2025 Annual Report

CONTENTS

INDEPENDENT AUDITOR'S REPORT

Consolidated and Separate Statement of Profit or Loss and Other Comprehensive Income 4

Consolidated and Separate Statement of Financial Position 6

Consolidated and Separate Statement of Changes in Equity 7

Consolidated and Separate Statement of Cash Flows 11

Notes to the consolidated and separate Financial Statements

1. REPORTING ENTITY 12

2. BASIS OF PREPARATION 13

3. MATERIAL ACCOUNTING POLICIES 17

4. FINANCIAL RISK MANAGEMENT 39

5. USE OF ESTIMATES AND JUDGMENTS 71

6. FAIR VALUE DISCLOSURES 79

7. PRESENTATION OF FINANCIAL INSTRUMENTS BY MEASUREMENT CATEGORY 87

8. NET INTEREST INCOME 93

9. NET FEE AND COMMISSION INCOME 94

10. NET GAIN/(LOSS) FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 95

11. NET GAIN/(LOSS) FROM DISPOSAL OF INVESTMENT SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 95

12. OTHER OPERATING INCOME 96

13. IMPAIRMENT LOSSES ON FINANCIAL ASSETS 97

14. PERSONNEL EXPENSES 97

15. ADMINISTRATIVE AND OTHER OPERATING EXPENSES 98

16. INCOME TAX 98

17. CASH AND CASH EQUIVALENTS 102

18. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 105

19. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 106

20. DUE FROM BANKS 109

21. LOANS AND ADVANCES TO CUSTOMERS 110

22. INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST 132

23. INVESTMENT PROPERTY 133

24. NON-CURRENT ASSETS HELD FOR SALE 134

25. INVESTMENTS IN SUBSIDIARIES 135

26. OTHER FINANCIAL ASSETS 135

27. OTHER ASSETS 139

28. INTANGIBLE ASSETS 139

29. PROPERTY AND EQUIPMENT 141

30. DUE TO BANKS 143

31. CUSTOMER DEPOSITS 143

32. LOANS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS 144

33. OTHER FINANCIAL LIABILITIES 147

34. PROVISIONS 147

35. OTHER LIABILITIES 149

36. SUBORDINATED LIABILITIES 149

37. DEBT SECURITIES IN ISSUE 150

38. SHARE CAPITAL 150

39. EARNINGS PER SHARE 151

40. SEGMENT REPORTING 152

41. RESERVES 152

42. NET DEBT RECONCILIATION 155

43. COMMITMENTS AND CONTINGENCIES 155

44. RELATED PARTY TRANSACTIONS 160

45. LEASES 164

46. SUBSEQUENT EVENTS 167

10

Net gain/(loss) from financial assets at fair value through profit or loss

Net gain/(loss) from disposal of investment securities at fair 11

value through other comprehensive income

Net gain/(loss) on derecognition of financial asstes measured at amortised cost

Net gain/(loss) from investment properties 23

Net gain/(loss) on non-current assets held for sale 24

Other operating income 12

5,915 6,701

5,784 7,427

(118) (1,453)

262 61

166 262

22,336 31,023

Personnel expenses 14

Administrative and other operating expenses 15

Depreciation and amortization 28,29

(75,486) (73,022)

(64,079) (48,924)

(21,988) (20,479)

5,575

7,138

5,784

7,427

(150)

262

166

18,990

243,462

(1,453)

61

262

25,786

218,388

(85,466)

(68,803)

(23,482)

(82,246)

(53,704)

(21,327)

65,711

61,111

(16,390)

(27,063)

49,321

(8,697)

40,624

34,048

(8,563)

25,485

Impairment losses on financial assets 13 (12,084) (24,818)

Income tax expense for the year 16

(7,090) (6,990)

Page 4 of 465

Thousand RON

Other comprehensive income

Net gain on debt instruments measured at FVOCI, transferred to profit or loss

Gain/(loss) from fair value measurement of debt instruments measured at FVOCI

Variation of expected credit loss related to debt instruments measured at FVOCI

Income tax recorded directly in other comprehensive income

Changes in revaluation reserve of property and equipment Income tax recorded directly in other comprehensive income, related to the changes of revaluation reserve

Gain on equity investments measured at FVOCI

Income tax recorded directly in other comprehensive income, related to investments measured at FVOCI

Profit attributable to:

-Equity holders of the parent entity

-Non-controlling interests

Comprehensive income attributable to:

-Equity holders of the parent entity

-Non-controlling interests

The consolidated and separate financial statements were approved by the Board of Directors on the 26 of March 2025 and were signed on its behalf by: Valentin Vancea Georgiana Stanciulescu

General Manager Deputy General Manager

Page 5 of 465

18

19

32

The consolidated and separate financial statements were approved by the Board of Directors on the 26 of March 2025 and were signed on its behalf by:

Valentin Vancea Georgiana Stanciulescu

General Manager Deputy General Manager

Page 6 of 465

Group

Share capital

Expected net credit loss related to FVOCI debt instruments

Gains/(losses) from the measurement at fair value of debt instruments FVOCI

Net gain from the fair value measurement of FVOCI equity instruments

Changes in the revaluation reserve for property and equipment

-

-

-

-

-

-

Net gain related to FVOCI debt instruments recycled

in profit or loss account

Expected net credit loss related to FVOCI debt instruments

Gains/(losses) from the measurement at fair value of debt instruments FVOCI

Net gain from the fair value measurement of FVOCI

equity instruments

Changes in the revaluation reserve for property and equipment

Revaluation reserve realized

The consolidated and separate financial statements were approved by the Board of Directors on the 26 of March 2025 and were signed on its behalf by:

Valentin Vancea Georgiana Stanciulescu

General Manager Deputy General Manager

Cash and cash equivalents at 1 January

494 660

(13,263) (59,951)

538,218 598,169

492 661

(13,235) (59,111)

537,692 596,803

The consolidated and separate financial statements were approved by the Board of Directors on the 26 of March 2025 and were signed on its behalf by:

Valentin Vancea Georgiana Stanciulescu

General Manager Deputy General Manager

1. ‌REPORTING ENTITY

   As at 31 December 2024, the Structure of the Patria Bank Group is the following:

   • Patria Bank S.A. - Parent company- "The Bank / PBK" is a Romanian credit institution resulted from the merger by absorption between the former Banca Comerciala Carpatica S.A. (as the absorbing entity) and former Patria Bank S.A. (as the absorbed entity), which took place on 1st of May 2017. According to the decision of the General Meeting of Shareholders regarding the approval of the merger, the decision to change the name of the absorbing company from Banca Comerciala Carpatica S.A. in Patria Bank S.A. was implemented at the same time with the merger date.

     The Registered office: 42, Pipera Road, Globalworth Plaza Building, 8 and 10 Floors, Bucharest, Sector 2, Romania, postal code 020112.

     As at 31 December 2024 and 31 December 2023 the Bank is ultimately controlled by Emerging Europe Accession Fund Cooperatief U.A. ("EEAF") sole owner of EEAF Financial Services B.V. The main investors in EEAF are EBRD - European Bank for Reconstruction and Development, EIF - European Investment Fund (part of the European Investment Bank group), DEG - Deutsche Investitions- und Entwicklungsgesellschaft GmbH, Black Sea Trade and Development Bank.

     The Bank provides banking services and other financial services to companies and retail clients. These services include: deposit and current accounts, domestic and international payments, foreign exchange transactions, working capital loans, medium term lending, bank guarantees, letters of credit.

     The Group exercises direct and indirect control over the following subsidiaries:

     Subsidiary	Field of activity	Ownership percentage as at	Ownership percentage as at
     		31.12.2024	31.12.2023
     Patria Credit IFN SA	Rural lending and microfinance	99,99%	99,99%
     SAI Patria Asset Management	The management of open-end	99,99%	99,99%
     SA	investment funds
     Patria Euro Obligatiuni	Investment fund	79,22%	80.03%
     Patria Stock	Investment fund	73,28%	82.14%
     Patria Global	Investment fund	49,75%	53.29%
     Carpatica Invest SA	Financial investment services	95.68%	95.68%

   • Patria Credit IFN SA - Subsidiary - ("IFN") is a company registered in Romania since February 12, 2004 and it is authorized by the National Bank of Romania ("NBR") to carry out lending activities. Starting with September 28, 2007, IFN is registered with the General Register of the NBR's Non-banking Financial Institutions ("IFN"), and as of February 26, 2008 Patria Credit IFN was also registered with the NBR Special Register.
   • SAI Patria Asset Management SA (former SAI Carpatica Asset Management SA) -Subsidiary - is authorized by the Financial Supervision Authority ("FSA") for the management of open-end investment funds. The company manages six investment funds - Patria Stock, Patria Global, Patria Obligatiuni (unconsolidated), Patria Euro Obligatiuni, ETF BET, Patria - Tradeville (unconsolidated) and ETF Energie Patria - Tradeville (unconsolidated). The two ETFs are the only Exchange Traded Funds in Romania and are both listed on the Bucharest Stock Exchange. SAI Patria Asset Management SA is under the control of Patria Bank. Patria Bank holds 99.99% of the share capital and voting rights of SAI Patria Asset Management.
   • Carpatica Invest SA (undergoing dissolution) - Subsidiary - Carpatica Invest S.A. with its headoffice in Sibiu, 5 Mihai Viteazu Street. Carpatica Invest S.A was a financial investment services company that operated according to FSA regulations.

     The Financial Supervisory Authority decide to suspend the trading activity of Carpatica Invest SA(decision 1486/06.07.2015).

     The liquidator appointed by the Extraordinary General Meeting of Carpatica Invest S.A. shareholders requested the opening of the simplified insolvency procedure, which was opened by sentence no.

     928/03.11.2016 of the Sibiu Court, in file no. 2127/85/2016.

     Considering the dissolution decision as well as the insignificant impact of the consolidation of Carpatica Invest SA, the Group took the decision to change the scope of consolidation in 2024 and 2023 excluding Carpatica Invest SA.

