-6 757	-6 757	-6 757
Intangible assets (-)	-8 091	-8 091	-7 457
Adjustment of value arising from requirements of reliable measurement (-)	-5	-5	-6
Other deductions from Tier 1 capital (-)	-2 674	0	-963
Other transitional adjustments of own funds	157	157	315
Common Equity Tier 1 (CET1)	91 411	100 357	91 171
Additional Tier 1 capital	16 100	16 100	0
Total Tier 1 capital	107 511	116 457	91 171
Subordinated debt	27 000	27 000	17 000
Tier 2 capital	27 000	27 000	17 000
Eligible capital for capital adequacy calculation	134 511	143 457	108 171
Risk-weighted assets RWA
Central government and central banks using standardised approach	0	0	638
Credit institutions, investment companies using standardised approach	2 817	2 817	3 112
Companies using standardised approach	96 236	96 236	65 173
Retail claims using standardised approach	147 954	147 954	130 582
Claims secured by mortgage on real estate using standardised approach	377 263	377 263	325 729
Claims past due using standardised approach	3 781	3 781	3 033
Items subject to particularly high risk using standardised approach	105 225	105 225	59 295
Other assets using standardised approach	12 667	12 667	13 543
Total credit risk and counter-party credit risk	745 943	745 943	601 105
Operational risk using basic indicator approach	59 360	59 360	47 007
Total risk-weighted assets (total risk exposure)	805 303	805 303	648 112
CET1 capital ratio %	11,35%	12,46%	14,07%
Tier 1 capital ratio %	13,35%	14,46%	14,07%
Capital adequacy ratio %	16,70%	17,81%	16,69%

* Includes unaudited profit for Q2 2022 which will be added to regulatory Tier 1 capital after approval of the interim profit by independent auditor and the Financial Supervisory Authority and from which expected dividend payments have been deducted.

Requirements to own funds:
Core Tier 1 capital ratio	4.50%	core Tier 1 capital / total risk exposure
Tier 1 capital ratio	6.00%	Tier 1 capital / total risk exposure
Total capital ratio (capital adequacy)	8.00%	total capital / total risk exposure
Capital conservation buffer	2.50%	of total risk exposure

By the end of the reporting period, the Group is compliant with all regulative capital requirements. Coop Pank carried out its first private placement of Additional Tier 1 (AT1) bonds during Q2, raising 16.1 million euros in capital was used to strengthen the capital base of the Bank and support its growth strategy.

Consolidated financial statements

Consolidated statement of comprehensive income

EUR thousand	Note	Q2 2022	6 M 2022	Q2 2021	6 M 2021
Interest income calculated using the effective
interest method		12 159	23 401	9 342	18 182
Other similar income		1 242	2 405	974	1 910
Interest expense		-1 772	-3 582	-1 991	-3 724
Net interest income	3	11 629	22 224	8 325	16 368
Fee and commission income		1 509	2 845	1 237	2 332
Fee and commission expense		-605	-1 146	-454	-901
Net fee and commission income	4	904	1 699	783	1 431
Rental income from investment properties		0	0	1	3
Direct property operating expenses		0	-1	-13	-22
Change in fair value of investment property		0	0	-14	-14
Net gains/losses from non-financial asset realization		6	6	0	0
Net gains/losses from financial assets measured at fair value		18	4	-46	-59
Revenue from claims handling		108	207	120	320
Other income		92	111	185	207
Other net income		224	327	233	435
Payroll expense		-3 780	-7 229	-3 065	-5 944
Operating expense		-1 768	-3 471	-1 399	-2 850
Depreciation		-1 062	-2 109	-872	-1 665
Total operating expense		-6 610	-12 809	-5 336	-10 459
Net profit before impairment costs		6 147	11 441	4 005	7 775
Impairment costs		-1 181	-2 675	-753	-1 524
Profit before income tax		4 966	8 766	3 252	6 251
Income tax		-378	-677	-220	-384
Net profit for the reporting period	2	4 588	8 089	3 032	5 867
Items that may subsequently be reclassified to income statement:
Financial assets at fair value through other comprehensive income		-24	-48	-3	-4
Comprehensive income for the reporting period		4 564	8 041	3 029	5 863
Net profit attributable to:
Owners of parent company		4 588	8 089	3 032	5 867
Net profit for the reporting period		4 588	8 089	3 032	5 867
Comprehensive income attributable to:
Owners of parent company		4 564	8 041	3 029	5 863
Comprehensive income for the reporting period		4 564	8 041	3 029	5 863
Basic earnings per share (in euros)		0,05	0,09	0,03	0,06
Diluted earnings per share (in euros)		0,05	0,09	0,03	0,06

