Bawag Group AgVIE: BG

Half-year financial report 2026 (20260731 bawag group half year financial report 2026 data)

· Issued by Bawag Group AG

HALF-YEAR FINANCIAL REPORT









KEY FIGURES



Profit or loss statement

in € million

Jan-Jun 2026

Jan-Jun 2025

Change %

Net interest income

968.4

903.4

7.2

Net fee and commission income

200.2

179.3

11.7

Core revenues

1,168.6

1,082.7

7.9

Other income1

7.8

3.0

>100.0

Operating income

1,176.4

1,085.7

8.4

Operating expenses

(372.8)

(404.3)

7.8

Pre-provision profit

803.6

681.4

17.9

Regulatory charges

(24.9)

(20.0)

(24.5)

Total risk costs

(140.6)

(111.2)

(26.4)

Profit before tax

645.3

551.9

16.9

Income taxes

(158.2)

(140.7)

(12.4)

Net profit

487.3

411.2

18.5

Performance ratios

figures annualized

Jan-Jun 2026

Jan-Jun 2025

Change pts

Return on common equity

24.2%

22.8%

1.4

Return on tangible common equity

27.8%

26.7%

1.1

Net interest margin

3.46%

3.29%

0.17

Cost-income ratio

31.7%

37.2%

(5.5)

Risk costs / interest-bearing assets

0.50%

0.40%

0.10

Share data

Jan-Jun 2026

Jan-Jun 2025

Change %

Pre-tax earnings per share (in €)2

8.31

6.96

19.4

After-tax earnings per share (in €)2

6.28

5.19

21.0

Book value per share (in €)

54.69

46.30

18.1

Tangible book value per share (in €)

47.87

39.54

21.1

Shares outstanding at the end of the period

76,998,527

78,524,046

(1.9)

Statement of financial position

in € million

Jun 2026

Dec 2025

Change %

Jun 2025

Change %

Total assets

72,218

72,297

(0.1)

72,760

(0.7)

Interest-bearing assets

56,342

56,653

(0.5)

55,913

0.8

Customer loans

51,074

50,749

0.6

49,300

3.6

Customer funding

61,299

61,873

(0.9)

62,128

(1.3)

Common equity

4,211

3,859

9.1

3,636

15.8

Tangible common equity

3,686

3,323

10.9

3,105

18.7

Risk-weighted assets

21,358

22,594

(5.5)

23,351

(8.5)

Balance sheet ratios

Jun 2026

Dec 2025

Change pts

Jun 2025

Change pts

Common Equity Tier 1 capital ratio

17.4%

14.2%

3.2

13.5%

3.9

Total capital ratio

22.9%

19.3%

3.6

19.9%

3.0

Leverage ratio

5.7%

4.9%

0.8

5.1%

0.6

Liquidity coverage ratio (LCR)

217%

204%

13

237%

(20)

NPL ratio

0.9%

0.8%

0.1

0.7%

0.2

  1. The term "Other Income" includes gains and losses on financial instruments and other operating income and expenses.

  2. Before deduction of AT1 coupon.

Note: For details on definitions and calculation methodology, please refer to the section entitled "Definitions".

Contents HALF-YEAR GROUP MANAGEMENT REPORT ................................................................................................................................ 4

ECONOMIC AND REGULATORY DEVELOPMENTS ........................................................................................................................................................................ 5

FINANCIAL REVIEW........................................................................................................................................................................................................................ 9

BUSINESS SEGMENTS 14

OUTLOOK AND TARGETS 20

RISK MANAGEMENT 21

CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS 23

CONSOLIDATED ACCOUNTS 24

NOTES 30

RISK REPORT 63

STATEMENT OF ALL LEGAL REPRESENTATIVES 81

DEFINITIONS 82 GLOSSARY 85

Disclaimer:

Certain statements contained in this report may be statements of future expectations and other forward-looking statements that are based on management's current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance.

Neither BAWAG Group nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this report or its content or otherwise arising in connection with this document.

This report does not constitute an offer or invitation to purchase or subscribe for any securities and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

The tables in this report may contain rounding differences.

‌HALF-YEAR GROUP MANAGEMENT REPORT ‌ECONOMIC AND REGULATORY DEVELOPMENTS

ECONOMIC DEVELOPMENTS



Prepared by Professor Dr. Ewald Nowotny, former Governor of Austrian National Bank (OeNB), former CEO of BAWAG and current Advisor to the BAWAG Group Supervisory Board

International Perspectives

The first half of 2026 was marked by a high level of economic uncertainty. The war in the Middle East led to an energy price shock, combined with widespread disruptions to important supply chains. By mid-year, a still fragile political stabilization resulted in a weakening of the energy price shock. However, energy prices are expected to remain higher for a prolonged period than they were before the start of the Middle East war.

Overall, however, the weakening of the global economy is likely to be only temporary, at least an almost permanent political stabilization, and the development of the global economy is likely to regain momentum with the gradual normalization of energy supply - although corresponding forecasts are still burdened with considerable uncertainty. In particular, the increasingly significant upswing in investments in connection with artificial intelligence (AI) can provide important impetus, from which the United States of America and Asian countries in particular benefit.

Market developments in the European Union

For the European Union, latest forecasts expect an economic growth of around 1% for 2026 and 1.4% for 2027. In addition to the Middle East crisis, the effects of the ongoing Russian war against Ukraine are also significant for Europe. The significant change in the geopolitical constellation results in the need for a significant increase in military spending in the short and medium term. This leads to considerable challenges for public budgets, which are already heavily burdened by previous crises. In connection with the problems of financing social systems and the expansion of ecologically sustainable infrastructure, the development of public budgets is of central focus of economic and social policy in most European countries.

The price shocks for energy and important input materials have led to a significant increase in inflation rates. The European Central Bank (ECB) reacted to this in June 2026 with

a first increase in its key interest rates since June 2025. The further development of monetary policy is characterized by considerable uncertainty, in particular to prevent a slide into a stagflation constellation of high inflation and economic stagnation. In general, however, it can be assumed that inflation rates will also approach the ECB's target of 2% again with a normalization of the energy markets. On the financial markets, it is widely expected that the ECB will carry out another interest rate hike of 0.25% this year to prevent "second-round effects" on the labor and service markets.

In light of the Middle East crisis, Austria did not reach the expected notable economic upswing. Overall, however, the Austrian economy proved relatively resilient, as evidenced by stable or even increasing demand for bank loans. Slightly higher economic growth is expected again in 2027, driven primarily by positive impulses from exports. The inflation rate is projected to be at 3.0% in 2026, before a significant decline to 2.5% is expected in 2027.

A central problem of Austrian economic policy is the need for budget consolidation. The overall government budget deficit (federal, state, and local governments, social security institutions) of approximately 4% is higher than the 3% limit set by the European Stability and Growth Pact. Austria (like many other Eurozone countries) is therefore subject to EU proceedings for an "excessive deficit." However, even apart from these proceedings, it is necessary to limit new borrowing to prevent rapidly rising debt servicing costs from severely restricting the budget's capacity for important macroeconomic tasks. This is of particular importance for the government but also for private borrowers given the impending expiration of low interest loans and the expectation of higher interest rates on new debt.

The Austrian Federal Government has accordingly implemented a series of consolidation measures in the double budget for 2027 and 2028, adopted in the summer of 2026. These measures also affect the banking sector through a special tax. The Austrian banking system has proven itself to be stable and efficient, even in challenging times. In 2025, the highest capitalization ratio ever achieved was recorded, with a CET1 of 19%. Non-performing loan ratios remain low. However, there is a negative development in the area of commercial real estate loans - which does not affect the BAWAG Group.

Germany, Europe's most important economy, has been facing a structural crisis for years. The cornerstones of the German economy's business model, strong export performance and affordable energy are facing significant challenges, competition from Chinese companies is becoming increasingly noticeable, and the strategy of the "green energy transition" has proven more expensive and protracted than initially anticipated. The result has been low, and in some cases even negative, growth rates in recent years. In addition to these structural problems, Germany also had to contend with the negative effects of the 2026 energy crisis. In light of these challenges, the German government has now launched a series of growth initiatives, including a comprehensive package to modernize its long-neglected infrastructure. These measures will likely only reach their full effect in the medium term, but positive growth effects are expected as early as 2027. Overall, Germany remains a wealthy and technologically advanced economy with positive long-term prospects. This is also leading to a significantly increasing interest from international banks in the German market. The BAWAG Group took important steps in this direction earlier on.

The Dutch economy is experiencing continuous and strong growth, driven primarily by robust private consumption. A particular focus is on the housing sector, and thus on mortgage loans.

The Irish economy achieved by far the strongest growth in Europe in 2025, at 12%. However, in 2026, Ireland is expected to be the only country in Europe with a negative growth rate. This particular development is due to the significant presence of international, especially U.S., companies in Ireland - and consequently, to sensitivity to U.S. economic policies, particularly in the area of tariffs. Overall, the Irish economy is characterized by a long-term growth-oriented structure, coupled with a strong public finance position.