     As at 31 December 2023 - The Group Patria Bank ("The Group") includes Patria Bank S.A. ("The Bank" / "PBK (resulted from the 2017 merger between Banca Comerciala Carpatica and Patria Bank, former Nextebank until 2016), Patria Credit IFN SA ("IFN"), SAI Patria Asset Management SA (former SAI Carpatica Asset Management SA) together with the managed investment funds: FDI Patria Stock, FDI Patria Global and FDI Patria Euro Obligatiuni and SSIF Carpatica Invest SA (in bankruptcy, ongoing insolvency procedure, unconsolidated). Patria Bank SA is the Parent company of the Group.

2. ‌BASIS OF PREPARATION
   1. Statement of compliance

      The financial statements of the Group and the Bank have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") and with Order of the National Bank of Romania No 27/2010 on the approval of accounting regulations in accordance with IFRS, as amended ("NBR Order No 27/2010").

      The accounts of the Group are maintained in RON in accordance with Romanian accounting law and National

      Bank of Romania's banking regulations and the Financial Supervisory Authority (ASF).

      Patria Bank S.A. is the result of the merger by absorption between the former Banca Comerciala Carpatica SA (as the absorbing entity) and the former Patria Bank S.A. (as the absorbed entity), merger which was implemented on the 1st of May 2017.

      Patria Bank is the parent company of the Group. Consequently, the consolidated financial statements prepared by Patria Bank represent the highest level of consolidation of the Group's entities.

   2. Basis of measurement

      These financial statements have been prepared under the historical cost convention, as modified by the initial recognition of financial instruments based on fair value, and by the revaluation of properties and equipment, financial assets at fair value through other comprehensive income, and financial instruments at fair value through profit or loss and non-current assets held for sale. The main accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented.

   3. Basis of consolidation

      The consolidated financial statements comprise the financial statements of the Patria Bank SA and all its subsidiaries for the year ended December 2024 and December 2023.

      In the separate financial statements the Bank records the participations in subsidiaries separately at cost, less investment funds that met the consolidation criteria, which are measured at fair value - the unit value of the net asset and presented in the category Assets at fair value through profit and loss.

      All balances between Group companies, transactions, income and expenses, losses and gains arising from transactions between Group companies are eliminated.

      Subsidiaries are entities controlled by the Bank. An investor controls an investee when it has power, exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the investor's returns.

      The entities in the Group are incorporated in Romania, keep their accounting books and prepare their statutory financial statements in accordance with IFRS.

      Determining whether the group controls an investment fund for which the Group acts as fund manager usually focuses on assessing the group's aggregate economic interests in the fund (comprising any carried interest and expected management fees). See Note 5 Use Of Estimates And Judgments, "Control over investment funds".

      The Group presents the non-controlling interest in its consolidated financial position within equity, separated

      from the equity of the parent company's owners.

      The non-controlling interest is measured proportionally with the percentage held in the net assets of the subsidiary. Changes in a parent's ownership interest in a subsidiary, which do not result in the loss of parent control of the subsidiary, are reflected as equity transactions.

   4. Going concern

      The preparation of the consolidated and separate financial statements is based on the going concern assumption that involves management's assessments, estimates and assumptions of the Bank and Group's management related to the income, expenses, assets, liabilities, cash flows, liquidity and capital requirements of the Bank and

      the Group. The management is not aware of any material uncertainties that may cast significant doubt upon the

      Bank's ability to continue as a going concern.

   5. Use of estimates and judgments

      The preparation of financial statements according to IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Current results may differ from these estimates.

      Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods, if the revision affects both current and future periods.

      Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the Note 5.

   6. Functional and presentation currency

   The elements included in these financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are prepared and presented in Romanian leu ("RON"), which is the Group's functional and presentation currency, rounded to the nearest thousand.

   Monetary assets and liabilities are translated into lei currency at the official exchange rate of the National Bank of

   Romania ("NBR") at the end of the respective reporting period.

   Foreign exchange gains and losses resulting from the settlement of transactions and from the translation of monetary assets and liabilities into RON at the official exchange rates of year-end, are recognized in profit or loss (as foreign exchange translation gains less losses). Translation at the official exchange rate does not apply to non-monetary items that are measured at historical cost.

   Non-monetary items measured at fair value in a foreign currency, including equity investments, are translated using the exchange rates at the date when the fair value was determined.

   Effects of exchange rate changes on non-monetary items measured at fair value in a foreign currency are recorded as part of the fair value gain or loss.

   The exchange rates of major foreign currencies were:

   Currencies	31 December 2024		31 December 2023 % Increase/ (Decrease)
   Euro (EUR)	1: LEI 4.9741		1: LEI 4.9746		(0,01%)
   US Dollar (USD)	1: LEI 4.7768		1: LEI 4.4958		6,25%
   	31 December 2024		31 December 2023		% Increase/ (Decrease)
   	EUR	USD	EUR	USD	EUR	USD
   At 31 December	4.9741	4.7768	4.9746	4.4958	(0,01%)	6,25%
   Average for the period	4.9746	4.5975	4.9464	4.5758	0,57%	0,47%
   Maximum for the period	4.9773	4.7908	4.9783	4.7430	(0,02%)	1,01%
   Minimum for the period	4.9655	4.4451	4.8858	4.3915	1,63%	1,22%

3. ‌MATERIAL ACCOUNTING POLICIES

Patria Bank SA as the entity resulted from the merger, adopted as accounting policy applied to the merger process the method of Predecessor Accounting, according to which the financial statements of the entity resulted from the merger represent a continuation of the consolidated financial statements of the two pre-merger entities, resulting from the application of IFRS 3 which identifies the acquisition date as March 2016 and the buyer as Patria Bank SA.