Consolidated statement of financial position

EUR thousand	Note	30.06.2022	31.12.2021
Assets
Cash and cash equivalents	5	261 821	252 799
Debt securities at fair value through other comprehensive income	6	4 969	5 932
Equity instruments at fair value through other comprehensive		13	13
income
Loans and advances to customers	7,8,9,10	1 131 367	953 396
Other financial assets		1 206	1 311
Other assets		2 118	927
Assets held for sale		3 731	3 725
Right-of-use assets		6 017	6 625
Tangible assets		2 778	3 034
Intangible assets		8 091	7 457
Goodwill		6 757	6 757
Total assets		1 428 868	1 241 976
Liabilities
Customer deposits and loans received	11	1 248 711	1 098 746
Lease liabilities		6 026	6 639
Other financial liabilities		11 693	3 221
Other liabilities		1 987	4 563
Subordinated debt		43 164	17 064
Total liabilities		1 311 581	1 130 233
Share capital		62 233	62 186
Share premium		12 260	12 230
Statutory reserve capital		3 838	3 165
Retained earnings		38 602	33 924
Other reserves		354	238
		117 287	111 743
Total		117 287	111 743
		1 428 868	1 241 976

Consolidated statement of cash flows

EUR thousand	Note	6 M 2022	6 M 2021
Cash flows from operating activities
Interest received		25 687	20 039
Interest paid		-3 530	-3 357
Service fee and commission received		2 845	2 332
Service fee and commission paid		-1 146	-901
Other received income		330	506
Salaries paid		-7 523	-6 547
Other operating expenses paid		-3 471	-2 850
Income tax paid		-512	-272
Cash flows from operating activities before change		12 680	8 950
in assets and liabilities related to operating activities
Change in operating assets:
Loan receivables from customers		-180 506	-103 391
Term deposits in credit institutions		2 001	-15 000
Change of statutory reserve in central bank		-1 597	-1 240
Other assets		-880	-431
Change in operating liabilities:
Change in client deposits and loans received		149 913	133 195
Other liabilities		6 061	4 944
Net cash flows from operating activities		-12 328	27 027
Cash flows from investment activities
Acquisition of property, plant and equipment		-2 089	-2 714
Sale of property, plant and equipment and investment properties		0	523
Acquisition of debt securities		-500	-825
Sale and redemption of debt instruments		1 542	448
Total cash flows from investment activities		-1 047	-2 568
Cash flows from financing activities
Contribution to share capital		59	414
Dividends paid		-2 738	0
Issue of subordinated bonds		26 100	10 000
Repayment of principal of lease liabilities		-613	-199
Total cash flows from financing activities		22 808	10 215
Effect of exchange rate fluctuations to cash and cash equivalents		-7	2
Change in cash and cash equivalents		9 426	34 676
Cash and cash equivalents at the beginning of period		241 286	164 439
Cash and cash equivalents at the end of period	5	250 712	199 115
Cash and cash equivalents balance is comprised of:		250 712	199 115
Cash on hand		44 503	26 749
Demand deposits in central bank		190 685	166 399
Demand and short-term deposits in credit institutions and other financial institutions		15 524	5 967

