Bawag Group AgVIE: BG

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

Jul 31, 2026 at 8:09 PM UTC · Issued by Bawag Group AG

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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

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

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