NLB — Investor Presentation 2021

Jun 9, 2021

NLB Group Presentation

Virtual Non-deal Roadshow

June 2021

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.

Group Overview

NLB's Management Board

Experienced team with proven track record of achieving strategic objectives

at managerial positions on all levels of international banking groups.

Andreas Burkhardt

19 years of experience in the area of banking, especially in the area of Central Europe.

Archibald Kremser

More than 20 years of experience in the financial services industry in Austria, CEE, and SEE

Our Vision, Mission and Strategic Focus

Together we will take care of the financial needs of our clients and will impact the quality of life in our region.

We will be improving quality of life in our home region.

The Group values and understands its home region and strives to improve and develop it for all generations.

Become regional champion

Putting clients first

Defend our market position

Exploit opportunities and synergies

NLB group today

Strong market position and consistent approach to the region

(as at March 31, 2021)

NLB Group – performance indicators across SEE countries

	Slovenia	North Macedonia	Bosnia	and Herzegovina		Kosovo		Montenegro		Serbia	NLB Group
	NLB, Ljubljana	NLB Banka, Skopje	NLB Banka, Banja Luka	KB, Banja Luka	NLB Banka, Sarajevo	NLB Banka, Prishtina	NLB Banka, Podgorica	KB, Podgorica	NLB Banka, Beograd	KB, Beograd
As at March 31, 2021					Data on stand-alone	basis					Consolidated data*
Result after tax (EURm)	39.3	9.7	3.9	-0.3	2.0	5.7	2.1	0.2	1.6	8.3	64.6
Total assets (EURm)	11,338	1,624	838	247	648	898	537	157	671	3,947	19,959
RoE a.t.	10.7%	16.6%	15.4%	-3.2%	8.8%	22.5%	12.2%	3.4%	8.8%	6.1%	13.0%
Net interest margin(1)	1.36%	3.11%	2.31%	2.59%	2.83%	3.72%	4.02%	4.73%	3.39%	2.33%	2.09%
CIR (cost/income ratio)	62.1%	44.1%	48.3%	85.4%	61.5%	33.4%	62.7%	71.0%	74.2%	69.3%	62.7%
LTD net	51.6%	73.0%	65.8%	89.6%	79.3%	74.5%	86.8%	86.3%	101.9%	51.1%	58.7%
NPL ratio	3.0%	4.9%	2.2%	1.4%	4.6%	2.2%	5.7%	4.1%	1.6%	1.6%	3.5%
NLB ownership (%)	/	87.0%	0.002%(8)	83.2%	97.3%	81.2%	99.8%	(7)	99.9%	83.2%(6)	/
Branches (#)	79	50	47	19	36	34	19	10	28	203	293(5)
Active clients (#)	666,313	411,267	215,919	46,815	129,427	222,588	65,210	15,614	139,358	871,331	1,850,082(5)
Market share by total asssets (%) Note: Financial data as of March 2021.	24.6%	16.5%	18.4% (2,4)	5.3%(2, 4)	5.3% (3, 4)	17.3%	11.6%	3.4%(4)	1.9%	9.9%	/

*Consolidated data. Including non-core members and other activities and other core members.

(1)Calculated on the basis of interest bearing assets; (2) Market share in the Republic of Srpska; (3) Market share in the Federation of BiH; (4) Data for market share as of 31 Dec 2020; (5) Total number of branches and active clients for the Group do not include data for Komercijalna Banka group banks due to different definitions; (6) In April NLB acquired additional ordinary shares in a takeover bid by increasing the stake to 88%; (7) KB PG is not owned directly by NLB d.d., but indirectly (by KB BG - in 100%). (8) KB BL is only 0,002% owned directly by NLB d.d. and 99,998% by KB BG.