Consolidated statement of changes in equity

			Statutory		Revalu
EUR thousand	Share capital	Share premium	reserve capital	Other reserves	ation reserve	Retained earnings	Total equity
Equity	61 756	12 061	2 802	142	-18	20 824	97 567
as at 31.12.2020
Contribution to share capital	368	132	0	-86	0	0	414
Share options	0	0	0	86	0	0	86
Change in reserves	0	0	363	0	0	-363	0
Net profit 01.01. 30.06.2021	0	0	0	0	0	5 867	5 867
Other comprehensive income 01.01. 30.06.2021	0	0	0	0	-4	0	-4
Total comprehensive income	0	0	0	0	-4	5 867	5 863
Equity as at 30.06.2021	62 124	12 193	3 165	142	-22	26 328	103 930
Contribution to share capital	62	37	0	-26	0	0	73
Share options	0	0	0	137	0	0	137
Net profit 01.07. 31.12.2021	0	0	0	0	0	7 596	7 596
Other comprehensive income 01.07. 31.12.2021	0	0	0	0	7	0	7
Total comprehensive income	0	0	0	0	7	7 596	7 603
Equity as at 31.12.2021	62 186	12 230	3 165	253	-15	33 924	111 743
Contribution to share capital	47	30	0	-18	0	0	59
Dividends paid	0	0	0	0	0	-2 738	-2 738
Share options	0	0	0	182	0	0	182
Change in reserves	0	0	673	0	0	-673	0
Net profit 01.01. 30.06.2022	0	0	0	0	0	8 089	8 089
Other comprehensive income 01.01. 30.06.2022	0	0	0	0	-48	0	-48
Total comprehensive income	0	0	0	0	-48	8 089	8 041
Equity as at 30.06.2022	62 233	12 260	3 838	417	-63	38 602	117 287

Notes to consolidated financial statements

Note 1 Accounting principles

The accounting principles used in interim report are in conformity with accounting principles used in Annual Report 2021.

Subsidiaries are consolidated on a line-by-line basis, eliminating the intercompany transactions, receivables and liabilities, income and expense. The definition of group according to the Regulation (EU) No 575/2013 of the European Parliament and of the Council matches that of IFRS.

All figures in financial statements are in thousands of euros unless noted otherwise.

Structure of the Group	Country	Activity	Holding
Coop Pank AS	Estonia	banking	parent company
Coop Liising AS	Estonia	leasing	100%
Coop Finants AS	Estonia	consumer financing	100%
Coop Kindlustusmaakler AS	Estonia	insurance brokerage	100%
CP Varad AS	Estonia	real estate management	100%
SIA Prana Property	Latvia	real estate management	100%

Note 2 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the main operating decision-maker. The main decision-maker, responsible for resource distribution and evaluation of the activities of the segments, is the management board of the bank.

The Group divides its business into segments based on both the legal structure and the customer-specific distribution within the Bank. According to the legal structure, the Group has a consumer loan and leasing segment that provides consumer loans to private customers and leasing products to both private and corporate customers, respectively. Consumer financing segment earns interest incomes from lending and fee commissions from issuing hire-purchase cards. Leasing segment earns interest income from lending. At the end of 2019 the new segment insurance brokerage was added, which earns revenues on intermediating insurance contracts.

Due to the Bank's customer-based division, the Group owns corporate banking (legal entities) and retail banking (private individuals) segments. Both segments offer money transferring products and loan products to customers and gather deposits. The segments earn interest income from lending and commissions fees from settlement of payments and bank card transactions.

Segments are the basis for regular monitoring of business results by the Group's management and supervisory boards, and separate financial data are available for the segments. According to the group's structure, the group also divides the corporate banking and retail banking segments into more detailed business lines of loans and everyday banking (deposits, settlements). The Group also uses the division of business lines for planning and budgeting. The Management Board of the Group has been appointed as the chief decision maker for assessing financial allocations and the profitability of business.

Revenue reported by a segment consists of revenue from external customers and additional interest income or interest expense on inter-segment borrowing, which is based on the internal transfer pricing model in the Group and is shown as elimination in the tables below. The Group does not have any customers whose income would account for more than 10% of the respective type of income. All interest income is earned in Estonia. The geographical breakdown of commission fees is shown in Note 4.

