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Tilžės 149, LT-76348 Šiauliai
Tel. (8 41) 595 607, faks. (8 41) 430 774
El. paštas info@sb.lt
www.sb.lt
FINANCIAL STATEMENTS AND
MANAGEMENT REPORT
31 December 2024
CONTENTS
2
FINANCIAL STATEMENTS ................................................................................................................................................... 4
THE GROUP’S AND THE BANK’S INCOME STATEMENTS .............................................................................................. 5
THE GROUP’S AND THE BANK’S STATEMENTS OF COMPREHENSIVE INCOME ....................................................... 6
THE GROUP’S AND THE BANK’S STATEMENTS OF FINANCIAL POSITION ................................................................. 7
THE GROUP’S STATEMENT OF CHANGES IN EQUITY .................................................................................................. 8
THE BANK’S STATEMENT OF CHANGES IN EQUITY ...................................................................................................... 9
THE GROUP’S AND THE BANK’S STATEMENTS OF CASH FLOWS ............................................................................ 10
GENERAL INFORMATION................................................................................................................................................ 11
ACCOUNTING POLICIES ................................................................................................................................................. 12
FINANCIAL RISK MANAGEMENT .................................................................................................................................... 23
1. Credit risk .......................................................................................................................................................................... 24
2. Market risk......................................................................................................................................................................... 52
3. Liquidity risk ...................................................................................................................................................................... 58
4. Fair value of financial assets and liabilities ....................................................................................................................... 63
5. The risk inherent in insurance activities ............................................................................................................................ 69
6. Operational risk ................................................................................................................................................................. 70
7. ICT risk .............................................................................................................................................................................. 70
8. Compliance risk ................................................................................................................................................................ 71
9. Model risk .......................................................................................................................................................................... 71
10. ESG risk .......................................................................................................................................................................... 72
11. Stress tests ..................................................................................................................................................................... 72
12. Capital management ....................................................................................................................................................... 72
12. Capital management (continued) .................................................................................................................................... 73
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS .......................................................................................... 73
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) ..................................................................... 74
SEGMENT INFORMATION ............................................................................................................................................... 74
NOTE 1 NET INTEREST INCOME ................................................................................................................................... 75
NOTE 2 NET FEE AND COMMISSION INCOME ............................................................................................................. 75
NOTE 3 NET GAIN FROM TRADING ACTIVITIES .......................................................................................................... 76
NOTE 4 OTHER OPERATING EXPENSES ..................................................................................................................... 77
NOTE 5 REVENUE AND EXPENSES RELATED TO INSURANCE ACTIVITIES ............................................................. 77
NOTE 6 OTHER INCOME................................................................................................................................................. 79
NOTE 7 IMPAIRMENT LOSSES ...................................................................................................................................... 80
NOTE 8 INCOME TAX ...................................................................................................................................................... 81
NOTE 9 EARNINGS PER SHARE .................................................................................................................................... 82
NOTE 10 CASH AND CASH EQUIVALENTS ................................................................................................................... 83
NOTE 11 DUE FROM OTHER BANKS .............................................................................................................................. 84
NOTE 12 FINANCIAL ASSETS AND LIABILITIES IN THE TRADING BOOK .................................................................. 85
NOTE 13 LOANS TO CUSTOMERS ................................................................................................................................ 87
NOTE 14 FINANCE LEASE RECEIVABLES .................................................................................................................. 101
NOTE 15 INVESTMENT SECURITIES ........................................................................................................................... 105
NOTE 16 INVESTMENTS IN SUBSIDIARIES ................................................................................................................ 108
NOTE 17 INTANGIBLE ASSETS .................................................................................................................................... 112
NOTE 17 INTANGIBLE ASSETS (CONTINUED) ............................................................................................................... 113
NOTE 18 PROPERTY, PLANT AND EQUIPMENT ........................................................................................................ 113
NOTE 18 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) ................................................................................... 114
NOTE 19 OTHER ASSETS ............................................................................................................................................. 116
NOTE 20 DUE TO OTHER BANKS AND FINANCIAL INSTITUTIONS .......................................................................... 117
NOTE 21 DUE TO CUSTOMERS ................................................................................................................................... 118
NOTE 22 SPECIAL AND LENDING FUNDS................................................................................................................... 118
NOTE 23 DEBT SECURITIES IN ISSUE ........................................................................................................................ 119
NOTE 24 ASSETS AND LIABILITIES RELATED TO INSURANCE ACTIVITIES ........................................................... 120
NOTE 24 ASSETS AND LIABILITIES RELATED TO INSURANCE ACTIVITIES (COTINUED) ......................................... 121
NOTE 25 OTHER LIABILITIES ....................................................................................................................................... 122
NOTE 26 INVESTMENT PROPERTY ............................................................................................................................ 123
NOTE 27 CAPITAL ......................................................................................................................................................... 123
NOTE 27 CAPITAL (CONTINUED) ..................................................................................................................................... 124
NOTE 28 CONTINGENT LIABILITIES AND COMMITMENTS ....................................................................................... 125
CONTENTS
3
NOTE 28 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED) ................................................................... 126
NOTE 29 DIVIDENDS ..................................................................................................................................................... 126
NOTE 30 RELATED-PARTY TRANSACTIONS ............................................................................................................. 126
NOTE 31 FINANCIAL GROUP INFORMATION ............................................................................................................. 128
NOTE 31 FINANCIAL GROUP INFORMATION (CONTINUED) ......................................................................................... 129
NOTE 32 EVENTS AFTER BALANCE SHEET DATE .................................................................................................... 132
CONSOLIDATED MANAGEMENT REPORT FOR 2024 .................................................................................................. 133
ANNUAL ACTIVITY RESULTS ........................................................................................................................................ 134
REGARDING EXTERNAL ENVIRONMENT FACTORS ................................................................................................. 136
RATINGS ......................................................................................................................................................................... 137
RISK MANAGEMENT, COMPLIANCE WITH PRUDENTIAL REQUIREMENTS ............................................................ 137
ACTIVITY PLANS AND FORECASTS ............................................................................................................................. 137
AUTHORIZED CAPITAL, SHAREHOLDERS .................................................................................................................. 138
DIVIDENDS ..................................................................................................................................................................... 140
AGREEMENTS WITH SECURITIES PUBLIC TRADING INTERMEDIARIES ................................................................ 140
MANAGEMENT OF THE BANK ...................................................................................................................................... 141
THE COMMITTEES FORMED WITHIN THE BANK, AREAS OF THEIR ACTIVITIES ................................................... 142
INTERNAL CONTROL ASSESSMENT ........................................................................................................................... 144
EXTERNAL AUDIT .......................................................................................................................................................... 144
EMPLOYEES ................................................................................................................................................................... 145
REMUNERATION POLICY.............................................................................................................................................. 150
MAIN INVESTMENTS DURING THE REPORTING PERIOD ........................................................................................ 158
COMPANIES COMPRISING GROUP ............................................................................................................................. 159
OTHER INFORMATION, PUBLISHED INFORMATION AND MAJOR EVENTS ............................................................ 160
ADDITIONAL INFORMATION ............................................................................................................................................ 160
GOVERNANCE INFORMATION FOR 2024 ...................................................................................................................... 161
REMUNERATION INFORMATION FOR 2024 .................................................................................................................. 183
REMUNERATION OF MEMBERS OF THE SUPERVISORY BODY ............................................................................... 185
REMUNERATION OF MEMBERS OF THE MANAGEMENT BODY .............................................................................. 186
CHANGES IN THE BANK’S RESULTS AND AVERAGE REMUNERATION AMOUNT ..................................................... 189
SUSTAINABILITY INFORMATION FOR 2024 .................................................................................................................. 189
CONFIRMATION FROM THE RESPONSIBLE PERSONS .............................................................................................. 275
FINANCIAL STATEMENTS
31 December 2024
Tilžės 149, LT-76348 Šiauliai
Tel. (8 41) 595 607, fax (8 41) 430 774
E-mail info@sb.lt
www.sb.lt
FINANCIAL STATEMENTS 31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
5
THE GROUP’S AND THE BANK’S INCOME STATEMENTS

|  |  |  |  | Year ended
|  |  | 31 December 2024 |  | 31 December 2023
Continuing operations | Notes | Group | Bank | Group | Bank
Interest income calculated using the effective interest method | 1 | 243,478 | 227,237 | 195,726 | 181,049
Other similar income | 1 | 26,735 | 24,953 | 21,242 | 21,070
Interest expense and similar charges | 1 | (110,004) | (110,146) | (60,115) | (60,189)
Net interest income |  | 160,209 | 142,044 | 156,853 | 141,930
Fee and commission income | 2 | 38,021 | 32,587 | 28,610 | 28,968
Fee and commission expense | 2 | (8,941) | (8,044) | (8,358) | (8,114)
Net fee and commission income |  | 29,080 | 24,543 | 20,252 | 20,854
Net gain from trading activities | 3 | 19,422 | 6,248 | 11,948 | 5,732
Net gain (loss) from derecognition of financial assets | 6 | 544 | 778 | 809 | 532
Net gain (loss) from disposal of tangible assets | 6 | 593 | 141 | 864 | 97
Revenue related to insurance activities | 5 | 13,090 | - | 5,684 | -
Other operating income | 6 | 775 | 1,384 | 41 | 1,722
Salaries and related expenses |  | (49,507) | (43,840) | (36,226) | (33,004)
Depreciation and amortization expenses |  | (8,006) | (6,392) | (5,490) | (5,126)
Expenses related to insurance activities | 5 | (20,747) | - | (12,514) | -
Other operating expenses | 4 | (38,111) | (32,402) | (31,247) | (25,557)
Operating profit before impairment losses |  | 107,342 | 92,504 | 110,974 | 107,180
Allowance for impairment losses | 7 |  |  | (15,518) | (8,059)
on loans and finance lease receivables |  | (10,896) | (4,635) |  |
(Allowance for)/ reversal of allowance for impairment losses on other assets | 7 | - | - | 286 | -
Allowance for impairment losses on investments in subsidiaries |  | - | - | - | -
Share of the profit or loss of investments in subsidiaries accounted for using the equity method | 16 | - | 7,227 | - | (4,267)
Profit from continuing operations before income tax |  | 96,446 | 95,096 | 95,742 | 94,854
Income tax expense | 8 | (17,659) | (15,810) | (20,367) | (19,234)
Net profit from continuing operations for the year |  | 78,787 | 79,286 | 75,375 | 75,620
Profit (loss) from discontinued operations, net of tax |  | - | - | - | -
Net profit for the year |  | 78,787 | 79,286 | 75,375 | 75,620
Net profit attributable to: |  |  |  |  |
Owners of the Bank |  | 78,787 | 79,286 | 75,375 | 75,620
From continuing operations |  | 78,787 | 79,286 | 75,375 | 75,620
From discontinued operations |  | - | - | - | -
Non-controlling interest |  | - | - | - | -
Basic earnings per share (in EUR per share) attributable to owners of the Bank | 9 | 0.12 |  | 0.13 |
From continuing operations |  | 0.12 |  | 0.13 |
From discontinued operations |  | - |  | - |
Diluted earnings per share (in EUR per share) attributable to owners of the Bank | 9 | 0.12 |  | 0.13 |
From continuing operations |  | 0.12 |  | 0.13 |
From discontinued operations |  | - |  | - |

Chief Executive Officer Vytautas Sinius
Chief Financial Officer Donatas Savickas
4
th
March 2025
The accounting policies and notes on pages 11 to 132 constitute an integral part of these financial statements.
FINANCIAL STATEMENTS 31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
6
THE GROUP’S AND THE BANK’S STATEMENTS OF COMPREHENSIVE INCOME
Chief Executive Officer Vytautas Sinius
Chief Financial Officer Donatas Savickas
4
th
March 2025
The accounting policies and notes on pages 11 to 132 constitute an integral part of these financial statements.

|  |  |  |  | Year ended
|  |  | 31 December 2024 |  | 31 December 2023
| Notes | Group | Bank | Group | Bank
Net profit for the year |  | 78,787 | 79,286 | 75,375 | 75,620
Other comprehensive income (loss): |  |  |  |  |
Items that may be subsequently reclassified to profit or loss: |  |  |  |  |
Financial assets valuation gains (losses) taken to other comprehensive income | 15 | 3,026 | 3,026 | 716 | 716
Financial assets valuation result transferred to profit or loss | 15 | 20 | 20 | 2,640 | 2,640
Deferred income tax on gain (loss) from revaluation of financial assets | 8, 15 | (609) | (609) | (671) | (671)
Items that may not be subsequently reclassified to profit or loss: |  |  |  |  |
Fair value changes of financial liabilities at fair value through profit or loss |  | - | - | - | -
attributable to changes in their credit risk |  |  |  |  |
Other comprehensive income (loss), net of deferred tax |  | 2,437 | 2,437 | 2,685 | 2,685
Total comprehensive income for the year |  | 81,224 | 81,723 | 78,060 | 78,305
Total comprehensive income attributable to: |  |  |  |  |
Owners of the Bank |  | 81,224 | 81,723 | 78,060 | 78,305
Non-controlling interest |  | - | - | - | -
|  | 81,224 | 81,723 | 78,060 | 78,305

FINANCIAL STATEMENTS 31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
7
THE GROUP’S AND THE BANK’S STATEMENTS OF FINANCIAL POSITION

|  |  | 31 December 2024 |  | 31 December 2023
ASSETS | Notes | Group | Bank | Group | Bank
Cash and cash equivalents | 10 | 395,136 | 386,365 | 751,499 | 742,969
Securities in the trading book | 12 | 235,110 | 13,543 | 207,677 | 20,402
Due from other banks | 11 | 3,121 | 3,121 | 3,013 | 3,013
Derivative financial instruments | 12 | 1,093 | 1,093 | 251 | 241
Loans to customers | 13 | 3,117,700 | 3,105,007 | 2,645,104 | 2,633,482
Finance lease receivables | 14 | 316,897 | 316,897 | 286,533 | 286,451
Investment securities at fair value | 15 | 43,868 | 43,620 | 74,500 | 74,382
Investment securities at amortized cost | 15 | 726,937 | 716,864 | 751,227 | 739,869
Investments in subsidiaries and associates | 16 | 270 | 84,069 | 100 | 76,672
Intangible assets | 17 | 43,617 | 7,859 | 45,138 | 8,149
Property, plant and equipment | 18 | 15,261 | 14,689 | 15,781 | 14,702
Investment property | 26 | - | - | 993 | -
Current income tax prepayment |  | 82 | - | 35 | -
Deferred income tax asset | 8 | 6,076 | 2,716 | 7,577 | 3,658
Other financial assets | 19 | 7,258 | 6,559 | 7,351 | 8,289
Other non-financial assets | 19 | 10,043 | 8,505 | 12,392 | 10,681
Assets classified as held for sale | 19 | 150 | 150 | 150 | 150
Total assets |  | 4,922,619 | 4,711,057 | 4,809,321 | 4,623,110
LIABILITIES |  |  |  |  |
Due to other banks and financial institutions | 20 | 65,860 | 68,487 | 569,994 | 576,316
Derivative financial instruments | 12 | 123 | 123 | 1,041 | 1,041
Due to customers | 21 | 3,537,972 | 3,543,291 | 3,162,657 | 3,166,908
Special and lending funds | 22 | 23,037 | 23,037 | 15,718 | 15,718
Debt securities in issue | 23 | 448,159 | 448,159 | 276,480 | 276,480
Current income tax liabilities |  | 303 | 48 | 6,412 | 6,412
Deferred income tax liabilities | 8 | 6,141 | - | 6,125 | -
Liabilities related to insurance activities | 24 | 198,432 | - | 179,318 | -
Other financial liabilities | 25 | 46,426 | 39,245 | 40,107 | 34,359
Other non-financial liabilities | 25 | 10,994 | 1,663 | 8,341 | 1,435
Total liabilities |  | 4,337,447 | 4,124,053 | 4,266,193 | 4,078,669
EQUITY |  |  |  |  |
Share capital | 27 | 192,269 | 192,269 | 192,269 | 192,269
Share premium | 27 | 25,534 | 25,534 | 25,534 | 25,534
Treasury shares (-) | 27 | (8,375) | (8,375) | (1,500) | (1,500)
Reserve capital | 27 | 756 | 756 | 756 | 756
Statutory reserve | 27 | 61,025 | 60,805 | 47,803 | 47,605
Financial instruments revaluation reserve |  | (2,989) | (2,989) | (5,426) | (5,426)
Reserve for acquisition of own shares | 27 | 20,000 | 20,000 | 20,000 | 20,000
Other equity | 27 | 1,480 | 1,019 | 1,697 | 1,209
Retained earnings |  | 295,472 | 297,985 | 261,995 | 263,994
Non-controlling interest |  | - | - | - | -
Total equity |  | 585,172 | 587,004 | 543,128 | 544,441
Total liabilities and equity |  | 4,922,619 | 4,711,057 | 4,809,321 | 4,623,110

Chief Executive Officer Vytautas Sinius
Chief Financial Officer Donatas Savickas
4
th
March 2025
The accounting policies and notes on pages 11 to 132 constitute an integral part of these financial statements.
FINANCIAL STATEMENTS 31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
8
THE GROUP’S STATEMENT OF CHANGES IN EQUITY
Notes
Share capital
Share premium
Treasury shares
(-)
Reserve
capital
Financial
instruments
revaluation
reserve
Statutory reserve
Reserve for
acquisition of
own shares
Other equity
Retained
earnings
Total
Non-controlling
interest
Total equity

|  |  |  | Attributable to Bank shareholders |  |  |  |  |  |  |  |  |
31 December 2022 |  | 174,211 | 3,428 | - | 756 | (8,111) | 37,113 | 20,000 | 2,355 | 213,154 | 442,906 | - | 442,906
Impact of change in accounting principles |  | - | - | - | - | - | - | - | - | - | - | - | -
1 January 2023 |  | 174,211 | 3,428 | - | 756 | (8,111) | 37,113 | 20,000 | 2,355 | 213,154 | 442,906 | - | 442,906
Transfer to/from statutory reserve |  | - | - | - | - | - | 10,690 | - | - | (10,690) | - | - | -
Transfer to reserve for acquisition of own shares | 27 | 18,058 | 22,106 | - | - | - | - | - | - | - | 40,164 | - | 40,164
Acquisition of own shares | 27 | - | - | (3,368) | - | - | - | - | - | - | (3,368) | - | (3,368)
Share-based payment | 27 | - | - | 1,868 | - | - | - | - | (658) | 75 | 1,285 | - | 1,285
Payment of dividends | 29 | - | - | - | - | - | - | - | - | (15,919) | (15,919) | - | (15,919)
Total comprehensive income |  | - | - | - | - | 2,685 | - | - | - | 75,375 | 78,060 | - | 78,060
Net profit |  | - | - | - | - | - | - | - | - | 75,375 | 75,375 | - | 75,375
Other comprehensive income |  | - | - | - | - | 2,685 | - | - | - | - | 2,685 | - | 2,685
31 December 2023 |  | 192,269 | 25,534 | (1,500) | 756 | (5,426) | 47,803 | 20,000 | 1,697 | 261,995 | 543,128 | - | 543,128
Transfer to statutory reserve |  | - | - | - | - | - | 13,222 | - | - | (13,222) | - | - | -
Increase in share capital | 27 | - | - | - | - | - | - | - | - | - | - | - | -
Acquisition of own shares | 27 | - | - | (8,375) | - | - | - | - | - | - | (8,375) | - | (8,375)
Share-based payment 27 |  | - | - | 1,500 | - | - | - | - | (217) | 7 | 1,290 | - | 1,290
Payment of dividends | 29 | - | - | - | - | - | - | - | - | (32,095) | (32,095) | - | (32,095)
Total comprehensive income |  | - | - | - | - | 2,437 | - | - | - | 78,787 | 81,224 | - | 81,224
Net profit |  | - | - | - | - | - | - | - | - | 78,787 | 78,787 | - | 78,787
Other comprehensive income |  | - | - | - | - | 2,437 | - | - | - | - | 2,437 | - | 2,437
31 December 2024 |  | 192,269 | 25,534 | (8,375) | 756 | (2,989) | 61,025 | 20,000 | 1,480 | 295,472 | 585,172 | - | 585,172