Macroeconomic snapshot

Developing region with strong expected recovery

Slovenia	EUR	Serbia
GDP (EURbn) / GDP per capita (EUR)	46.3 / 22,088	GDP (EURbn) / GDP per capita (EUR)
Real GDP growth 2020 (%)	-5.5	Real GDP growth (%)
Real GDP growth 2021E (%)	4.5	Real GDP growth 2021E (%)
Population (m)	2.1	Population (m)
Credit ratings (S&P / Moody's / Fitch)	EUR AA- / A3 / A	RSD Credit ratings (S&P / Moody's / Fitch)

Bosnia and Herzegovina(2)	EUR(1)	Kosovo	EUR
GDP (EURbn) / GDP per capita (EUR)	17.4 / 5,472	GDP (EURbn) / GDP per capita (EUR)	6.8 / 3,801
Real GDP growth (%)	-4.5 EUR(3)	Real GDP growth (%) EUR
Real GDP growth 2021E (%)	3.0	Real GDP growth 2021E (%)
Population (m)	3.3	Population (m)
Credit ratings (S&P / Moody's / Fitch)	B / B3 / n.a.	Credit ratings (S&P / Moody's / Fitch)

Montenegro	EUR EUR	MKD North Macedonia	MKD
GDP (EURbn) / GDP per capita (EUR)	4.2 / 6,731	GDP (EURbn) / GDP per capita (EUR)	10.8 / 5,188
Real GDP growth (%)	-15.2	Real GDP growth (%)
Real GDP growth 2021E (%)	6.5	Real GDP growth 2021E (%)
Population (m)	0.6	Population (m)
Credit ratings (S&P / Moody's / Fitch)	B / B1 / n.a.	Credit ratings (S&P / Moody's / Fitch)

Serbia
GDP (EURbn) / GDP per capita (EUR)	46.5 / 6,699
Real GDP growth (%)	-1.0
Real GDP growth 2021E (%)	5.0
Population (m)	6.9
Credit ratings (S&P / Moody's / Fitch)	BB+/ Ba2 / BB+

Kosovo
GDP (EURbn) / GDP per capita (EUR)	6.8 / 3,801
Real GDP growth (%)	-3.9
Real GDP growth 2021E (%)	4.5
Population (m)	1.8
Credit ratings (S&P / Moody's / Fitch)	n.a. / n.a. / n.a.

North Macedonia
GDP (EURbn) / GDP per capita (EUR)	10.8 / 5,188
Real GDP growth (%)	-4.5
Real GDP growth 2021E (%)	4.0
Population (m)	2.1
Credit ratings (S&P / Moody's / Fitch)	BB- / n.a. / BB+

Banking landscape overview

Underpenetrated and fragmented markets offer further potentials to grow organically and through M&A

Credit to households and non-financial corporations (as % of GDP)

Merger & Acquisition deals in the region

Number of banks in respective countries within market share bracket (as at 2019)

Market share<1% 1%<Market share<3% 3%<Market share<5% 5%<Market share

Country	Year	Target	Buyer	% Acquired	Deal Value in EUR mn	Seller
Slovenia	2020	Abanka	NKBM	100.0%	511	Slovenian State
Slovenia	2019	SKB Banka	OTP	99.7%	n.a.	Société Générale
Slovenia	2016	NKBM	Apollo GM, EBRD	100.0%	250	Slovenian State
Croatia	2017	SocGen Splitska Banka	OTP	100.0%	n.a.	Société Générale
Croatia	2015	Addiko Bank	Advent International, EBRD	100.0%	200	Heta Asset Resolution
Serbia	2020	Komercijalna Banka	NLB	83.2%	387	Serbian State
Serbia	2019	SocGen Banka Srbija	OTP	100.0%	n.a.	Société Générale
Serbia	2018	Piraeus Bank	Direktna Banka	100.0%	58	Piraeus Bank
Serbia	2017	Vojvođanska Banka	OTP	100.0%	125	National Bank of Greece

Shareholder information

The Bank shares are listed on the Prime Market sub-segment of the Ljubljana Stock Exchange and the GDRs, representing shares, are listed on the Main Market of the London Stock Exchange. Five GDRs represent one share of NLB.

The Bank's shares are included in several indices such as: SBITOP (local), FTSE Frontier, MSCI Frontier, S&P Eastern Europe, STOXX Balkan Total Index, STOXX Eastern Europe 300 Banks and others.