Segment profits, Q2 2022, EUR thousand	Corporate banking	Retail banking	Consumer financing	Leasing	Other*	Elimi nation	Total
Interest income	6 590	3 542	3 210	1 135	144	-1 220	13 401
Incl. external income	5 811	3 214	3 210	1 135	31	0	13 401
Incl. internal income	779	328	0	0	113	-1 220	0
Interest expense	-1 295	-1 100	-200	-294	-103	1 220	-1 772
Net interest income	5 295	2 442	3 010	841	41	0	11 629
Commission income	362	560	402	61	124	0	1 509
Commission expense	-132	-369	-57	-3	-44	0	-605
Net commission income	230	191	345	58	80	0	904
Other net income	35	50	92	37	10	0	224
Net income	5 560	2 683	3 447	936	131	0	12 757
Total operating expense	-1 903	-2 385	-1 330	-710	-282	0	-6 610
Profit before credit losses	3 657	298	2 117	226	-151	0	6 147
and income tax
Impairment losses (-) or
reversals (+)	-720	-126	-409	74	0	0	-1 181
Income tax expense	-216	-162	0	0	0	0	-378
Net profit	2 721	10	1 708	300	-151	0	4 588

Segment profits, 6M 2022, EUR thousand	Corporate banking	Retail banking	Consumer financing	Leasing	Other*	Elimi nation	Total
Interest income	12 538	6 841	6 277	2 196	334	-2 380	25 806
Incl. external income	11 060	6 206	6 277	2 196	67	0	25 806
Incl. internal income	1 478	635	0	0	267	-2 380	0
Interest expense	-2 553	-2 180	-402	-583	-244	2 380	-3 582
Net interest income	9 985	4 661	5 875	1 613	90	0	22 224
Commission income	685	1 053	772	117	218	0	2 845
Commission expense	-256	-710	-112	-5	-63	0	-1 146
Net commission income	429	343	660	112	155	0	1 699
Other net income	41	67	169	54	-4	0	327
Net income	10 455	5 071	6 704	1 779	241	0	24 250
Total operating expense	-3 647	-4 626	-2 604	-1 400	-532	0	-12 809
Profit before credit losses and income tax	6 808	445	4 100	379	-291	0	11 441
Impairment losses	-1 588	-114	-985	12	0	0	-2 675
Income tax expense	-515	-162	0	0	0	0	-677
Net profit	4 705	169	3 115	391	-291	0	8 089

Assets and liabilities as at 30.06.2022 EUR million	Corporate banking	Retail banking	Consumer financing	Leasing	Other*	Elimi nation	Total
Loan portfolio	739	435	76	115	319	-553	1 131
Other assets	122	107	29	30	11	0	298
Total assets	861	542	105	145	330	-553	1 429
Total liabilities	809	498	97	132	329	-553	1 311

Treasury, subsidiaries CP Varad, Prana Property, Coop Kindlustusmaakler.

Segment profits, Q2 2021, EUR thousand	Corporate banking	Retail banking	Consumer financing	Leasing	Other*	Elimi nation	Total
Interest income	4 243	2 846	3 126	931	384	-1 214	10 316
Incl. external income	3 696	2 538	3 126	931	25	0	10 316
Incl. internal income	547	308	0	0	359	-1 214	0
Interest expense	-1 110	-1 150	-276	-341	-328	1 214	-1 991
Net interest income	3 133	1 696	2 850	590	56	0	8 325
Commission income	361	419	365	39	53	0	1 237
Commission expense	-111	-280	-61	-2	0	0	-454
Net commission income	250	139	304	37	53	0	783
Other net income	157	10	74	20	-28	0	233
Net income	3 540	1 845	3 288	647	81	0	9 341
Total operating expense	-1 349	-1 998	-1 162	-605	-222	0	-5 336
Profit before credit losses	2 191	-153	2 066	42	-141	0	4 005
and income tax
Impairment losses (-) or reversals (+)	-110	-95	-513	-35	0	0	-753
Income tax expense	-220	0	0	0	0	0	-220
Net profit	1 861	-248	1 553	7	-141	0	3 032