The accounting policies and notes on pages 11 to 132 constitute an integral part of these financial statements.
FINANCIAL STATEMENTS 31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
9
THE BANK’S STATEMENT OF CHANGES IN EQUITY
Notes
Share capital
Share premium
Treasury shares (
-)
Reserve capital
Financial instruments
revaluation reserve
Statutory reserve
Reserve for acquisition
of own shares
Other equity
Retained
earnings
Total
31 December 2022
174,211
3,428
-
756
(8,111)
36,922
20,000
1,917
214,888
444,011
Impact of change in accounting principles
-
-
-
-
-
-
-
-
-
-
1 January 2023
174,211
3,428
-
756
(8,111)
36,922
20,000
1,917
214,888
444,011
Transfer to/from statutory reserve
-
-
-
-
-
10,683
-
-
(10,683)
-
Transfer to reserve for acquisition of own shares
27
18,058
22,106
-
-
-
-
-
-
-
40,164
Acquisition of own shares
27
-
-
(3,368)
-
-
-
-
-
-
(3,368)
Share-based payment
27
-
-
1,868
-
-
-
-
(708)
88
1,248
Payment of dividends
29
-
-
-
-
-
-
-
-
(15,919)
(15,919)
Total comprehensive income
-
-
-
-
2,685
-
-
-
75,620
78,305
Net profit
-
-
-
-
-
-
-
-
75,620
75,620
Other comprehensive income
-
-
-
-
2,685
-
-
-
-
2,685
31 December 2023
192,269
25,534
(1,500)
756
(5,426)
47,605
20,000
1,209
263,994
544,441
Transfer to statutory reserve
-
-
-
-
-
13,200
-
-
(13,200)
-
Increase in share capital
27
-
-
-
-
-
-
-
-
-
-
Acquisition of own shares
27
-
-
(8,375)
-
-
-
-
-
(8,375)
Share-based payment
27
-
-
1,500
-
-
-
(190)
-
1,310
Payment of dividends
29
-
-
-
-
-
-
-
-
(32,095)
(32,095)
Total comprehensive income
-
-
-
-
2,437
-
-
-
79,286
81,723
Net profit
-
-
-
-
-
-
-
-
79,286
79,286
Other comprehensive income
-
-
-
-
2,437
-
-
-
-
2,437
31 December 2024
192,269
25,534
(8,375)
756
(2,989)
60,805
20,000
1,019
297,985
587,004
The accounting policies and notes on pages 11 to 132 constitute an integral part of these financial statements.
FINANCIAL STATEMENTS 31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
10
THE GROUP’S AND THE BANK’S STATEMENTS OF CASH FLOWS

|  |  |  |  | Year ended
|  |  | 31 December 2024 |  | 31 December 2023
Operating activities | Notes | Group | Bank | Group | Bank
Interest received on loans and advances |  | 230,501 | 209,897 | 177,448 | 163,133
Interest received on finance leases |  | 22,958 | 22,956 | 18,678 | 18,652
Interest received on debt securities in the trading book |  | 1,470 | 1,292 | 1,887 | 1,741
Interest paid |  | (103,746) | (104,419) | (29,458) | (29,633)
Fees and commissions received |  | 38,021 | 32,587 | 28,610 | 28,968
Fees and commissions paid |  | (8,941) | (8,044) | (8,358) | (8,114)
Net cash inflows from trade in securities in the trading book |  | 2,667 | 7,116 | 2,973 | 1,602
Net inflows from foreign exchange trading |  | 5,236 | 5,218 | 6,982 | 6,975
Net inflows from derecognition of financial assets |  | 544 | 779 | 809 | 532
Net inflows from derecognition of non-financial assets |  | 593 | 141 | 864 | 97
Cash inflows related to other activities of Group companies |  | 13,865 | 1,384 | 5,725 | 2,096
Cash outflows related to other activities of Group companies |  | (20,747) | - | (12,514) | -
Recoveries on loans previously written off |  | 285 | 161 | 210 | 208
Salaries and related payments to and on behalf of employees |  | (45,619) | (39,952) | (34,372) | (31,150)
Payments related to operating and other expenses |  | (38,111) | (32,402) | (31,247) | (25,557)
Income tax paid | 8 | (22,442) | (22,442) | (17,628) | (16,200)
Net cash flow from operating activities before change in operating assets and liabilities |  | 76,534 | 74,272 | 110,609 | 113,350
Change in operating assets and liabilities: |  |  |  |  |
(Increase) decrease in due from other banks |  | (108) | (108) | (280) | (280)
Increase in loans to customers |  | (479,621) | (475,529) | (253,637) | (263,910)
Decrease (increase) in finance lease receivable |  | (30,412) | (30,494) | (47,511) | (47,685)
Decrease (increase) in other financial assets |  | 93 | 1,730 | (1,536) | (2,669)
(Increase) decrease in other non-financial assets |  | 16,021 | 16,894 | 1,303 | 9,743
Increase in due to banks and financial institutions |  | (487,444) | (491,139) | (129,700) | (124,862)
Increase in due to customers |  | 362,970 | 364,038 | 361,782 | 361,653
Increase (decrease) in special and lending funds |  | 7,319 | 7,319 | 1,534 | 1,534
Increase (decrease) in other financial liabilities |  | 6,176 | 4,743 | 15,731 | 10,203
Increase (decrease) in other non-financial liabilities |  | (1,218) | (3,655) | 785 | (3,155)
Change |  | (606,224) | (606,201) | (51,529) | (59,428)
Net cash flow from operating activities |  | (529,690) | (531,929) | 59,080 | 53,922
Investing activities |  |  |  |  |
Acquisition of property, plant and equipment, investment property and intangible assets |  | (5,457) | (4,893) | (7,754) | (7,299)
Disposal of property, plant and equipment, investment property and intangible assets |  | 576 | 187 | 3,844 | 2,215
Acquisition of debt securities at amortized cost | 15 | (438,515) | (316,044) | (91,408) | (64,157)
Proceeds from redemption or sale of debt securities at amortized cost | 15 | 452,745 | 335,131 | 292,941 | 279,209
Interest received on debt securities at amortized cost | 15 | 19,620 | 17,776 | 10,082 | 9,777
Dividends received |  | 204 | 13 | 14 | 10,014
Acquisition of investment securities at fair value |  | - | - | - | -
Sale or redemption of investment securities at fair value |  | 33,645 | 33,645 | 16,824 | 16,824
Interest received on investment securities at fair value |  | 639 | 639 | 758 | 758
Business acquired net of cash acquired during transaction | 16 | - | - | 5,608 | -
Establishment of subsidiaries | 16 | (100) | (100) | - | (400)
Increase in share capital of subsidiaries in cash | 16 | (70) | (70) | - | (17,706)
Net cash flow from (used in) investing activities |  | 63,287 | 66,284 | 230,909 | 229,235
Financing activities |  |  |  |  |
Payment of dividends | 29 | (32,159) | (32,159) | (15,909) | (15,909)
Acquisition of own shares | 27 | (8,375) | (8,375) | (3,368) | (3,368)
Interest on debt securities in issue | 23 | (13,387) | (13,387) | (2,905) | (2,905)
Issue of debt securities | 23 | 375,000 | 375,000 | 100,000 | 100,000
Redemption of debt securities issued | 23 | (210,000) | (210,000) | - | -
Principal elements of lease payments | 10 | (1,039) | (2,038) | (1,066) | (1,524)
Net cash flow (used in) from financing activities |  | 110,040 | 109,041 | 76,752 | 76,294
Net increase (decrease) in cash and cash equivalents |  | (356,363) | (356,604) | 366,741 | 359,451
Cash and cash equivalents at 1 January |  | 751,499 | 742,969 | 384,758 | 383,518
Cash and cash equivalents at 31 December | 10 | 395,136 | 386,365 | 751,499 | 742,969

The accounting policies and notes on pages 11 to 132 constitute an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
11
GENERAL INFORMATION
Šiaulių Bankas AB was registered as a public company in the Enterprise Register of the Republic of Lithuania on 4 February 1992. The
Bank is licensed by the Bank of Lithuania to perform all banking operations provided for in the Law on Banks of the Republic of Lithuania
and the Charter of the Bank. In this document Šiaulių Bankas AB is referred to as the Bank, Šiaulių Bankas AB and its subsidiaries - the
Group.
The Head Office of the Bank is located in Šiauliai, Tilžės str. 149, LT-76348. At the end of the reporting period the Bank had 54 customer
service outlets (2022: 56 outlets). As of 31 December 2023 the Bank had 981 employees (31 December 2022: 817). As at 31 December
2023 the Group had 1,137 employees (31 December 2022: 908 employees).
The Bank accepts deposits, issues loans, makes money transfers and documentary settlements, exchanges currencies for its clients,
issues and processes debit and credit cards, is engaged in trade finance and is investing and trading in securities, as well as performs
other activities set forth in the Law on Banks of the Republic of Lithuania and the Charter of the Bank. Subsidiary companies of the Group
perform consumer financing, life insurance and real estate management activities.
The Bank’s shares are listed on the Baltic Main List of the NASDAQ Vilnius Stock Exchange.

As of 31 December 2024, the Bank owned the following | As of 31 December 2023, the Bank owned the following |
directly controlled subsidiaries: | directly controlled subsidiaries: |
| 1. SB Draudimas UAB (life insurance activities),
1. SB Draudimas UAB (life insurance activities), | 2. | SB Lizingas UAB (consumer financing activities),
2. SB Lizingas UAB (consumer financing activities), | 3. | Šiaulių Banko Lizingas UAB (lease activities),
3. SB Turto Fondas UAB (real estate management | 4. | SB Turto Fondas UAB (real estate management
activities), |  | activities),
4. SB Modernizavimo Fondas UAB (multi-apartment | 5. | SB Modernizavimo Fondas UAB (multi-apartment
renovation financing)*, | renovation financing)*,
5. SB Modernizavimo Fondas 2 UAB (multi-apartment | 6. | SB Asset Management UAB (fund management
renovation financing)*, 6. SB Asset Management UAB (fund management |  | activities).
activities). |  |