Outlook

At the global economic level, high levels of political uncertainty persist. However, experience has shown that companies are capable of responding to external crises. Even further political disruptions are therefore unlikely to have a lasting impact on the anticipated slight global economic recovery. In Germany, after many years of slower growth, slightly stronger economic momentum is now expected - with positive effects also for neighboring countries.

Inflation rates in the eurozone, which rose due to the energy crisis, are expected to gradually return to the ECB's 2% target. To avoid prematurely sounding the all-clear, the ECB is expected to continue pursuing a rather restrictive monetary policy for the foreseeable future. Preparations for the introduction of the digital euro as a complement to-not a replacement for-cash are becoming an increasingly important topic for the ECB, banks, and the public. A pilot program is scheduled to begin in 2027, with full implementation planned for 2029.

A key focus of economic policy in Austria remains the effort to reduce the overall budget deficit to below 3%. This involves combining effective consolidation policies with support for economic structural change and the maintenance of social stability. For the Austrian banking sector, it is crucial to maintain and secure Austria's strong position in international financial markets.

The slight economic upswing is also expected to lead to increased demand for investment and consumer loans. The housing sector is of particular economic and social importance. Having expanded BAWAG Group's operations into Germany, the Netherlands, and Ireland not only creates additional earnings opportunities but further enhances the resilience of BAWAG`s business model through greater geographic and structural diversification.

Macro data in our core markets in 2026

in %

Austria

Germany

Netherlands

Ireland

Euro area

United States

GDP growth rate

0.6

0.6

1.0

(1.2)

0.9

2.2

Inflation rate

3.0

2.9

3.2

3.5

3.0

2.6

Unemployment rate

5.8

4.0

4.4

4.8

6.4

4.5

Outlook for 2027

GDP growth rate

0.9

0.9

1.1

3.4

1.2

2.1

Inflation rate

2.5

2.7

2.5

2.6

2.3

3.5

Data sources: EU Commission (Spring 2026 Economic Forecast)

REGULATORY DEVELOPMENTS



The European Central Bank (ECB) continued its direct oversight of the Eurozone's main credit institutions, including BAWAG Group, under the Single Supervisory Mechanism (SSM). The SSM's supervisory priorities for the years 2026-2028 reflect ECB Banking Supervision's medium-term strategy and consist of strengthening banks' resilience to geopolitical risks and macro-financial uncertainties with a view to ensuring prudent risk-taking and sound credit standards, adequate capitalization and consistent implementation of CRR III and prudent management of climate and nature-related risks. This requires the continued strengthening of banks' operational resilience and fostering robust ICT capabilities focusing on the implementation of robust and resilient operational risk management frameworks, remedying deficiencies in risk reporting capabilities and related information systems and banks' digital and, in particular, AI-related strategies, governance and risk management.

In 2023 the European Commission published its proposal to introduce a digital euro with the aim to support open strategic autonomy by creating a new payment scheme that would be resilient against potential external disruptions and provide an alternative for private payments solutions. The digital euro will be a direct liability of the European Central Bank or of national central banks towards digital euro users. The Council adopted its general approach (negotiation mandate) in December 2025. The ECON adopted the European Parliament's negotiating position in June 2026. The co-legislators have not reached a final agreement yet. We will carefully assess the impact of the project, particularly regarding liquidity outflows and fee structure. The European Central Bank is advancing its work on the introduction of the digital euro with a possible start of the pilot digital euro in 2027 together with interested payment service providers and plans the potential issuance in 2029, assuming the legal act will be adopted in 2026.

On 19 June 2024, CRR III and CRD VI (the Banking Package, a review of the CRR and CRD adopted by the European Commission on 27 October 2021) were published in the European Official Journal. CRR III applies for the most part from January 1, 2025. Member States were required to implement CRD VI into their national law by January 10, 2026, with transitional rules applying for a further period of five years. The Banking Package completed the implementation of the international Basel III agreement (also known as Basel IV) in the EU, while considering the specific features of the EU's banking sector. The application of the CRR III articles that implement the Fundamental Review of the Trading Book (FRTB) into EU law was postponed until 1 January 2027. A Commission Delegated Regulation amending the CRR as regards temporary targeted operational relief measures and targeted multipliers for the calculation of an institution's own

funds requirements for market risk is expected to apply from 1 January 2027.

The main points of the banking package primarily consist of significant adjustments to the measurement methods for credit, market and operational risk. The key elements are:

Introduction of an output floor, limiting the capital benefits from risk models

Update of the standardized approach for credit risk

Changes to the internal ratings-based (IRB) approach for credit risk

A new operational risk framework

Amendments to the market risk framework and the calculation of credit valuation adjustments (CVA)

On 20 April 2026, the amendments to the EU Directives on Deposit Guarantee (DGSD) and Bank Recovery and Resolution (BRRD) and the EU Regulation on Single Resolution Mechanism (SRMR) under the review of the bank crisis management and deposit insurance framework (CMDI review) were published in the European Official Journal, with transposition of BRRD and DGSD into national law by 11 May 2028, and application as of

12 May 2028. The reform aims to enhance the ability of resolution authorities to manage the failure of small and medium-sized banks by broadening the scope of resolution to include these banks when it serves the public interest. It will also strengthen depositor protection across the European Union. The reform will replace the current partially harmonized depositor ranking with a fully harmonized three-tier depositor preference consisting of covered deposits and DGS subrogation (Tier 1), eligible retail, SME and certain public authority deposits above the coverage level (Tier 2) and other deposits which rank ahead of ordinary unsecured creditors (Tier 3). The reform also acknowledges the specificities of national banking sectors while ensuring that a level playing field is maintained.

We will continue to proactively monitor and implement the upcoming regulatory changes on a regular basis and to consider them in our business plans accordingly. Due to its strong capital position and profitable business model, BAWAG Group considers itself well prepared for the upcoming requirements.

Minimum requirement for own funds and eligible liabilities (MREL)

In December 2025, BAWAG Group received its new MREL decision from the Single Resolution Board (SRB), based on a single point of entry resolution strategy with BAWAG P.S.K. AG as the resolution entity. The MREL requirement, including the combined buffer requirement, was set at 27.6% of RWA at the consolidated level of BAWAG P.S.K. AG. The current decision does not include a subordination requirement. In addition, the SRB set the MREL requirement at 5.9% of LRE (leverage ratio exposure) on a consolidated basis.

As of 30 June 2026, BAWAG P.S.K. reported on consolidated level MREL-eligible instruments amounting to 36.1% of RWA and 10.3% of LRE (compared to 34.0% of RWA and 10.2% of LRE as of 31 December 2025), thereby exceeding the final requirements on both measures.

‌FINANCIAL REVIEW

ANALYSIS OF PROFIT OR LOSS STATEMENT AND STATEMENT OF FINANCIAL POSITION



in € million

Jan-Jun 2026

Jan-Jun 2025

Change

Change %

Net interest income

968.4

903.4

65.0

7.2

Net fee and commission income

200.2

179.3

20.9

11.7

Core revenues

1,168.6

1,082.7

85.9

7.9

Other income1

7.8

3.0

4.8

>100.0

Operating income

1,176.4

1,085.7

90.7

8.4

Operating expenses2

(372.8)

(404.3)

31.5

7.8

Pre-provision profit

803.6

681.4

122.2

17.9

Regulatory charges

(24.9)

(20.0)

(4.9)

(24.5)

Operating profit

778.7

661.4

117.3

17.7

Total risk costs

(140.6)

(111.2)

(29.4)

(26.4)

Net result of at-equity investments

7.2

1.7

5.5

>100.0

Profit before tax

645.3

551.9

93.4

16.9

Income taxes

(158.2)

(140.7)

(17.5)

(12.4)

Profit after tax

487.1

411.2

75.9

18.5

Non-controlling interests

0.2

-

0.2

-

Net profit

487.3

411.2

76.1

18.5

  1. The term "Other Income" includes gains and losses on financial instruments and other operating income and expenses.

  2. In accordance with IFRS, the item Other operating income and expenses also includes regulatory charges in the amount of € 21.0 million for the first six months 2026 (first half 2025: € 16.1 million). The item "Operating expenses" includes regulatory charges in the amount of € 3.9 million for the first six months 2026 as well (first half 2025: € 3.9 million). However, BAWAG's management considers regulatory charges as a separate expense. Accordingly, they are shown in a separate expense line in the Group Management Report.

Net profit increased by 18.5% or € 76.1 million, to € 487.3 million in the first half 2026. The underlying operating performance of the business was strong during the first half 2026, generating pre-provision profit of € 803.6 million, up 17.9% year-over-year.

Net interest income increased by 7.2%, or € 65.0 million, to

€ 968.4 million in the first half 2026, supported by the continued growth in unsecured consumer lending which offset subdued mortgage volumes. In addition, deposit beta continued to decrease during the first half 2026.