Segment profits, 6M 2021, EUR thousand	Corporate banking	Retail banking	Consumer financing	Leasing	Other*	Elimi nation	Total
Interest income	8 144	5 298	6 211	1 837	802	-2 200	20 092
Incl. external income	7 147	4 850	6 211	1 837	47	0	20 092
Incl. internal income	997	448	0	0	755	-2 200	0
Interest expense	-2 013	-2 064	-512	-626	-709	2 200	-3 724
Net interest income	6 131	3 234	5 699	1 211	93	0	16 368
Commission income	629	813	727	72	91	0	2 332
Commission expense	-208	-565	-123	-5	0	0	-901
Net commission income	421	248	604	67	91	0	1 431
Other net income	206	61	167	48	-47	0	435
Net income	6 758	3 543	6 470	1 326	137	0	18 234
Total operating expense	-2 609	-3 949	-2 279	-1 173	-449	0	-10 459
Profit before credit losses and income tax	4 149	-406	4 191	153	-312	0	7 775
Impairment losses	-507	-112	-941	36	0	0	-1 524
Income tax expense	-384	0	0	0	0	0	-384
Net profit	3 258	-518	3 250	189	-312	0	5 867

Assets and liabilities as at 30.06.2021, EUR million	Corporate banking	Retail banking	Consumer financing	Leasing	Other*	Elimi nation	Total
Loan portfolio	383	307	68	90	214	-290	772
Other assets	90	91	31	28	12	0	252
Total assets	473	398	99	118	226	-290	1 024
Total liabilities	430	360	90	105	225	-290	920

CP Varad (prev. Martinoza), Prana Property, Coop Kindlustusmaakler.

Note 3 Net interest income

Interest income	Q2 2022	6M 2022	Q2 2021	6M 2021
Interest income calculated using the effective interest method:
Loans to legal entities	5 678	10 802	3 653	7 073
Consumer loans and hire-purchase loans	3 210	6 277	3 126	6 211
Loans to private individuals	3 214	6 206	2 538	4 850
Bonds	57	116	24	46
Interest income on liabilities	0	0	1	2
	12 159	23 401	9 342	18 182
Other similar interest income:
Leasing	1 242	2 405	974	1 910
Total interest revenues	13 401	25 806	10 316	20 092
Customer deposits and loans received	-1 220	-2 515	-1 501	-2 943
Subordinated debt	-387	-674	-261	-383
Interest expense on assets	-146	-354	-226	-392
Lease liabilities	-19	-39	-3	-6
Total interest expenses	-1 772	-3 582	-1 991	-3 724
Net interest income	11 629	22 224	8 325	16 368

Note 4 Net fee and commission income

Fee and commission income	Q2 2022	6M 2022	Q2 2021	6M 2021
Fees from consumer loans	416	796	365	727
Monthly account fees and transaction fees	328	651	275	551
Fees from cards	328	602	214	400
Insurance brokerage commission	99	176	0	0
Foreign exchange transactions	21	36	12	20
Other fee and commission income	317	584	371	634
Total fee and commission income	1 509	2 845	1 237	2 332
Expenses related to cards	-427	-823	-338	-657
Transaction costs	-62	-115	-42	-88
Other fee and commission expense	-116	-208	-74	-156
Total fee and commission expense	-605	-1 146	-454	-901
Net fee and commission income	904	1 699	783	1 431

In Q2 2022, the Group earned 86% of fee and commission income from Estonian residents and 14% from residents of other countries (mostly EU countries). This ratio remains unchanged QoQ. All fee and commission income is recognized as incurred.

Note 5 Cash and cash equivalents

	30.06.2022	31.12.2021
Cash	44 503	27 192
Mandatory reserve at the central bank *	11 109	9 512
Demand deposits at central bank	190 685	200 670
Demand deposits at credit institutions and other financial institutions	15 524	13 424
Term deposits at credit institutions *	0	2 001
Total	261 821	252 799

* Not included in cash and cash equivalents in the consolidated statement of cash flows.

Note 6 Financial investments

	30.06.2022	31.12.2021
Government debt securities	0	1 277
Credit institutions	2 271	2 329
Debt securities of other non-financial companies	2 698	2 326
Total of debt securities	4 969	5 932
Shares of other non-financial companies	13	13
Total of equity instruments	13	13
Total of financial investments	4 982	5 945

All debt securities and equity instruments in amount of 13 thousand euros are recognized at fair value through changes in other comprehensive income.

