Q2, 2020 FIRST INVESTMENT BANK Table of contents Section 1 Country - PowerPoint PPT Presentation

Q2, 2020 FIRST INVESTMENT BANK

Table of contents Section 1 Country Profile and Bulgarian Economic Overview 3 Section 2 Fibank and the Bulgarian Banking System 9 Section 3 Fibank at a Glance 17 Section 4 Key Figures and Loan Portfolio 21 Section 5 Company Profile 26 Section 6 А ppendix 33 2

SECTION 1 COUNTRY PROFILE AND BULGARIAN ECONOMIC OVERVIEW 3

Country profile • Full name: Republic of Bulgaria • Memberships: European Union (since 2007), NATO (since 2004) • Population: 7.2 M • Capital: Sofia Area: 110,994 sq km (42,855 sq miles) • • Official language: Bulgarian • Traditional religion: Orthodox Christianity ROMANIA • Monetary unit: Bulgarian Lev (BGN) • A currency board arrangement was established in 1997 through the Bulgarian National Bank Act. • Fixed Exchange rate: EUR 1 = BGN 1.95583 SERBIA (BGN 1  EUR 0.51) • Main tax rates: BULGARIA • corporate tax rate of 10%; • personal income tax rate of 10%; BLACK KOS. Sofia • Value Added Tax Act (VAT) rate of 20%; SEA • Main exports: Ferrous and non-ferrous MACE- metals, petrol products, foods and drinks, DONIA textiles, machines and equipment • Payment Systems: RINGS, TARGET2 BNB, ALB. BISERA, BISERA7EUR, BORICA, SEPA, ESROT, CENTRAL DEPOSITARY GREECE TURKEY Source: National Statistical Institute, Bulgarian National Bank, Ministry of Finance 4

Bulgarian economy had strong results over past few years with high growth and low unemployment INFLATION & KEY DRIVERS OF BULGARIAN GDP UNEMPLOYMENT THE BULGARIAN GROWTH ABOVE EU DECREASED SINCE 2012 ECONOMY AVERAGE • In q4, 2019, the country's economy HICP & Unemployment GDP real growth (%, 2012-2018) reported a real annual growth rate of 3.7% (%, 2013-2019) for the period (2011: 3.1%), influenced by the improving external environment on a global scale, as well as the growing economic activity in the countries of the European Union. The main driver of the economy was private consumption growing by 5.7% for Q4 (2018: 6.9%), due to 3.7 higher internal demand and positive 3.1 dynamics in the labor market; • The unemployment rate declined to 4.1% at the end of q4 2019, driven by employment in trade, agriculture, 2.5% hospitality industry and education; 2.3% • The current account remained positive, at the amount of BGN 4 862 М , or 8,2% of GDP in q4, 2019. 2018 2019 2018 2019 Source: International Monetary Fund; European Commission; Bulgarian Ministry of Finance; National Statistical Institute; Bulgarian National Bank 5

Bulgarian Economic Overview Macroeconomic indicators 2014 2015 2016 2017 2018 2019 Q2, 2020 EUR M 42, 824 45,675.2 48,619.8 52,309.2 56,086.2 60,674.5 13,835 GDP Growth, % 1.8 4.0 3.8 3.5 3.1 3.4 -8.2 EUR M 530.6 55.1 1 550.9 1 825.0 773.7 2 452.3 777.0 Current account % of GDP 0.1 0.1 3.2 3.5 1.4 4.0 1.4 EUR M 347 2,000.9 927.2 1,618.9 1,027.9 1,092.4 263.0 FDI % of GDP 0.8 4.4 1.9 3.1 1.8 1.8 0.5 Budget deficit/ surplus % of GDP (5.4) (1.7) 0.2 1.1 1.0 1.2 0.6 Growth of Real GDP, Consumption and Investments Bulgaria Current Ratings Date Outlook Rating Positive Baa2 30 August 2019 Positive BBB- 11 November 2019 21 February 2020 Positive BBB Source: Bulgarian National Bank, National Statistical Institute, Ministry of Finance 6