Net fee and commission income increased by 11.7% to

€ 200.2 million compared to the first half 2025, reflecting a positive business momentum across retail business lines.

Other income, consisting of gains and losses on financial instruments and other operating income and expenses, was at

€ 7.8 million compared to € 3.0 million in the first half 2025.

Operating expenses decreased by 7.8% to € 372.8 million in the first half 2026, following ongoing synergy realization and efficiency gains across the Group.

Regulatory charges were € 24.9 million in the first half 2026, compared to € 20.0 million in the first half 2025.

Total risk costs were € 140.6 million in the first half 2026, an increase of € 29.4 million, or 26.4%, compared to the first half 2025. The underlying asset quality of the business remained strong with an NPL ratio of 0.9%. The increase in risk costs reflects the continued change in asset mix towards growth in unsecured consumer business as well as an update of macroeconomic assumptions following the geopolitical developments.

Total assets

in € million

Jun 2026

Dec 2025

Change %

Jun 2025

Change %

Cash reserves

14,513

14,093

3.0

14,991

(3.2)

Financial assets

Held for trading

124

109

13.8

369

(66.4)

Fair value through profit or loss

476

517

(7.9)

573

(16.9)

Fair value through OCI

1,187

1,322

(10.2)

1,621

(26.8)

At amortized cost

54,677

54,814

(0.2)

53,720

1.8

Customers

51,074

50,749

0.6

49,300

3.6

Debt instruments

3,034

3,613

(16.0)

4,034

(24.8)

Credit institutions

569

452

25.9

386

47.4

Valuation adjustment on interest rate risk hedged portfolios

(586)

(616)

(4.9)

(371)

58.0

Hedging derivatives

212

358

(40.8)

367

(42.2)

Tangible non-current assets

542

532

1.9

459

18.1

Intangible non-current assets

525

535

(1.9)

532

(1.3)

Tax assets

113

131

(13.7)

131

(13.7)

Other assets

430

383

12.3

363

18.5

Non-current assets held for sale

5

119

(95.8)

5

-

Total assets

72,218

72,297

(0.1)

72,760

(0.7)

The cash reserves increased by 3.0% to € 14.5 billion in June 2026 compared to year-end 2025, equaling 20% of the balance sheet.

Financial assets at fair value through OCI decreased by 10.2%.

The line item at amortized cost slightly decreased by 0.2% compared to year-end 2025 and stood at € 54.7 billion as of June 2026.

Non-current assets held for sale decreased compared to December 2025 due to the sale of a participation in the first half 2026.

Total liabilities and equity

in € million

Jun 2026

Dec 2025

Change %

Jun 2025

Change %

Total liabilities

67,502

67,452

0.1

68,046

(0.8)

Financial liabilities

Fair value through profit or loss

57

55

3.6

54

5.6

Held for trading

472

450

4.9

650

(27.4)

At amortized cost

65,552

65,707

(0.2)

65,935

(0.6)

Customers

45,815

47,367

(3.3)

47,250

(3.0)

Issued securities

19,013

17,528

8.5

17,697

7.4

Credit institutions

724

812

(10.8)

988

(26.7)

Valuation adjustment on interest rate risk hedged portfolios

(316)

(299)

5.7

(204)

54.9

Hedging derivatives

279

91

>100.0

93

>100.0

Provisions

244

251

(2.8)

279

(12.5)

Tax liabilities for current taxes

222

131

69.5

226

(1.8)

Tax liabilities for deferred taxes

179

189

(5.3)

141

27.0

Other obligations

813

877

(7.3)

872

(6.8)

Obligations in disposal groups held for sale

-

-

-

-

-

Total equity

4,716

4,845

(2.7)

4,714

-

Common equity

4,211

4,340

(3.0)

4,038

4.3

AT1 capital

496

496

-

670

(26.0)

Non-controlling interests

9

9

-

6

50.0

Total liabilities and equity

72,218

72,297

(0.1)

72,760

(0.7)

Financial liabilities at amortized cost decreased slightly by

€ 0.2 billion to € 65.6 billion as of 30 June 2026 compared to year-end 2025.

Total equity including Additional Tier 1 capital stood at

€ 4.7 billion as of 30 June 2026. In the first quarter a share buyback in amount of € 75 million was carried out and on 22 April 2026, a € 481 million dividend for the financial year 2025 was paid out.

CAPITAL AND LIQUIDITY POSITION



BAWAG Group set a target CET1 of 12.5%, considering regulatory capital requirements and in addition maintaining a conservative buffer above the minimum capital requirements set by the regulator.

June 2026

Dec 2025

Pillar 1 minimum

4.5%

4.5%

Pillar 2 requirement (CET1 requirement)

1.32%

1.41%

Capital conservation buffer

2.5%

2.5%

Systemic risk buffer

0.5%

0.5%

O-SII buffer

0.9%

0.9%

Sectoral systemic risk buffer for commercial real estate financing

0.011%

0.007%

Countercyclical buffer based on exposure

0.46%

0.49%

Overall capital requirement (OCR)

10.19%

10.30%

Pillar 2 guidance (P2G)

0.5%

0.5%

Overall capital requirement including P2G

10.69%

10.80%

CET1 target ratio

12.50%

12.50%

Management buffer to OCR (in basis points)

231

220

Management buffer to OCR including P2G (in basis points)

181

170

CET1 capital (in € million)

3,723

3,205

Risk-weighted assets (in € million)

21,358

22,594

CET1 ratio (post dividend)

17.4%

14.2%

Tier1 ratio (post dividend)

19.8%

16.2%

Total capital ratio (post dividend)

22.9%

19.3%

Building on the Group's presence since 2015 and the establishment of its retail business with MoCo in 2023, BAWAG agreed to a recommended all cash offer for PTSB, Ireland's third largest bank, on 14 April 2026. The transaction is subject to the satisfaction or waiver of the conditions set out in the Scheme Document sent to PTSB shareholders dated 15 May 2026, including High Court and the remaining regulatory approval. During the first half of the year, BAWAG Group focused on ensuring we are positioned to fully self-fund the proposed PTSB transaction. Therefore, we ended the first six months 2026 with a CET1 ratio of 17.4% and are well positioned to fully self-fund the proposed acquisition. BAWAG had temporarily adjusted its dividend policy, including a non-distribution commitment for first-half profits, with the maximum potential dividend limited to second-half earnings. In addition, the Group executed RWA optimization measures, including significant risk transfers (SRTs). The capital threshold to fully self-fund the deal is at approximately 17.0%. We continue to generate capital at a strong pace and have multiple capital management levers available should additional organic growth opportunities arise.

Based on the ratios as of 30 June 2026, the maximum distributable amount above the regulatory requirements for 2026 (Pillar 1 minimum ratios, Pillar 2 CET1 requirement and combined buffer requirements) is € 1.5 billion (no dividend considered for the first six months 2026). Available distributable items as defined in Art. 4.1 (128) CRR on the level of BAWAG Group AG amount to approximately € 2.9 billion as of 30 June 2026.

Capital distribution policy

Following the approval by the Annual General Meeting held on 22 April 2026, BAWAG Group paid out € 481 million dividend for the financial year 2025, equivalent to € 6.25 per share.

Maintaining a strong capital base with a conservative buffer above regulatory requirements is a strategic priority for BAWAG Group. If the PTSB acquisition receives all required approvals, we still aim to maintain the minimum CET1 ratio target of 12.5%, while setting an excess capital distribution threshold of greater than 13% CET1 ratio for 2026 and 2027.

Our capital distribution framework is as follows:

Dividend - 55% payout

In light of the proposed acquisition of PTSB, BAWAG had temporarily adjusted its dividend policy, including a non-distribution commitment for first-half 2026 profits, with the maximum potential dividend for the financial year 2026 limited to the earnings of the second half 2026, barring unforeseen circumstances. Dividends will be distributed annually after the Annual General Meeting in line with the respective shareholders' resolution. Dividend distributions will comply with regulatory and/or corporate law restrictions and take into account recommendations made by competent regulatory authorities.

Excess capital management

Additional capital will be allocated to business growth, M&A, minority and/or platform investments.

Excess capital distribution

Any additional capital will be allocated to share buybacks and/ or special dividends, subject to our routine annual assessment. If the PTSB acquisition receives all required approvals, we still aim to maintain the minimum CET1 ratio target of 12.5%, while setting an excess capital distribution threshold of greater than 13% CET1 ratio for 2026 and 2027.

Debt issuances

Customer funding, defined as deposits and covered bonds (mortgages and public sector), accounts for more than 90% of total funding and is complemented by diversified capital market funding.