*not consolidated under IFRS 10 requirements
*not consolidated under IFRS 10 requirements
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
12
ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below.
Basis of preparation
The financial statements of the Group and the Bank have been prepared in accordance with International Financial Reporting Standards
as adopted by the EU. The financial statements have been prepared under the historical cost convention as modified for the fair value of
financial assets and liabilities at fair value through profit or loss and investment securities at fair value through other comprehensive
income.
The preparation of financial statements in conformity with International Financial Reporting Standards require the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are
based on management’s best knowledge of current event and actions, actual results ultimately may differ from those estimates.
These financial statements combine the consolidated financial statements for the Group and separate financial statements of the Bank.
Such format of reporting was adopted to ensure consistency of presentation with the format prescribed by the Bank of Lithuania and
applied for statutory reporting.
Neither the Bank’s shareholders, nor any other party have power to amend the financial statements after issue. According to local
legislation, the financial statements are subject to approval in the general meeting of shareholders, but the approval/disapproval cannot
result in amendment of the financial statements.
Amounts shown in these financial statements are presented in the national currency the euro (EUR), which is the Bank’s and Group‘s
functional and presentation currency.
Amendments to existing standards and interpretations effective in 2024
A number of new standards are effective from 1 January 2024 but they do not have a material effect on the Group’s financial statements:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8);
• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12);
• International Tax Reform – Pillar II Model Rules (Amendments to IAS 12).
On 1 January 2023 Group and Bank’s subsidiary UAB SB draudimas (hereinafter – the Company) applied IFRS 17 Insurance contracts
for the first time. Application of this standard introduced significant accounting changes for insurance and reinsurance contracts and
financial instruments.
Standards and amendments to existing standards that are not yet effective and have not been early adopted by the Group and
the Bank
A number of new standards are effective for annual periods beginning 1 January 2025 and after, earlier application is permitted; however,
the Group and the Bank has not early adopted the new or amended standards in preparing these financial statements.
The following new and amended standards are not expected to have a significant impact on the Group’s and Bank's financial statements:
• Classification and Measurement of Financial Instrument (Amendment to IFRS 9 and IFRS 7)
• Presentation and Disclosure in Financial Statements (Amendments to IFRS 18);
• Subsidiaries without Public Accountability: Disclosures (IFRS 19);
• Lack of Exchangeability (Amendments to IAS 21);
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
13
ACCOUNTING POLICIES (CONTINUED)
Consolidation of subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as
transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling
interests are also recorded in equity.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-
acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s
identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in
the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized
in profit or loss.
The excess of the consideration transferred the amount of any non-controlling interest in the acquiree and the acquisition-date fair value
of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with
the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the
operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the
portion of the cash-generating unit retained.
If the total of consideration transferred, non-controlling interest recognized and previously held interest measured is less than the fair
value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the income
statement.
Inter-company transactions, balances and unrealized gains on transactions between the Group companies (including subsidiaries
classified as held for sale) are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of impairment
of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Bank.
Subsidiaries in the stand-alone financial statements are accounted for using equity method. Investment is initially recognized at cost, and
adjusted thereafter for the post-acquisition change in the Bank’s share of net assets of the subsidiary. the share of the profit or loss is
included in the value of investments in subsidiaries and Bank’s income statement, dividends paid by the subsidiary to the Bank are
subtracted from the value of investment in subsidiary and not included in Bank’s income statement.
The Group’s share of post-acquisition profit or loss is recognized in the income statement, and its share of post-acquisition movements
in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount
of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the associate.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
14
ACCOUNTING POLICIES (CONTINUED)
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in the euro,
which is the Bank’s functional and presentation currency. Euro also is functional and presentation currency of all the subsidiaries of
the Bank included in the consolidated financial statements.
(b) Transactions and balances
All monetary assets and liabilities denominated in foreign currencies are translated into the euro (EUR) at the official daily euro
foreign exchange reference rates (published by the European Central Bank) prevailing at the end of the reporting period. Gains and
losses arising from this translation are included in the income statement for the reporting period. All non-monetary liabilities and
assets are translated using the exchange rate prevailing on the date of acquisition.
Foreign currency transactions are recorded in the euro using the exchange rate ruling on the date of the transaction. Exchange differences
arising from the settlement of transactions denominated in foreign currency are charged to the income statement at the time of transaction
using the exchange rate ruling at that date.
Off-setting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to
offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.
Recognition of income and expenses
Interest income and expense are recognized in the income statement on debt instruments at amortized cost or at fair value through other
comprehensive income on an accrual basis using the effective interest method based on the actual purchase price. The effective interest
method is a method of calculating the authorized cost of a financial asset or a financial liability and of allocating the interest income or
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual
terms of the financial instrument (for example, prepayment options). The calculation includes all fees and points paid or received between
parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.
Loan origination fees are accounted for as an adjustment to the effective interest rate calculation for each issued loan separately. Other
commission fees and other similar income and expenses are recognized as gained or incurred.
For financial assets interest income is calculated by applying the effective interest rate to the gross carrying amount, except for financial
assets that are credit-impaired (Stage 3), for which interest income is calculated by applying the effective interest rate to the net carrying
amount (i.e. gross carrying amount reduced by the allowance for impairment), and purchased or originated credit-impaired (POCI) assets,
for which the credit-adjusted effective interest rate is applied to the amortized cost of the financial asset.
Revenues from contracts with customers consist primarily of service-related fees and are reported as Commission income, including fees
for settlement services, service plans, cash operations, cards, account servicing fees, services related to securities, funds management
fees, collection of utility and similar payments and others. The revenues reflect the consideration which is expected to be received in
exchange for those services or transactions. The recognition in Income statement depends on whether the Group's obligations are
provided. Revenue from such services is recognized over time on a straight-line basis when the services are provided to the customer.
Revenue related to transactions is recognized at a point in time when the transaction takes place. Fee income for settlement services,
cash operations, documentary collection, collection of utility and similar payments, services related to securities, funds distribution and
other is recognized at a point in time when the Group satisfies its performance obligation upon execution of the specified transaction.
Insurance income and expense recognition is disclosed under Accounting principles section Insurance and investment contracts
classification and accounting.
For distribution of second and third-tier pension funds Group uses services of external intermediaries, for whom a commission fee is paid
for conclusion of the contract. The Group considers commissions paid to intermediaries for the conclusion of contracts for new pension
fund participants as the costs of concluding contracts with clients and capitalizes and amortizes them over the average expected period
of the new client's retention as a client of the Group - 10 years. Capitalized amounts of commission fees to intermediaries are recognized
in the statement of financial position in the part of fixed assets.
Revenue from other activities of the Group comprise sale of apartments or other developed real estate projects. This revenue is
recognized at a point of time upon transfer of completed property to client.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
15
ACCOUNTING POLICIES (CONTINUED)
Share-based payment
Employees whose professional activities and/or decisions might have a significant impact on the risk accepted by the Group, receive
deferred variable remuneration. The grant-date fair value of equity-settled shares-based payment arrangements granted to these
employees is recognized as salaries and related expenses in income statement with a corresponding increase in other equity line in the
statement of financial position, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the
number of awards for which the service and conditions (not directly based on market performance of shares) are expected to be met,
such that the amount ultimately recognized is based on the number of awards that meet the related service and conditions at vesting
date. Any deviation from the original approval due to modifications of original terms and conditions are recognized in Income statement
and a corresponding adjustment is recognized in other equity.
Taxation
a) Income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred
income tax asset is realized or the deferred income tax liability is settled (20% for deferred income tax assets and liabilities recognized
at 31 December 2024 and at 31 December 2023. Starting from 1 January 2025, 21% of deferred income tax will be applied to the
Bank).
The principal temporary differences arise from carry forward of unused tax losses, revaluation of securities, difference between net
book value and tax base of tangible fixed assets and accrued charges. The rates enacted or substantively enacted at the balance
sheet date are used to determine deferred income tax. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred tax assets are recognized where it is probable that future taxable profit will be available against which the temporary
differences can be utilized.
b) Other taxes
Since 16 May 2023 Republic of Lithuania has imposed new solidarity contribution for credit institutions operating in territory of
Lithuania. This contribution is calculated on surplus of net interest income of credit institution for years 2023 and 2024 generated
from operations in Lithuania. Expenses of this contribution are included in other expenses in the income statement.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than three months’ maturity from
the date of acquisition, including cash and non-restricted balances with the Bank of Lithuania, treasury bills and other eligible bills,
amounts due from banks and financial institutions and short-term government securities.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
16
ACCOUNTING POLICIES (CONTINUED)
Financial assets
Financial assets are classified into 3 categories:
• financial assets at fair value through profit and loss (the Group and the Bank have debt and equity securities which are
included to trading book, and equity securities which are included to investment securities portfolio),
• financial assets at fair value through other comprehensive income (the Group and the Bank have only debt securities of this
category, these are included to Investment securities portfolio) and
• financial assets at amortized cost.
Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit
or loss. The classification is based on the cash flow characteristics of the asset and the Group’s business model for managing the asset.
Financial assets at fair value through profit or loss
Trading book (trading sub-portfolio) includes debt securities which were acquired either for generating a profit from short-term fluctuations
in price or dealer’s margin.
Trading book (other assets sub-portfolio) includes debt and equity assets of the subsidiary involved in life insurance activities. These
assets are managed on behalf of customers and were designated at fair value through profit or loss in order to significantly reduce the
accounting mismatch between these securities and unit-linked provisions.
Investment portfolio includes non-trading (investment) equities that were acquired for generating a profit in longer term fluctuations or in
line with other purposes with the Group (e.g. to have participation in entities that provide services to the group, or other).
Securities at fair value through profit or loss are initially recognized at fair value, which is based on transaction price and are subsequently
measured at fair value based on quoted bid prices or derived from a discounted cash flow model if market price is unreliable measure.
All related realized and unrealized gains and losses are included in net trading income. Interest earned is reported as interest income.
Dividends received are included in dividend income. The instruments are derecognized when the rights to receive cash flows have
expired or the Group has transferred substantially all the risks and rewards of ownership and the transfer qualifies for derecognizing.
All purchases and sales of securities at fair value through profit or loss that require delivery within the time frame established by regulation
or market convention (‘regular way’ purchases and sales) are recognized at settlement date, which is the date when payment is made
for assets purchased or sold. All other purchases and sales are recognized as derivative forward transactions until settlement. Changes
in the asset's fair value between the trade date and the settlement date are recognized as trading gains/losses in the income statement.
Financial assets at fair value through other comprehensive income
Debt securities that are held for collection of contractual cash flows and for selling them, where the assets’ cash flows represent solely
payments of principal and interest, and that are not designated at fair value through profit or loss, are measured at fair value through
other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for recognition
of impairment gains or losses, interest income and foreign exchange gains or losses on the financial instrument’s authorized cost which
are recognized in profit or loss. When the debt asset is derecognized, the cumulative gain or loss previously recognized in other
comprehensive income is reclassified from equity to profit or loss and recognized in Net gain (loss) in operations from securities. Interest
income from these financial assets is included in Interest income using the effective interest rate method.
The Group did not designate any equities at fair value through other comprehensive income.
Financial assets at amortized cost
Loans to customers and finance lease receivables that are the main strategic direction of Group's business and debt securities that are
held for collecting cash flows in line with prescribed business model to generate long-term yield and to serve as secondary liquidity
reserves constitute the major part of Group's assets and are attributable to financial assets at amortized cost (as well as other qualifying
assets such as cash equivalents, due from banks, other financial assets). These assets may be sold, but sales (other than sales low in
volume or sales as part of problem debt recovery activities) are rare and infrequent. Financial assets at amortized cost are non-derivative
financial assets that pass the “Solely payments of principal and interest” (SPPI) test other than: (a) those that the bank classifies as fair
value through profit or loss due to intention for short-term sale or reduction of accounting mismatch; (b) those that the bank upon initial
recognition designates at fair value through other comprehensive income; or (c) those for which the holder may not recover substantially
all of its initial investment, other than because of credit deterioration. In the case of impairment, the impairment loss is reported as a
deduction from the carrying value of the asset and recognized in the income statement as ‘Allowance for impairment losses’. Financial
assets at amortized cost are derecognized when the contractual rights to receive the cash flow from the assets expire, or the assets are
written-off, or the Group has transferred substantially all the risks and rewards of ownership and the transfer qualifies for derecognizing.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
17
ACCOUNTING POLICIES (CONTINUED)
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit losses (ECL) associated with its debt instrument assets carried at
amortized cost and fair value through other comprehensive income and with exposure arising from loan commitments and financial
guarantee contracts. The Group recognizes a loss allowance for such losses at each reporting date. The measurement of ECL reflects
an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money
and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic condition. Section 1.3 of the Financial risk management disclosure provides more details on
the ECL measurement.
Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in which substantially all risks and rewards of ownership of the financial asset
are transferred or in which the Group neither transfers nor retains substantially all of risks and rewards of ownership and it does not retain
control of the financial asset. On derecognition of a financial asset the difference between the carrying amount (measured at the date of
derecognition) and the consideration received (including any new asset obtained less any new liability assumed) and any cumulative
gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.
Write-offs of financial assets
Loans and receivables are regularly reviewed and written-off from the balance sheet when the total loan balance or a part of it is
considered as uncollectible under the most optimistic scenario using expert judgement on each exposure. Typically, the judgement that
there is no reasonable expectation for recovery is applied for the exposures where there are no clear indications of possible cash flows
from the borrower and to the extent that the collateral is deemed insufficient. 100% impairment provision against the carrying amount of
the exposure must be recognized before an uncollectible exposure (or part of it that is considered to be uncollectible) can be written-off.
Written-off exposures are accounted for as off-balance sheet claims (“accumulated write-offs”) until the legal right to claim the amounts
from the borrower expires.
Modifications of financial assets
The Bank sometimes modifies the payment terms of loans to customers due to commercial renegotiations, or for distressed loans, with
a view to maximizing recovery. Modification practices are based on criteria which, in the judgement of management, indicate that payment
will most likely continue. Legal treatment for loan contract amendments is followed, i.e. amended loan contracts are accounted for as
modifications - i.e. date of signing the original contract remains the point for loan parameters at origination used to assess significant
increase of credit risk. On modification, the gross carrying amount of the loan is recalculated as the present value of the modified
contractual cash flows that are discounted at the loan’s original effective interest rate. The resulting modification gain or loss is included
in other income line in the income statement. The modification of loan contract does not automatically impact its credit stage assignment
if it done on a commercial negotiations basis or according to public or sectoral moratoria, but the loans subject to modification are checked
if it is done because of borrower's inability to serve the loan by its original schedule. If this is the case, significant increase credit risk
(Stage 2) is recognized. Additional scenarios for moving the loans the loans that were modified due to customers problems to Stage 3
are in place, and additional observation periods are in place for recognizing improvement in staging for such loans.
I mpairment of non-financial assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. Goodwill is tested for impairment at least annually. An impairment loss is recognized for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows (cash-generating units). The impairment test also can be performed on a single asset when the fair value less cost to sell
or the value in use can be determined reliably. Non-financial assets other than goodwill that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
Reverse repurchase transactions
Securities purchased under agreements to resell (“reverse repos”) are recorded as loans and advances to other banks or customers, as
appropriate. The difference between purchase and repurchase price is treated as interest and accrued over the life of agreement using
the effective interest method. Securities borrowed are not recognized in the financial statements, unless these are sold to third parties,
in which case the purchase and sale are recorded with the gain or loss included in trading income.
Reverse repurchase agreements are classified as loans and receivables and are accounted for using the authorized cost method.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
18
ACCOUNTING POLICIES (CONTINUED)
Intangible assets
Intangible assets are stated at cost less accumulated amortization. Intangible assets are authorized using the straight-line method over
their estimated useful life (see note 17).
Property, plant and equipment
Tangible fixed assets are stated at historical cost less accumulated depreciation. Depreciation is provided on a straight-line basis to write
off proportionally the cost of each asset over its estimated useful life.
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. The recoverable amount is the higher of the asset’s fair value less
costs to sell and value in use.
Gains and losses on disposals of fixed assets are determined by reference to their carrying amount and are charged to the Income
statement.
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Asset maintenance
costs are charged to the income statement when they are incurred. Significant improvements of assets are capitalized and depreciated
over the remaining useful life period of the improved asset. Useful lives of property, plant and equipment are disclosed in Note 18.
Leases
a) Group company is the lessee
Right-of-use assets and liabilities arising from lease are initially measured on present value basis, discounted using the interest rate
implicit in the lease. Lease liabilities include fixed and variable payments (based on consumer index or inflation rate). Lease payments
to be made under reasonably certain extension options are also included in the measurement of the liability. The discount influence
is recognized in finance cost as interest expense in income statement. Right-of-use assets are measured at cost comprising the
amount of the initial measurement of lease liability, any initial direct costs, adjusted by advance payments. Right-of-use assets are
depreciated using the straight-line method over rent period. The depreciation charge is recognized as depreciation expenses in
income statement. The duration of rent agreements are adjusted by the Group‘s management assumptions on contract extensions.
The expenses related to short-term leases or to leases of low-value assets are included in other operating expenses in income
statement. Right-of-use assets are included in Property, plant and equipment, lease liabilities are included in Other financial liabilities.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an
extension option, or not exercise a termination option. Extension options are only included in the lease term if the lease is reasonably
certain to be extended (or not terminated). If any leasehold improvements are expected to have a significant remaining value, the
Group is typically reasonably certain to extend (or not terminate). Otherwise, the Group considers other factors including the plans
to continue an activity. Contracts may contain both lease and non-lease components. The Group allocates the consideration in the
contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for
which the Group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a
single lease component.
b) Group company is the lessor
Operating leases
Assets leased out under operating leases are included in tangible fixed assets in the statement of financial position. They are
depreciated over their expected useful lives on a basis consistent with similar owned fixed assets. Rental income is recognized on
a straight-line basis over the lease term.
Finance leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may
not eventually be transferred. When assets are held subject to a finance lease, the present value of the lease payments is recognized
as a receivable. The difference between the gross receivable and the present value of the receivable is recognized as unearned
finance income. Lease income is recognized over the term of the lease using the net investment method (before tax), which reflects
a constant periodic rate of return.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
19
ACCOUNTING POLICIES (CONTINUED)
Financial liabilities
The Group’s financial liabilities consist of those designated at fair value and those carried at authorized cost. Financial liabilities are
derecognized when extinguished.
Financial liabilities at fair value through profit or loss
The group can designate certain liabilities upon initial recognition as at fair value through profit or loss (fair value option); this
designation cannot be changed subsequently.
Other liabilities measured at authorized cost
Financial liabilities that are not classified as at fair value through profit or loss fall into this category and are measured at authorized
cost. Financial liabilities measured at authorized cost are deposits from banks or customers, debt securities in issue, liabilities to
special and lending funds as well as other various financial liabilities. Initially they are recognized at fair value, and subsequently
stated at authorized cost, with any difference between net proceeds and the redemption value recognized in the Income statement
over their period using the effective interest method.
Accounting policies for subordinated perpetual bonds
Under IAS 32, a financial instrument is classified as a financial liability if the issuer has a contractual obligation to deliver cash or
another financial asset. The subordinated bond involves fixed interest payments, and the issuer's call option does not alter this
obligation. Bondholders do not have voting rights or ownership rights in the issuer. The subordinated bond is recognized as a
financial liability based on the following criteria: (i) the issuer has a contractual obligation to pay annual interest, (ii) the bond
redemption, though at the issuer's discretion, inevitably results in the return of the principal amount, (iii) write-down and write-up
features do not eliminate the obligation to pay interest, and (iv) bondholders have no rights to the residual value of the company or
voting rights. Upon initial recognition, the financial liability is measured at fair value, deducting directly attributable transaction costs.
These costs are amortized using the effective interest rate method over an expected period.
Provisions
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 will be required to settle the obligation; and the amount of the obligation can be reliably estimated.
Dividends
Dividends on the Bank’s shares are recorded in equity in the period in which they are declared.
Insurance and investment contracts classification and accounting
Subsidiary of the Bank SB draudimas UAB GD (hereinafter – the Company) is engaged in life insurance activities and offers various
insurance contracts.
The contracts concluded by the Company are divided into insurance contracts (accounted for in accordance with IFRS 17) and investment
contracts (accounted for in accordance with IFRS 9, except for investment contracts with discretionary participation feature that are
accounted for in accordance with IFRS 17) based on accepted insurance and (or) financial risk.
A contract is not recognized as an insurance contract if the insurer accepts only financial risks such as interest rate risk, equity prices
risk, credit risk or other financial risk but not significant insurance risk. A contract without significant insurance risk is recognized as an
investment contract.
A contract is recognized as an insurance contract only if it meets a definition for contract with significant insurance risk. The significance
of insurance risk is evaluated at initial recognition for each contract, except for products for which the significance of insurance risk is
obvious (for example, Term life insurance, Endowment etc.). For such products, the Company has decided not to evaluate the significance
of insurance risk separately for each contract and these contracts are recognized as insurance contracts accounted for with IFRS 17 at
the date of initial recognition. A contract which at the date of initial recognition is recognized as insurance contracts, remains an insurance
contract until all rights and obligations expire.
Company chooses to use 10 % limit for significant testing. The significance of insurance risk is evaluated considering the (evaluated by
probability) expected future cashflows discounted using risk-free interest rate curve at initial recognition, including additional amounts
which would be payable in economic scenarios. The evaluation of significance of insurance risk is based on the following two scenarios:
1. insurance event does not occur;
2. insurance event does occur with probability of 100 %.
If additional amount payable due to the second scenario are higher than 10% of amounts under the first scenario, then insurance risk is
considered significant.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
20
ACCOUNTING POLICIES (CONTINUED)
For portfolio acquired on 1 December 2023 and new contracts concluded after this date, the significance of insurance risk is evaluated
using a simplified method, proving that the simplified method gives reliable results that do not significantly differ from results given by
exact evaluation. According to the simplified method, the significance of insurance risk for unit-linked contracts is evaluated by comparing
the sum of valid life and riders cover with 10% of unit-linked fund (investment) value. If the sum of valid life and riders cover is bigger,
then it is considered that contract has significant insurance risk.
IFRS 17 requires separating the investment component from insurance contract only if the investment component is distinct. Some of
the Company’s insurance contracts have investment components however investment component and the insurance component are not
highly interrelated and investment component is not distinct therefore the Company is not separating the investment component from the
insurance contracts. Receipts and payments from these investment components are excluded from insurance contract revenue and
insurance service expenses presented in profit or loss.
Insurance contract liabilities
Application of IFRS17 introduces significant accounting and disclosure changes for insurance contracts. All rights and obligations arising
from the insurance contracts are shown at fair value. Amounts related to reinsurance contracts held are presented separately. This
presentation of insurance and financial results provides a more transparently the sources of profit and the quality of income generated.
In accordance to IFRS 17, the amounts shown in profit (loss) are divided into:
• Insurance service result, which consist of insurance revenue and insurance service expenses; and
• insurance finance income and expenses.
Insurance revenue is a sum of expected benefits and expenses incurred, change in the risk adjustment, contractual service margin
recognized over period and recovery of acquisition cashflows. Insurance service expenses is a sum of incurred claims expenses, losses
on onerous contracts and reversal of those losses, changes of liability of incurred claims related to past service and insurance acquisition
costs. Insurance service result does not include investment components and cash-flow changes related to future services (these changes
ad adjusting the contractual service margin).
Insurance finance income and expenses include the time value of money (discounting) and changes in financial risks related to insurance
contracts groups. The Group and the Company have decided not to distribute the insurance finance income and expenses between profit
and loss and other comprehensive income statements.
In accordance with IFRS 17, the Company groups the insurance contracts into so-called units of accounts. The purpose of such grouping
is to ensure that profit would be recognized over time proportionally to the insurance service provided while losses are recognized
immediately when the Company assesses that the contract is generating loss. Setting off profit and loss between different insurance
contracts groups is not allowed. Insurance contracts are aggregated into insurance contracts groups based on such three levels:
1. Portfolio – similar risk contracts managed together.
2. Profitability – contracts of same profitability.
It was decided to divide a portfolio of insurance contracts issued into onerous and remaining, where onerous group covers insurance
contracts that at initial recognition have been estimated with a loss component. The insurance contract is estimated with loss
component if the risk-adjusted present value of future cash-flows for the is negative. After initial recognition no re-grouping in respect
of profitability is done.
3. Cohort – contracts which date of entry into force differ by more than one year.
Portfolio cohort period beginning is January 1st of each calendar year and contracts of each portfolio are accounted using a one-year
interval principle (annual cohort). The insurance contracts within a portfolio acquired at 1 December 2023 were recognized at
acquisition date and were group into 2023-year cohort.
The Company has chosen to apply two of the models defined in IFRS 17 for evaluating the insurance contracts:
• General Measurement Model, GMM, is applied to insurance contracts that insures certain risk over the longer period of time.
• Variable Fee Approach, VFA, is applied to insurance contracts with investment components and fulfilling the definition of contracts
with direct participation feature.
According to IFRS 17, the carrying value of a group of insurance contracts at end of each reporting period is calculated by adding the
liability for remaining coverage and the liability for incurred claims. When evaluating these liabilities, the risk-adjusted present value of
future cash-flows (hereinafter - fulfilment cashflows) is estimate for each unit of account, separately evaluating the present value of the
future cash-flows and risk adjustment for non-financial risks.
For unit of accounts without loss component, the liability for remaining coverage consists of fulfilment cashflows and contractual service
margin. At initial recognition, the contractual service margin is equal to such amount which results in total liability for remaining coverage
equal to 0. In case, the contractual service margin at initial recognition is negative, the contractual service margin is zeroized and the
corresponding negative value is recognized as loss component which directly impacts profit or loss.
For evaluation of the liability for remaining coverage, the future cashflows of insurance contracts are modelled within the contract
boundary. Due to long term insurance and the limited ability to reassess portfolio risk, the contract boundary is the same as contracts’
maturity date. When evaluating the unit of account liabilities, the Company takes into account all future cashflows within the boundary of
insurance contracts.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
21
ACCOUNTING POLICIES (CONTINUED)
Insurance acquisition cashflows is a separate cost category which is considered when evaluating the insurance liability of remaining
coverage. Such cashflows include cashflows arising from insurance contracts group acquisition, distribution and commencement costs
directly attributable to portfolio of insurance contracts to which that group belongs. When applying GMM and VFA methods, future
expected attributable costs are affecting the amount of CSM and are recognized in profit (loss) during the remaining insurance coverage
according to the respective coverage units.
For the estimation of the present value of the expected future cashflows, the Company has decided to use discount rates derived by
applying the bottom-up approach (described as a combination of risk-free curve and the liquidity premium). For the discounting of
cashflows, the Company has decided to use the risk-free interest rate curves published by European Insurance and Occupational
Pensions Authority (EIOPA). For the purpose to reflect the liquidity characteristics of the cashflows, for unit-linked products, the EIOPA
risk-free interest rate without volatility adjustment is used, and for other products, as they are considered less liquid, the EIOPA risk-free
rate with volatility adjustment is used.
When applying GMM, the discount curves locked-in at initial recognition are used. As new contracts start uniformly over the year, the
weighted average discount curve is locked-in which is derived by using end of each quarter/month risk-free rates and the contracts
issued/written premiums during the respective period.
When evaluating the insurance contract liabilities, the Company includes the risk adjustment for non-financial risk which is estimated
separately from the expected future cashflows and defined as the compensation an entity requires for bearing the uncertainty about the
amount and timing of the cash flows that arises from non-financial risk as the Company fulfils insurance contracts. The Company chose
to calculate risk adjustment based on Solvency II capital requirement before diversification. Assumption is made that all Solvency II non-
financial risk (mortality, longevity, disability, validity, outflows and catastrophe risk) is distributed by normal distribution. The calculation
of the risk adjustment is based on determining the risks at the reference date (t=0) and forecasting them based on a run-off pattern
appropriate for each non-financial risk based on Coverage units. Based on the decision of the Company, the risk adjustment corresponds
to a 75% confidence level of the derived non-financial risk distribution. The entire change in risk adjustment for non-financial risk is
included as part of the insurance service result.
The contractual service margin at the end of the accounting period shows profit from the units of account which has not yet been
recognized as it relates to service that will be provided for insurance contracts in the future. In accordance with IFRS 17, the part of
contractual service margin which is recognized as profit or loss in the period shows the service provided for the respective unit of account
in that period. The amount allocated to a certain period is determined by identifying coverage units within the portfolio. The number of
coverage units within a group of insurance contracts is the quantity of insurance contracts services provided by the contracts in the group,
determined considering for each contract the quantity of the benefits provided under a contract and its expected coverage period
(including expected surrenders). Based on Company’s decision, coverage units are not discounted.
The future cashflows for liability for incurred claims is estimated on the unit of account level, separately evaluating the present value of
expected future cashflows and the risk adjustment for non-financial risk. The present value of the expected future cashflows for liability
of incurred claims is estimated by evaluating the best estimate of incurred claim outpayments, forecasting the future cashflows using
Company’s historical claims settlement data and discounting the future cashflows by the respective risk-free interest rate curve. The risk
adjustment for non-financial risk, as part of the liability for incurred claims, reflects the risk compensation related to the amounts of the
incurred claims as well as the timing when the incurred claims will be settled, and corresponds to the confidence level of 75%.
Investment contracts liabilities
A contract without significant insurance risk is recognized as an investment contract. Under an investment contract the Company accepts
only financial risks such as interest rate, equity prices, credit or other financial risk but not significant insurance risk. Investment contracts
liabilities are measured by those contracts' portfolio market value, and the value of liabilities changes depending on the change in market
value of related investments. Administrative and risk fees of investment contracts decrease investment contracts liabilities and are
recognized as the Company’s income.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
22
ACCOUNTING POLICIES (CONTINUED)
Segment information
Operating segments are reported in accordance with the information analyzed by the Executive Board (the chief operating decision-
maker) of the Group, which is responsible for allocating resources to the reportable segments and assesses its performance.
In relation to adjusted strategy of the Bank, business model and strategic decisions are divided into three business lines – corporate,
private and investment:
• Private segment – includes retail banking operations such as issuing loans and providing banking services to the customers and
finance, lease and consumer financing services provided to private customers of the Group (includes financial information of the
subsidiaries);
• Corporate segment – includes corporate banking operations such as issuing loans and providing banking services provided to
corporate customers of the Group (includes financial information of the subsidiaries);
• Investment segment – includes banking treasury operations such as managing securities and liquidity portfolio, currency exchange
etc. (includes financial information of the Bank and subsidiaries allocated to this segment).
As the Group’s segment operations, except for real estate development are all financial with a majority of revenues deriving from interest
and the Group Executive Board relies primarily on net interest revenue to assess the performance of the segment, the total interest
income and expense for all reportable segments is presented on a net basis. Also all other main items of the income statement are
analyzed by the management of the Group on segment basis therefore they are presented in the segment reporting.
Transactions between the business segments are carried out at arm’s length. The revenue from external parties reported to the Group
Executive Board is measured in a manner consistent with that in the consolidated income statement.
As the Group focuses on domestic activities, no geographical concentration is observed in Group‘s decision making. Due to the nature
of Group‘s activities (financial services), capital expenditures are not important in the decision making process therefore not used in the
segment reporting and total assets is more relevant indicator than the fixed asset amount.
Fair value of assets and liabilities
Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Financial guarantee contracts, letters of credit and undrawn 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 other bodies on behalf of customers to secure loans, overdrafts and other banking
facilities.
Financial guarantees are initially recognized in the financial statements at fair value on the date the guarantee was given. Subsequent to
initial recognition, the Bank’s liabilities under such guarantees are measured at the higher of the amount of loss allowance and the
premium received on initial recognition less income recognized in accordance with principles of IFRS 15.
Undrawn loan commitments and letters of credits are commitments under which, over the duration of the commitment, the Bank is
required to provide a loan with pre-specified terms to the customer.
These contracts are in the scope of the ECL impairment recognition requirements.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
23
ACCOUNTING POLICIES (CONTINUED)
Investment properties
Properties that are held for long-term rental yields or for capital appreciation or both, and that are not occupied by the entities in the
consolidated group, are classified as investment properties. Investment properties comprise buildings for commercial activities and land
plots for undetermined future use.
Some properties may be partially occupied by the Group, with the remainder being held for rental income or capital appreciation. If that
part of the property occupied by the Group can be sold separately, the Group accounts for the portions separately. The portion that is
owner-occupied is accounted for under IAS 16, and the portion that is held for rental income or capital appreciation or both is treated as
investment property under IAS 40. When the portions cannot be sold separately, the whole property is treated as investment property
only if an insignificant portion is owner-occupied. The Group considers the owner-occupied portion as insignificant when the property is
more than 95% held to earn rental income or capital appreciation. In order to determine the percentage of the portions, the Group uses
the size of the property measured in square meters.
Recognition of investment properties takes place only when it is probable that the future economic benefits that are associated with the
investment property will flow to the entity and the cost can be measured reliably. This is usually the day when all risks are transferred.
Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing parts
of an existing investment property at the time the cost has incurred if the recognition criteria are met; and excludes the costs of day-to-
day servicing of an investment property. Subsequent to initial recognition, investment properties are measured at cost less accumulated
depreciation. Depreciation is provided on a straight-line basis to write off proportionally the cost of each asset over its estimated useful
life. All other repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred.
In addition, investment properties are tested for impairment. These valuations are performed annually by external or internal appraisers.
Derivative financial instruments
Derivatives are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently
remeasured at their fair value. Fair values are obtained from quoted market prices in active markets (for example, for exchange-traded
options), including recent market transactions, and valuation techniques (for example for non-traded options), including discounted cash
flow models and options pricing models, as appropriate. All derivatives are carried as assets when fair value is positive and as liabilities
when fair value is negative. All derivative financial instruments are classified as held for trading.
FINANCIAL RISK MANAGEMENT
Strategy in using financial instruments
The Bank’s and the Group’s activities are principally related to the use of financial instruments. The Group accepts deposits from
customers and borrows from other financial institutions at both fixed and floating rates and for various periods and seeks to earn above
average interest margins by investing these funds in high quality assets. The Group seeks to increase these margins by consolidating
short-term funds and lending for longer periods at higher rates whilst maintaining sufficient liquidity to meet all claims that might fall due.
Strategic decisions related to financing and investing activities of the Bank and the Group is made by the Board of the Bank. Operating
financing and investment decisions are made on division level. Divisions of the Group are presented in Segment information. Decisions
on risk management are made by the Risk Management Committee of the Bank.
The Bank and the Group also seeks to raise its interest margins by obtaining above average margins, net of provisions, through lending
to commercial and retail borrowers with a range of credit standings. Such exposures involve not just on-balance sheet loans and advances
but the Group also enters into guarantees and other commitments such as letters of credit and other guarantees.
The Group analyzes, evaluates, accepts and manages the risk or combination of risks it is exposed to. Risk management at the Group
aims at ensuring a sufficient return on equity following the conservative risk management policy. While implementing an advanced risk
management policy the Group focuses not only on minimizing potential risk but also on improving pricing and achieving efficient capital
allocation.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
24
FINANCIAL RISK MANAGEMENT (CONTINUED)
The Risk Management Policy approved by the Council of the Bank as well as by the procedures to manage different types of risks
prepared on its basis ensures the integrity of the risk management process in the Group.
The purpose of risk management policy is to define the risks as well as their management principles in the Group’s activities. Due to the
fact that various risks experienced by the Group are interdependent their management is centralized. Organization and coordination of
the experienced risk management system is one of the main goals of the Bank’s Risk Management Committee.
The Group reviews its risk management procedures and systems to reflect changes in markets, products and emerging best practice on
regular basis, at least annually.
The Group performs self assessment each year. This process analyzes types of risks that could potentially arise from banking activities
and have material impact to the Group. The most important types of risk the Group is exposed to are credit risk, market risk, liquidity risk,
concentration risk, operational risk, IT risk, model risk, compliance risk and ESG risk. Market risk includes currency risk, interest rate and
securities price risk. Other types of risk are considered immaterial by the Group and, therefore, are not assessed.
In order to avoid a conflict of interest the Bank’s subdivisions that implement risk management functions are separated from those
subdivisions the direct activities of which are connected with the up rise of various types of banking risks.
1. CREDIT RISK
Credit risk is defined as the risk for the Group to incur losses due to the Group’s customers’ failure to fulfil their financial obligations
towards the Group. Credit exposures arise principally in lending activities and it is the most significant risk in the Group’s banking activities.
There is also credit risk in investment activities that arise from debt securities and in the Group’s asset portfolio as well as in the off-
balance sheet financial instruments, such as loan commitments, guarantees and letters of credit.
The Bank regularly reviews its credit risk management policies which include lending policies, credit risk limit control, other credit risk
mitigation measures as well as the internal control and internal audit of credit risk management.
The Bank’s Board has approved the credit risk management policies and procedures which lay down the principles for credit risk
management and control, establish an acceptable level of credit risk and credit risk’s structure and determine credit risk mitigation
measures and their interaction. This ensures a uniform understanding of the principles for taking on exposure to credit risk and allows
achieving consistency with the nature and complexity of the Bank’s lending policy and the prudential requirements.
The Bank takes risks only in the fields, which are well known to it and where it has long-term experience, trying to avoid excessive risk
in transactions that can have negative influence to the big portion of shareholders’ equity but seeks the sufficient profitability which, in
terms of increasing competition, would ensure the stable Bank’s position in the market and would increase the Bank’s value. In assessing
exposure to credit risk, the Bank adheres to the principle of prudence.
The Bank’s lending policy is focused on small and medium-size business clients, seeking to provide them with the better funding terms
and long-term support, at the same time paying attention to Bank’s potential to grow.
Large entities are defined as entities employing more than 250 employees. Small and medium size entities are defined as entities
employing less than 250 employees and the balance sheet total does not exceed EUR 43 million or annual turnover does not exceed
EUR 50 million.
New types of activities or products are launched only after the assessment of the arising risk. All lending products and processes at the
Bank are regulated and documented pursuant to the requirements of risk assessment and internal control policy. Special procedures are
established with respect to each lending product.
The aim of the Bank’s credit risk management policy is to ensure that the conflict between interests of staff or structural units is avoided.
With respect to provision of credits to clients, the principle stating that profit should not be earned at the expense of excessive credit risk
is observed.
The Bank’s credit risk management policy is based on regulatory requirements to adequate risk management policy and the best practice
in risk management of other banks. Therefore, the Bank’s employees continuously enhance their knowledge of credit risk management
systems of Lithuanian and foreign banks and the results of their application.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
25
FINANCIAL RISK MANAGEMENT (CONTINUED)
1.1. Credit risk measurement
(a) Loans and receivables
The Bank applies credit risk management measures, which could be divided into two types:
1) Measures that help to avoid decisions to grant loans with higher risk potential;
2) Measures ensuring the effective monitoring system of the Bank’s asset quality.
Measures that help to avoid decisions to grant loans with higher risk potential:
1) Multi-stage decision-making and its approval system;
2) Defined credit risk appetite, credit risk indicators and risk allocation among structural levels – limit establishment;
3) Customer risk assessment requirements set by internal procedures;
4) Credit standards and acceptable credit risk criteria for separate products;
5) Security measures for credit repayment (collateral).
Multi-stage decision-making and its approval system has an aim not to make one-man decisions regarding credit granting by authorized
persons but to make them be discussed by the collegial bodies of the Bank and, as the case may be, by the Bank’s Loan Committee,
the Bank’s Board or Council. There are certain limits to authorized persons established regarding credit granting implementation as well
as approval limits to collegial bodies. Limit establishment depends on the authorized persons’ qualification, experience and the
effectiveness of their managed branches; while in the Branch Committees and the Bank Loan Committee the attention is paid to the
Committee members’ qualification, experience and economic activity of the region, where the branch is located, the quality of loan
portfolio and other factors. The level of involvement of second line of defense in decision making process, providing secondary opinion
or/ and performing decision-making control is determined depending on the size of the loan and compliance with the credit standards.
It is very important to precisely analyze all the information about the customer before granting the credit. The goal of credit analysis is to
do the best in evaluating the customer’s creditworthiness, status and prospects in the field where he/she provides his/her goods or
services. Every credit decision is based on the adequate assessment of credit repayment possibilities proportionate to the size of
exposure and level of possible risk. Providing credit first of all the Bank analyzes the borrower’s financial capacity from the borrower’s
cash flows. The repayment of credits granted by the Bank must be enough secure in order to minimize possible credit repayment risks.
A security measure has to be chosen in accordance with the credit type. Providing credit first of all the Bank analyzes the borrower’s
financial capacity and credit repayment possibilities from the borrower’s cash flows.
Credit administration and constant credit monitoring is the main principle in the Bank’s security and reliability maintenance. The proper
credit administration includes the timely updating of the borrower’s credit file, providing with the latest financial information, the timely
introduction of latest financial information to the database and preparation of the various documents and their amendments.
The Bank’s Credit Risk Management and Control Department collects and, if necessary, provides to responsible managerial personnel
information on external conditions, the growth of the credit portfolio and fulfilment of targeted profit, expenses associated with risks, the
largest amounts due from clients, distribution of credits by the type of economic activity, repayment terms past due, the largest clients
with default possibilities, analysis of the credit portfolio by risk groups, changes in risk groups over a certain time period and other credit
risk metrics.
The Bank establishes and implements the procedures, improves information systems for monitoring separate credits as well as loan
portfolio. These procedures include the criteria for early indication of potentially impaired loans and other transactions.
(b) Debt securities
Credit risk exposures with respect to debt securities are managed by carrying out counterparty analysis when decision for acquisition of
securities is made. The concentration risk together with lending exposure arising from debt securities portfolio is analyzed and monitored
on a regular basis by the Risk Management Committee of the Bank.
(c) Credit-related commitments
Other credit-related commitments assumed by the Group include guarantees, letters of documentary credit, commitments to grant a
credit which expose the Group to the same credit risk as the loans do. The key aim of these instruments is to ensure that funds are
available to a customer as required. The above guarantees and letters of documentary credit are usually collateralized by clients’ funds
in the Bank accounts. With regards to commitments to grant credit the Bank is exposed to loss equal to the unused commitment amount.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
26
FINANCIAL RISK MANAGEMENT (CONTINUED)
1.2. Control of risk limits and risk mitigation policy
(a) Concentrations
The Group manages, limits and controls concentration of credit risk – in particular, to individual counterparties and groups of the
associated counterparties as well as to economic sectors.
In addition to the supervisory requirements to limit the exposures to a single borrower and large exposures, the Group also sets exposure
requirement, which to a single borrower may not exceed 15 percent of the Bank’s capital. The Bank’s Council must approve the higher
limits. Prudential maximum exposure requirement to a single borrower is 25 percent. Concentration of credit risk of the Bank is disclosed
in Section 1.8. of Financial Risk Management disclosure.
The Group also sets limits to industry segments, i.e. a possible concentration in certain industries at the Group’s level is restricted by the
internal lending limits. The percentage and volume of lending limits are set for individual industries to ensure that the Group is not overly
exposed to any particular economic sector in the country.
The geographical concentration risk is not recognized in the Group’s business since the principle of focusing on domestic customers is
followed.
Some other specific control and mitigation measures are outlined below.
b) Collateral
The Group mitigates credit risk by taking security for loans granted. The types of collateral considered by the Group as the most
acceptable for loans and advances are the following:
• Real estate (mainly residential properties, commercial and industrial real estate);
• Business assets (equipment, inventory, transport vehicles);
• Property rights over financial instruments (debt securities, equities);
• Third party guarantees.
Long-term financing and lending to corporate entities are generally secured; revolving facilities and consumer loans to private individuals
are generally unsecured. In order to minimize the credit loss as the impairment indicators for the relevant individual loans and advances
are noticed the Group seeks for additional collateral from the counterparty.
While calculating a decrease in value for the loan the repayment of which is secured by the collateral, a cash flow from the security
measure is also taken into consideration when determining the LGD factor. If several loans are insured with the same security measure
(collateral), such security measure (collateral) is allocated according to rank of the pledge.
Debt securities, treasury and other eligible bills are generally unsecured.
For finance lease receivables the lender remains the owner of the leased object. Therefore, in case of customer’s default the lender is
able to gain control on the risk mitigation measures and realize them in rather short period.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
27
FINANCIAL RISK MANAGEMENT (CONTINUED)
1.3. Impairment and provisioning policies
a) ECL model used by the Group
Upon assessing impairment losses on loans, due to banks, debt securities at amortized cost and at fair value through other
comprehensive income and other assets the Group follows the requirements expected credit loss (ECL) model prescribed in IFRS 9
Financial Instruments. The Group and the Bank carries out valuation of assets on a monthly basis, based on valuation policies approved
by the Board of the Bank.
The ECL is measured by the formula:
PD x LGD x EAD = ECL
Where:
PD – probability of default. It represents the likelihood of a borrower on defaulting on its financial obligation;
LGD – loss given default. It represents the extent of loss the Group is likely to incur in case the borrower defaults;
EAD – exposure at default. It represents expected exposure at the time of the default.
The financial assets are grouped into 3 stages:
1) Stage 1 financial assets – no significant increase in credit risk is observed since initial recognition. The Group uses low credit
risk exemption and assigns all of the exposures with external investment grade credit rating or exposures with Standard
internal credit rating to Stage 1. 12 months PDs apply to Stage 1 exposures;
2) Stage 2 financial assets – significant increase in credit risk is observed since initial recognition. The Group uses multiple
criteria to assess whether the credit risk has increased. Main criteria include: credit rating decrease (external credit rating
decrease by >=3 notches; internal credit rating decrease by more than 1 notch), payment delays (>30 days past due financial
assets are classified to Stage 2 unless there is observable evidence indicating otherwise), other observable criteria
(restructuring, forbearance, inclusion in Watch List, other qualitative factors showing increased credit risk reflected in lower
ratings). Lifetime PDs apply to Stage 2 exposures;
3) Stage 3 financial assets – credit-impaired financial assets. Main criteria for inclusion the asset in Stage 3 include: bankruptcy
of the customer; termination of the contract; payment delay >90 days; non-performing exposure status by regulatory rules (i.e.
the exposure is unlikely to be repaid in full without collateral realization (irrespective of any past-due amount or of the number
of days past-due)); other observable criteria. For Stage 3 exposures, the PD ratio is always equal to 1. Minimal provisions are
also calculated in accordance to regulatory requirements for older non-performing loans.
In case observable evidence is available, Group’s employees responsible for impairment calculations can rank certain exposures to
better or worse stage.
The exposure ceases to be Stage 3 when it no longer meets the criteria for the consecutive period of at least 3 months. It should be
noted that some of the regulatory non-performing exposure criteria have their own exit periods, therefore the period for an exposure to
be classified out of Stage 3 may actually be longer.
The Group calculates its own PDs for loans to customers, finance lease receivables and other assets and uses PDs published by the
rating agencies for debt securities and due to banks.
PDs for loans to customers and finance lease receivables are calculated using the historical data of Group’s own lending portfolio. Full
approach is applied for finance lease receivables as financial leases are part of Group’s main activities. For this purpose, the Group uses
migration matrices for the exposures grouped by the economic sector. The Group uses PDs published by rating agencies for debt
securities and due from banks. For other financial assets, a simplified model derived from Group’s lending data is used.
For loans to customers and finance lease receivables, LGDs are estimated by the Group using the value of collateral available for each
exposure individually and discounting by certain ratios over certain period of time. Ratios and recovery periods depend on the type of
collateral and are derived from Group’s own recovery experience. For consumer financing exposures, the LGDs are estimated on a
exposure group level using the ultimate recovery rate historical data. For debt securities and due from banks, LGDs from rating agencies
are used.
For lending portfolio, Stage 1 EAD represents the expected exposure value over 12 month period and assumptions on the expected use
of the off-balance sheet credit commitments; Stage 2 EAD represents the expected exposure value over the term of the loan and
assumptions on the expected use of the off-balance sheet credit commitments. Stage 3 EAD is estimated as the total balance and off-
balance sheet exposure. For debt securities, due from banks and other assets, gross exposure value is used as EAD estimate.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
28
FINANCIAL RISK MANAGEMENT (CONTINUED)
Group’s PD estimates incorporate forward-looking information. The Group transfers its historical (“through the cycle”) data to economic-
situation specific (“point-in-time”) data by using models based on the expected economic development scenarios. The economic variables
and their associated impact on the PD vary by financial instrument. The impact of economic variables on PD has been determined by
performing statistical regression analysis. Expert judgement is also applied in the process.
To include the impact of economic variables, the Group uses 3 economic scenarios (base case, optimistic, pessimistic) that are based
on the forecasts published by the chief economist of Šiaulių Bankas and derives a single scenario based on the probabilities assigned to
these scenarios. These probabilities are approved in ECL calculation procedure, any deviation from procedure is approved by the Board
of the Bank.
The most significant assumptions used for the ECL estimates as at 31 December 2024 are presented in the tables below:
GDP growth
Change in
manufacturing
output
Unemployment
Change in
housing prices
Change in
salaries