Macro environment: Key indicators historic development Indicators 2014 2015 2016 2017 2018 2019 Q2, 2020 Gross domestic product (BGN million) 107, 925 83,634 88,571 94,130 98,361 118,669 27,058 Gross domestic product, real growth 3.9 3.6 3.1 3.4 (8.2) 1.3 3.6 (%) - Consumption, real growth (%) 2.2 3.8 3.3 4.5 5.0 6.4 0.4 - Gross fixed capital formation, real (6.6) 3.8 10.2 3.4 2.7 5.3 (3.8) growth (%) Export (% of GDP) 47.5 51.5 49.5 48.0 22.9 49.2 48.0 Inflation at period-end (%) (0.9) (0.4) 0.1 2.8 2.7 3.8 (1.0) Average annual inflation (%) (1.4) (0.1) (0.8) 2.1 2.8 42.1 1.6 Unemployment (%) 10.0 8.0 7.1 6.1 3.7 8.3 10.7 Current account (% of GDP) 0.1 3.2 3.5 1.4 4.0 1.4 1.2 Trade balance (% of GDP) (6.5) (5.8) (2.0) (1.5) (4.1) (0.5) (0.4) Foreign exchange reserves of BNB (EUR 16,534 20,285.4 23,898.5 23,662.1 25,072.2 24,835.6 28,040 million) Foreign direct investments (% of GDP) 0.8 4.4 1.9 3.1 1.8 1.8 0.5 Gross external debt (% of GDP) 60.3 56.2 20.4 91.9 74.1 71.3 65.4 Public debt (% of GDP) 15.3 13.2 14.9 12.1 10.9 10.2 21.0 Consolidated budget balance (% of (3.7) (2.8) 1.6 0.8 - 2.9 0.9 GDP) Exchange rate of USD (BGN for USD 1) 1.61 1.79 1.86 1.63 1.71 1.74 1.79 Source: National Statistical Institute, Bulgarian National Bank, Ministry of Finance CONFIDENTIAL 7

Mid-term macro forecast FAVOURABLE MACRO ENVIRONMENT MACRO ASSUMPTIONS IN THE MID TERM (2019-2022F) 2019-2021F ▪ Positive assumptions of the economic development during Forecast 2019, Ministry of 2019 Q2, 2020 2021F 2022F the period 2019-2022; Finance ▪ Stable growth in GDP to slow down in q1, 2020 & then to GDP real growth, % 3,4 -8,2 3,3 3,3 gradually increase exceeding 2.4% y/o/y; - consumption 5,7 0,4 4,5 3,7 ▪ The consumption will accelerate its growth up to 4.1% y/o/y until q1, 2020; - investment 1,9 -3,8 3,7 5,8 ▪ The growth will slow down to 3.7% y/o/y in 2021; - exports - 0,4 -20,3 2,5 2,5 ▪ FDI are expected to remain stable around 2.4% of GDP; - imports 0,2 -20,0 4,2 3,8 ▪ Full production capacity in the business; Unemployment, % 8,3 4,4 4,0 4,0 ▪ Additional increase in the share of goods with a high value added; Average HICP, % 2,5 1,0 2,2 2,1 ▪ Recovery of the labor market; Current account, % of GDP 5,2 0,7 3,2 2,5 ▪ Reduction in unemployment rate down to 4.0% in 2021; Trade balance, % of GDP -2,7 -0,3 -4,2 -4,7 ▪ Strong fiscal position; FDI, % of GDP 2,4 0,5 2,6 2,5 ▪ Increased activity on the real estate market of residential and office space; M3 aggregate 8,4 8,2 8,3 8,3 ▪ Augmentation of public investments; Loans to corporates 5,9 6,8 8,1 8,3 ▪ Acceleration in the absorption of EU funds; Loans to individuals 9,8 8,8 8,4 8,2 ▪ Expected completion of important infrastructure projects. CONFIDENTIAL 8