In 2026, BAWAG remained an active issuer in the capital markets across funding instruments. The Bank executed a total of € 2.4 billion in issuances:

a € 500 million senior preferred benchmark transaction was executed in the second quarter as a green bond under our Sustainable Finance Framework.

on the covered bond side, we issued a € 1.25 billion dual tranche in the first quarter, consisting of a € 500 million mortgage covered bond and a € 750 million public sector covered bond issued at the same time. In the second quarter, we issued a US$ 700 million mortgage covered bond, representing the first USD denominated benchmark bond by BAWAG.

Liquidity management

BAWAG Group follows a conservative liquidity management strategy, reflected in a strong liquidity coverage ratio (LCR) of 217% and cash position of € 14.5 billion, representing 20% of total assets as of the end of June 2026. This significantly exceeds the regulatory LCR requirement of 100%.

‌BUSINESS SEGMENTS

RETAIL & SME



Business Review

In the first half 2026, the Retail & SME segment delivered a net profit of € 412 million, a return on tangible common equity of 35.7% and a cost-income ratio of 30.6%. Continued growth in Consumer & SME sector, particularly credit cards, together with ongoing synergy realization and efficiency gains across the Group, were the key drivers for the development in the first six months 2026. Average interest-bearing assets were € 39 billion, up 3% versus full-year 2025. Asset quality remained strong, with the NPL ratio at 1.4%.

Alongside the ongoing integration of easybank in Germany, we continued to make progress against our strategic priorities. We invested further in the digitalization of the customer journey, expanded our product capabilities across key channels, and advanced our simplification strategy by increasing automation and enhancing operational efficiency. These initiatives support scalable, sustainable growth while strengthening the customer experience. Throughout, we maintained our disciplined approach to pricing and capital allocation, with a continued focus on attractive risk-adjusted returns and delivering simple, intuitive financial products for our customers.

Outlook

Looking ahead, we remain committed to executing our longterm strategy, serving more than four million customers with best-in-class products and services in the most efficient and straightforward manner. Our streamlined operating model and focus on efficiency provide a competitive cost advantage, enabling us to succeed in low risk yet highly competitive markets.

With our most recent acquisitions largely complete, our focus shifts to channel development and the rollout of new products. By leveraging the Group's broader platform and creating synergies across the Group, we aim to better serve existing markets and expand into new ones.

Building on our presence in Ireland since 2015 and the establishment of our retail business through the acquisition of MoCo in 2023, BAWAG agreed a recommended all-cash offer for PTSB on 14 April 2026. The proposed acquisition would combine PTSB's local franchise with BAWAG Group's financial strength and operational expertise to create a stronger platform for customers, employees, and shareholders. The transaction remains subject to the satisfaction or waiver of the conditions set out in the Scheme Document sent to PTSB shareholders dated 15 May 2026, including High Court and the remaining regulatory approval.

Financial results

Income metrics

in € million

Jan-Jun 2026

Jan-Jun 2025

Change %

Net interest income

826.9

733.5

12.7

Net fee and commission income

188.1

164.9

14.1

Core revenues

1,015.0

898.4

13.0

Other income1

-

2.1

(100.0)

Operating income

1,015.0

900.5

12.7

Operating expenses

(310.3)

(347.4)

10.7

Pre-provision profit

704.7

553.1

27.4

Regulatory charges

(15.2)

(10.2)

(49.0)

Total risk costs

(140.8)

(100.9)

(39.5)

Net result of at-equity investments

-

-

-

Profit before tax

548.7

442.0

24.1

Income taxes

(136.3)

(110.5)

(23.3)

Profit after tax

412.4

331.5

24.4

Non-controlling interests

-

-

-

Net profit

412.4

331.5

24.4

Key ratios

Jan-Jun 2026

Jan-Jun 2025

Change pts

Return on tangible common equity

35.7%

34.2%

1.5

Net interest margin

4.28%

3.95%

0.33

Cost-income ratio

30.6%

38.6%

(8.0)

Risk costs / interest-bearing assets

0.72%

0.54%

0.18

NPL ratio

1.4%

1.1%

0.3

Business volumes

in € million

Jun 2026

Dec 2025

Change %

Jun 2025

Change %

Interest bearing assets

39,216

38,813

1.0

38,032

3.1

Interest bearing assets (average)

38,970

37,847

3.0

37,127

5.0

Risk-weighted assets

14,241

14,813

(3.9)

15,448

(7.8)

Own issues

11,990

11,552

3.8

11,974

0.1

Customer deposits

43,449

44,516

(2.4)

43,672

(0.5)

Customer deposits (average)

43,154

42,682

1.1

42,492

1.6

Customer funding

55,535

56,182

(1.2)

55,756

(0.4)

Customer funding (average)

55,829

55,568

0.5

55,500

0.6

1 The term "Other income" includes gains and losses on financial instruments and other operating income and expenses.

CORPORATES, REAL ESTATE AND PUBLIC SECTOR



Business Review

During the first half 2026, the Corporates, Real Estate & Public Sector segment delivered a net profit of € 82 million, a return on tangible common equity of 28.5% and a cost-income ratio of 24.6%. Core revenues increased by 4.7% in the first half 2026, while maintaining our focus on risk-adjusted returns. Average interest-bearing assets were € 14.1 billion, up 2.7% versus full-year 2025. Asset quality remained strong, with the NPL ratio at 0.4%.

Despite ongoing market volatility driven by geopolitical uncertainty, business activity remained resilient throughout the first six months of 2026. We continued to take a disciplined approach to risk, selectively pursuing higher-quality opportunities with a more conservative credit profile.

Outlook

Discipline remains at the core of our business model. We continue to avoid pursuing growth at any cost, which has allowed us to maintain a strong and diversified lending pipeline. While competition for defensive, high-quality assets remains intense, our focus remains on disciplined underwriting and risk-adjusted returns in line with our guidelines rather than uneconomic volume growth. We expect market volatility to remain elevated, reflecting uncertainty around the interest rate outlook and geopolitical developments.

Financial results

Income metrics

in € million

Jan-Jun 2026

Jan-Jun 2025

Change %

Net interest income

138.1

129.5

6.6

Net fee and commission income

12.6

14.5

(13.1)

Core revenues

150.7

144.0

4.7

Other income1

-

1.6

(100.0)

Operating income

150.7

145.6

3.5

Operating expenses

(37.1)

(34.9)

(6.3)

Pre-provision profit

113.6

110.7

2.6

Regulatory charges

(4.6)

(4.6)

-

Total risk costs

0.2

(8.2)

-

Net result of at-equity investments

-

-

-

Profit before tax

109.2

97.9

11.5

Income taxes

(27.2)

(24.5)

(11.0)

Profit after tax

82.0

73.4

11.7

Non-controlling interests

-

-

-

Net profit

82.0

73.4

11.7

Key ratios

Jan-Jun 2026

Jan-Jun 2025

Change pts

Return on tangible common equity

28.5%

28.2%

0.3

Net interest margin

1.98%

1.89%

0.09

Cost-income ratio

24.6%

24.0%

0.6

Risk costs / interest-bearing assets

0.00%

0.12%

(0.12)

NPL ratio

0.4%

0.1%

0.3

Business volumes

in € million

Jun 2026

Dec 2025

Change %

Jun 2025

Change %

Interest bearing assets

13,874

14,166

(2.1)

13,331

4.1

Interest bearing assets (average)

14,079

13,704

2.7

13,702

2.8

Risk-weighted assets

4,428

4,862

(8.9)

4,881

(9.3)

Own issues

2,055

1,329

54.6

1,321

55.6

Customer deposits

2,852

3,386

(15.8)

4,082

(30.1)

Customer deposits (average)

3,529

4,870

(27.5)

5,414

(34.8)

Customer funding

5,577

5,406

3.2

6,139

(9.2)

Customer funding (average)

6,173

6,890

(10.4)

7,459

(17.2)

1 The term "Other Income" includes gains and losses on financial instruments and other operating income and expenses.

CORPORATE CENTER AND TREASURY



Business Review

As of June 2026, the investment portfolio amounted to € 2.7 billion and the liquidity reserve was € 13.8 billion. The investment portfolio's average maturity was 3 years, made up of approximately 100% investment grade rated securities, of which 88% were rated in the single A category or higher. As of June 2026, the portfolio had no direct exposure to China, Russia, Ukraine or the Middle East and limited exposure to Central Eastern European countries.

Outlook

In the second half of 2026, key drivers for credit spreads will be among others geopolitical risk, fiscal performance of Eurozone countries and political risk driven by key general elections approaching in France, Italy and Spain in 2027. We remain committed to maintaining high credit quality across the portfolio.