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. Regular way purchases and sales of financial assets are recognised on trade date, the date on which the Group commits to purchase or sell the asset.

At initial recognition, the Group measures a financial asset or financial liability at its fair value. In the case of a financial asset or financial liability that is not measured at fair value through profit or loss, it is adjusted for transaction costs that are incremental and directly attributable to the acquisition or issue of the financial asset or liability, such as fees and commissions.

Transaction costs of financial assets and liabilities carried at fair value through profit or loss are expensed in profit or loss. Immediately after initial recognition, an expected credit loss allowance (ECL) is recognised for financial assets measured at amortised cost and investments in debt instruments measured at Fair Value through Other Comprehensive Income (FVOCI), which results in an accounting loss being recognised in profit or loss when an asset is newly originated.

When the fair value of financial assets and liabilities differs from the transaction price on initial recognition, the Group recognises the difference as follows:

• When the fair value is evidenced by a quoted price in an active market for an identical asset or liability (i.e. a Level 1 input) or based on a valuation technique that uses only data from observable markets, the difference is recognised as a gain or loss;

• In all other cases (i.e. a Level 2 and 3 input), the difference is deferred, and the timing of recognition of deferred day one profit or loss is determined individually. It is either amortised over the life of the instrument, deferred until the instrument's fair value can be determined using market observable inputs, or realised through settlement.

  Measurement methods

  Amortised cost and effective interest rate

  Financial assets are measured at amortised cost if they are held in a business model whose objective is to collect the contractual cash flows and the contractual cash flows are Solely Payment of Principal and Interest (SPPI).

  The amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance.

  The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or liability to the gross carrying amount of a financial asset (i.e. its amortised cost before any impairment allowance) or to the amortised cost of a financial liability. The calculation does not consider expected credit losses and includes transaction costs, premiums or discounts and fees and points paid or received that are integral to the effective interest rate, such as origination fees. For purchased or originated credit-impaired financial assets ("POCI") the Group calculates the credit-adjusted effective interest rate, which is calculated based on the amortised cost of the financial asset instead of its gross carrying amount and incorporates the impact of expected credit losses in estimated future cash flows.

  When the Group revises the estimates of future cash flows, the carrying amount of the respective financial asset or financial liability is adjusted to reflect the new estimate discounted using the original effective interest rate. Any changes are recognised in profit or loss.

  In the statement of financial position these assets are measured at amortised cost which is the gross carrying value less impairment allowances. These assets are included within the following statement of financial position line items: "Investments in debt instruments at amortised cost", "Loans and advances to customers", "Cash and cash equivalents', "Due from banks" and "Other Financial Assets".

  In Patria Bank SA the financial assets at amortised cost represent the largest financial asset category; these include: the largest majority of loans and advances to customers, interbank placements and loans (including reverse repo transactions), deposits with Central Bank, amounts in course of settlement, trade receivables and other receivables. Investments in securities measured at amortised cost may be acquired for different business purposes such as: compliance with internal/external liquidity risk requirements, efficient investment of surplus liquidity, strategic position set by the Bank's management, origination and support for client relationships, replacement of loan activity with other activities in order to improve the yield.

  Fair value option for financial assets

  The Group may also irrevocably designate financial assets at fair value through profit or loss if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being measured on different bases.

  Interests income

  Interests income are calculated by applying the effective interest rate to the gross carrying amount of financial assets, except for:

• Purchased or Originated Credit Impaired (POCI) financial assets, for which the original credit-adjusted effective interest rate is applied to the amortised cost of the financial asset;

• Financial assets that are not POCI but subsequently become credit-impaired (or stage 3), for which interest revenue is calculated by applying the effective interest rate to their amortised cost (i.e. net of the expected credit loss provision).

Interest income for these assets are valued using the effective interest rate and are included in the line item "Interest and similar income calculated using the effective interest rate" in the statement of comprehensive income.

Gains or losses from impairment are included in the line item "Net charge with impairment of financial assets".

1. Classification and subsequent measurement

   According to IFRS 9 the Group classifies its financial assets in the following measurement categories:

   • Fair value through profit or loss ("FVPL");

   • Fair value through other comprehensive income ("FVOCI"); or

   • Amortised cost.

     The classification requirements for debt and equity instruments are described below:

     Debt instruments

     Debt instruments are those instruments that meet the definition of a financial liability from the issuer's perspective, such as loans, government and corporate bonds and trade receivables purchased from clients in factoring arrangements without recourse.

     Classification and subsequent measurement of debt instruments depend on:

   • The Group's business model for managing the asset; and

   • The cash flow characteristics of the asset.

     Based on these factors, the Group classifies its debt instruments into one of the following three measurement categories:

   • Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (SPPI), and that are not designated at FVPL, are measured at amortised cost. The carrying amount of these assets is adjusted by any expected credit loss allowance recognised and measured as described in the (ii) Impairment of financial instruments in accordance with IFRS 9 section below. Interest income from these financial assets is included in "Interest income using the effective interest rate method".

