NLB Group Annual Report 2025

Inspiration

for Success

NLB Group

Annual Report 2025

NLB Group

Annual Report 2025

2

NLB Group

Annual Report 2025

Overview

Business Report

Sustainability

Statement

Financial Report

398 Financial Report

401

Independent Auditor’s Report

405

Statement of Management’s Responsibility

583

NLB Group Directory

586

Definitions and Glossary of Selected Terms

33 Business Report

34

Strategy

37

Funding Strategy, MREL Compliance,

and Capital

42

Risk Factors and Outlook

47

Overview of Financial Performance

70

Segment Analysis

86

NLB Group Key Members

97

Risk Management

110

IT and Cyber Security

114

People and Culture

116

Corporate Governance

126

Compliance and Integrity

128

Internal Audit

129

Corporate Governance Statements

156

Disclosure on Shares and Shareholders

of NLB

159

Events after the End of the

2025 Financial Year

160

Reconciliation of Financial Statements

in Business and Financial Part of the Report

162

Alternative Performance Indicators

169

NLB Group Chart

170

Organisational Structure of NLB

171

Sustainability Statement

Forward-looking statements

The expectations, forecasts and statements regarding future developments that are

contained in this report are based on assumptions and are contingent on a number of

factors that will come into play in the future. Consequently, the actual situation may turn

out to be different.

Contents

4 Overview

5

NLB Group at a Glance

7

Statement by the Management Board of NLB

9

Statement by the Chairman

of the Supervisory Board of NLB

12

Inspired by Our Home Region

13

Key Highlights

17

Key Events

21

Shareholders Structure and Market

Performance of NLB’s Shares and GDRs

24

Macroeconomic Environment

30

Regulatory Environment

The NLB Group has long been a

generous patron of both Slovenian

and regional culture and the

arts in general. This commitment

reached a landmark milestone

in 2025 with the opening of the

MUZA, a new gallery operating

under the NLB’s auspices.

The MUZA’s mission is to

inspire and engage the public

by showcasing the NLB Art

Collection – a national treasure

of the Republic of Slovenia and

one of the country’s largest

private collections – together

with contemporary works by the

region’s most distinguished artists.

Yet the MUZA is more than just

a gallery: it is also a museum and

an academy. A dedicated banking

museum takes the visitors on

a journey through 200 years of

Slovenia’s financial history.

With its exhibits, the MUZA brings

to life the evolution of money,

banking practices, and the crucial

role of banks as both institutions

and supporters of the arts, making

this impact tangible and accessible

to all.

Both collections are carefully

managed by the NLB’s Cultural

Heritage Institute, which

continually expands them through

acquisitions and ensures they

remain a source of inspiration for

generations to come.

OVERVIEW

Explore NLB Group’s 2025 Overview:

key achievements and milestones, rooted

in Southeastern Europe – our home region

and our inspiration for success.

5

NLB Group

Annual Report 2025

Overview

NLB Group at Glance

MB Statement

SB Statement

Regional Presence

Key Highlights

Business Report

Sustainability

Statement

Financial Report

NLB Group at a Glance

Note: Number of active clients in NLB Group banking members. Core financial members include seven banks with 381 branches, four leasing companies and three asset management companies. Ratings refer to long-term credit rating

and Outlook. On 3 March 2026, Moody’s upgraded NLB’s long-term issuer credit ratings by one notch to A2 from A3 with stable outlook. For more information on ratings, see the chapter

Events after the End of the 2025 Financial Year

.

Morningstar Sustainalytics rating was awarded in early 2025 for FY 2024; the 2025 result was not available at the reporting date.

7

banks

with

branches

leasing

companies

asset

management

companies

more than

million

EUR

million

EUR

million

EUR

million

2025

BBB+

2025

7

NLB Group

Annual Report 2025

Overview

NLB Group at Glance

MB Statement

SB Statement

Regional Presence

Key Highlights

Business Report

Sustainability

Statement

Financial Report

Statement by the Management Board of NLB

Esteemed Shareholders,

Great and compelling stories all share a few building

blocks: meaningful challenges, captivating characters,

significant transformation, and emotional resonance.