Financial results

Income metrics

in € million

Jan-Jun 2026

Jan-Jun 2025

Change %

Net interest income

3.4

40.4

(91.6)

Net fee and commission income

(0.5)

(0.1)

>100.0

Core revenues

2.9

40.3

(92.8)

Other income1

7.8

(0.7)

-

Operating income

10.7

39.6

(73.0)

Operating expenses

(25.4)

(22.0)

(15.5)

Pre-provision profit

(14.7)

17.6

-

Regulatory charges

(5.1)

(5.2)

1.9

Total risk costs

0.0

(2.1)

100.0

Net result of at-equity investments

7.2

1.7

>100.0

Profit before tax

(12.6)

12.0

-

Income taxes

5.3

(5.7)

-

Profit after tax

(7.3)

6.3

-

Non-controlling interests

0.2

-

-

Net profit

(7.1)

6.3

-

Business volumes

in € million

Jun 2026

Dec 2025

Change %

Jun 2025

Change %

Assets

19,128

19,319

(1.0)

21,397

(10.6)

Risk-weighted assets

2,689

2,919

(7.9)

3,022

(11.0)

Equity

4,707

4,355

8.1

3,812

23.5

Own issues and other liabilities

6,399

6,354

0.7

4,693

36.4

1 The term "Other income" includes gains and losses on financial instruments and other operating income and expenses.

‌OUTLOOK AND TARGETS

The macroeconomic outlook for our core markets is described in the chapter "Macroeconomic developments".

For the banking industry, the key themes in the second half of 2026 are expected to remain broadly consistent. Persistent geopolitical uncertainty is likely to keep macroeconomic developments and the interest rate development in focus. At

Targets

Financial targets 2026 2027 2028

Net profit >€ 960 million >€ 1.1 billion >€ 1.2 billion

the same time, earnings of European banks remained strong,

with headlines on sector consolidation increasingly emerging as a key strategic theme.

At the same time, structural challenges, like legacy cost bases and business models, outdated technology stacks, overleveraged balance sheets and the rapid evolution of the financial ecosystem driven by artificial intelligence, stablecoins, the digital euro and intensifying competition, will continue to accelerate.

We will continue to execute on our strategic ambitions across businesses and brands as well as the continued integration of the easybank business in Germany following the rebranding in the first quarter.

BAWAG Group held excess capital above its 12.5% CET1 ratio target of € 1.05 billion as of end of June 2026. The capital build during the first half 2026 positioned the Group to fund the proposed acquisition of PTSB, which is subject to the satisfaction or waiver of the conditions set out in the Scheme Document sent to PTSB shareholders dated 15 May 2026, including High Court and the remaining regulatory approval.

Our resilience across all cycles is underpinned by a focus on profitable growth, disciplined cost management, and risk-adjusted returns. The 2026 targets remain unchanged and exclude any effects from the proposed acquisition of PTSB subject to the aforementioned approvals or waiver. The mid-term targets communicated in early 2026 will be updated with full-year results.

Given the evolving asset mix, ongoing loan growth, and the contribution from the deposit hedge, we foresee continued positive momentum in net interest income for the remainder of 2026.

Return targets 2026 & beyond Return on tangible

common equity >20%

Cost-Income ratio <33%

Given our strong capital generation in the first half of 2026 and a CET1 ratio of 17.4% at quarter-end, we are well positioned to fully self-fund the proposed acquisition of PTSB. BAWAG Group had temporarily adjusted its dividend policy, including a non-distribution commitment for first-half profits, with the maximum potential dividend limited to second-half earnings. With the capital threshold to fully self-fund the proposed acquisition of approximately 17.0%, we are fully funded for the transaction. We continue to generate capital at a strong pace and have multiple capital management levers available should additional organic growth opportunities arise.

‌RISK MANAGEMENT

With respect to the explanations on financial and legal risks at BAWAG Group as well as the goals and methods of risk management, please refer to the information in the Notes section. For policies on our investment standards in the context of sustainability, please refer to our website, https:// www.bawaggroup.com/en/sustainabi l i ty.

Vienna, 31 July 2026 The Management Board

Anas Abuzaakouk m.p. Chief Executive Officer

Enver Sirucic m.p.

Member of the Management Board

Andrew Wise m.p.

Member of the Management Board

David O'Leary m.p.

Member of the Management Board

Sat Shah m.p.

Member of the Management Board

Guido Jestädt m.p.

Member of the Management Board

‌CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS

‌CONSOLIDATED ACCOUNTS

PROFIT OR LOSS STATEMENT



in € million

[Notes]

Jan-Jun 2026

Jan-Jun 2025

restated

Interest income

1,621.3

1,698.9

thereof calculated using the effective interest method

1,474.8

1,468.5

Interest expense

(657.0)

(799.4)

thereof calculated using the effective interest method

(390.5)

(459.8)

Dividend income

4.1

3.9

Net interest income

968.4

903.4

Fee and commission income

280.0

264.9

Fee and commission expense

(79.8)

(85.6)

Net fee and commission income

[2]

200.2

179.3

Gains and losses on financial assets and liabilities

[3]

37.3

0.6

thereof gains from the derecognition of financial assets measured at amortized cost

-

0.1

thereof losses from the derecognition of financial assets measured at amortized cost

(17.8)

(0.2)

Other operating income

63.5

43.4

Other operating expenses

(114.0)

(57.2)

Operating expenses

[4]

(376.7)

(408.1)

thereof administrative expenses

(342.6)

(372.4)

thereof depreciation and amortization on tangible and intangible non-current assets

(34.1)

(35.7)

Risk costs

[5]

(140.6)

(111.2)

thereof according to IFRS 9

(131.7)

(102.5)

Share of the profit or loss of associates accounted for using the equity method

7.2

1.7

Profit before tax

645.3

551.9

Income taxes

(158.2)

(140.7)

Profit after tax

487.1

411.2

Thereof attributable to non-controlling interests

(0.2)

-

Thereof attributable to owners of the parent

487.3

411.2

,

STATEMENT OF OTHER COMPREHENSIVE INCOME



in € million

[Notes]

Jan-Jun 2026

Jan-Jun 2025

restated

Profit after tax

487.1

411.2

Other comprehensive income

Items that will not be reclassified to profit or loss

Actuarial gains (losses) on defined benefit plans

0.3

4.4

Fair value changes of shares and other equity investments at fair value through other comprehensive income

(0.8)

0.3

thereof from shares and other equity investments held at the end of the reporting period

(0.8)

0.1

thereof from shares and other equity investments derecognized during the reporting period

-

0.2

Change in credit spread of financial liabilities

(0.4)

-

Share of other comprehensive income of associates accounted for using the equity method

-

3.4

Deferred income tax on items that will not be reclassified

-

(1.6)

Total items that will not be reclassified to profit or loss

(0.9)

6.5

Items that may be reclassified subsequently to profit or loss

Foreign exchange differences

6.2

(25.2)

Hedge of net investment in foreign operations

(5.2)

22.9

Cash flow hedge reserve

(33.9)

69.1

thereof transferred to profit (-) or loss (+)1

1.6

2.0

Fair value changes of debt instruments at fair value through other comprehensive income

8.8

(11.1)

thereof transferred to profit (-) or loss (+)

(1.0)

(8.9)

Deferred income tax on items that will not be reclassified

(1.3)

(13.4)

Total items that may be reclassified subsequently to profit or loss

(25.4)

42.3

Other comprehensive income

(26.3)

48.8

Total comprehensive income, net of tax

460.8

460.0

Thereof attributable to non-controlling interests

-

(0.2)

Thereof attributable to owners of the parent

460.8

460.2

1 To net interest income.

STATEMENT OF FINANCIAL POSITION



Total assets

in € million

[Notes]

30.06.2026

31.12.2025

Cash reserves

14,513

14,093

Financial assets at fair value through profit or loss

[6]

476

517

Financial assets at fair value through other comprehensive income

[7]

1,187

1,322

Financial assets held for trading

[8]

124

109

Financial assets measured at amortized cost

[9]

54,677

54,814

Customers

51,074

50,749

Credit institutions

569

452

Securities

3,034

3,613

Valuation adjustment on interest rate risk hedged portfolios

(586)

(616)

Hedging derivatives

212

358

Property, plant and equipment

295

300

Investment properties

247

232

Goodwill

118

117

Brand names and customer relationships

219

223

Software and other intangible assets

188

195

Tax assets for current taxes

25

23

Tax assets for deferred taxes

[10]

88

108

Associates recognized at equity

120

106

Other assets

310

277

Non-current assets and disposal groups held for sale

[11]

5

119

Total assets

72,218

72,297

Total liabilities and equity

in € million

[Notes]

30.06.2026

31.12.2025

Total liabilities

67,502

67,452

Financial liabilities designated at fair value through profit or loss

[12]

57

55

Financial liabilities held for trading

[13]

472

450

Financial liabilities at amortized cost

[14]

65,552

65,707

Customers

45,815

47,367

Issued bonds and supplementary capital

19,013

17,528

Credit institutions

724

812

Valuation adjustment on interest rate risk hedged portfolios

(316)

(299)

Hedging derivatives

279

91

Provisions

[15]

244

251

Tax liabilities for current taxes

222

131

Tax liabilities for deferred taxes

[10]

179

189

Other obligations

813

877

Total equity

4,716

4,845

Equity attributable to the owners of the parent (ex AT1 capital)