At 31 December 2024: |  |  |  |  |
Base scenario | 2.90 % | 6.50 % | 6.80 % | 6.28 % | 8.70 %
Optimistic scenario | 4.00 % | 8.50 % | 5.70 % | 20.08 % | 11.50 %
Pessimistic scenario | 1.90 % | 3.00 % | 8.50 % | -15.18 % | 4.00 %

Scenario probabilities and weighted average GDP growth:

|  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029
At 31 December 2024: | GDP | Probability | GDP | Probability | GDP | Probability | GDP | Probability | GDP | Probability
Base scenario | 2.90 % | 60 % | 2.90 % | 60 % | 2.70 % | 60 % | 2.50 % | 60 % | 2.50 % | 60 %
Optimistic scenario | 4.00 % | 15 % | 4.00 % | 15 % | 3.50 % | 15 % | 3.10 % | 15 % | 3.10 % | 15 %
Pessimistic scenario | 1.90 % | 25 % | 2.00 % | 25 % | 1.50 % | 25 % | 1.50 % | 25 % | 1.50 % | 25 %
Weighted average GDP |  |  |  |  |  |  |  |  |  |
growth | 2.82% |  | 2.84% |  | 2.52% |  | 2.34% |  | 2.34% |

The most significant assumptions used for the ECL estimates as at 31 December 2023 are presented in the tables below:
GDP growth
Unemployment
Change in
manufacturing
output
Change in
housing prices

At 31 December 2023: |  |  |  |
Base scenario | 1.80% | 6.50% | 2.50% | 6.80 %
Optimistic scenario | 2.50% | 6.00% | 8.50% | 20.08 %
Pessimistic scenario | 0.20% | 7.80% | -2.30% | -15.18 %

Scenario probabilities and weighted average GDP growth:

|  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028
At 31 December 2023: | GDP | Probability | GDP | Probability | GDP | Probability | GDP | Probability | GDP | Probability
Base scenario | 1.80% | 60 % | 3.10% | 60 % | 3.30% | 60 % | 2.21% | 60 % | 2.15% | 60 %
Optimistic scenario | 2.50% | 15 % | 3.80% | 15 % | 4.00% | 15 % | 3.50% | 15 % | 3.10% | 15 %
Pessimistic scenario | 0.20% | 25 % | 1.90% | 25 % | 2.00% | 25 % | 1.50% | 25 % | 1.50% | 25 %
Weighted average GDP |  |  |  |  |  |  |  |  |  |
growth | 1.51% |  | 2.91% |  | 3.08% |  | 2.23% |  | 2.13% |

The assumptions underlying ECL calculations are subject to frequent review, the models used in ECL calculation are back tested
against the actual performance data. In case of need, changes are made to the models. In 2024 EAD conversion factor was removed
from calculating Stage 3 EAD exposure and Unsecured Recoveries was included in LGD calculation for stage 1,2 and 3 loans. In 2023
EAD conversion factor was added in calculating Stage 3 EAD exposure.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
FINANCIAL RISK MANAGEMENT (CONTINUED)
b) Impairment loss sensitivity
The most significant assumptions affected the estimated ECL allowance are GDP, given the significant impact on the borrowers
performance; real estate price level, given the significant impact on the collateral values and consumer financing portfolio recovery rates,
given the significant impact on the ultimate recoveries of the unsecured borrowings. The table below provides an sensitivity analysis of
the above factors.