Note 7 Loans and advances to customers

	30.06.2022	31.12.2021
Total receivables from private individuals	572 040	485 882
incl. consumers loans	78 940	70 380
incl. lease financing	57 135	50 903
incl. mortgage loans and other loans	435 965	364 599
Total receivables from legal entities	569 366	476 341
incl. lease financing	69 929	57 844
incl. other loans to legal entities	499 437	418 497
Total receivables	1 141 406	962 223
Loss allowances of loans and advances	-10 039	-8 827
Total	1 131 367	953 396

Note 8 Loss allowances of loans and advances

	30.06.2022	31.12.2021
Balance at the beginning of the reporting period	-8 827	-8 743
Allowances during the reporting period	-2 602	-2 440
Derecognized during reporting period	1 390	2 356
Balance of allowance at the end of the reporting period	-10 039	-8 827

Note 9 Allocation of past due loans

	30.06.2022			31.12.2021
	Unsecured	Secured loans	Loans to	Unsecured	Secured loans	Loans to
	loans to private	to private	legal	loans to private	to private	legal
	individuals	individuals	entities	individuals	individuals	entities
1-30 days	4 311	5 942	3 603	3 519	3 690	9 511
31-60 days	847	751	1 136	772	598	451
61-90 days	519	324	112	440	132	8
over 90 days	1 433	115	138	1 919	283	122
Total	7 110	7 132	4 989	6 650	4 703	10 092

Note 10 Financial assets and liabilities by residual maturity

Undiscounted cash flows by residual maturity

30.06.2022	Up to 3 months	3-12 months	1-5 years	Over 5 years	Total
Assets
Cash and cash equivalents	217 318	0	0	0	217 318
Debt securities at fair value	0	870	1 828	2 271	4 969
Equity instruments	0	0	0	13	13
Loans and advances to customers	68 210	150 267	719 072	468 092	1 405 641
Other financial assets	1 185	0	21	0	1 206
Total financial assets	286 713	151 137	720 921	470 376	1 629 147
Liabilities
Customer deposits and loans received	806 447	353 817	82 513	7 897	1 250 674
Lease liabilities	210	620	2 857	2 670	6 357
Other financial liabilities	10 193	1 500	0	0	11 693
Subordinated debt	790	2 916	28 175	31 825	63 706
Total financial liabilities	817 640	358 853	113 545	42 392	1 332 430
Off-balance sheet liabilities
Undrawn lines of credit and overdraft facilities	166 408	0	0	0	166 408
Financial guarantees	16 889	0	0	0	16 889
Total on-balance / off-balance-sheet liabilities	1 000 937	358 853	113 545	42 392	1 515 727
Duration gap of financial assets and financial liabilities	-714 224	-207 716	607 376	427 984	113 420

31.12.2021	Up to 3 months	3-12 months	1-5 years	Over 5 years	Total
Assets
Cash and cash equivalents	252 799	0	0	0	252 799
Debt securities at fair value	1 277	202	2 124	2 329	5 932
Equity instruments	0	0	0	13	13
Loans and advances to customers	49 243	150 539	599 836	392 379	1 191 997
Other financial assets	976	0	21	314	1 311
Total financial assets	304 295	150 741	601 981	395 035	1 452 052
Liabilities
Customer deposits and loans received	648 424	342 412	102 092	8 395	1 101 323
Lease liabilities	226	647	2 911	3 251	7 035
Other financial liabilities	3 221	0	0	0	3 221
Subordinated debt	260	786	4 185	19 999	25 230
Total financial liabilities	652 131	343 845	109 188	31 645	1 136 809
Off-balance sheet liabilities
Undrawn lines of credit and overdraft facilities	124 838	0	0	0	124 838
Financial guarantees	16 553	0	0	0	16 553
Total on-balance / off-balance-sheet liabilities	793 522	343 845	109 188	31 645	1 278 200
Duration gap of financial assets and financial liabilities	-489 227	-193 104	492 793	363 390	173 852