4,211

4,340

AT1 capital

496

496

Non-controlling interests

9

9

Total liabilities and equity

72,218

72,297

STATEMENTS OF CHANGES IN EQUITY



Debt

instruments at

fair value

Cash flow

through other

Other equity

Retained

hedge

Actuarial

comprehensive

Subscribed

Capital

instruments

earnings

reserve net

gains/losses

income net of

in € million

capital

reserves

issued

reserve

of tax

net of tax

tax

Balance as of 01.01.2025

79

1,173

708

2,940

(68)

(78)

39

Transfer from other comprehensive income

-

-

-

1

-

-

-

Transactions with owners

-

8

-

(432)

-

-

-

Share-based payment

-

8

-

-

-

-

-

Dividends

-

-

-

(432)

-

-

-

AT1 capital

-

-

(38)

-

-

-

-

AT1 redemption

-

-

(38)

-

-

-

-

AT1 coupon

-

-

-

(24)

-

-

-

Change in scope of consolidation

-

-

-

-

-

-

-

Total comprehensive income

-

-

-

411

53 1

4

(9) 2

Balance as of 30.06.2025

79

1,181

670

2,896

(14)

(74)

30

Balance as of 01.01.2026

77

1,228

496

3,143

(13)

(71)

31

Transfer from other comprehensive income

-

-

-

(56)

-

-

-

Transactions with owners

-

(17)

-

(555)

-

-

-

Share-based payment

1

(17)

-

-

-

-

-

Dividends

-

-

-

(481)

-

-

-

Buyback of shares

(1)

-

-

(74)

-

-

-

AT1 capital

-

-

-

-

-

-

-

AT1 redemption

-

-

-

-

-

-

-

AT1 coupon

-

-

-

(18)

-

-

-

Change in scope of consolidation

-

-

-

-

-

-

-

Total comprehensive income

-

-

-

487

(26) 1

-

- 2

Balance as of 30.06.2026

77

1,211

496

3,001

(39)

(71)

31

  1. Thereof transferred to profit or loss: plus € 1 million (H1 2025: plus € 2 million).

  2. Thereof transferred to profit or loss: minus € 1 million (H1 2025: minus € 7 million).

Equity

investments

at fair value

Change in

Hedge of net

Equity

Equity

through other

credit spread

investment

attributable

including

comprehen-

of financial

in foreign

Foreign

to the

Non-

non-

sive income

liabilities net

operations

exchange

owners of

controlling

controlling

in € million

net of tax

of tax

net of tax

differences

the parent

interests

interests

Balance as of 01.01.2025

(6)

(53)

(10)

9

4,733

-

4,733

Transfer from other comprehensive income

(1)

-

-

-

-

-

-

Transactions with owners

-

-

-

-

(424)

-

(424)

Share-based payment

-

-

-

-

8

-

8

Dividends

-

-

-

-

(432)

-

(432)

AT1 capital

-

-

-

-

(38)

-

(38)

AT1 redemption

-

-

-

-

(38)

-

(38)

AT1 coupon

-

-

-

-

(24)

-

(24)

Change in scope of consolidation

-

-

-

-

-

6

6

Total comprehensive income

3

-

23

(25)

460

-

460

Balance as of 30.06.2025

(4)

(53)

13

(16)

4,708

6

4,714

Balance as of 01.01.2026

2

(53)

12

(16)

4,836

9

4,845

Transfer from other comprehensive income

2

54

-

-

-

-

-

Transactions with owners

-

-

-

-

(572)

-

(572)

Share-based payment

-

-

-

-

(16)

-

(16)

Dividends

-

-

-

-

(481)

-

(481)

Buyback of shares

-

-

-

-

(75)

-

(75)

AT1 capital

-

-

-

-

-

-

-

AT1 redemption

-

-

-

-

-

-

-

AT1 coupon

-

-

-

-

(18)

-

(18)

Change in scope of consolidation

-

-

-

-

-

-

-

Total comprehensive income

(1)

-

(5)

6

461

-

461

Balance as of 30.06.2026

3

1

7

(10)

4,707

9

4,716

CONDENSED CASH FLOW STATEMENT



Jan-Jun 2025

in € million

Jan-Jun 2026

restated

Profit (after tax, before non-controlling interests)

487

411

Non-cash items included in the profit (loss) and reconciliation to net cash from operating activities

(461)

(385)

Change in assets and liabilities arising from operating activities after corrections for non-cash items

(826)

(3,067)

Interest receipts

1,734

1,610

Interest paid

(736)

(976)

Dividend receipts

7

6

Taxes paid

(51)

(53)

Net cash from operating activities

154

(2,454)

Cash receipts from sales and redemptions of

Financial investments

793

838

Tangible and intangible non-current assets

39

5

Cash paid for

Financial investments

(50)

(608)

Tangible and intangible non-current assets

(75)

(19)

Cash receipts from sales of associates

151

-

Cash payments for the acquisition of associates

(7)

-

Acquisition of subsidiaries, net of cash acquired

-

(121)

Net cash used in investing activities

851

95

Cash paid for treasury shares

(75)

-

Dividends paid

(481)

(432)

Issuance of subordinated liabilities (including those designated at fair value through profit or loss)

-

250

Changes in ownership interests in subsidiaries not resulting in a loss of control

-

6

Cash paid for the buyback of AT1 capital

-

(38)

AT1 coupon

(18)

(24)

Cash paid for amounts included in lease liabilities

(11)

(16)

Net cash from financing activities

(585)

(254)

Cash and cash equivalents at end of previous period

14,093

17,604

Net cash from operating activities

154

(2,454)

Net cash used in investing activities

851

95

Net cash from financing activities

(585)

(254)

Cash and cash equivalents at end of period

14,513

14,991

‌NOTES

The condensed Consolidated Half-Year Financial Statements of BAWAG as of 30 June 2026 were prepared in accordance with the International Financial Reporting Standards (IFRS) released by the International Accounting Standards Board (IASB) and in accordance with their interpretation by the IFRS Interpretations Committee (IFRIC/SIC) to the extent adopted by the EU.

These Consolidated Half-Year Financial Statements for the first half 2026 were prepared in accordance with IAS 34 (Interim Financial Reporting).

The accounting principles used in preparing these Consolidated Half-Year Financial Statements are the same as those applied in the consolidated annual financial statements as of 31 December 2025.

The Half-Year Financial Report as of 30 June 2026 was not audited or reviewed by the external auditor.

The reporting currency is euro. Unless indicated otherwise, all figures are rounded to millions of euros. The tables in this report may contain rounding differences.

All monetary balance sheet figures in foreign currencies are translated at the middle exchange rate on the reporting date.

Exercise of judgment and uncertainty of estimates

The Consolidated Half-Year Financial Statements include values which are determined, as permitted, on the basis of estimates and judgments. The estimates and judgments used are based on past experience and other factors, such as planning and expectations or forecasts of future events that are considered likely as far as we know today. The estimates and judgments themselves and the underlying estimation methods and judgment factors are reviewed regularly and compared with actual results. With respect to the current geopolitical situation, please refer to the bullet point on IFRS 9.

The measurement of financial instruments and the related estimates in respect of measurement parameters, in particular the future development of interest rates, have a material effect on the results of operations. The parameter values applied by the Bank are derived largely from market conditions prevailing as of the reporting date.

The determination of the fair value for financial assets and liabilities for which there is no observable market price (Level 2, Level 3) requires the use of valuation techniques. For financial instruments that trade infrequently, calculation of fair value requires varying degrees of judgment depending on

liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument. Details regarding valuation techniques and uncertainty of estimates regarding unobservable input factors are described in Note 17 Fair value.

Assessments of the recoverability of long-term loans are based on assumptions regarding the borrower's future cash flows and, hence, possible impairments of loans and the recognition of provisions for off-balance-sheet commitments in relation to the lending business. In light of the current geopolitical situation (conflicts in Ukraine, the Middle East and Southeast Asia, as well as the future dynamics of international climate policy in general), assessments regarding the measurement of individual financial assets, assessments regarding the transfer of financial instruments from Stage 1 to Stage 2, macroeconomic assumptions for the determination of forward-looking information in the course of the calculation of expected credit losses and assumptions for expected cash flows for impaired loans are based on the latest observations available to us. The long-term impact of the current geopolitical situation on economic development, the development of labor and other industry-specific markets may be overestimated or underestimated when applying hindsight in the future.

The Bank may also face an impact from changed climate conditions and consequently see an impact on the loan portfolio or any collaterals (e.g. through flooding). Other ESG risks may contain changes in client behavior, changes in relevant legislation etc. ESG risks may impact our planning assumptions used for impairment testing, valuation of collateral and financial instruments. The analysis and monitoring of these risks is an ongoing process. For further information on ESG risks, please refer to the Risk Report in the BAWAG Group Consolidated Annual Report 2025.

Assessments as to whether or not cash-generating units (CGUs) were unimpaired are based on planning calculations. These naturally reflect the management's evaluations, which are in turn subject to a degree of predictive uncertainty.