Shareholder structure (as at 31.12.2020):

Shareholder	% of Shares
Bank of NY Mellon on behalf of the GDR
holders	58.85
of which Schroders Plc	>5 and <10
of which Brandes Investment Partners	>5 and <10
of which EBRD	>5 and <10
Republic of Slovenia	25 + 1 share

Analyst coverage:

Company	Prime Analyst
Citi	Simon Nellis
Deutsche Bank	Kazim Andac
InterCapital Securities	Dino Durrigl
JP Morgan	Samuel Goodacre
Raiffeisen Bank International	Jovan Sikimić
Wood & Company	Alex Boulougouris

Share Performance

Transformaton into Modern Bank

Sustainability

ESG is not something we do, it is something we are

Key Financials

NLB Group: Key Financials

in EUR million / % / bps	1-12 2020	1-12 2019	1-3 2021	Change YoY	in EUR million / %	31 Mar 2021	31 Dec 2020	31 Mar 2020	Change YoY
Key Income Statement Data					Key Financial Position
Net operating income(i)	504.5	517.2	154.0	-2%	IT Strategy Statement Data
Net interest income	299.6	318.5	97.5	-6%	Total assets	19,959.0	19,565.9	14,288.3	40%
Net non-interest income	204.9	198.7	56.5	3%	Gross loans to customers	10,208.2	10,033.3	8,125.6	26%
Total costs(i)	-293.9	-305.0	-96.6	4%	Net loans to customers	9,824.5	9,644.9	7,759.8	27%
Result before impairments and					Deposits from customers	16,732.1	16,397.2	11,652.9	44%
provisions	210.5	212.2	57.5	-1%	Equity (without non-controlling
Impairments and provisions	-71.4	-1.0	15.5	-	interests)	2,014.1	1,952.8	1,678.9	20%
Negative goodwill	137.9	0.0	0.0	-	Other Key Financial Indicators
Result after tax	269.7	193.6	64.6	39%	LTD(vii)	58.7%	58.8%	66.6%	-7.9 p.p.
Key Financial Indicators					Common Equity Tier 1 Ratio	13.7%	14.1%	15.4%	-1.7 p.p.
Return on equity after tax (ROE a.t.)	8.1%	11.7%	13.0%	-3.6 p.p.	Total capital ratio	16.1%	16.6%	18.5%	-2.5 p.p.
Return on assets after tax (ROA a.t.)	1.0%	1.5%	1.3%	-0.5 p.p.	Total risk weighted assets	12,615.1	12,421.0	9,226.7	37%
Interest margin (on interest bearing					NPL volume(viii)	479.5	474.7	393.5	22%
assets)	2.11%	2.48%	2.09%	-0.4 p.p.	def.)(ix) NPL ratio (internal	3.5 %	3.5 %	3.9 %	-0,5 p.p.
Operational business margin(ii)	3.32%	3.77%	3.21%	-0.5 p.p.
Cost-to-income ratio (CIR)(iii)	58.3%	59.0%	62.7%	-0.7 p.p.
Cost of risk net (bps)(iv)	62	-20	-78	82

(i) Data for 2019 are adjusted to changed schemes prescribed by the Bank of Slovenia (relocation of some items from net other income to other general and administrative expenses).

(ii) Net income from operational business (NII - Tier 2 costs + Net fee and commission income + Recurring net income from financial operations) / Average total assets.

(iii) CIR is adjusted to changed schemes prescribed by the Bank of Slovenia.

(iv) Credit impairments and provisions (annualised level) / average net loans to non-banking sector

(vii) LTD = Net loans to customers / deposits from customers.

(viii) 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).

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

Revenues and Cost Dynamics

Strict cost discipline and negative CoR

Net interest income (Group, EURm)

Net non-interest income (Group, EURm)

Costs (Group, EURm)

Cost of risk(1) (Group, bps)

Net impairments and provisions (Group, EURm)

Loan Dynamics

Solid loan growth with both retail and corporate loans increasing

1.5

2.0 2.5 3.0 3.5 4.0 4.5 5.0

0.0 0.5 1.0

Balance Sheet Structure – NLB Group

Deposit driven balance sheet

(31 Mar 2021, in EUR million)

NLB Group Assets

Diversified structure of credit portfolio & inflow of deposits placed with the Central bank