Note 11 Customer deposits and loans received

Due to customers	30.06.2022	31.12.2021
Private individuals	462 059	477 383
Legal entities	786 652	621 363
Total	1 248 711	1 098 746
Demand deposits	617 019	518 122
Term deposits	623 180	571 452
Special purpose loans	8 512	9 172
Total	1 248 711	1 098 746

Note 12 Contingent liabilities

	30.06.2022	31.12.2021
Financial guarantees	16 889	16 553
Credit lines and overdrafts	166 408	124 838
Total	183 297	141 391

Note 13 Related parties

Related parties are:

• a shareholder of significant influence and companies that are part of its group;
• management of the group: i.e. members of the Management Board and the Supervisory Board of parent company, head of internal audit and entities controlled by them;
• individuals, who have equal economic interest as management, and entities associated to them.

The terms of the loans issued to related parties do not differ from the loans issued to other customers regarding interest rates. Transactions with related parties are based on the price list and/or are carried out at market value. Maximum termination benefits payable to members of the management board on a contingent basis is 258 thousand euros (31.12.2021: 237).

Balances	30.06.2022	31.12.2021
Shareholders:
Loans	0	0
Deposits	6 142	8 972
Members of the Management Board and Supervisory Board, and persons and entities associated with them:
Loans	761	705
Deposits	1 801	1 308
Transactions	30.06.2022	31.12.2021
Shareholders:
Interest expense	1	16
Members of the Management Board and Supervisory Board, and persons and entities associated with them:
Interest income of the reporting period	13	51
Interest expense of the reporting period	2	12
Other goods and services sold	0	5
Compensation paid to members of the Management Board and Supervisory Board	407	636

Note 14 Basic earnings and diluted earnings per share

In order to calculate basic earnings per share, net profit attributable to owners of the parent has been divided by the weighted average number of shares issued. Diluted earnings per share comes from the share options granted to key employees.

	Q2 2022	6 M 2022	Q2 2021	6 M 2021
Profit attributable to the owners of the parent (in th. euros)	4 588	8 089	3 032	5 867
Weighted average number of shares (in th. of units)	91 289	91 278	90 894	90 804
Basic earnings per share (euros)	0,05	0,09	0,03	0,06
Adjustments for calculation of diluted earnings per share share options (in th. of units)	1 922	1 854	1 698	1 647
Weighted average number of shares used for calculating the diluted earnings per share (in th. of units)	93 211	93 132	92 592	92 451
Diluted earnings per share (euros)	0,05	0,09	0,03	0,06

Shareholders, Supervisory Board and Management Board of Coop Pank AS

As at 30.06.2022 shareholders with holding over 5% are:

Coop Investeeringud OÜ	24,79%
Andres Sonn	8,33%
CM Capital OÜ	5,19%

In addition, the member cooperatives of Coop Eesti Keskühistu hold the total of 17,92% of the total amount of shares, however, separately none of them holds over 5%.

Members of Supervisory Board hold 74 thousand shares of Coop Pank and Members of Management Board hold 654 thousand shares of Coop Pank, which in total accounts for 0,80% of the total amount of shares.

Members of the Supervisory board:

Alo Ivask (Chairman), Viljar Arakas, Jaan Marjundi, Roman Provotorov, Raul Parusk, Silver Kuus

Members of the Management board:

Margus Rink (Chairman), Heikko Mäe, Arko Kurtmann, Rasmus Heinla, Paavo Truu (mandate is valid since 16.02.2022)

Statement of the Management Board of Coop Pank AS

The Management Board of Coop Pank is of the opinion, that information in this interim report, consisting of the management report and financial reports, is in conformity with requirements to interim reports and gives a true and fair view of the financial condition and economic results of Coop Pank Group, the presented data and additional information is true and comprehensive. Current interim report is not audited.

20.07.2022

Margus Rink Chairman of the Management Board

Paavo Truu Heikko Mäe

Member of the Management Board Member of the Management Board

Arko Kurtmann Rasmus Heinla Member of the Management Board Member of the Management Board

Contacts 669 0966

klienditugi@cooppank.ee www.cooppank.ee