They give us something to believe in. And they inspire us

– to dream and to act. At the NLB Group,

we are writing

our own story – one of clear ambition, focus, and

growth

. As our reflections of the year 2025 clearly show,

also

one with plenty of inspiration

.

In 2025, the world witnessed no shortage of challenges,

leaving a global, regional and local footprint. The

global macroeconomic environment was marked by

a slowdown in economic activity, with key headwinds

including persistent geopolitical tensions in Ukraine

and the Middle East influencing supply chains, the

energy market, commodity prices, and defence

budgets, intensified trade and tariff wars, weak demand

in Europe and China, and a restrictive, albeit less

aggressive than before, monetary policy.

In

our home region of Southeast Europe

, inflation

declined but remained elevated, continuing to put

upward pressure on investments in talents. Nevertheless,

wage growth supported an improvement in purchasing

power and eligibility for lending, asset management and

insurance solutions. With above all, public infrastructural

investment remained supportive,

growth stayed solid

,

despite trade tensions and slower growth among key

European partners weighing on performance.

Banking operated in an environment of lower interest

rates and gradual disinflation, while the ECB’s key rate

cuts stimulated significant growth of credit activity.

Risks remained present but prudently managed,

ensuring operational stability and

strong asset quality

.

The demand for banking services remained robust,

positively impacting

NLB Group’s performance,

resulting in EUR 503.1 million in profit after tax

at

the end of 2025. ROTE remained solid (at 15.2%), and

normalised ROE is still attractive.

The result reflects the Group’s unwavering commitment

to justifying the trust of NLB’s shareholders, who in 2025

received

dividends in two tranches

, totalling

EUR 257.2

million

, or 50% of NLB Group’s net profit for the year

2024. In contrast, financial bottom-line outperformance,

strong strategic execution, and a focus on sustainable

operations resulted in recognition for the Bank and the

Group. In June, the

rating agency S&P raised NLB’s

long-term issuer credit rating

by one notch

to BBB+

from BBB with a stable outlook, while in early 2025 the

NLB Group received an improved

ESG Rating of 10.5

from

Morningstar Sustainalytics

and later in the year

also achieved an improved

S&P Global ESG Score of 59

.

On 3 March 2026, the

rating agency Moody’s upgraded

NLB’s long-term issuer credit rating

by one notch to

A2

from A3 with a stable outlook.

These, however, were not the only welcoming NLB-

related news connected to

international capital

markets

. In January, NLB issued new 4NC3 senior

preferred notes of EUR 500 million to meet its MREL

requirements. Later, in November, NLB successfully

concluded the bookbuilding process for its pioneer

perpetual NC5 Additional Tier 1 notes in the

benchmark amount of EUR 300 million with significant

oversubscription, resulting in a very reasonable yield

of 6.5% p.a. and signalling strong investor confidence.

The notes, which obtained a credit rating of BB- by S&P

Global Ratings, are strengthening and optimising NLB

Group’s capital position, ensuring that NLB is now

well

established for the next period of growth

, which will be

organic and potentially M&A driven as well.

With an eye on market trends, NLB Group continuously

explores opportunities for meaningful, value-accretive

acquisitions to strengthen its foothold in the markets

it serves, after having in 2025 strongly expanded

its services in the field of leasing. After obtaining all

regulatory approvals, the legal and technical merger of

NLB Lease&Go, leasing, Ljubljana, and Summit Leasing

Slovenija, Ljubljana were successfully concluded in

July. The merged entity operates under the name

NLB

Lease&Go, leasing, Ljubljana,

and has become the

leading provider of leasing services

on the Slovenian

market. It is now also a part of one of the largest leasing

ecosystems across the region, with operations in Serbia,

North Macedonia, and Croatia, as well as a recently

established NLB Car&Go company with an online

vehicle sales platform.

