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

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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 income 1 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 STATEMENT S 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 income 1 7.8 3.0 4.8 >100.0 Operating income 1,176.4 1,085.7 90.7 8.4 Operating expenses 2 (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 income 1 - 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 income 1 - 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 income 1 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/sustain abi 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 Thereof transferred to profit or loss: plus € 1 million (H1 2025: plus € 2 million). 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. |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. |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 | Financial assets at fair value through profit or loss | 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 | 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 | 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 sheet 1 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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