3rd Quarter Results

Date: 30.11.2018

51st Supervisory Board Meeting: NLB Group recorded EUR 158.3 million of profit after tax in the first nine months of 2018

30 November 2018

Today, on the 30th of November 2018, the Supervisory Board of NLB d.d. met at its 51st meeting and discussed the NLB Group results for the first nine months of 2018. NLB Group continued its trend of profitable business operations, posting a net profit attributable to shareholders of EUR 158.3 million. All subsidiary banks in the South-Eastern Europe (SEE) markets also generated profit and contributed 42% (EUR 76.2 million) to the NLB Group profit before tax. For more details on Q3 2018 NLB Group performance, please refer to the NLB Group Interim Report Q3 2018, which was published today.

NLB Group's results from regular operations before provisions are the reflection of stable net interest income, benefiting from gross loan growth of 2% YtD in key business activities, especially in strategic foreign markets (7% YtD) as well as in the retail segment in Slovenia (4% YtD). Total net operating income amounted EUR 369.0 million, representing a 1% increase YoY (9M 2017: EUR 365.3 million) driven by higher net interest income (1% YoY) and net fee and commission income (4% YoY).

Further improvement of loan portfolio quality was also demonstrated by the additional reduction of NPLs (down EUR 138 million versus December 2017). The NPL ratio decreased to 7.6%, while the internationally more comparable NPE ratio (based on EBA guidelines) fell to 5.3%. At the end of the third quarter of 2018, the capital ratios (CET1 and total capital ratio) of the NLB Group remained very strong, reaching 16.9% after dividend pay-out (EUR -271 million), and including the 1H 2018 result (EUR 109 million) and were well above the regulatory thresholds.

The successfully completed privatization process of the majority stake in the bank represents a basis for strengthening the future business operations, development and growth of NLB d.d as well as the entire NLB Group. NLB Group will continue to act thoughtfully and responsibly, and pursue its medium-term strategic and financial goals.

The Supervisory Board also took note of the resignation of Simona Kozjek and Vida Šeme Hočevar. Members of the Supervisory Board submitted their resignation statements with a three-month notice in accordance with the statute, which follows the commitments in the field of corporate governance, which the Republic of Slovenia submitted to the European Commission in 2018. After the expiration of the notice period, the Supervisory Board will continue to work with full powers.

In addition to this, the Supervisory Board also discussed and adopted budget for 2019 for NLB Group. As usual, members of the Supervisory Board took note of the reports from its Committees and granted their consent to relevant cases if required.

Interim Report - September 2018

https://www.nlb.si/financial-reports/nlb-group-interim-report-for-3q-2018.pdf

NLB Group Presentation - 3Q 2018 Results

https://www.nlb.si/financial-reports/presentation-3q-2018.pdf

Investor Relations

NLB d.d., Ljubljana