In determining the amount of deferred tax assets, the Group uses historical utilization possibilities of tax loss carryforwards and a multi-year forecast prepared by the management of the subsidiaries and the approved budget for the following year, including tax planning. The Group regularly re-evaluates its estimates related to deferred tax assets, including its assumptions about future profitability. Details regarding deferred taxes are set out in Note 10 Net deferred tax assets and liabilities on the Statement of Financial Position.

Pension obligations are measured based on the projected unit credit method for defined benefit pension plans. In measuring such obligations, assumptions have to be made regarding longterm trends for salaries, pensions and future mortality in particular. Changes in the underlying assumptions from year to

year and divergences from the actual effects each year are reported under actuarial gains and losses.

The following items are also subject to the judgment of management:

recoverability of intangible assets

recognition of provisions for uncertain liabilities

assessments of legal risks from legal proceedings, supreme court rulings and inspections of regulatory authorities and the recognition of provisions regarding such risks

assessment of the lease term applied for the standard IFRS 16 Leases

Restatement in accordance with IAS 8.41

Correction of presentation of net interest income from derivatives

During the preparation of the financial statements as of 30 June 2026, an incorrect presentation of interest income and interest expense arising from derivatives used to hedge interest rate risk and forming part of a hedging relationship in accordance with IAS 39 was identified. The misstatement relates to the financial statements as of 30 June 2025.

The correction resulted in a reduction in total interest income and interest expense of € 212.5 million, while net interest income remained the same.

The prior-year figures in the income statement have been corrected and are presented in the table below:

assessing which entities are structured entities, and which

involvements in such entities are interests

IFRS 9: Judgment may be required when assessing the SPPI criterion to ensure that financial assets are classified into the appropriate measurement category.

fair value calculation for unquoted financial instruments

in € million

published

derivatives

restated

where some parameters required for the valuation model

Interest income

1,911.4

(212.5)

1,698.9

are not observable in the market (Level 3).

Interest expense

(1,011.9)

212.5

(799.4)

Net interest income

903.4

-

903.4

Statement of comprehensive income

Jan-Jun 2025

Correction of presentation

of net interest income from

Jan-Jun 2025

Accounting standards issued but not yet effective

IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 Presentation of Financial Statements and is effective from 1 January 2027. BAWAG did not adopt the standard early and is currently assessing its impact. Preliminary impacts may change as the assessment and implementation progress.

Structure of the statement of profit or loss

IFRS 18 requires all income and expenses to be classified into five categories in the statement of profit or loss: operating, investing, financing, income taxes and discontinued operations. The classification is based on an entity's main business activities.

BAWAG has assessed its business model and concluded that its main business activities within the meaning of IFRS 18 are providing financing to customers and investing in financial assets. Accordingly, income and expenses arising from those activities are classified within the operating category. Neither net profit nor net assets will change as a result of BAWAG's adoption of IFRS 18. However, a new subtotal "operating profit" will have to be presented. BAWAG has not finalized the assessment and implementation of changes, hence the actual impacts may change. Based on the information currently available, BAWAG expects the following changes to the current structure of the statement of profit or loss:

Income and expenses arising from equity accounted investments, gains and losses from not consolidated participations measured at fair value through profit or loss and dividend income will be presented in the investing category.

Income and expenses from IAS 40 investment properties will be presented in the investing category.

Interest expenses from IFRS 16 lease liabilities and interest expenses from provisions for social capital will be presented in the financing category.

Regulatory charges will be presented as a separate line item in the operating category.

Management-defined Performance Measures (MPMs) Management-defined performance measures (MPMs) are subtotals of income and expenses used in public communications outside the financial statements that communicate management's view of an aspect of BAWAG's financial performance as a whole and are not listed in IFRS 18. IFRS 18 requires an entity to disclose specific information about MPMs in a single note in the financial statements.

BAWAG is currently in the process of identifying its MPMs. MPMs relate to the same reporting period as the financial statements. Accordingly, MPMs disclosed following adoption

of IFRS 18 will be determined based on public communications issued by BAWAG relating to the 2027 reporting period.

Principals of aggregation and disaggregation

IFRS 18 provides enhanced principles on how to group information in the primary financial statements and the notes. It also introduces guidance on labelling and describing items presented in the primary financial statements or disclosed in the notes.

BAWAG is assessing the grouping of items on the basis of similar and dissimilar characteristics. Based on this assessment, it will present line items in the primary financial statements that provide useful structured summaries and disclose additional material information in the notes.

Consequential amendments

IFRS 18 introduces consequential amendments to IAS 7 Statement of Cash Flows. BAWAG expects these changes to affect the presentation of the statement of cash flows (e.g. received dividends will be reclassified from cash flows from operating activities to cash flows from investing activities; operating profit as the starting point for the indirect method), without impacting cash flows themselves.

Finalization of acquisition of Barclays Consumer Bank Europe in accordance with IFRS 3

The acquisition of Barclays Consumer Bank Europe was completed in February 2025. The accounting for the business combination was regarded as preliminary in our consolidated financial statements as of 31 Dec 2025. After the date of signing the consolidated annual report of BAWAG, no new information about facts and circumstances that existed as of the acquisition date was obtained. Therefore, no adjustment of the provisional amounts recognized as of year-end 2025 was required. As of the date of publication of this half year report no more information is expected to be obtained and the measurement period therefore ended.

Miscellaneous

The scope of consolidation includes all direct and indirect material equity investments of BAWAG.

As of 30 June 2026, the Group consists of 45 (31 December

2025: 48) fully consolidated companies and 2 (31 December 2025: 3) companies that are accounted for using the equity method in Austria and abroad.

Events after the reporting date

On 30 July 2026, PTSB's shareholders approved the proposed acquisition of Permanent TSB Group Holdings plc ("PTSB") with 91% of votes cast at the meeting supportive of the transaction and all related resolutions at the PTSB extraordinary general meeting receiving the requisite approvals. With this approval, the transaction has reached the required shareholder majority for BAWAG Group's all-cash offer, announced in April 2026, to acquire 100% of PTSB's issued share capital. The completion of the transaction is expected in the fourth quarter of this year or the first quarter 2027 and remains subject to satisfaction or waiver of the other conditions set out in the Scheme Document sent to PTSB shareholders dated 15 May 2026, including High Court sanction and the remaining regulatory approval.

DETAILS OF THE CONSOLIDATED PROFIT

1 |Earnings per share

Earnings per share pursuant to IAS 33

Jan-Jun 2026

Jan-Jun 2025

Net result attributable to owners of the parent (in € million)

487.3

411.2

AT1 coupon (in € million)

(18.1)

(23.6)

Net result attributable to owners of the parent after deduction of AT1 coupon (in € million)

469.2

387.6

Weighted average number of outstanding shares

76,905,855

78,524,046

Basic earnings per share (in €)

6.10

4.94

Weighted average diluted number of outstanding shares

77,632,404

79,294,597

Diluted earnings per share (in €)

6.04

4.89

Supplemental information on after-tax earnings per share according to BAWAG's internal definition (before deduction of AT1 coupon; not in accordance with IAS 33)

Jan-Jun 2026

Jan-Jun 2025

Net result attributable to owners of the parent (in € million)

487.3

411.2

Weighted average diluted number of outstanding shares

77,632,404

79,294,597

After-tax earnings per share in (€) - BAWAG definition

6.28

5.19

Changes in number of outstanding shares

Jan-Jun 2026

Jan-Jun 2025

Shares outstanding at the beginning of the period

76,976,955

78,524,046

Shares outstanding at the end of the period

76,998,527

78,524,046

Weighted average number of outstanding shares

76,905,855

78,524,046

Weighted average diluted number of outstanding shares

77,632,404

79,294,597

Earnings per share represent the net result attributable to

OR LOSS STATEMENT



ordinary equity holders divided by the weighted average number of ordinary shares outstanding during the reporting period. As part of our incentives program, shares will be awarded to employees after fulfillment of certain conditions. For these shares, a potential dilutive effect is calculated.