   • Fair value through other comprehensive income (FVOCI): Financial assets that are held for collection of contractual cash flows and for selling the assets, where the assets' cash flows represent solely payments of principal and interest, and that are not designated at FVPL, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses on the instrument's amortised cost which are recognised in profit or loss.

     When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in "Net investment income". Interest income from these financial assets is included in "Interest income" using the effective interest rate method in the statement of comprehensive income;

   • Fair value through profit or loss (FVPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented in the profit or loss statement within "Net trading income " in the period in which it arises, unless it arises from debt instruments that were designated at fair value or which are not measured at fair value through profit or loss, in which case they are presented separately in "Net investment income". Interest income from these financial assets is included in "Interest income using the effective interest rate method".

     Business model: the business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group's objective is solely to collect the contractual cash flows from the assets or is to collect both the contractual cash flows and cash flows arising from the sale of assets. If neither of these is applicable (e.g. financial assets are measured at fair value through profit or loss purposes), then the financial assets are classified as part of 'other 'business model and measured at FVPL.

     Factors considered by the Group in determining the business model for a group of assets include:

   • Past experience on how the cash flows for these assets were collected

   • How the asset's performance is evaluated and reported to key management personnel

   • How risks are assessed and managed

   • How managers are compensated

     Solely Payment of Principal and Interest (SPPI): Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, the Group assesses whether the financial instruments' cash flows represent solely payments of principal and interest (the "SPPI test"). In making this assessment, the Group considers whether the contractual cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair value through profit or loss.

     The Group considers the following factors in applying the SPPI benchmark test:

     • Whether payment terms are "not genuine" or "de minimis"

     • Rights in bankruptcy or when non-payment happens

     • Arrangements denominated in a foreign currency

     • Prepayment and term extending options

     • Other contingent payment features

     • Non-recourse arrangements

     • The time value of money element of interest

     • Contractually linked instruments (tranches) and negative interest rates.

       Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

       The Group reclassifies debt investments when and only when its business model for managing those assets changes. The reclassification takes place from the start of the first reporting period following the change.

       Equity instruments

       Equity instruments are instruments that meet the definition of equity from the issuer's perspective; that is, instruments that do not contain a contractual obligation to pay and that evidence a residual interest in the issuer's net assets. Basic ordinary shares held by the Group are such equity instruments.

       The Group subsequently measures all equity investments at fair value through profit or loss, except where the Group's management has elected, at initial recognition, to irrevocably designate an equity investment at fair value through other comprehensive income. The Group's policy is to designate equity investments as FVOCI when those investments are held for purposes other than to generate investment returns. When this election is used, fair value gains and losses are recognised in OCI and are not subsequently reclassified to profit or loss, including on disposal. Impairment losses (and reversal of impairment losses) are not reported separately from other changes in fair value. Dividends, when representing a return on such investments, continue to be recognised in profit or loss as other income when the Group's right to receive payments is established.

       Gains and losses on equity investments at FVPL are included in the "Gain / (loss) from financial assets measured at fair value through profit or loss account" line in the statement of profit or loss.

2. Impairment of financial instruments in accordance with IFRS 9

   IFRS 9 impairment model applies to financial assets measured at amortized cost or at FVOCI and to certain credit commitments and financial guarantees.

   Expected credit losses on assets measured at amortized cost are recognized in the income statement and reduces the value of the asset.

   For credit commitments and financial guarantees, the expected credit losses are recognized as liabilities.

   Expected credit losses on assets measured at FVOCI are recognized in the income statement and reduces the value of asset.

   The main assets to which the Expected Credit Loss model applies are:

   • Loans to customers

   • Due to banks (current accounts, deposits)

   • Government securities

   • Corporate bonds

   • Other financial assets (other receivables, cash in transit etc.)

3. Modification of the terms and conditions of the loans granted to the clients

   If the Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers, the Group assesses whether or not the new terms are substantially different to the original terms. The Group does this by considering, among others, the following factors:

   • If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay;

   • Whether any substantial new terms are introduced, such as a profit share/equity-based return that substantially affects the risk profile of the loan;

   • Significant extension of the loan term when the borrower is not in financial difficulty;

   • Significant change in the interest rate;

   • Change in the currency the loan is denominated in;

   • Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.

     If the terms are substantially different, the Group derecognizes the original financial asset and recognizes a 'new' asset at fair value and recalculates a new effective interest rate for the asset. The date of renegotiation is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a significant increase in credit risk has occurred. However, the Group also assesses whether the new financial asset recognized is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. At derecognition, the differences in the carrying amount are also recognized in profit or loss as a gain or loss.

     If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group recalculates the gross carrying amount based on the revised cash flows of the financial asset and recognizes a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets).

4. Derecognition other than a modification

   Financial assets, or a portion thereof, are derecognized when the contractual rights to receive the cash flows from the assets have expired, or when they have been transferred and either (i) the Group transfers substantially all the risks and rewards of ownership, or (ii) the Group neither transfers nor retains substantially all the risks and rewards of ownership and the Group has not retained control.

   Control is maintained when the other party does not have the practical ability to sell the asset in its entirety to a third party, without imposing restrictions to selling the asset.