(1)

5,119.5 3,711.2 628.2 4,123.2 7,759.8 5,376.4 2,189.0 642.6 14,288.3 31 Mar 2020 9,644.9 4,158.8 31 Dec 2020 634.9 19,959.0 9,824.5 31 Mar 2021 19,565.9 +2% YtD YtD -1% 5% 2% -1%

Cash equivalents, placements with banks and loans to banks Other Assets Net loans to customers

Financial Assets

Credit portfolio by segment (1) (Group, 31 Mar 2021)

Banking book portfolio by asset class (1) (Group, 31 Mar 2021)

Total assets of NLB Group – structure (EURm)

NLB Group Liabilities and Equity

Strong deposit growth continues, driven mainly by individuals

Deposits accounting for Deposit split (Group, EURm) 84% of funding (Group, EURm)

Asset Quality and CoR

Gross NPL ratio within the planned framework (Group, EURm)

Good asset quality, decisive workout and credit rating changes leading to negative CoR

Impairments and provisions (Group, EURm)

Cost of risk was negative in Q1 2021, -78 bps, due to credit risk releases coming from repayment of several exposures or changed credit ratings in Key clients and Restructuring and Workout, and a number of smaller ones. Cost of risk in 2021 is now expected to outperform the current outlook range (70-90 bps); including potential one-off effects.

Material non-performing exposure that was restructured in 2014, and was classified as non-performing, was repaid on 23 April 2021. The effect on NLB Group will be a reduction of non-performing loans in the amount of EUR 40.8 million and a positive valuation impact of EUR 14.6 million in the income statement.

In Q1 NPL inflow was within the planned framework. More than half of the NPL inflow was observed in retail segment, while from geographical perspective, almost a third of new NPLs derived from Serbia (consolidation with NLBG rating methodology in newly acquired bank).

NPL ratio remained at last year's level at 3.5%, as well as NPE ratio at 2.3%.

Coverage ratio reduced at the end of 2020 due to recognition of loans from KB at fair value.

Decisive Response to COVID-19

By the end Q1 2021 78% of moratoria expired

(in mio EUR)
	Covid - 19 Moratorium
NLB Group member	Exposure	o/w expired by 31 Mar. 2021	Outstanding amount	Relevant book	% of Relevant book	% of Relevant book (excl. expired moratoriums)
NLB d.d.	522,5	182,6	340,0	6.707,8	7,8%	5,1%
NLB Banka, Skopje	216,7	205,1	11,6	882,2	24,6%	4,2%
NLB Banka, Banja Luka	3,0	2,8	0,2	90,9	3,3%	0,5%
NLB Banka, Sarajevo	157,4	157,4	0,0	2.613,8	6,0%	1,3%
NLB Banka, Prishtina	20,1	16,9	3,1	66,0	30,4%	6,4%
NLB Banka, Podgorica	317,9	263,8	54,1	1.059,7	30,0%	2,7%
NLB Banka, Beograd	32,6	25,5	7,1	85,6	38,1%	2,0%
NLB Leasing d.o.o. - v likv., Ljubljana	238,0	188,2	49,8	1.646,9	14,5%	0,7%
Komercijalna banka a.d., Beograd	707,0	673,4	33,6	2.483,4	28,5%	1,4%
Komercijalna banka a.d., Banja Luka	38,5	34,9	3,5	262,6	14,6%	0,4%
Komercijalna banka a.d., Podgorica	30,8	30,0	0,8	102,7	30,0%	2,7%
NLB Group	2.284,4	1.780,6	503,8	13.794,6	16,6%	3,7%

On NLB Group level (including Komercijalna Banka group) EUR 2,284 million moratorium approved, 46% to Non-financial corporations and 53% to Households. Moratoria were granted for the period between 3 to 12 months. By the end Q1 2021 78% of the granted moratoria already expired.

In Slovenia EUR 525.5 million moratoriums have been approved with outstanding amount EUR 340.1 million at the end of Q1 2021 and represents less than 5% of the total portfolio. Banks in Strategic Foreign Markets have approved EUR 1,758.8 million moratoriums, more than half of them in Serbian Banks as a result of COVID-19 related measures taken at the state level. 91% of the approved moratoriums approved in Strategic Foreign Markets have already expired by the end of Q1 2021.