The strong capital position of the Bank also supports

the Group’s ambitious

business strategy

with the aim

of reaching more than EUR 50 billion in total assets,

more than EUR 2 billion of recurring revenues, and a

profit of more than EUR 1 billion by 2030. The strategy

commenced at the beginning of the year, further gaining

momentum after

Reinhard Höll joined the Management

Board

of NLB

as the seventh member and Chief

Transformation Officer (CTO) in June, who later also took

charge of IT and back office.

In addition to initiatives on retail, corporate, and

investment banking, and payments, one of the strategy’s

key pillars is the

transformation of the operating

model

from a product-oriented to a customer-centric

approach. This shift is seen by our efforts to expand

and invest in the ecosystem of adjacent banking

services, such as asset management, bancassurance,

trade finance, leasing, payment rails, among others.

Digital transformation advances brought our customer

experience closer to the best-in-class peers and

challengers, and the

digital core products sales share

in Slovenia to 36.0%

, while

Group digital penetration

exceeded 61.8%

, keeping us firmly on track to achieve

our 80% target by 2030.

8

NLB Group

Annual Report 2025

Overview

NLB Group at Glance

MB Statement

SB Statement

Regional Presence

Key Highlights

Business Report

Sustainability

Statement

Financial Report

Recognising AI as a key driver of productivity and cost

savings across the banking sector, the Group is also

investing in large-scale AI initiatives

, driving process

optimisation through advanced data and analytics,

comprehensive employee upskilling in AI, and the rollout

of a Group-wide generative AI platform to transform

operations and customer experience.

These deliberate strategic investments in technology, AI,

and people – the latter earned NLB the

Top Employer

certificate for the 10

th

consecutive year – are driving

NLB’s transformation into a faster and more efficient

organisation. They aim to

increase speed and reduce

the cost to serve

, while continuously

improving

customer satisfaction

, resulting in more extensive

cross-sell and market share growth. They are also the

foundation of our long-term competitiveness, enabling

faster, more efficient, and more personalised client

service. We believe the future of banking belongs to

those who

see beyond transactions

– to those who

build relevant relationships

.

Banks and other companies in the NLB Group are

deeply intertwined with the local environment,

supporting it not only through services and solutions,

but also through

sports

sponsorships

and a variety

of projects such as

NLB Youth Sports

. The Group’s

contribution also extends to

donations

for various

causes, which in 2025 focused on the health of children,

as well as the

promotion of culture

– a mission that

reached its culmination in the grand

opening of the

MUZA Gallery in Ljubljana

, operating under the

auspices of NLB.

With all this, our story writes itself in 2026 as well.

We will further accelerate our transformation and

strategy delivery, focusing on growth, innovation,

and sustainability, while maintaining prudent risk

management in an uncertain global environment. And

above all, we will continue finding inspiration all around

us: in a job well done, in growth, in services rendered,

in our strategy that is well on track, in stronger ties

among colleagues, in our communities supported, in

milestones celebrated, in our home region ... all leading

to

inspiration for success

.

Yours truly,

Management Board of the NLB d.d.

Hedvika Usenik

Member

Andrej Lasič

Member

Archibald Kremser

Member

Reinhard Höll

Member

Blaž Brodnjak

Chief Executive Officer

Peter Andreas Burkhardt

Member

Antonio Argir

Member

9

NLB Group

Annual Report 2025

Overview

NLB Group at Glance

MB Statement

SB Statement

Regional Presence

Key Highlights

Business Report

Sustainability

Statement

Financial Report

Statement by the Chairman

of the Supervisory Board of NLB

1 Shane Parrish:

Brain Food,

December 2025.

To Our Shareholders,

“Short-term results come from intensity. Long-term

results come from consistency. Ninety percent of success

can be boiled down to consistently doing the obvious

thing for a longer period of time without thinking that

you’re smarter than you are.”

By borrowing the above quote

, I only tried to

describe the mental model your NLB Group should

be, and is, pursuing when trying to execute on its

triangle targets.

Your Supervisory Board is of the opinion that the

“obvious” for NLB Group boils down to:

Focus on customer centricity and serving the client

with an increased speed-to-serve and decreasing

cost-to-serve.