   The Group enters into transactions where it retains the contractual rights to receive cash flows from assets but assumes a contractual obligation to pay those cash flows to other entities and transfers substantially all the risks

   and rewards. These transactions are accounted for as 'pass through' transfers that result in derecognition if the

   Group:

   1. Has no obligation to make payments unless it collects equivalent amounts from the assets;

   2. Is prohibited from selling or pledging the assets; and

   3. Has an obligation to remit any cash it collects from the assets without material delay.

5. Derecognition of non-recoverable loans

   The Group performs derecognition of non-recoverable loans by recording them off thee balance sheet (and their respective impairment losses) when the Board of Directors decides that they are irrecoverable. This decision is made after analysing relevant information such as the occurrence of significant changes in the debtor / issuer's financial position so that the debtor / issuer is no longer able to pay the obligation. For lower value credits with homogeneous characteristics, decisions are made based on the number of days of late payment at the specific product level.

   For loans that are 100% impaired, the Group closes the book value of the loans directly in counterparty with the impairment allowance. Subsequently, the Group records all receipts from debtors directly to the profit or loss account under Net impairment of financial assets ".

6. Restructured loans

Restructured loans are considered impaired if the forbearance measure is applied to a loan already impaired or if the loan has more than 1 restructuring measure or number of days overdue is more than 30.

A loan is considered to be restructured if the Group / Bank grant a concession that, in other conditions it would not have made, to a debtor due to a deterioration in the debtor's financial position. Once the loan is restructured, it remains in this category independent of the subsequent satisfactory performance, for a minimum of 2 years, the period called the probation period.

1. Classification and subsequent measurement

   In both the current and prior period, financial liabilities are classified as subsequently measured at amortised cost, except for:

   • Financial liabilities at fair value through profit or loss: this classification is applied to derivatives, financial liabilities held for trading (e.g. short positions in the trading booking) and other financial liabilities designated as such at initial recognition. Gains or losses on financial liabilities designated at fair value through profit or loss are presented partially in other comprehensive income (the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, which is determined as the amount that is not attributable to changes in market conditions that give rise to market risk) and partially profit or loss (the remaining amount of change in the fair value of the liability). This is unless such a presentation would create, or enlarge, an accounting mismatch, in

     which case the gains and losses attributable to changes in the credit risk of the liability are also presented in profit or loss;

   • Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition or when the continuing involvement approach applies;

   • Financial guarantee contracts and loan commitments.

     The Net Assets Attributable to Unit Holders of Consolidated Investment Funds are classified as liabilities based on the following assessment:

   • Redemption Rights: Unit holders have the right to redeem their units at the net asset value (NAV) of the fund.

   • Lack of Discretionary Control: The issuer (fund) does not have unconditional discretion to refuse redemption requests.

   • Contractual Obligation: There is a contractual requirement to transfer cash or other financial assets upon redemption requests from unit holders.

2. Derecognition

   Financial liabilities are derecognised when they are extinguished (i.e. when the obligation specified in the contract is discharged), cancelled or expires.

   Repurchase agreement

   Sales and repurchase agreements are transactions in which the Bank sells a security and simultaneously agrees to repurchase it (or an asset that is substantially the same) at a fixed price on a future date.

   These securities continue to be recognized in the statement of financial position as securities and are measured in accordance with the applicable accounting policies. The liability for amounts received under these agreements from banking book portfolio is included in customers' or interbank deposits. The difference between sale and repurchase price is treated as interest expense using the effective yield method. Assets acquired with a corresponding commitment to resell at a specified future date (reverse repos) from the banking book portfolio are recorded as loans and advances.

   Financial guarantee contracts and loan commitments

   Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and others on behalf of customers to secure loans, overdrafts and other banking facilities.

   Financial guarantee contracts are initially measured at fair value and subsequently measured at the higher of:

   • The amount of the loss allowance (calculated as described by IFRS 9); and

   • The premium received on initial recognition less income recognised in accordance with the principles of IFRS 15. The Group defers the income on a straight-line basis in profit or loss account.

The loan commitments granted by the Group are measured in terms of the possibility of impairment, for the recognition and measurement of an estimated credit loss (ECL) (estimated impairment is calculated as presented in this note - ECL model).

For loan commitments and financial guarantee contracts, the loss allowance is recognised as a provision. However, for contracts that include both a loan and an undrawn commitment and for the Group cannot separately identify the expected credit losses on the undrawn commitment component from those on the loan component, the expected credit losses on the undrawn commitment are recognised together with the loss allowance for the loan. If these combined losses are greater than the gross amount of the loan, the difference between the amount of the expected loss and the gross amount of the loan is recognized as a provision.

Derivatives, including foreign exchange contracts, forward rate agreements, foreign exchange swaps and interest rate swaps, and options exchange rate and interest rate contracts, are accounted for at their fair values.

All derivatives are accounted for as assets when the fair value is positive and as liabilities when the fair value is negative. Changes in the fair value of financial derivatives are included in the current period result (earnings minus losses from derivatives). The Group does not apply hedge accounting for derivative financial instruments. Certain derivatives embedded in other instruments are treated as separate derivatives when their risks and characteristics are not closely related to those of the framework contract.