  1. |Net fee and commission income

    Net fee and commission income can be broken down by BAWAG's segments as follows:

    Jan-Jun 2026

    in € million Retail & SME

    Corporates, Real Estate &

    Public Sector Treasury

    Corporate

    Center

    BAWAG

    Group

    Fee and commission income

    265.6

    14.3

    0.1

    -

    280.0

    Transactional

    156.8

    14.3

    -

    -

    171.1

    Advisory

    76.4

    -

    -

    0.3

    76.7

    Securities

    66.3

    - - 0.3

    66.6

    Insurance

    10.1

    - - -

    10.1

    Lending and others

    32.4

    -

    0.1

    (0.3)

    32.2

    Lending

    17.9

    -

    -

    -

    17.9

    Factoring

    9.5

    -

    -

    -

    9.5

    Others

    5.0

    -

    0.1

    (0.3)

    4.8

    Fee and commission expense

    (77.5)

    (1.7)

    (0.3)

    (0.3)

    (79.8)

    Transactional

    (49.6)

    (1.7)

    -

    -

    (51.3)

    Advisory

    (6.9)

    -

    -

    (0.1)

    (7.0)

    Securities

    (6.9)

    -

    -

    (0.1)

    (7.0)

    Insurance

    -

    -

    -

    -

    -

    Lending and others

    (21.0)

    -

    (0.3)

    (0.2)

    (21.5)

    Lending

    (20.1)

    -

    -

    -

    (20.1)

    Factoring

    (0.6)

    -

    -

    -

    (0.6)

    Others

    (0.3)

    -

    (0.3)

    (0.2)

    (0.8)

    Net fee and commission income

    188.1

    12.6

    (0.2)

    (0.3)

    200.2

    Jan-Jun 2025

    Corporates, Real Estate &

    Corporate

    BAWAG

    in € million

    Retail & SME

    Public Sector

    Treasury

    Center

    Group

    Fee and commission income

    247.3

    16.7

    0.1

    0.8

    264.9

    Transactional

    145.4

    16.7

    -

    -

    162.1

    Advisory

    67.5

    -

    -

    0.3

    67.8

    Securities

    57.4

    - - 0.3

    57.7

    Insurance

    10.1

    - - -

    10.1

    Lending and others

    34.4

    -

    0.1

    0.5

    35.0

    Lending

    19.7

    -

    -

    -

    19.7

    Factoring

    9.6

    -

    -

    -

    9.6

    Others

    5.1

    -

    0.1

    0.5

    5.7

    Fee and commission expense

    (82.4)

    (2.2)

    (0.3)

    (0.7)

    (85.6)

    Transactional

    (52.9)

    (2.2)

    -

    -

    (55.1)

    Advisory

    (6.6)

    -

    -

    (0.1)

    (6.7)

    Securities

    (6.6)

    -

    -

    (0.1)

    (6.7)

    Insurance

    -

    -

    -

    -

    -

    Lending and others

    (22.9)

    -

    (0.3)

    (0.6)

    (23.8)

    Lending

    (21.7)

    -

    -

    -

    (21.7)

    Factoring

    (0.6)

    -

    -

    -

    (0.6)

    Others

    (0.6)

    -

    (0.3)

    (0.6)

    (1.5)

    Net fee and commission income

    164.9

    14.5

    (0.2)

    0.1

    179.3

    Net fee and commission

    income includes an amount of

    € 0.1 million (H1 2025: € 0.2 million) for fiduciary transactions. Income from payment transfers and securities and custody business is recognized mainly at a point in time, income from lending over time and other income using a mix of point in time and over time.

  2. |Gains and losses on financial assets and liabilities

in € million

Jan-Jun

2026

Jan-Jun 2025

Realized gains and losses on financial assets and liabilities not measured at fair value through profit or loss, net 29.3 10.7

Gains (losses) on financial assets and liabilities held for trading, net 29.6 (16.3)

Gains (losses) on financial assets and liabilities measured at fair value through profit or loss, net 3.1 14.4

Gains (losses) from fair value hedge accounting (26.7) (5.9)

Exchange differences, net 2.0 (2.3)

Gains and losses on financial assets and liabilities 37.3 0.6

The item Gains and losses on financial assets and liabilities is primarily driven by the valuation and sale of the Group's investments, the valuation of issued securities and derivatives.

4 |Operating expenses

in € million

Jan-Jun

2026

Jan-Jun 2025

Staff costs

(211.8)

(227.1)

Other administrative expenses

(130.8)

(145.3)

Administrative expenses

(342.6)

(372.4)

Depreciation and amortization on tangible and intangible non-current assets

(34.1)

(35.7)

Operating expenses

(376.7)

(408.1)

5 |Risk costs

in € million

Jan-Jun

2026

Jan-Jun 2025

Loan loss provisions and changes in provisions for off-balance credit risk

(131.7)

(102.5)

Provisions and expenses for operational risk

-

(2.6)

Securitization costs

(8.9)

(6.1)

Risk costs

(140.6)

(111.2)

DETAILS OF THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION



  1. | Financial assets at fair value through profit or loss
  2. | Financial assets at fair value through other comprehensive income

    in € million

    30.06.2026

    31.12.2025

    in € million

    30.06.2026

    31.12.2025

    Financial assets designated at fair value

    Debt instruments

    1,139

    1,275

    through profit or loss

    35

    38

    Bonds and other fixed income

    Receivables from customers

    35

    38

    securities

    1,139

    1,275

    Financial assets mandatorily at fair value

    Bonds of other issuers

    962

    1,100

    through profit or loss

    441

    479

    Public sector debt instruments

    177

    175

    Bonds and other securities

    210

    220

    Subsidiaries and other equity

    Receivables from customers

    139

    149

    investments

    48

    47

    Subsidiaries and other equity

    investments 92 110

    Financial assets at fair value through

    profit or loss 476 517

    The category Financial assets designated at fair value through profit or loss contains all financial instruments that are carried at their fair value through profit or loss because the fair value option defined in IFRS 9 has been exercised for them. The maximum credit risk of loans and advances to customers equals book value.

    Investments in non-consolidated

    subsidiaries 5 5

    Other shareholdings 43 42

    Financial assets at fair value through

    other comprehensive income 1,187 1,322

  3. | Financial assets held for trading

    in € million

    30.06.2026

    31.12.2025

    Derivatives in banking book

    124

    109

    Foreign currency derivatives

    19

    15

    Interest rate derivatives

    105

    94

    Financial assets held for trading

    124

    109

  4. | Financial assets measured at amortized cost

in € million

carrying amount

Stage 1

Stage 2

Stage 3

POCI

carrying amount

Receivables from customers

51,637

(81)

(89)

(386)

(7)

51,074

Securities

3,034

-

-

-

-

3,034

Public sector debt instruments

254

- - - -

254

Debt instruments of other issuers

2,780

- - -

2,780

Receivables from credit institutions

569

- - - -

569

Total

55,240

(81) (89) (386) (7)

54,677

The following breakdown depicts the composition of the item Financial assets at amortized cost of the Group.

30.06.2026

Total gross

Impairments

Impairments

Impairments

Total net

31.12.2025

Total gross

Impairments

Impairments

Impairments

Total net

in € million

carrying amount

Stage 1

Stage 2

Stage 3

POCI

carrying amount

Receivables from customers

51,223

(84)

(95)

(304)

9

50,749

Securities

3,613

-

-

-

-

3,613

Public sector debt instruments

263

- - - -

263

Debt instruments of other issuers

3,350

- - - -

3,350

Receivables from credit institutions

452

- - - -

452

Total

55,288

(84) (95) (304) 9

54,814

The following table depicts the breakdown of receivables from customers by credit type:

in € million

30.06.2026

31.12.2025

Loans

44,130

44,079

Current accounts

4,471

4,306

Finance leases

2,155

2,075

Cash advances

245

209

Money market

73

80

Receivables from customers

51,074

50,749

10 | Net deferred tax assets and liabilities on Statement of Financial Position

The deferred tax assets and liabilities reported on the Statement of Financial Position are the result of temporary differences between the carrying amounts pursuant to IFRS and the valuations of the following items according to the tax requirements:

in € million

30.06.2026

31.12.2025

Financial liabilities designated at fair value through profit or loss

43

44

Financial liabilities at amortized cost

367

445

Financial assets at fair value through other comprehensive income

45

4

Provisions

10

8

Liabilities held for trading

54

59

Tax loss carryforwards

5

6

Other

15

10

Deferred tax assets

539

576

Deferred tax assets netted with deferred tax liabilities

(451)

(468)

Deferred tax assets reported on the balance sheet1

88

108

Financial assets at fair value through profit or loss

17

22

Financial assets at amortized cost

501

517

Hedging derivatives

20

42

Internally generated intangible assets

29

27

Other intangible assets

48

49

Property, plant and equipment

15

-

Deferred tax liabilities

630

657

Deferred tax liabilities netted with deferred tax assets

(451)

(468)

Deferred tax liabilities reported on the balance sheet

179

189

1 Representing deferred tax assets of companies that were not part of the tax group.

For each group member, the deferred tax assets and liabilities pertaining to the same local tax authority were offset against each other and reported under Tax assets or Tax liabilities.

Deferred tax assets and deferred tax liabilities have a remaining maturity of more than one year.

As of 30 June 2026, deferred tax assets on tax loss carryforwards of BAWAG amount to € 5 million (31 December 2025: € 6 million). The risk that the current geopolitical situation will have an impact on the recoverability of tax loss carryforwards that have not yet been utilized is therefore considered to be low. As outlined in the table above, the Statement of Financial Position shows a net deferred tax liability of € 91 million (31 December 2025: liability of € 82 million). There is no increased risk that deferred tax assets cannot be used for future taxable profits.

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