Focus on continuously pushing for an increased

digitalisation of our services and products (client view),

and faster process re-engineering and automation

(organisation view), basically making our business

model completely future-proof ready.

Focus on hospitality and expanded ecosystem of

services, the banking model is developing into mid-to-

long term, moving beyond broad client segmentation

to individualisation, basically delivering data-driven

access to products and services that earn and cement

trust in an era of fading loyalty across our industry

segments.

Focus on credible double-digit growth targets across

all key loan categories and fee driven business (like

payments, bancassurance, trade finance, wealth

management…) and prioritising steady and profitable

growth rather than keeping Return on tangible equity

and/or payouts at peak levels, thus maintaining

10

NLB Group

Annual Report 2025

Overview

NLB Group at Glance

MB Statement

SB Statement

Regional Presence

Key Highlights

Business Report

Sustainability

Statement

Financial Report

flexibility between EPS growth and distributions.

.

Focus on capital efficiency and balance sheet

discipline – product by product, client by client if

needed, down to individual risk-weighted assets, all

based on our RORAC signalling system logic – to free

up trapped capital with precision and put it to work

where it earns more.

.

Focus on pursuing potential inorganic growth that adds

reach in specific segments and geographies, or that

bring distinct capabilities in a specialised area.

We also think that being humble (and “not thinking of

being smarter”) simply means that NLB should:

.

Continue to try to catch the pace of digitally native

banking role models when it comes to new digital

products development speed, technical delivery speed

and consequential product profitability uptake, all

applicable for retail and micro/SME clientele.

.

Continue to redefine the flow of our IT work to meet the

standards of higher efficiency and quality, measured

predominantly through the ratio of how much time we

spend on thinking vs building the new product features.

.

Continue to baseline our employees’ headcount

according to end-to-end client journey processes,

so that we can come to clear conclusions where the

additional efficiency gains are realistic, given the

expected impact of technology (including AI-driven

solutions) on internal processes and their much-needed

constant re-engineering.

.

Continue to try to understand and deploy an agile

way of working, institutionalising the so called “tribe

model”, with the goal to drastically shorten delivery

cycles and raise quality by fully integrating business, IT,

and control functions, and part ways with traditional

hierarchical organisation – all with the purpose to

unlock gains in efficiency and customer satisfaction.

We are basically talking about all the banking business

model elements which have to-date already proven

to be working well in the best-of-class digitally

transformed world’s leading banks and/or digitally

native banking sector leaders who show the way for the

“future of banking”.

But we are also aware that Europe remains fragmented

– strategically and structurally. Unlike the U.S., Europe

has no single dominant banking champion. Narrowing

down the picture to our core region – South-East

Europe – we sometimes mention that our fragmented

markets (classified as frontier markets, albeit arguably

they should bear the emerging markets classification)

are sort of a limiting factor for the quick valuation

upside re-rating of your NLB Group today. But you

should also know this fact preserves long-term

consolidation optionality. And we stand ready to play in

this field as well.

That said, we should maintain the intensity levels while

we work. And we should focus on consistency as our

key mid-to-long term promise. And we should continue

rigorously learning from the best-of-class. Maintaining

the growth mindset at the core of our thinking. For that

to happen, NLB Group will continue to heavily invest in

both technology and talent.

To continue enabling our clients to enjoy the benefits of

their purchasing and investment decisions today, while

spreading the sustainable cost of funding them over

the future. All while we will be expensing our decisions

now, so that our key constituencies (meaning you, our

shareholders, our employees and wider society) can

enjoy their outcomes and benefits long into the future.

Yours truly,

Supervisory Board of NLB d.d.

Primоž Karpe

Chairman

NINA IVANOVIĆ

Serbia

Forest, 2018

wire, metal rods, and spray paint

430 × 218 × 0.8 cm

New acquisition

A wire drawing in space transforms

a flat photograph of a forest

into a fragile three-dimensional

experience of nature.

INSPIRATION

FOR SUCCESS