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Scenario 1: GDP growth | ECL decreases by EUR 814 | ECL decreases by EUR 814 | ECL decreases by EUR 935 | ECL decreases by EUR 935
increases by 0.5 p.p. | thousand, equity increases | thousand, equity increases | thousand, equity increases | thousand, equity increases
| by EUR 651 thousand | by EUR 651 thousand | by EUR 748 thousand | by EUR 748 thousand
Scenario 2: GDP growth | ECL increases by EUR 810 | ECL increases by EUR 810 | ECL increases by EUR 928 | ECL increases by EUR 928
decreases by 0.5 p.p. | thousand, equity decreases | thousand, equity decreases | thousand, equity decreases | thousand, equity decreases
| by 648 thousand | by EUR 648 thousand | by 742 thousand | by EUR 742 thousand
| ECL decreases by EUR | ECL decreases by EUR - | ECL decreases by EUR 900 | ECL decreases by EUR 900
Scenario 3: real estate prices | 1356 thousand, equity 1356 thousand, equity | thousand, equity increases | thousand, equity increases
increase by 5% | increases by EUR 1085 | increases by EUR 1085 | by EUR 720 thousand | by EUR 720 thousand
| thousand | thousand |  |
| ECL increases by EUR 1509 ECL increases by EUR 1509 | ECL increases by EUR | ECL increases by EUR
Scenario 4: real estate prices | thousand, equity decreases | thousand, equity decreases | 1,124 thousand, equity | 1,124 thousand, equity
decrease by 5% | by EUR 1207 thousand | by EUR 1207 thousand | decreases by EUR 899 | decreases by EUR 899
|  |  | thousand | thousand
Scenario 5: consumer | ECL decreases by EUR | ECL decreases by EUR 17 | ECL decreases by EUR | ECL decreases by EUR 14
financing portfolio recoveries | 1510 thousand, equity | thousand, equity increases | 1,416 thousand, equity | thousand, equity increases
increase by 5 p.p. | increases by EUR 1208 | by EUR 14 thousand | increases by EUR 1,132 | by EUR 11 thousand
| thousand |  | thousand |
Scenario 6: consumer | ECL increases by EUR 2102 | ECL increases by EUR 17 | ECL increases by EUR | ECL increases by EUR 14
financing portfolio recoveries | thousand, equity decreases | thousand, equity decreases | 1,416 thousand, equity | thousand, equity decreases
decrease by 5 p.p. | by EUR 1682 thousand | by EUR 14 thousand | decreases by EUR 1,132 | by EUR 11 thousand
|  |  | thousand |

c) write-offs
The accumulated write-offs, including any amount constituting legal claims to the borrowers even if those amounts were never recognized
on the balance sheet (the most common example of such cases is the difference between gross value and acquisition value of credit-
impaired loans acquired by the Group) is presented in the table below:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Total accumulated write-offs subject to enforcement | 37,855 | 36,367 | 81,184 | 80,906
of which: amounts written-off during the year subject to enforcement | 1,827 | 981 | 447 | 389

29
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
30
FINANCIAL RISK MANAGEMENT (CONTINUED)
1.4. Maximum exposure to credit risk before collateral held or other credit enhancements

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Cash equivalents: | 315,599 | 307,181 | 679,810 | 671,390
Balances in bank correspondent accounts | 267,305 | 258,887 | 608,675 | 600,255
Placements with Central Bank | 48,294 | 48,294 | 71,135 | 71,135
Loans and advances to banks | 3,121 | 3,121 | 3,013 | 3,013
Loans and advances to customers: | 3,117,700 | 3,105,007 | 2,645,104 | 2,633,482
Loans and advances to financial institutions | 20,287 | 311,104 | 26,413 | 273,966
Loans to individuals (Retail): | 1,431,482 | 1,127,971 | 1,258,203 | 999,028
Consumer loans | 305,329 | 1,818 | 260,914 | 1,739
Mortgages | 915,760 | 915,760 | 778,931 | 778,931
Other (reverse repurchase agreements, other loans backed by securities, other) | 210,393 | 210,393 | 218,358 | 218,358
Loans to business customers: | 1,665,931 | 1,665,932 | 1,360,488 | 1,360,488
Large corporates | 216,656 | 216,657 | 108,069 | 108,069
SME | 1,395,605 | 1,395,605 | 1,183,839 | 1,183,839
Central and local authorities, administrative bodies and other | 53,670 | 53,670 | 68,580 | 68,580
Finance lease receivables | 316,897 | 316,897 | 286,533 | 286,451
Individuals | 43,125 | 43,125 | 32,475 | 33,281
Business customers | 273,772 | 273,772 | 254,058 | 253,170
Securities in the trading book: |  |  |  |
Debt securities in the trading book | 56,617 | 13,521 | 65,761 | 20,240
Derivative financial instruments | 1,093 | 1,093 | 251 | 241
Investment securities at fair value |  |  |  |
Debt securities at fair value through other comprehensive income | 40,994 | 40,994 | 71,740 | 71,740
Investment securities at amortized cost |  |  |  |
Debt securities at amortized cost | 726,937 | 716,864 | 751,227 | 739,869
Other financial assets | 7,258 | 6,559 | 7,351 | 8,289
Credit risk exposures relating to off –balance sheet items are as follows: |  |  |  |
Financial guarantees | 87,985 | 87,985 | 59,216 | 59,256
Letters of credit | 135 | 135 | 538 | 538
Loan commitments and other credit related liabilities | 393,488 | 403,711 | 482,027 | 489,655
At 31 December | 5,067,824 | 5,003,068 | 5,052,571 | 4,984,164

The table above represents a worst-case scenario of credit risk exposure at 31 December 2024 and 2023, without taking into account
any collateral held or other credit enhancements attached. For on-balance sheet assets, the exposures presented above are net carrying
amount as reported in the balance sheet.
1.5. Loans to customers
Loans to customers are summarized as follows:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Gross loans to customers | 3,167,425 | 3,138,574 | 2,688,662 | 2,664,243
Allowance for loan impairment | (49,725) | (33,567) | (43,558) | (30,761)
Net loans to customers | 3,117,700 | 3,105,007 | 2,645,104 | 2,633,482

During the year ended 31 December 2024, the Group’s gross loans and advances increased by 18%. The Group’s total impairment
provision for loans and advances amounts to EUR 49,725 thousand (2023: EUR 43,558 thousand) and it accounts for 1.57% of the
respective portfolio (2023: 1.62%).
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
31
FINANCIAL RISK MANAGEMENT (CONTINUED)
a) Credit grades
The Group and the Bank examines the potential borrower’s financial performance before issuing a loan and monitors any development
in financial performance during the whole loan service period. The Group and the Bank evaluates the borrower’s financial performance
at least annually. Consumer loans to individuals are assessed based on application scorings when decision is made. After they are
granted they are monitored based on their past due status.

|  |  |  |  |  |  |  | Group loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 2,248,345 | 48,398 | 59 | 2,296,802 | 1,833,422 | 30,525 | 135 | 1,864,082
Watch | 414,400 | 36,192 | 287 | 450,879 | 387,014 | 37,282 | 432 | 424,728
Substandard | 221,441 | 122,969 | 4,394 | 348,804 | 189,748 | 132,932 | 7,006 | 329,686
Problem | - | - | 70,941 | 70,941 | - | - | 70,164 | 70,164
Gross | 2,884,186 | 207,559 | 75,681 | 3,167,426 | 2,410,184 | 200,739 | 77,737 | 2,688,660
Less: allowance for impairment | (25,347) | (5,327) | (19,052) | (49,726) | (21,262) | (6,284) | (16,010) | (43,556)
Net | 2,858,839 | 202,232 | 56,629 | 3,117,700 | 2,388,922 | 194,455 | 61,727 | 2,645,104

|  |  |  |  |  |  |  | Bank loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 2,230,400 | 338,622 | - | 2,569,022 | 1,816,646 | 277,206 | - | 2,093,852
Watch | 364,120 | 34,381 | - | 398,501 | 349,132 | 35,061 | - | 384,193
Substandard | 350 | 105,117 | - | 105,467 | 144 | 115,889 | - | 116,033
Problem | - | - | 65,585 | 65,585 | - | - | 70,164 | 70,164
Gross | 2,594,870 | 478,120 | 65,585 | 3,138,575 | 2,165,922 | 428,156 | 70,164 | 2,664,242
Less: allowance for impairment | (18,389) | (795) | (14,384) | (33,568) | (15,954) | (2,279) | (12,527) | (30,760)
Net | 2,576,481 | 477,325 | 51,201 | 3,105,007 | 2,149,968 | 425,877 | 57,637 | 2,633,482

|  |  |  |  |  |  |  | Group loans to individuals (retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 1,066,241 | 27,807 | 59 | 1,094,107 | 948,783 | 17,263 | 135 | 966,181
Watch | 76,416 | 10,903 | 287 | 87,606 | 62,958 | 7,907 | 432 | 71,297
Substandard | 221,412 | 19,878 | 4,394 | 245,684 | 189,748 | 19,543 | 7,006 | 216,297
Problem | - | - | 27,426 | 27,426 | - | - | 24,189 | 24,189
Gross | 1,364,069 | 58,588 | 32,166 | 1,454,823 | 1,201,489 | 44,713 | 31,762 | 1,277,964
Less: allowance for impairment | (10,177) | (4,665) | (8,496) | (23,338) | (8,968) | (4,195) | (6,598) | (19,761)
Net | 1,353,892 | 53,923 | 23,670 | 1,431,485 | 1,192,521 | 40,518 | 25,164 | 1,258,203

|  |  |  |  |  |  |  | Bank loans to individuals (retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 1,048,296 | 27,213 | - | 1,075,509 | 932,007 | 16,391 | - | 948,398
Watch | 26,136 | 9,092 | - | 35,228 | 25,076 | 5,686 | - | 30,762
Substandard | 321 | 2,026 | - | 2,347 | 144 | 2,500 | - | 2,644
Problem | - | - | 22,069 | 22,069 | - | - | 24,189 | 24,189
Gross | 1,074,753 | 38,331 | 22,069 | 1,135,153 | 957,227 | 24,577 | 24,189 | 1,005,993
Less: allowance for impairment | (3,219) | (133) | (3,828) | (7,180) | (3,660) | (190) | (3,115) | (6,965)
Net | 1,071,534 | 38,198 | 18,241 | 1,127,973 | 953,567 | 24,387 | 21,074 | 999,028

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
32
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Group loans to individuals (retail): Consumer loans
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 19,609 | 733 | 59 | 20,401 | 18,390 | 959 | 135 | 19,484
Watch | 50,285 | 1,819 | 287 | 52,391 | 37,882 | 2,261 | 432 | 40,575
Substandard | 221,092 | 17,852 | 4,394 | 243,338 | 189,603 | 17,069 | 7,006 | 213,678
Problem | - | - | 5,549 | 5,549 | - | - | 179 | 179
Gross | 290,986 | 20,404 | 10,289 | 321,679 | 245,875 | 20,289 | 7,752 | 273,916
Less: allowance for impairment | (7,034) | (4,550) | (4,766) | (16,350) | (5,370) | (4,026) | (3,606) | (13,002)
Net | 283,952 | 15,854 | 5,523 | 305,329 | 240,505 | 16,263 | 4,146 | 260,914

|  |  |  |  |  |  |  | Bank loans to individuals (retail): Consumer loans
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 1,663 | 139 | - | 1,802 | 1,613 | 87 | - | 1,700
Watch | 5 | 8 | - | 13 | - | 40 | - | 40
Substandard | 2 | - | - | 2 | - | 26 | - | 26
Problem | - | - | 192 | 192 | - | - | 179 | 179
Gross | 1,670 | 147 | 192 | 2,009 | 1,613 | 153 | 179 | 1,945
Less: allowance for impairment | (76) | (18) | (97) | (192) | (62) | (21) | (123) | (206)
Net | 1,594 | 129 | 95 | 1,818 | 1,551 | 132 | 56 | 1,739

|  |  |  |  |  |  |  | Group loans to individuals (retail): Mortgages
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 868,147 | 26,061 | - | 894,208 | 748,506 | 14,144 | - | 762,650
Watch | 3,062 | 6,898 | - | 9,960 | 3,510 | 3,017 | - | 6,527
Substandard | 295 | 715 | - | 1,010 | 119 | 1,218 | - | 1,337
Problem | - | - | 12,757 | 12,757 | - | - | 10,929 | 10,929
Gross | 871,504 | 33,674 | 12,757 | 917,935 | 752,135 | 18,379 | 10,929 | 781,443
Less: allowance for impairment | (195) | (29) | (1,951) | (2,174) | (177) | (45) | (2,290) | (2,512)
Net | 871,309 | 33,645 | 10,806 | 915,760 | 751,958 | 18,334 | 8,639 | 778,931

|  |  |  |  |  |  |  | Bank loans to individuals (retail): Mortgages
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 868,147 | 26,061 | - | 894,208 | 748,506 | 14,144 | - | 762,650
Watch | 3,062 | 6,898 | - | 9,960 | 3,510 | 3,017 | - | 6,527
Substandard | 295 | 715 | - | 1,010 | 119 | 1,218 | - | 1,337
Problem | - | - | 12,757 | 12,757 | - | - | 10,929 | 10,929
Gross | 871,504 | 33,674 | 12,757 | 917,935 | 752,135 | 18,379 | 10,929 | 781,443
Less: allowance for impairment | (195) | (29) | (1,951) | (2,174) | (177) | (45) | (2,290) | (2,512)
Net | 871,309 | 33,645 | 10,806 | 915,760 | 751,958 | 18,334 | 8,639 | 778,931

|  |  |  |  |  |  |  | Group loans to individuals (retail): Other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 178,485 | 1,013 | - | 179,498 | 181,887 | 2,160 | - | 184,047
Watch | 23,069 | 2,186 | - | 25,255 | 21,566 | 2,629 | - | 24,195
Substandard | 25 | 1,311 | - | 1,336 | 26 | 1,256 | - | 1,282
Problem | - | - | 9,120 | 9,120 | - | - | 13,081 | 13,081
Gross | 201,579 | 4,510 | 9,120 | 215,209 | 203,479 | 6,045 | 13,081 | 222,605
Less: allowance for impairment | (2,950) | (86) | (1,780) | (4,814) | (3,421) | (124) | (702) | (4,247)
Net | 198,629 | 4,424 | 7,340 | 210,393 | 200,058 | 5,921 | 12,379 | 218,358

|  |  |  |  |  |  |  | Bank loans to individuals (retail): Other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 178,485 | 1,013 | - | 179,498 | 181,888 | 2,160 | - | 184,048
Watch | 23,069 | 2,186 | - | 25,255 | 21,566 | 2,629 | - | 24,195
Substandard | 24 | 1,311 | - | 1,335 | 25 | 1,256 | - | 1,281
Problem | - | - | 9,120 | 9,120 | - | - | 13,081 | 13,081
Gross | 201,578 | 4,510 | 9,120 | 215,208 | 203,479 | 6,045 | 13,081 | 222,605
Less: allowance for impairment | (2,949) | (86) | (1,780) | (4,815) | (3,421) | (124) | (702) | (4,247)
Net | 198,629 | 4,424 | 7,340 | 210,393 | 200,058 | 5,921 | 12,379 | 218,358

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
33
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Group loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 20,313 | - | - | 20,313 | 14,704 | - | - | 14,704
Watch | - | - | - | - | 11,892 | - | - | 11,892
Substandard | - | - | - | - | - | - | - | -
Problem | - | - | - | - | - | - | - | -
Gross | 20,313 | - | - | 20,313 | 26,596 | - | - | 26,596
Less: allowance for impairment | (26) | - | - | (26) | (183) | - | - | (183)
Net | 20,287 | - | - | 20,287 | 26,413 | - | - | 26,413

|  |  |  |  |  |  |  | Bank loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 20,314 | 290,817 | - | 311,131 | 14,704 | 247,553 | - | 262,257
Watch | - | - | - | - | 11,892 | - | - | 11,892
Substandard | - | - | - | - | - | - | - | -
Problem | - | - | - | - | - | - | - | -
Gross | 20,314 | 290,817 | - | 311,131 | 26,596 | 247,553 | - | 274,149
Less: allowance for impairment | (27) | - | - | (27) | (183) | - | - | (183)
Net | 20,287 | 290,817 | - | 311,104 | 26,413 | 247,553 | - | 273,966

|  |  |  |  |  |  |  | Group loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 1,161,791 | 20,592 | - | 1,182,383 | 869,935 | 13,262 | - | 883,197
Watch | 337,984 | 25,289 | - | 363,273 | 312,164 | 29,375 | - | 341,539
Substandard | 29 | 103,091 | - | 103,120 | - | 113,389 | - | 113,389
Problem | - | - | 43,516 | 43,516 | - | - | 45,975 | 45,975
Gross | 1,499,804 | 148,972 | 43,516 | 1,692,292 | 1,182,099 | 156,026 | 45,975 | 1,384,100
Less: allowance for impairment | (15,144) | (662) | (10,554) | (26,360) | (12,111) | (2,089) | (9,412) | (23,612)
Net | 1,484,660 | 148,310 | 32,962 | 1,665,932 | 1,169,988 | 153,937 | 36,563 | 1,360,488

|  |  |  |  |  |  |  | Bank loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 1,161,791 | 20,592 | - | 1,182,383 | 869,935 | 13,262 | - | 883,197
Watch | 337,984 | 25,289 | - | 363,273 | 312,164 | 29,375 | - | 341,539
Substandard | 29 | 103,091 | - | 103,120 | - | 113,389 | - | 113,389
Problem | - | - | 43,516 | 43,516 | - | - | 45,975 | 45,975
Gross | 1,499,804 | 148,972 | 43,516 | 1,692,292 | 1,182,099 | 156,026 | 45,975 | 1,384,100
Less: allowance for impairment | (15,144) | (662) | (10,554) | (26,360) | (12,111) | (2,089) | (9,412) | (23,612)
Net | 1,484,660 | 148,310 | 32,962 | 1,665,932 | 1,169,988 | 153,937 | 36,563 | 1,360,488

|  |  |  |  |  |  |  | Group loans to business customers: Large corporates
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 196,134 | - | - | 196,134 | 89,586 | 1,768 | - | 91,354
Watch | 1,401 | 5,450 | - | 6,851 | - | 1,047 | - | 1,047
Substandard | - | - | - | - | - | 243 | - | 243
Problem | - | - | 16,262 | 16,262 | - | - | 17,209 | 17,209
Gross | 197,535 | 5,450 | 16,262 | 219,247 | 89,586 | 3,058 | 17,209 | 109,853
Less: allowance for impairment | (494) | (3) | (2,095) | (2,592) | (651) | (6) | (1,127) | (1,784)
Net | 197,041 | 5,447 | 14,167 | 216,655 | 88,935 | 3,052 | 16,082 | 108,069

|  |  |  |  |  |  |  | Bank loans to business customers: Large corporates
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 196,134 | - | - | 196,134 | 89,586 | 1,768 | - | 91,354
Watch | 1,401 | 5,450 | - | 6,851 | - | 1,047 | - | 1,047
Substandard | - | - | - | - | - | 243 | - | 243
Problem | - | - | 16,262 | 16,262 | - | - | 17,209 | 17,209
Gross | 197,535 | 5,450 | 16,262 | 219,247 | 89,586 | 3,058 | 17,209 | 109,853
Less: allowance for impairment | (494) | (3) | (2,095) | (2,592) | (651) | (6) | (1,127) | (1,784)
Net | 197,041 | 5,447 | 14,167 | 216,655 | 88,935 | 3,052 | 16,082 | 108,069