Performance of Portfolio where Moratoria expired More than 82% of expired moratoria clients have no delays

% of DPD in total expired moratoria

PERFORMANCE OF EXPIRED PORTFOLIO – encouraging trends:

Out of expired portfolio, we observe that more than 82% of exposure have no problems with servicing their obligations.

Among the non-performing exposures, 62% are in the unlikely to pay or less than 90 days category, indicating that asset quality is behaving as

Strong capital position

7,096

Capital conservation buffer P2G

P1 req.

Increase due to NGW inclusion to further support strong growth ambitions

Capital position above all regulatory requirements including P2G.

Unchanged Overall capital requirement (OCR) of 14.25% on a consolidated basis in 2021.

Capital decreased EUR 44.6 million YtD due to decrease of NCI – Minority interest in the amount of EUR 42.6 million, of which EUR 43.0 million due to Komercijalna Banka, Beograd takeover bid, after obtaining ECB approval. If as of 30 September 2021 NLB does not own 100% of Komercijalna banka, Beograd shares, the remaining part of minority interest will be included back into capital.

Negative goodwill, acknowledged by the ECB (EUR 138 mil or 110 bps), will be included in the regulatory capital after the General Meeting of shareholders, which will be held in June.

Acquisition of Komercijalna banka – Becoming a Regional Champion

Transformational Deal: Becoming Leading Player in SEE

Franchise value enhancing transaction in Serbia

KB enhances NLB Group's market share and presence across the country
	Before acquisition	After acquisition
% total assets(1) Market share by	1.9%	over 12%
No. of branches	28	231

KB supports growth capacity and funding flexibility with stable core deposits and strong capital position.

KB adds new customer relationships as well as delivers our comprehensive range of products and services to an expanded customer base
	Before acquisition	After acquisition
No. of active clients	141,866	991,354

EPS Accreative Acquisition from 2022

New business opportunities to generate additional revenues

Dividend Capacity Remains a Key Driver to our Equity Story Dividend distribution in 2021 – 2023 exceeding EUR 300 million

2021 Dividend:

• approval received for EUR 25 million as per ECB's limitation currently in place;
• ambition to distribute 70% of 2020 group profit excl. NGW – EUR 92.2 million.

Ambition to distribute in excess of EUR 300 million in 2021-2023

Closing Remarks

Outlook

	1Q 2021	2021	2023
Regular income	EUR 154 million	Exceeding EUR 600 million	Exceeding EUR 700 million
Costs	EUR 96.6 million	Initial increase in cost base in the year 2021, costs projected around EUR 430 million including restructuring charges.	Costs below EUR 400 million
CoR	- 78 bps	70-90 bps (including potential one-offs expected to outperform CoR guidance)	40-60 bps
Loan growth	2% YtD	Mid-single digit loan growth	High single-digit CAGR 2021-2023
Dividend	n.a.	EUR 92.2 million	Cummulative more than EUR 300 million in 2021-2023
ROE	13.0 % (a.t.)	High single digit	> 10% (RORAC(1) > 12%)

Additional Information

Access our financial reports, presentations, webcasts, key financials and other relevant information here.

If you have any questions or would like to have further information, please contact our team:

E: IR@nlb.si

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

Select year: 2020 V
Annual Report		Interim Reports
Annual Report 2020 (PDF file) Annual Report 2020 (XBRL Zip file) Annual Report 2020 (XBRL viewer) Pillar 3 Disclosures - December 2020		Interim Report - September 2020 Pillar 3 Disclosures - September 2020 Interim Report - June 2020 Pillar 3 Disclosures - June 2020 Interim Report - March 2020 Pillar 3 Disclosures - March 2020
Presentations	Key Financials	Webcasts
NLB Group Presentation - FY 2020 Results NLB Group Presentation - Key Unaudited FY2020 Data	Key Financial Data - FY 2020 Results Key Financial Data - Q3 2020 Results	Key Unaudited FY2020 Data Presentation (Video) Transcript of the Key Unaudited FY2020 Data Webcast Presentation