SECTION 2 FIBANK AND THE BULGARIAN BANKING SYSTEM 9

The banking sector: 23 banks & foreign branches operated in the country. Fibank in Top5 banks at June 2020. GROUP 1: TOP 5 BANKS GROUP 2: OTHER BANKS TOTAL ASSETS MARKET SHARE TOTAL ASSETS MARKET SHARE (Q2’20, BGNm) (Q2’20%) (Q2’20, BGNm) (Q2’20%) UniCredit Bulbank 19.0% 21,949 8.1% 9,369 Raiffeisenbank DSK Bank (OTP) 21,877 19.0% 5.4% Central Cooperative Bank 6,255 United Bulgarian Bank (KBC) 10.1% 11,647 3.0% Bulgarian Development Bank 3,511 Eurobank Bulgaria 9.5% 10,975 2.6% Allianz Bank 3,054 First Investment Bank 8.7% 9,998 2.2% 2,574 Procredit Bank GROUP 3: FOREIGN BRANCHES 1.8% 2,045 Municipal Bank 1.7% 1,970 Investbank TOTAL ASSETS MARKET SHARE (Q2’20, BGNm) (Q2’20%) 1.5% Bulgarian-American Credit Bank 1,674 Citi Bank Europe - Bulgaria 1.0% 1.4% 1,169 International Asset Bank 1,607 Branch 0.9% D Commerce Bank 1,069 ING Bank N.V. - Sofia Branch 1,060 0.9% BNP Paribas S.A. - Sofia 0.8% TBI Bank 945 0.8% 893 Branch 0.3% Tokuda Bank 381 BNP Paribas Personal finance 713 0.6% T.C. Ziraat Bankasi - Sofia 0.3% 0.1% 162 Texim Bank 380 Branch Fibank is the fourth largest overall, systemically important ▪ Fibank is the largest Bulgarian-owned bank ▪ to the Bulgarian banking system 10 10

Current Status of the Bank System Banking Sector as at 31 March 2020 у /oy 2014 2015 2016 2017 2018 2019 Q2, 2020 Bank system assets, BGN M 85 135 87 524 92 095 97 807 105 557 114 201 115 276 8.2 6.2 Growth of assets in the bank system,% (0.7) 2.8 5.2 6.2 7.9 Bank system profit, BGN M 746.3 898.4 1 262.3 1 174.0 1 678 1 675 515,2 Profit growth, %, y/oy 27.6 20.4 40.5 (7.0) 42.9 (0.2) (43.9) Bank system deposits, BGN M 63 710 69 276 74 129 78 405 84 571 91 853 93 393 Growth of deposits, % 2.4 8.7 7.0 5.8 7.9 8.6 8.0 61 699 62 302 Bank system loans, BGN M 54 158 52 256 52 442 53 553 57 688 Growth of loans, % (5.6) (3.5) (1.8) 2.1 7.7 7.0 4.5 Capital adequacy, % 21.95 22.18 22.15 22.08 20.01 20.38 20.45 - - - - Liquidity, % 294.1 269.9 258.0 In the period March 2020 – June 2020, the dynamics of processes in the banking system was impacted by the increase in assets, deposits and loans. Source: Bulgarian National Bank, June 2020 11 11

Fibank and the Bulgarian Banking System Fibank and the Banking Sector as at 31 June 2020 in BGN M June'19 June’20 Growth, % Banking system 108,579 115,276 6.2% Assets Fibank 9,538 9,998 4.8% Deposits (other than from Banking system 86,479 93,393 8.0% credit institution) Fibank 8,339 8,564 2.7% Banking system 54,926 59,097 Deposit of individuals and 7.6% households Fibank 6,494 6,702 3.2% Banking system 59,641 62,302 4.5% Loans to non-banks Fibank 6,297 6,348 0.8% Banking system 11,950 12,561 5.1% Consumer loans Fibank 1,034 1,075 4.0% Banking system 11,616 13,008 12.0% Mortgage loans Fibank 794 886 11.7% Banking system 35,873 36,469 1.7% Company loans Fibank 4,457 4,375 -1.8% in BGN M June'19 June’20 Growth Banking system 918 515 -43.9% Profit Fibank 94 22 -77.0% Source: Bulgarian National Bank, June 2019 and June 2020 12 12