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
34
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Group loans to business customers: SME
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 913,788 | 19,833 | - | 933,621 | 718,128 | 9,384 | - | 727,512
Watch | 336,217 | 19,839 | - | 356,056 | 311,571 | 28,328 | - | 339,899
Substandard | 29 | 103,081 | - | 103,110 | - | 110,413 | - | 110,413
Problem | - | - | 25,955 | 25,955 | - | - | 27,423 | 27,423
Gross | 1,250,034 | 142,753 | 25,955 | 1,418,742 | 1,029,699 | 148,125 | 27,423 | 1,205,247
Less: allowance for impairment | (14,475) | (658) | (8,004) | (23,137) | (11,312) | (2,069) | (8,027) | (21,408)
Net | 1,235,559 | 142,095 | 17,951 | 1,395,605 | 1,018,387 | 146,056 | 19,396 | 1,183,839

|  |  |  |  |  |  |  | Bank loans to business customers: SME
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 913,788 | 19,833 | - | 933,621 | 718,128 | 9,384 | - | 727,512
Watch | 336,217 | 19,839 | - | 356,056 | 311,571 | 28,328 | - | 339,899
Substandard | 29 | 103,081 | - | 103,110 | - | 110,413 | - | 110,413
Problem | - | - | 25,955 | 25,955 | - | - | 27,423 | 27,423
Gross | 1,250,034 | 142,753 | 25,955 | 1,418,742 | 1,029,699 | 148,125 | 27,423 | 1,205,247
Less: allowance for impairment | (14,475) | (658) | (8,004) | (23,137) | (11,312) | (2,069) | (8,027) | (21,408)
Net | 1,235,559 | 142,095 | 17,951 | 1,395,605 | 1,018,387 | 146,056 | 19,396 | 1,183,839

|  |  |  |  |  |  |  | Group loans to business customers: Central and local authorities and other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 51,868 | 759 | - | 52,627 | 62,221 | 2,110 | - | 64,331
Watch | 366 | - | - | 366 | 593 | - | - | 593
Substandard | - | 10 | - | 10 | - | 2,733 | - | 2,733
Problem | - | - | 1,299 | 1,299 | - | - | 1,343 | 1,343
Gross | 52,234 | 769 | 1,299 | 54,302 | 62,814 | 4,843 | 1,343 | 69,000
Less: allowance for impairment | (175) | (1) | (457) | (633) | (148) | (14) | (258) | (420)
Net | 52,059 | 768 | 842 | 53,669 | 62,666 | 4,829 | 1,085 | 68,580

|  |  |  |  |  |  |  | Bank loans to business customers: Central and local authorities and other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 51,868 | 759 | - | 52,627 | 62,221 | 2,110 | - | 64,331
Watch | 366 | - | - | 366 | 593 | - | - | 593
Substandard | - | 10 | - | 10 | - | 2,733 | - | 2,733
Problem | - | - | 1,299 | 1,299 | - | - | 1,343 | 1,343
Gross | 52,234 | 769 | 1,299 | 54,302 | 62,814 | 4,843 | 1,343 | 69,000
Less: allowance for impairment | (175) | (1) | (457) | (633) | (148) | (14) | (258) | (420)
Net | 52,059 | 768 | 842 | 53,669 | 62,666 | 4,829 | 1,085 | 68,580

For analysis of debt securities according to the credit quality see Notes 12 and 15.
b) Payment delays
The tables below provide an analysis of loans and advances to customers by payment delays. The Group considers a loan to be past
due when the following criteria are met: for loans to individuals – overdue amount is higher than the lower of EUR 100 or 1% of total
exposure; for loans to business customers – overdue amount is higher than the lower of EUR 500 or 1% of total exposure.

|  |  |  |  |  |  |  | Group loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 2,841,708 | 169,149 | 23,870 | 3,034,727 | 2,364,707 | 165,303 | 36,773 | 2,566,783
Past due up to 30 days | 42,477 | 25,004 | 5,262 | 72,743 | 45,340 | 20,976 | 5,455 | 71,771
Past due 31-90 days | - | 13 405 | 3 431 | 16 836 | 135 | 14,397 | 5,263 | 19,795
Past due more than 90 days | - | - | 43 117 | 43 117 | 4 | 64 | 30,247 | 30,315
Gross | 2,884,185 | 207,558 | 75,680 | 3,167,423 | 2,410,186 | 200,740 | 77,738 | 2,688,664
Less: allowance for impairment | (25,347) | (5,327) | (19,052) | (49,726) | (21,263) | (6,285) | (16,012) | (43,560)
Net | 2,858,838 | 202,232 | 56,630 | 3,117,697 | 2,388,923 | 194,455 | 61,726 | 2,645,104

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Bank loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 2,552,393 | 458,625 | 21,358 | 3,032,376 | 2,130,579 | 412,310 | 35,118 | 2,578,007
Past due up to 30 days | 42,477 | 10,296 | 3,931 | 56,704 | 35,340 | 6,877 | 4,065 | 46,282
Past due 31-90 days | - | 9,200 | 2,533 | 11,733 | - | 8,965 | 1,930 | 10,895
Past due more than 90 days | - | - | 37,762 | 37,762 | 4 | 4 | 29,052 | 29,060
Gross | 2,594,870 | 478,121 | 65,584 | 3,138,575 | 2,165,923 | 428,156 | 70,165 | 2,664,244
Less: allowance for impairment | (18,391) | (795) | (14,384) | (33,570) | (15,955) | (2,279) | (12,528) | (30,762)
Net | 2,576,479 | 477,326 | 51,200 | 3,105,005 | 2,149,968 | 425,877 | 57,637 | 2,633,482

|  |  |  |  |  |  |  |  | Group loans to individuals (retail)
|  |  |  |  | 2024 |  |  |  | 2023
|  | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 1,346 | 028 | 26,646 | 10,832 | 1,383,506 | 1,177,876 | 14,435 | 11,574 | 1,203,885
Past due up to 30 days |  | 18,038 | 19,913 | 4,289 | 42,240 | 23,474 | 15,952 | 2,892 | 42,318
Past due 31-90 days |  | - | 12,027 | 2,508 | 14,535 | 135 | 14,264 | 4,801 | 19,200
Past due more than 90 days |  | - | - | 14,536 | 14,536 | 4 | 64 | 12,496 | 12,564
Gross |  | 1,364,066 | 58,586 | 32,165 | 1,454,817 | 1,201,489 | 44,715 | 31,763 | 1,277,967
Less: allowance for impairment |  | (10,177) | (4,665) | (8,496) | (23,338) | (8,969) | (4,196) | (6,599) | (19,764)
Net |  | 1,353,889 | 53,921 | 23,669 | 1,431,479 | 1,192,520 | 40,519 | 25,164 | 1,258,203

|  |  |  |  |  |  |  | Bank loans to individuals (retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 1,056,712 | 25,303 | 8,320 | 1,090,335 | 943,748 | 13,889 | 9,919 | 967,556
Past due up to 30 days | 18,038 | 5,205 | 2,958 | 26,201 | 13,474 | 1,853 | 1,502 | 16,829
Past due 31-90 days | - | 7,822 | 1,610 | 9,432 | - | 8,832 | 1,468 | 10,300
Past due more than 90 days | - | - | 9,181 | 9,181 | 4 | 4 | 11,301 | 11,309
Gross | 1,074,750 | 38,330 | 22,069 | 1,135,149 | 957,226 | 24,578 | 24,190 | 1,005,994
Less: allowance for impairment | (3,219) | (133) | (3,828) | (7,180) | (3,661) | (190) | (3,115) | (6,966)
Net | 1,071,531 | 38,197 | 18,241 | 1,127,969 | 953,565 | 24,388 | 21,075 | 999,028

|  |  |  |  |  |  |  | Group loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 20,314 | - | - | 20,314 | 26,596 | - | - | 26,596
Past due up to 30 days | - | - | - | - | - | - | - | -
Past due 31-90 days | - | - | - | - | - | - | - | -
Past due more than 90 days | - | - | - | - | - | - | - | -
Gross | 20,314 | - | - | 20,314 | 26,596 | - | - | 26,596
Less: allowance for impairment | (27) | - | - | (27) | (183) | - | - | (183)
Net | 20,287 | - | - | 20,287 | 26,413 | - | - | 26,413

|  |  |  |  |  |  |  | Bank loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 20,314 | 290,817 | - | 311,131 | 26,596 | 247,553 | - | 274,149
Past due up to 30 days | - | - | - | - | - | - | - | -
Past due 31-90 days | - | - | - | - | - | - | - | -
Past due more than 90 days | - | - | - | - | - | - | - | -
Gross | 20,314 | 290,817 | - | 311,131 | 26,596 | 247,553 | - | 274,149
Less: allowance for impairment | (27) | - | - | (27) | (183) | - | - | (183)
Net | 20,287 | 290,817 | - | 311,104 | 26,413 | 247,553 | - | 273,966

|  |  |  |  |  |  |  | Group loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 1,475,366 | 142,504 | 13,038 | 1,630,908 | 1,160,235 | 150,868 | 25,199 | 1,336,302
Past due up to 30 days | 24,439 | 5,091 | 973 | 30,503 | 21,866 | 5,024 | 2,563 | 29,453
Past due 31-90 days | - | 1,378 | 923 | 2,301 | - | 133 | 462 | 595
Past due more than 90 days | - | - | 28,581 | 28,581 | - | - | 17,751 | 17,751
Gross | 1,499,805 | 148,973 | 43,515 | 1,692,293 | 1,182,101 | 156,025 | 45,975 | 1,384,101
Less: allowance for impairment | (15,144) | (662) | (10,556) | (26,362) | (12,111) | (2,089) | (9,413) | (23,613)
Net | 1,484,661 | 148,311 | 32,959 | 1,665,931 | 1,169,990 | 153,936 | 36,562 | 1,360,488

35
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  |  | Bank loans to business customers
|  |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 1,475 | 367 | 142,505 | 13,038 | 1,630,910 | 1,160,235 | 150,868 | 25,199 | 1,336,302
Past due up to 30 days |  | 24,439 | 5,091 | 973 | 30,503 | 21,866 | 5,024 | 2,563 | 29,453
Past due 31-90 days |  | - | 1,378 | 923 | 2,301 | - | 133 | 462 | 595
Past due more than 90 days |  | - | - | 28,581 | 28,581 | - | - | 17,751 | 17,751
Gross |  | 1,499,806 | 148,974 | 43,515 | 1,692,295 | 1,182,101 | 156,025 | 45,975 | 1,384,101
Less: allowance for impairment |  | (15,145) | (662) | (10,556) | (26,363) | (12,111) | (2,089) | (9,413) | (23,613)
Net |  | 1,484,661 | 148,312 | 32,959 | 1,665,932 | 1,169,990 | 153,936 | 36,562 | 1,360,488

c) Stage 3 loans and advances to customers
The breakdown of the gross amount of Stage 3 loans and advances by class, along with the fair value of related collateral held by the
Group and the Bank as security is as follows:
31 December 2024

|  |  |  | Group |  |  |  | Bank
|  | Allowance for |  | Fair value | Gross | Allowance for |  | Fair value
| Gross value | impairment | Net value | of | value | impairment | Net value | of
Loans and advances to financial |  |  |  | collateral |  |  |  | collateral
institutions | - | - | - | - | - | - | - | -
Loans to individuals (Retail): | 32,166 | (8,497) | 23,669 | 21,057 | 22,069 | (3,828) | 18,241 | 21,057
Consumer loans | 10,289 | (4,766) | 5,523 | 6 | 192 | (98) | 94 | 6
Mortgages | 12,757 | (1,951) | 10,806 | 10,765 | 12,757 | (1,950) | 10,807 | 10,765
Other | 9,120 | (1,780) | 7,340 | 10,285 | 9,120 | (1,780) | 7,340 | 10,285
Loans to business customers: | 43,516 | (10,556) | 32,960 | 45,328 | 43,516 | (10,556) | 32,960 | 45,328
Large corporates | 16,262 | (2,095) | 14,167 | 17,209 | 16,262 | (2,095) | 14,167 | 17,209
SME | 25,955 | (8,004) | 17,951 | 26,775 | 25,955 | (8,004) | 17,951 | 26,775
Central and local authorities, administrative bodies and other | 1,299 | (457) | 842 | 1,343 | 1,299 | (457) | 842 | 1,343
Total loans to customers | 75,682 | (19,053) | 56,629 | 66,384 | 65,585 | (14,384) | 51,201 | 66,384

31 December 2023

|  |  |  | Group |  |  |  | Bank
|  | Allowance for |  | Fair value | Gross | Allowance for |  | Fair value
| Gross value | impairment | Net value | of | value | impairment | Net value | of
Loans and advances to financial |  |  |  | collateral |  |  |  | collateral
institutions | - | - | - | - | - | - | - | -
Loans to individuals (Retail): | 31,762 | (6,598) | 25,164 | 21,057 | 24,189 | (3,115) | 21,074 | 21,057
Consumer loans | 7,752 | (3,606) | 4,146 | 6 | 179 | (123) | 56 | 6
Mortgages | 10,929 | (2,290) | 8,639 | 10,765 | 10,929 | (2,290) | 8,639 | 10,765
Other | 13,081 | (702) | 12,379 | 10,285 | 13,081 | (702) | 12,379 | 10,285
Loans to business customers: | 45,975 | (9,412) | 36,563 | 45,328 | 45,975 | (9,412) | 36,563 | 45,328
Large corporates | 17,209 | (1,127) | 16,082 | 17,209 | 17,209 | (1,127) | 16,082 | 17,209
SME | 27,423 | (8,027) | 19,396 | 26,775 | 27,423 | (8,027) | 19,396 | 26,775
Central and local authorities, administrative bodies and other | 1,343 | (258) | 1,085 | 1,343 | 1,343 | (258) | 1,085 | 1,343
Total loans to customers | 77,737 | (16,010) | 61,727 | 66,384 | 70,164 | (12,527) | 57,637 | 66,384

Impairment loss by class of financial assets for loans is disclosed in Note 13.
36
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
37
FINANCIAL RISK MANAGEMENT (CONTINUED)
d) Information about loan collateral
The method for collateral valuation is selected by the Group and the Bank based on specifics of collateral and existing market conditions
on the day of valuation. Based on collateral characteristics and the purpose of its valuation the following valuation methods are used:
comparable sales price method or income capitalization method. Fair values of the collateral are updated regularly in line with the Bank’s
procedures.
If loan is secured by several different types of collateral, priority in their recognition is based on their liquidity. Cash deposits are treated
as having the highest liquidity followed by guarantees, residential real estate and then other real estate. Securities that have no active
market and other assets are treated as having the lowest liquidity.
Unsecured loans also include loans secured by other types of collateral (e.g. future inflow of funds into the borrowers’ Bank accounts
(controlled by the Bank), third party warrantees, bills of exchange, etc.). The total amount of loans to individuals and business customers
secured by the above security measure but disclosed as unsecured as at 31 December 2023 amounted to EUR 54 million (2023: EUR
23 million). Totally unsecured loans comprise only consumer loans and loans issued by the Bank to its subsidiaries.
31 December 2024

|  |  |  | Group loans to individuals (retail)
| Consumer loans | Mortgages | Other | Total
Unsecured loans | 321,632 | - | - | 321,632
Loans collateralized by: | 47 | 917,935 | 215,209 | 1,133,191
residential real estate - | - | 917,935 | 11,130 | 929,065
other real estate - | - | - | 6,518 | 6,518
securities - | - | - | - | -
guarantees - | - | - | 159,294 | 159,294
cash deposits - | - | - | - | -
other assets - | 47 | - | 38,267 | 38,314
Total | 321,679 | 917 935 | 215,209 | 1,454,823

|  |  |  |  | Group loans to business customers
|  | SME Large corporates | Financial | Central and local authorities and | Total
|  |  | institutions | other |
Unsecured loans | - | - | - | - | -
Loans collateralized by: | 1,418,742 | 219,248 | 20,313 | 54,303 | 1,712,606
residential real estate - | 181,829 | 3,275 | - | 667 | 185,771
other real estate - | 1,236,913 | 215,973 | 5,458 | 41,482 | 1,499,826
securities - | - | - | - | - | -
guarantees - | - | - | 6,555 | 2,487 | 9,042
cash deposits - | - | - | - | - | -
other assets - | - | - | 8,300 | 9,667 | 17,967
Total | 1,418,742 | 219,248 | 20,313 | 54,303 | 1,712,606

|  |  |  | Bank loans to individuals (retail)
| Consumer loans | Mortgages | Other | Total
Unsecured loans | 1,962 | - | - | 1,962
Loans collateralized by: | 47 | 917,935 | 215,208 | 1,133,190
residential real estate - | - | 917,935 | 11,129 | 929,064
other real estate - | - | - | 6,518 | 6,518
securities - | - | - | - | -
guarantees - | - | - | 159,294 | 159,294
cash deposits - | - | - | - | -
other assets - | 47 | - | 38,267 | 38,314
Total | 2,009 | 917,935 | 215,208 | 1,135,152

|  |  |  |  | Bank loans to business customers
|  | SME Large corporates | Financial | Central and local authorities and | Total
|  |  | institutions | other |
Unsecured loans | - | - | 290,818 | - | 290,818
Loans collateralized by: | 1,418,742 | 219,248 | 20,313 | 54,302 | 1,712,605
residential real estate - | 181,829 | 3,275 | - | 667 | 185,771
other real estate - | 1,236,913 | 215,973 | 5,458 | 41,481 | 1,499,825
securities - | - | - | - | - | -
guarantees - | - | - | 6,555 | 2,487 | 9,042
cash deposits - | - | - | - | - | -
other assets - | - | - | 8,300 | 9,667 | 17,967
Total | 1,418,742 | 219,248 | 311,131 | 54,302 | 2,003,423