Subsidiaries are those investees that the Group controls because the Group (i) has power to direct relevant activities of the investees that significantly affect their returns, (ii) has exposure, or rights, to variable returns from its involvement with the investees, and (iii) has the ability to use its power over the investees to affect the amount of investor's returns. The existence and effect of substantive rights, including substantive potential voting rights, are considered when assessing whether the Bank has power over another entity. For a right to be substantial, the holder must have practical ability to exercise that right when decisions about the direction of the relevant activities of the investee need to be made.

In the separate financial statements, the Bank records the participations in subsidiaries separately at cost. The investments are tested for impairment whenever there are indicators that the carrying amount of an investment may not be recoverable. If the recoverable amount of an investment (the higher of its fair value less cost to sell and its value in use) is less than it's carrying amount, the carrying amount is reduced to its recoverable amount.

The carrying amount of an investment is derecognized on disposal. The difference between the fair value of the sale proceeds and the disposed share of the carrying amount of the investment is recognized in profit or loss as gain or loss on disposal. The same applies if the disposal result in a step down from subsidiary to joint venture or an associate measured at cost.

For the consolidated investments funds in the separate financial statements, the funds units are classified at fair value through profit and loss (FVTPL) and the revaluation is performed using the market cotation on related date. The carrying amount of units fund are derecognized on disposal, the difference between selling price and carrying amount is recognized in profit and loss.

The profit tax was calculated and reflected in the financial statements, in accordance with the legislation in force or adopted until the end of the reporting period. Profit tax includes current tax and deferred tax and is recognized in the current year's result, except when it is recognized in other comprehensive income of the global result, or directly in equity, because it refers to transactions that are also recognized in the same period or in another period, in other comprehensive income of the global result or directly in equity.

Current tax is the amount expected to be paid to, or recovered from the taxation authorities in respect of taxable profits or losses for the current and prior periods. Taxes other than on income are recorded within administrative and other operating expenses.

Deferred income tax is provided using the balance sheet liability method for tax loss carry forwards and temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial

reporting purposes.

In accordance with the initial recognition exemption, deferred taxes are not recorded for temporary differences on initial recognition of an asset or a liability in a transaction other than a business combination if the transaction, when initially recognized, affects neither accounting nor taxable profit. Deferred tax liabilities are not recorded for temporary differences on initial recognition of goodwill, and subsequently for goodwill which is not deductible for tax purposes. Deferred tax balances are calculated using the tax rates enacted or substantively enacted at the end of the reporting period, which are expected to apply to the period when the temporary differences will reverse or the tax loss carry forwards will be utilized.

Deferred tax assets for deductible temporary differences and tax loss carry forwards are recorded only to the extent that it is probable that future taxable profit will be available against which the deductions can be utilized.

The tax rate used to calculate the current and deferred tax position at 31 December 2024 and 31 December 2023 is 16%.

Investment property

At the recognition in the balance sheet, an investment property is accounted at cost. The investment property cost includes the trading costs and any expenses directly attributable to the investment property. Subsequent to initial recognition, investment property is measured using the revaluation model (fair value model). Gains or losses from the change in the fair value of the investment property are included in the line "Net gains/(losses) on investment properties" in the consolidated and separate statement of profit or loss.

If a property held by the owner becomes an investment property, the Group will treat that property in accordance with the policy established for tangible assets, until the date when the use is changed.

In the case of assets that were originally earmarked for lease and that subsequently change their destination and are to be used for a long period or they are intended to be realized by sale, a transfer from investment property to tangible assets or inventory, as the case may be, will be accounted for accordingly. The transfer is made at the date when the destination is changed, at the asset value booked in the accounting records.

The investment property is derecognized when they were either sold or permanently withdrawn from use and no economic benefit is expected from their sale. The difference between the cash obtained from the sale and the carrying amount of the asset is recognized in the consolidated statement of profit or loss and other comprehensive income in the financial year in which the asset was derecognised.

Provisions

Provisions for liabilities and charges are non-financial liabilities of uncertain timing or amount.

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

Interest income and expense are recorded for all debt instruments on an accrual basis using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial asset or financial liability and allocating interest income or interest expense for the relevant period.

The effective interest rate is the rate that updates future payments and receipts over the estimated life of the financial instrument or, where applicable, for a shorter period of time to the net carrying amount of the financial asset or debt. When calculating the effective interest rate, the Group estimates cash flows taking into account all contractual terms of the financial instrument, without taking into account future credit losses.

This method allocates, as part of interest income or expense, all fees paid or received between the parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

Fees integral to the effective interest rate include origination fees received or paid by the Group relating to the creation or acquisition of a financial asset or issuance of a financial liability, for example fees for evaluating creditworthiness, evaluating and recording guarantees or collateral, negotiating the terms of the instrument and for processing transaction documents.

Commitment fees received by the Group to originate loans at market interest rates are integral to the effective interest rate if it is probable that will enter into a specific lending arrangement and does not expect to sell the resulting loan shortly after origination. The Group does not designate loan commitments as financial liabilities at fair value through profit or loss.

Interest income and expense presented in the statement of comprehensive income include:

• interest on financial assets and financial liabilities measured at amortized cost calculated on an effective interest basis;

• interest on financial assets at fair value through other comprehensive income calculated on an effective interest basis;

• interest income on impaired loans is recognized according to the provisions of IFRS 9.