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
38
FINANCIAL RISK MANAGEMENT (CONTINUED)
31 December 2023

|  |  |  | Group loans to individuals (retail)
| Consumer loans | Mortgages | Other | Total
Unsecured loans | 273,916 | - | 67,266 | 341,182
Loans collateralized by: | - | 781,443 | 155,339 | 936,782
residential real estate - | - | 749,409 | 8,083 | 757,492
other real estate - | - | 32,034 | 8,776 | 40,810
securities - | - | - | - | -
guarantees - | - | - | 123,556 | 123,556
cash deposits - | - | - | 7 | 7
other assets - | - | - | 14,917 | 14,917
Total | 273,916 | 781,443 | 222,605 | 1,277,964

|  |  |  |  | Group loans to business customers
|  | SME Large corporates | Financial | Central and local authorities and | Total
|  |  | institutions | other |
Unsecured loans | - | - | - | 49,103 | 49,103
Loans collateralized by: | 1,205,247 | 109,853 | 26,596 | 19,897 | 1,361,593
residential real estate - | 138,606 | 2,633 | - | 457 | 141,696
other real estate - | 1,066,641 | 107,220 | 26,596 | 18,971 | 1,219,428
securities - | - | - | - | 1 | 1
guarantees - | - | - | - | 468 | 468
cash deposits - | - | - | - | - | -
other assets - | - | - | - | - | -
Total | 1,205,247 | 109,853 | 26,596 | 69,000 | 1,410,696

|  |  |  | Bank loans to individuals (retail)
| Consumer loans | Mortgages | Other | Total
Unsecured loans | 1,945 | - | 67,266 | 69,211
Loans collateralized by: | - | 781,443 | 155,339 | 936,782
residential real estate - | - | 749,409 | 8,083 | 757,492
other real estate - | - | 32,034 | 8,776 | 40,810
securities - | - | - | - | -
guarantees - | - | - | 123,556 | 123,556
cash deposits - | - | - | 7 | 7
other assets - | - | - | 14,917 | 14,917
Total | 1,945 | 781,443 | 222,605 | 1,005,993

|  |  |  |  | Bank loans to business customers
|  | SME Large corporates | Financial | Central and local authorities and | Total
|  |  | institutions | other |
Unsecured loans | - | - | 247,553 | 49,103 | 296,656
Loans collateralized by: | 1,205,247 | 109,853 | 26,596 | 19,897 | 1,361,593
residential real estate - | 138,606 | 2,633 | - | 457 | 141,696
other real estate - | 1,066,641 | 107,220 | 26,596 | 18,971 | 1,219,428
securities - | - | - | - | 1 | 1
guarantees - | - | - | - | 468 | 468
cash deposits - | - | - | - | - | -
other assets - | - | - | - | - | -
Total | 1,205,247 | 109,853 | 274,149 | 69,000 | 1,658,249

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
39
FINANCIAL RISK MANAGEMENT (CONTINUED)
Following tables show the distribution of LTV (loan to collateral value) ratios for the Group’s loan portfolio:

|  |  |  |  |  |  |  | Group loans to customers – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 1,631,765 | 142,726 | 46,396 | 1,820,887 | 1,270,696 | 149,029 | 49,268 | 1,468,993
50% to 60% | 140,192 | 7,204 | 1,954 | 149,350 | 150,592 | 14,578 | 2,835 | 168,005
60% to 70% | 147,239 | 22,643 | 4,282 | 174,164 | 105,707 | 3,854 | 1,551 | 111,112
70% to 80% | 168,178 | 5,320 | 1,405 | 174,903 | 173,230 | 2,396 | 1,555 | 177,181
80% to 90% | 164,569 | 2,938 | 1,307 | 168,814 | 150,401 | 2,922 | 1,977 | 155,300
90% to 100% | 3,718 | 136 | 533 | 4,387 | 13,704 | 838 | 85 | 14,627
higher than 100% | 171,879 | 4,886 | 9,273 | 186,038 | 147,883 | 4,494 | 12,386 | 164,763
no collateral | 456,645 | 21,706 | 10,532 | 488,883 | 397,973 | 22,629 | 8,081 | 428,683
Total gross | 2,884,185 | 207,559 | 75,682 | 3,167,426 | 2,410,186 | 200,740 | 77,738 | 2,688,664
loans |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  | Bank loans to customers – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 1,631,765 | 142,725 | 46,391 | 1,820,881 | 1,270,696 | 149,029 | 49,268 | 1,468,993
50% to 60% | 140,192 | 7,204 | 1,954 | 149,350 | 150,592 | 14,578 | 2,835 | 168,005
60% to 70% | 147,239 | 22,643 | 4,282 | 174,164 | 105,707 | 3,854 | 1,551 | 111,112
70% to 80% | 168,178 | 5,321 | 1,405 | 174,904 | 173,230 | 2,396 | 1,555 | 177,181
80% to 90% | 164,569 | 2,938 | 1,307 | 168,814 | 150,401 | 2,922 | 1,977 | 155,300
90% to 100% | 3,718 | 136 | 533 | 4,387 | 13,704 | 838 | 85 | 14,627
higher than 100% | 171,877 | 4,886 | 9,274 | 186,037 | 147,883 | 4,494 | 12,386 | 164,763
no collateral | 167,331 | 292,268 | 435 | 460,034 | 153,710 | 250,045 | 508 | 404,263
Total gross | 2,594,869 | 478,121 | 65,581 | 3,138,571 | 2,165,923 | 428,156 | 70,165 | 2,664,244
loans |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  | Group loans to individuals (Retail) – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 296,540 | 15,718 | 6,232 | 318,490 | 246,967 | 8,578 | 5,671 | 261,216
50% to 60% | 126,594 | 5,505 | 1,712 | 133,811 | 85,306 | 2,615 | 1,529 | 89,450
60% to 70% | 114,659 | 3,866 | 1,558 | 120,083 | 98,834 | 3,261 | 1,250 | 103,345
70% to 80% | 166,872 | 5,320 | 1,405 | 173,597 | 169,164 | 2,395 | 1,555 | 173,114
80% to 90% | 164,508 | 2,938 | 1,307 | 168,753 | 149,520 | 2,849 | 1,962 | 154,331
90% to 100% | 1,237 | 136 | 533 | 1,906 | 2,155 | 83 | 85 | 2,323
higher than 100% | 145,459 | 4,294 | 8,916 | 158,669 | 138,356 | 4,494 | 11,659 | 154,509
no collateral | 348,198 | 20,810 | 10,503 | 379,511 | 311,187 | 20,440 | 8,052 | 339,679
Total gross | 1,364,067 | 58,587 | 32,166 | 1,454,820 | 1,201,489 | 44,715 | 31,763 | 1,277,967
loans |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  | Bank loans to individuals (Retail) – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 296,541 | 15,717 | 6,229 | 318,487 | 246,967 | 8,578 | 5,671 | 261,216
50% to 60% | 126,594 | 5,505 | 1,712 | 133,811 | 85,306 | 2,615 | 1,529 | 89,450
60% to 70% | 114,659 | 3,866 | 1,558 | 120,083 | 98,834 | 3,261 | 1,250 | 103,345
70% to 80% | 166,872 | 5,320 | 1,405 | 173,597 | 169,164 | 2,395 | 1,555 | 173,114
80% to 90% | 164,508 | 2,938 | 1,307 | 168,753 | 149,520 | 2,849 | 1,962 | 154,331
90% to 100% | 1,237 | 136 | 533 | 1,906 | 2,155 | 83 | 85 | 2,323
higher than 100% | 145,457 | 4,294 | 8,917 | 158,668 | 138,356 | 4,494 | 11,659 | 154,509
no collateral | 58,884 | 554 | 406 | 59,844 | 66,924 | 303 | 479 | 67,706
Total gross | 1,074,752 | 38,330 | 22,067 | 1,135,149 | 957,226 | 24,578 | 24,190 | 1,005,994
loans |  |  |  |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
40
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Group loans to individuals (Retail) : Consumer loans – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | - | - | - | - | - | - | 1 | 1
50% to 60% | - | - | - | - | - | - | - | -
60% to 70% | - | - | - | - | - | - | - | -
70% to 80% | - | - | - | - | - | - | - | -
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | 16 | 2 | 1 | 19
higher than 100% | - | - | - | - | 16 | 1 | 4 | 21
no collateral | 290,986 | 20,404 | 10,289 | 321,679 | 245,843 | 20,286 | 7,746 | 273,875
Total gross | 290,986 | 20,404 | 10,289 | 321,679 | 245,875 | 20,289 | 7,752 | 273,916
loans |  |  |  |  |  |  |  |

Bank loans to individuals (Retail) : Consumer loans – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | - | - | - | - | - | - | 1 | 1
50% to 60% | - | - | - | - | - | - | - | -
60% to 70% | - | - | - | - | - | - | - | -
70% to 80% | - | - | - | - | - | - | - | -
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | 16 | 2 | 1 | 19
higher than 100% | - | - | - | - | 16 | 1 | 4 | 21
no collateral | 1,670 | 147 | 192 | 2,009 | 1,581 | 150 | 173 | 1,904
Total gross | 1,670 | 147 | 192 | 2,009 | 1,613 | 153 | 179 | 1,945
loans |  |  |  |  |  |  |  |

Group loans to individuals (Retail) : Mortgages – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 294,357 | 15,323 | 5,685 | 315,365 | 244,611 | 7,319 | 4,786 | 256,716
50% to 60% | 126,505 | 5,502 | 1,682 | 133,689 | 85,242 | 2,459 | 1,363 | 89,064
60% to 70% | 114,649 | 3,866 | 1,526 | 120,041 | 98,807 | 3,252 | 1,126 | 103,185
70% to 80% | 166,869 | 5,320 | 1,377 | 173,566 | 169,158 | 2,395 | 1,549 | 173,102
80% to 90% | 164,500 | 2,938 | 1,293 | 168,731 | 149,137 | 2,849 | 1,936 | 153,922
90% to 100% | 1,160 | 136 | 533 | 1,829 | 2,101 | 81 | 84 | 2,266
higher than 100% | 1,522 | 273 | 636 | 2,431 | 1,482 | 24 | - | 1,506
no collateral | 1,943 | 315 | 23 | 2,281 | 1,597 | - | 85 | 1,682
Total gross | 871,505 | 33,673 | 12,755 | 917,933 | 752,135 | 18,379 | 10,929 | 781,443
loans |  |  |  |  |  |  |  |

Bank loans to individuals (Retail) : Mortgages – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 294,357 | 15,323 | 5,685 | 315,365 | 244,611 | 7,319 | 4,786 | 256,716
50% to 60% | 126,505 | 5,502 | 1,682 | 133,689 | 85,242 | 2,459 | 1,363 | 89,064
60% to 70% | 114,649 | 3,866 | 1,526 | 120,041 | 98,807 | 3,252 | 1,126 | 103,185
70% to 80% | 166,869 | 5,320 | 1,377 | 173,566 | 169,158 | 2,395 | 1,549 | 173,102
80% to 90% | 164,500 | 2,938 | 1,293 | 168,731 | 149,137 | 2,849 | 1,936 | 153,922
90% to 100% | 1,160 | 136 | 533 | 1,829 | 2,101 | 81 | 84 | 2,266
higher than 100% | 1,522 | 273 | 636 | 2,431 | 1,482 | 24 | - | 1,506
no collateral | 1,943 | 315 | 23 | 2,281 | 1,597 | - | 85 | 1,682
Total gross | 871,505 | 33,673 | 12,755 | 917,933 | 752,135 | 18,379 | 10,929 | 781,443
loans |  |  |  |  |  |  |  |

Group loans to individuals (Retail) : Other – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 2,184 | 394 | 544 | 3,122 | 2,356 | 1,258 | 883 | 4,497
50% to 60% | 89 | 3 | 30 | 122 | 64 | 156 | 166 | 386
60% to 70% | 10 | - | 32 | 42 | 27 | 9 | 124 | 160
70% to 80% | 3 | - | 28 | 31 | 6 | - | 6 | 12
80% to 90% | 8 | - | 14 | 22 | 383 | - | 26 | 409
90% to 100% | 77 | - | - | 77 | 38 | - | - | 38
higher than 100% | 143,935 | 4,021 | 8,281 | 156,237 | 136,858 | 4,469 | 11,655 | 152,982
no collateral | 55,271 | 92 | 191 | 55,554 | 63,747 | 153 | 221 | 64,121
Total gross | 201,577 | 4,510 | 9,120 | 215,207 | 203,479 | 6,045 | 13,081 | 222,605
loans |  |  |  |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
41
FINANCIAL RISK MANAGEMENT (CONTINUED)
Bank loans to individuals (Retail) : Other – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 2,184 | 394 | 544 | 3,122 | 2,356 | 1,258 | 883 | 4,497
50% to 60% | 89 | 3 | 30 | 122 | 64 | 156 | 166 | 386
60% to 70% | 10 | - | 32 | 42 | 27 | 9 | 124 | 160
70% to 80% | 3 | - | 28 | 31 | 6 | - | 6 | 12
80% to 90% | 8 | - | 14 | 22 | 383 | - | 26 | 409
90% to 100% | 77 | - | - | 77 | 38 | - | - | 38
higher than 100% | 143,935 | 4,021 | 8,281 | 156,237 | 136,858 | 4,469 | 11,655 | 152,982
no collateral | 55,271 | 92 | 191 | 55,554 | 63,747 | 153 | 221 | 64,121
Total gross | 201,577 | 4,510 | 9,120 | 215,207 | 203,479 | 6,045 | 13,081 | 222,605
loans |  |  |  |  |  |  |  |

Group loans to financial institutions – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 20,314 | - | - | 20,314 | 19,716 | - | - | 19,716
50% to 60% | - | - | - | - | 1,054 | - | - | 1,054
60% to 70% | - | - | - | - | 5,826 | - | - | 5,826
70% to 80% | - | - | - | - | - | - | - | -
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | - | - | - | -
higher than 100% | - | - | - | - | - | - | - | -
no collateral | - | - | - | - | - | - | - | -
Total gross | 20,314 | - | - | 20,314 | 26,596 | - | - | 26,596
loans |  |  |  |  |  |  |  |

Bank loans to financial institutions – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 20,314 | - | - | 20,314 | 19,716 | - | - | 19,716
50% to 60% | - | - | - | - | 1,054 | - | - | 1,054
60% to 70% | - | - | - | - | 5,826 | - | - | 5,826
70% to 80% | - | - | - | - | - | - | - | -
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | - | - | - | -
higher than 100% | - | - | - | - | - | - | - | -
no collateral | - | 290,818 | - | 290,818 | - | 247,553 | - | 247,553
Total gross | 20,314 | 290,818 | - | 311,132 | 26,596 | 247,553 | - | 274,149
loans |  |  |  |  |  |  |  |

Group loans to business customers – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 1,314,912 | 127,008 | 40,164 | 1,482,084 | 1,004,012 | 140,451 | 43,597 | 1,188,060
50% to 60% | 13,598 | 1,699 | 242 | 15,539 | 64,232 | 11,963 | 1,306 | 77,501
60% to 70% | 32,580 | 18,777 | 2,724 | 54,081 | 1,047 | 593 | 301 | 1,941
70% to 80% | 1,306 | - | - | 1,306 | 4,066 | 1 | - | 4,067
80% to 90% | 61 | - | - | 61 | 881 | 73 | 15 | 969
90% to 100% | 2,481 | - | - | 2,481 | 11,549 | 755 | - | 12,304
higher than 100% | 26,420 | 592 | 357 | 27,369 | 9,527 | - | 727 | 10,254
no collateral | 108,447 | 896 | 29 | 109,372 | 86,785 | 2,190 | 29 | 89,004
Total gross | 1,499,805 | 148,972 | 43,516 | 1,692,293 | 1,182,099 | 156,026 | 45,975 | 1,384,100
loans |  |  |  |  |  |  |  |

Bank loans to business customers – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 1,314,912 | 127,008 | 40,164 | 1,482,084 | 1,004,012 | 140,451 | 43,597 | 1,188,060
50% to 60% | 13,598 | 1,699 | 242 | 15,539 | 64,232 | 11,963 | 1,306 | 77,501
60% to 70% | 32,580 | 18,777 | 2,724 | 54,081 | 1,047 | 593 | 301 | 1,941
70% to 80% | 1,306 | - | - | 1,306 | 4,066 | 1 | - | 4,067
80% to 90% | 61 | - | - | 61 | 881 | 73 | 15 | 969
90% to 100% | 2,481 | - | - | 2,481 | 11,549 | 755 | - | 12,304
higher than 100% | 26,420 | 592 | 357 | 27,369 | 9,527 | - | 727 | 10,254
no collateral | 108,447 | 896 | 29 | 109,372 | 86,785 | 2,190 | 29 | 89,004
Total gross | 1,499,805 | 148,972 | 43,516 | 1,692,293 | 1,182,099 | 156,026 | 45,975 | 1,384,100
loans |  |  |  |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
42
FINANCIAL RISK MANAGEMENT (CONTINUED)
Group loans to business customers: Large corporates – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 173,195 | 5,450 | 16,262 | 194,907 | 78,684 | 3,057 | 17,209 | 98,950
50% to 60% | - | - | - | - | 1,100 | - | - | 1,100
60% to 70% | 2,503 | - | - | 2,503 | - | - | - | -
70% to 80% | - | 1 | - | 1 | - | 1 | - | 1
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | 9,776 | - | - | 9,776
higher than 100% | 21,838 | - | - | 21,838 | - | - | - | -
no collateral | - | - | - | - | 26 | - | - | 26
Total gross | 197,536 | 5,451 | 16,262 | 219,249 | 89,586 | 3,058 | 17,209 | 109,853
loans |  |  |  |  |  |  |  |

Bank loans to business customers: Large corporates – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 173,195 | 5,450 | 16,262 | 194,907 | 78,684 | 3,057 | 17,209 | 98,950
50% to 60% | - | - | - | - | 1,100 | - | - | 1,100
60% to 70% | 2,503 | - | - | 2,503 | - | - | - | -
70% to 80% | - | 1 | - | 1 | - | 1 | - | 1
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | 9,776 | - | - | 9,776
higher than 100% | 21,838 | - | - | 21,838 | - | - | - | -
no collateral | - | - | - | - | 26 | - | - | 26
Total gross | 197,536 | 5,451 | 16,262 | 219,249 | 89,586 | 3,058 | 17,209 | 109,853
loans |  |  |  |  |  |  |  |

Group loans to business customers: SME – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 1,129,962 | 121,548 | 22,603 | 1,274,113 | 916,238 | 135,614 | 25,045 | 1,076,897
50% to 60% | 13,598 | 1,699 | 242 | 15,539 | 63,132 | 11,312 | 1,306 | 75,750
60% to 70% | 29,535 | 18,777 | 2,724 | 51,036 | 1,047 | 593 | 301 | 1,941
70% to 80% | 1,306 | - | - | 1,306 | 4,066 | - | - | 4,066
80% to 90% | 61 | - | - | 61 | 881 | 73 | 15 | 969
90% to 100% | 2,481 | - | - | 2,481 | 1,773 | 454 | - | 2,227
higher than 100% | 4,582 | 592 | 357 | 5,531 | 9,527 | - | 727 | 10,254
no collateral | 68,509 | 137 | 29 | 68,675 | 33,035 | 79 | 29 | 33,143
Total gross | 1,250,034 | 142,753 | 25,955 | 1,418,742 | 1,029,699 | 148,125 | 27,423 | 1,205,247
loans |  |  |  |  |  |  |  |

Bank loans to business customers: SME – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 1,129,962 | 121,548 | 22,603 | 1,274,113 | 916,238 | 135,614 | 25,045 | 1,076,897
50% to 60% | 13,598 | 1,699 | 242 | 15,539 | 63,132 | 11,312 | 1,306 | 75,750
60% to 70% | 29,535 | 18,777 | 2,724 | 51,036 | 1,047 | 593 | 301 | 1,941
70% to 80% | 1,306 | - | - | 1,306 | 4,066 | - | - | 4,066
80% to 90% | 61 | - | - | 61 | 881 | 73 | 15 | 969
90% to 100% | 2,481 | - | - | 2,481 | 1,773 | 454 | - | 2,227
higher than 100% | 4,582 | 592 | 357 | 5,531 | 9,527 | - | 727 | 10,254
no collateral | 68,509 | 137 | 29 | 68,675 | 33,035 | 79 | 29 | 33,143
Total gross | 1,250,034 | 142,753 | 25,955 | 1,418,742 | 1,029,699 | 148,125 | 27,423 | 1,205,247
loans |  |  |  |  |  |  |  |