Interest income and expense on all trading assets and liabilities are considered to be adjacent to the Group's trading operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.

All other fees, commissions and other income and expense items are generally recorded on an accrual basis by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

Dividend income is recognized in profit or loss when the right to receive dividends payment is established. Dividends income are reflected as a component of other operating income.

Cash and cash equivalents are elements which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash and cash equivalents include mandatory reserve deposits with the National Bank of Romania, all interbank placements.

Funds restricted for a period of more than three months on origination are excluded from cash and cash equivalents. Cash and cash equivalents are carried at amortized cost.

Amounts due from banks are recorded when the Group advances money to counterparty banks with no intention of trading the resulting unquoted non-derivative receivable due on fixed or determinable dates. Due from banks are carried at amortized cost.

Loans and advances to customers are recorded when the Group advances money to purchase or originate an unquoted non-derivative receivable from a customer due on fixed or determinable dates, and has no intention of trading the receivable. Loans and advances to customers are carried at amortised cost.

Non-current assets held for sale represents financial and non-financial assets acquired by the Group in settlement of overdue loans. The assets are initially recognized at fair value when acquired. The Group's intention in respect of Non-current assets held for sale is to sell these properties.

Subsequently, these assets are revalued and accounted for in accordance with the accounting policies taking into account the carrying amount determined in 2016 (initial cost), so that any increase in fair value over the initial value is not recognized in the accounting.

The Group applies its accounting policy for non-current assets held for sale to repossessed collateral where the relevant conditions for such classification are met at the end of the reporting period.

The Group issues financial guarantees and commitments to provide loans. Financial guarantees represent irrevocable commitment to make payments if a customer cannot meet its obligations to third parties and carry the same credit risk as loans. Financial guarantees and commitments to provide a loan are initially recognised at their fair value, which is normally evidenced by the amount of fees received. Fees for financial guarantees are recorded on income in the financial year in which the financial guarantee was issued, and fees for credit commitments are amortized on a straight line basis over the life of the commitment, except for commitments to originate loans if it is probable that the Group will enter into a specific lending arrangement and does not expect to sell the resulting loan shortly after origination; such loan commitment fees are deferred and included in the carrying value of the loan on initial recognition. At the end of each reporting period, the commitments are measured at the higher of (i) the remaining unamortised balance of the amount at initial recognition and (ii) the best estimate of expenditure required to settle the commitment at the end of each reporting period.

Goodwill is carried at cost less accumulated impairment losses, if necessary. The Group tests goodwill for impairment at least annually and whenever there are indications that goodwill may be impaired. Depreciation is determined by evaluating the recoverable value of the cash-generating unit to which the goodwill refers. If the recoverable amount of the cash-generating unit is lower than the book value, an impairment loss is recognized. Goodwill is allocated to the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination. Such units or group of units represent the lowest level at which the Group monitors goodwill, and are not larger than an operating segment. Gains or losses on disposal of an operation within a cash generating unit to which goodwill has been allocated include the carrying amount of goodwill associated with the disposed operation, generally measured on the basis of the relative values of the disposed operation and the portion of the cash-generating unit which is retained.

Buildings and lands are carried at revalued amounts, as described below, less accumulated depreciation and provision for impairment, where required. Equipment is stated and measured at cost less accumulated depreciation and provision for impairment, where required.

Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. If an item of property and equipment is revalued, the entire class of property and equipment to which that asset belongs shall be revalued.

If an asset's carrying amount is increased as a result of a revaluation, the increase shall be recognized in other comprehensive income and accumulated in equity. However, the increase shall be recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss. If an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be recognized in profit or loss as an expenses. The decrease shall be recognized in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognized in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus.

The Group recognizes in the carrying value of a tangible cost of replacing it when that cost is incurred or is likely that future economic benefits embodied in the asset will be transferred to the Group and the cost of this asset can be measured reliably. All other costs are recognized as an expense in the profit or loss account as incurred.

Costs of minor repairs and day-to-day maintenance are expensed when incurred. Costs of replacing major parts or components of premises and equipment items are capitalized.

At the end of each reporting period, management assesses whether there is any indication of impairment of premises and equipment. If any such indication exists, management estimates the recoverable amount, which is determined as the higher of an asset's fair value less costs to sell and its value in use. The carrying amount is reduced to the recoverable amount and the impairment loss is recognized in profit or loss for the year to the extent it exceeds the previous revaluation surplus in equity. An impairment loss recognized for an asset in prior years is reversed if there has been a change in the estimates used to determine the asset's value in use or fair value less costs to sell. Gains and losses on disposals determined by comparing proceeds with carrying amount are recognized in profit or loss for the year (within other operating income or expenses).

Depreciation is calculated using the straight-line method and charged to profit and loss of the year to allocate their cost or revalued amounts over their estimated useful lives:

Useful lives in years

Buildings 48 - 60 years

Equipment's 4 years

Motor vehicles 5- 6 years

Other tangible fixed assets(*) 3 - 30 years

(*) Other tangible fixed assets includes bright lights, mobile phones, with a useful live time of 3 years, and also safes deposits with a useful live time of 30 years.

The lands and constructions in progress are not depreciated.