Group loans to business customers: Central and local authorities, administrative bodies and other – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 11,755 | 10 | 1,299 | 13,064 | 9,090 | 1,780 | 1,343 | 12,213
50% to 60% | - | - | - | - | - | 651 | - | 651
60% to 70% | 542 | - | - | 542 | - | - | - | -
70% to 80% | - | - | - | - | - | - | - | -
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | - | 301 | - | 301
higher than 100% | - | - | - | - | - | - | - | -
no collateral | 39,938 | 759 | - | 40,697 | 53,724 | 2,111 | - | 55,835
Total gross | 52,235 | 769 | 1,299 | 54,303 | 62,814 | 4,843 | 1,343 | 69,000
loans |  |  |  |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
43
FINANCIAL RISK MANAGEMENT (CONTINUED)
Bank loans to business customers: Central and local authorities, administrative bodies and other – LTV distribution

|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 11,755 | 10 | 1,299 | 13,064 | 9,090 | 1,780 | 1,343 | 12,213
50% to 60% | - | - | - | - | - | 651 | - | 651
60% to 70% | 542 | - | - | 542 | - | - | - | -
70% to 80% | - | - | - | - | - | - | - | -
80% to 90% | - | - | - | - | - | - | - | -
90% to 100% | - | - | - | - | - | 301 | - | 301
higher than 100% | - | - | - | - | - | - | - | -
no collateral | 39,938 | 759 | - | 40,697 | 53,724 | 2,111 | - | 55,835
Total gross loans | 52,235 | 769 | 1,299 | 54,303 | 62,814 | 4,843 | 1,343 | 69,000

e) Loans to customers against which no impairment loss allowance is recognized
Loans to customers contain loans against which no loss impairment loss allowance was recognized because of sufficiency of collateral.
Such loans are summarized in the following table (rounded to a whole number):

Group, as at 31 December 2024 |  |  |  | Gross value |
| Stage 1 | Stage 2 | Stage 3 | Total | LTV
Loans to financial institutions | - | - | - | - | 0%
Loans to individuals: | 5,088 | 1,796 | 4 | 6,888 | 4%
Mortgages - | - | 1,487 | - | 1,487 | 15%
Other- | 5,088 | 309 | 4 | 5,401 | 0%
Loans to business customers: | 4,622 | 13,681 | - | 18,303 | 0%
Central and local authorities, administrative bodies and other - | - | - | - | - | 0%
Large corporates - | - | - | - | - | 0%
SME - | 4,622 | 13,681 | - | 18,303 | 0%
Total | 9,710 | 15 477 | 4 | 25,191 | 2%
Group, as at 31 December 2023 |  |  |  | Gross value |
| Stage 1 | Stage 2 | Stage 3 | Total | LTV
Loans to financial institutions | - | - | - | - | 0%
Loans to individuals: | 147 | 713 | 455 | 1,315 | 6%
Mortgages - | 61 | - | - | 61 | 5%
Other- | 86 | 713 | 455 | 1,254 | 7%
Loans to business customers: | 2,916 | - | 1,243 | 4,159 | 0%
Central and local authorities, administrative bodies and other - | - | - | - | - | 0%
Large corporates - | - | - | - | - | 0%
SME - | 2,916 | - | 1,243 | 4,159 | 0%
Total | 3,063 | 713 | 1,698 | 5,474 | 3%

f) Purchased or originated credit-impaired (POCI) loans to customers
Loans to customers contain POCI loans to customers. Major part of these loans were acquired under the transaction transfer of assets,
rights, transactions and liabilities of Ūkio Bankas under a discount over their nominal value due to their non-performing status at the time
of transfer. Details on POCI loans are summarized in the following table:

|  | As at 31 December 2024 |  |  | As at 31 December 2023 |
| Gross value | Impairment | Carrying | Gross value | Impairment | Carrying
|  |  | value |  |  | value
Loans to financial institutions | - | - | - | - | - | -
Loans to individuals: | 75 | (7) | 68 | 87 | (18) | 69
Consumer loans - | - | - | - | - | - | -
Mortgages - | 72 | (6) | 66 | 82 | (17) | 65
Other- | 3 | (1) | 2 | 5 | (1) | 4
Loans to business customers: | 1,343 | (105) | 1,238 | 1,472 | (96) | 1,376
Central and local authorities, administrative bodies and other - | - | - | - | - | - | -
Large corporates - | - | - | - | - | - | -
SME - | 1.343 | (105) | 1,238 | 1,472 | (96) | 1,376
Total | 1,418 | (112) | 1,306 | 1,559 | (114) | 1,445

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
44
FINANCIAL RISK MANAGEMENT (CONTINUED)
g) Modifications of loans to customers
Group follows legal treatment for loan contract amendments, i.e. amended loan contracts are accounted for as modifications.
The amortized cost before the modification of loans with lifetime ECL whose cash flows were modified during 2024 as part of Group
restructuring activities was EUR 51,353 thousand, these modifications resulted in a net loss of EUR 80 thousand. The amortized cost
before modification of loans with lifetime ECL whose cash flows were modified during 2022 as part of Group restructuring activities was
EUR 78,774 thousand, these modifications resulted in a net gain of EUR 13 thousand.
1.6. Finance lease receivables
Finance lease receivables are summarized as follows:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Business customers | 279 528 | 279 528 | 260,303 | 259,415
Individuals | 44 056 | 44 056 | 33,804 | 33,804
Gross | 323,584 | 323,584 | 294,107 | 293,219
Subtract: Allowance for impairment | (6,687) | (6,687) | (7,574) | (6,768)
Net | 316,897 | 316,897 | 286,533 | 286,451

During the year ended 31 December 2024, finance lease receivables portfolio of the Group increased by 10.6% (2023: increased by
18.2%). Total impairment provisions for finance lease receivables of the Group amount to EUR 6,687 thousand (2023: EUR 7,574
thousand) and account for 2.07% of the respective portfolio (2023: 2.58%).
a) Credit grades of finance lease receivables

|  |  |  |  |  |  |  | Group finance lease receivables
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 266,927 | 2,939 | - | 269,866 | 239,174 | 1,177 | - | 240,351
Watch | 35,704 | 3,291 | - | 38,995 | 28,248 | 3,002 | - | 31,250
Substandard | 19 | 11,997 | - | 12,016 | 40 | 14,914 | - | 14,954
Problem | - | - | 2,707 | 2,707 | - | - | 7,552 | 7,552
Gross | 302,650 | 18,227 | 2,707 | 323,584 | 267,462 | 19,093 | 7,552 | 294,107
Less: allowance for impairment | (4,961) | (720) | (1,006) | (6,687) | (2,941) | (1,077) | (3,556) | (7,574)
Net | 297,689 | 17,507 | 1,701 | 316,897 | 264,521 | 18,016 | 3,996 | 286,533

|  |  |  |  |  |  |  | Bank finance lease receivables
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 266,927 | 2,939 | - | 269,866 | 239,174 | 1,177 | - | 240,351
Watch | 35,704 | 3,291 | - | 38,995 | 28,248 | 3,002 | - | 31,250
Substandard | 19 | 11,997 | - | 12,016 | 40 | 14,829 | - | 14,869
Problem | - | - | 2,707 | 2,707 | - | - | 6,750 | 6,750
Gross | 302,650 | 18,227 | 2,707 | 323,584 | 267,462 | 19,008 | 6,750 | 293,220
Less: allowance for impairment | (4,961) | (720) | (1,006) | (6,687) | (2,941) | (1,074) | (2,754) | (6,769)
Net | 297,689 | 17,507 | 1,701 | 316,897 | 264,521 | 17,934 | 3,996 | 286,451

|  |  |  |  |  |  |  | Group finance lease receivables – business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 225,427 | 897 | - | 226,324 | 208,188 | 813 | - | 209,001
Watch | 35,627 | 3,089 | - | 38,716 | 28,119 | 1,221 | - | 29,340
Substandard | - | 11,997 | - | 11,997 | - | 14,888 | - | 14,888
Problem | - | - | 2,491 | 2,491 | - | - | 7,074 | 7,074
Gross | 261,054 | 15,983 | 2,491 | 279,528 | 236,307 | 16,922 | 7,074 | 260,303
Less: allowance for impairment | (4,174) | (661) | (921) | (5,756) | (2,609) | (1,007) | (3,435) | (7,051)
Net | 256,880 | 15,322 | 1,570 | 273,772 | 233,698 | 15,915 | 3,639 | 253,252

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
45
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Bank finance lease receivables – business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 225,427 | 897 | - | 226,324 | 208,188 | 813 | - | 209,001
Watch | 35,627 | 3,089 | - | 38,716 | 28,119 | 1,221 | - | 29,340
Substandard | - | 11,997 | - | 11,997 | - | 14,803 | - | 14,803
Problem | - | - | 2,491 | 2,491 | - | - | 6,272 | 6,272
Gross | 261,054 | 15,983 | 2,491 | 279,528 | 236,307 | 16,837 | 6,272 | 259,416
Less: allowance for impairment | (4,174) | (661) | (921) | (5,756) | (2,609) | (1,004) | (2,633) | (6,246)
Net | 256,880 | 15,322 | 1,570 | 273,772 | 233,698 | 15,833 | 3,639 | 253,170

|  |  |  |  |  |  |  | Group finance lease receivables – individuals
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 41,500 | 2,042 | - | 43,542 | 30,986 | 364 | - | 31,350
Watch | 77 | 202 | - | 279 | 129 | 1,781 | - | 1,910
Substandard | 19 | - | - | 19 | 40 | 26 | - | 66
Problem | - | - | 216 | 216 | - | - | 478 | 478
Gross | 41,596 | 2,244 | 216 | 44,056 | 31,155 | 2,171 | 478 | 33,804
Less: allowance for impairment | (787) | (59) | (85) | (931) | (332) | (70) | (121) | (523)
Net | 40,809 | 2,185 | 131 | 43,125 | 30,823 | 2,101 | 357 | 33,281

|  |  |  |  |  |  |  | Bank finance lease receivables – individuals
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Standard | 41,500 | 2,042 | - | 43,542 | 30,986 | 364 | - | 31,350
Watch | 77 | 202 | - | 279 | 129 | 1,781 | - | 1,910
Substandard | 19 | - | - | 19 | 40 | 26 | - | 66
Problem | - | - | 216 | 216 | - | - | 478 | 478
Gross | 41,596 | 2,244 | 216 | 44,056 | 31,155 | 2,171 | 478 | 33,804
Less: allowance for impairment | (787) | (59) | (85) | (931) | (332) | (70) | (121) | (523)
Net | 40,809 | 2,185 | 131 | 43,125 | 30,823 | 2,101 | 357 | 33,281

b) Payment delays of finance lease receivables

|  |  |  |  |  |  |  | Group finance lease receivables
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 285,578 | 14,121 | 322 | 300,021 | 240,528 | 17,133 | 4,089 | 261,750
Past due up to 30 days | 16,626 | 1,735 | 356 | 18,717 | 26,934 | 895 | 212 | 28,041
Past due 31-90 days | 409 | 2,281 | 486 | 3,176 | - | 1,065 | 1,143 | 2,208
Past due more than 90 days | 37 | 91 | 1,542 | 1,670 | - | - | 2,108 | 2,108
Gross | 302,650 | 18,228 | 2,706 | 323,584 | 267,462 | 19,093 | 7,552 | 294,107
Less: allowance for impairment | (4,961) | (720) | (1,006) | (6,687) | (2,941) | (1,077) | (3,556) | (7,574)
Net | 297,689 | 17,508 | 1,700 | 316,897 | 264,521 | 18,016 | 3,996 | 286,533

|  |  |  |  |  |  |  | Bank finance lease receivables
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 285,578 | 14,121 | 322 | 300,021 | 240,528 | 17,056 | 4,089 | 261,673
Past due up to 30 days | 16,626 | 1,735 | 356 | 18,717 | 26,934 | 895 | 212 | 28,041
Past due 31-90 days | 409 | 2,281 | 486 | 3,176 | - | 1,057 | 1,143 | 2,200
Past due more than 90 days | 37 | 91 | 1,542 | 1,670 | - | - | 1,306 | 1,306
Gross | 302,650 | 18,228 | 2,706 | 323,584 | 267,462 | 19,008 | 6,750 | 293,220
Less: allowance for impairment | (4,961) | (720) | (1,006) | (6,687) | (2,941) | (1,074) | (2,754) | (6,769)
Net | 297,689 | 17,508 | 1,700 | 316,897 | 264,521 | 17,934 | 3,996 | 286,451

|  |  |  |  |  |  |  | Group finance lease receivables – business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 245,800 | 12,404 | 290 | 258,494 | 210,277 | 15,198 | 3,894 | 229,369
Past due up to 30 days | 14,997 | 1,604 | 269 | 16,870 | 26,030 | 761 | 184 | 26,975
Past due 31-90 days | 220 | 1,885 | 463 | 2,568 | - | 963 | 1,112 | 2,075
Past due more than 90 days | 37 | 90 | 1,469 | 1,596 | - | - | 1,884 | 1,884
Gross | 261,054 | 15,983 | 2,491 | 279,528 | 236,307 | 16,922 | 7,074 | 260,303
Less: allowance for impairment | (4,174) | (661) | (921) | (5,756) | (2,609) | (1,007) | (3,435) | (7,051)
Net | 256,880 | 15,322 | 1,570 | 273,772 | 233,698 | 15,915 | 3,639 | 253,252

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
46
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  |  | Bank finance lease receivables – business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 245,800 | 12,404 | 290 | 258,494 | 210,277 | 15,121 | 3,894 | 229,292
Past due up to 30 days | 14,997 | 1,604 | 269 | 16,870 | 26,030 | 761 | 184 | 26,975
Past due 31-90 days | 220 | 1,885 | 463 | 2,568 | - | 955 | 1,112 | 2,067
Past due more than 90 days | 37 | 90 | 1,469 | 1,596 | - | - | 1,082 | 1,082
Gross | 261,054 | 15,983 | 2,491 | 279,528 | 236,307 | 16,837 | 6,272 | 259,416
Less: allowance for impairment | (4,174) | (661) | (921) | (5,756) | (2,609) | (1,004) | (2,633) | (6,246)
Net | 256,880 | 15,322 | 1,570 | 273,772 | 233,698 | 15,833 | 3,639 | 253,170

|  |  |  |  |  |  |  | Group finance lease receivables – individuals
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 39,779 | 1,718 | 32 | 41,529 | 30,251 | 1,935 | 195 | 32,381
Past due up to 30 days | 1,629 | 131 | 87 | 1,847 | 904 | 134 | 28 | 1,066
Past due 31-90 days | 189 | 396 | 23 | 608 | - | 102 | 31 | 133
Past due more than 90 days | - | 1 | 73 | 74 | - | - | 224 | 224
Gross | 41,597 | 2,246 | 215 | 44,058 | 31,155 | 2,171 | 478 | 33,804
Less: allowance for impairment | (789) | (59) | (85) | (933) | (332) | (70) | (121) | (523)
Net | 40,808 | 2,187 | 130 | 43,125 | 30,823 | 2,101 | 357 | 33,281

|  |  |  |  |  |  |  | Bank finance lease receivables – individuals
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Not past due | 39,779 | 1,718 | 32 | 41,529 | 30,251 | 1,935 | 195 | 32,381
Past due up to 30 days | 1,629 | 131 | 87 | 1,847 | 904 | 134 | 28 | 1,066
Past due 31-90 days | 189 | 396 | 23 | 608 | - | 102 | 31 | 133
Past due more than 90 days | - | 1 | 73 | 74 | - | - | 224 | 224
Gross | 41,597 | 2,246 | 215 | 44,058 | 31,155 | 2,171 | 478 | 33,804
Less: allowance for impairment | (789) | (59) | (85) | (933) | (332) | (70) | (121) | (523)
Net | 40,808 | 2,187 | 130 | 43,125 | 30,823 | 2,101 | 357 | 33,281

c) Stage 3 Finance lease receivables
31 December 2024

|  |  |  | Group |  |  |  | Bank
|  | Allowance |  | Fair value of |  | Allowance |  | Fair value of
| Gross value | for | Net value |  | Gross value | for | Net value |
31 December 2024: |  | impairment |  | collateral |  | impairment |  | collateral
Business customers | 2,491 | (921) | 1,570 | 13,110 | 2,491 | (921) | 1,570 | 13,110
Individuals | 216 | (85) | 131 | 346 | 216 | (85) | 131 | 346
Total finance lease | 2,707 | (1,006) | 1,701 | 13,456 | 2,707 | (1,006) | 1,701 | 13,456
receivables |  |  |  |  |  |  |  |

31 December 2023

|  |  |  | Group |  |  |  | Bank
|  | Allowance |  | Fair value of |  | Allowance |  | Fair value of
| Gross value | for | Net value |  | Gross value | for | Net value |
31 December 2023: |  | impairment |  | collateral |  | impairment |  | collateral
Business customers | 7,074 | (3,435) | 3,639 | 473 | 6,272 | (2,633) | 3,639 | 473
Individuals | 478 | (121) | 357 | 6,181 | 478 | (121) | 357 | 6,181
Total finance lease | 7,552 | (3,556) | 3,996 | 6,653 | 6,750 | (2,754) | 3,996 | 6,653
receivables |  |  |  |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
47
FINANCIAL RISK MANAGEMENT (CONTINUED)
d) Information about risk mitigation measures for finance lease receivables
Upon initial recognition of financial lease receivables, the fair value of risk mitigation measures is based on valuation approaches
commonly used for the corresponding types of assets. Market values are used for real estate and movable assets serving as risk
mitigation measures. In subsequent periods, the fair value of risk mitigation measures is updated based on their depreciation rates.
If exposure is secured by several different types of risk mitigation measures, priority in their recognition is based on their liquidity.
Transport vehicles are treated as having highest liquidity followed by residential real estate and then other real estate. Equipment and
other assets are treated as having lowest liquidity.
The lender remains the owner of the leased object. Therefore, in case of customer default it is able to gain control on the risk mitigation
measures and realize them in rather short period.
Following tables present the lower of lease receivable and collateral amount per agreement.

|  |  |  |  |  | The Group
|  |  | 2024 |  |  | 2023
| Individuals | Business | Total | Individuals | Business | Total
|  | customers |  |  | customers |
Unsecured finance lease receivables | 4,805 | - | 4,805 | 5,960 | - | 5,960
Finance lease receivables secured by: |  |  |  |  |  |
transport vehicles - | 43,709 | 223,514 | 267,223 | 33,441 | 199,511 | 232,952
real estate - | 1,266 | 15,777 | 17,043 | 626 | 18,822 | 19,448
equipment and other - | 32 | 34,480 | 34,512 | 22 | 35,725 | 35,747
Total | 49,812 | 273,771 | 323,583 | 40,049 | 254,058 | 294,107

|  |  |  |  |  | The Bank
|  |  | 2024 |  |  | 2023
| Individuals | Business | Total | Individuals | Business | Total
|  | customers |  |  | customers |
Unsecured finance lease receivables | 4,805 | - | 4,805 | 5,960 | - | 5,960
Finance lease receivables secured by: |  |  |  |  |  |
transport vehicles - | 43,709 | 223,514 | 267,223 | 33,441 | 199,511 | 232,952
real estate - | 1,266 | 15,777 | 17,043 | 626 | 18,822 | 19,448
equipment and other - | 32 | 34,480 | 34,512 | 22 | 34,837 | 34,859
Total | 49,812 | 273,771 | 323,583 | 40,049 | 253,170 | 293,219

The following tables present the LTV distributions of finance lease receivables:

|  |  |  |  |  |  |  | Group finance lease receivables – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 42,783 | 3,779 | 324 | 46,886 | 155,913 | 6,736 | 5,278 | 167,927
50% to 60% | 32,434 | 2,555 | 400 | 35,389 | 41,962 | 2,384 | 462 | 44,808
60% to 70% | 21,422 | 1,675 | 220 | 23,317 | 28,933 | 1,772 | 323 | 31,028
70% to 80% | 19,651 | 1,282 | 157 | 21,090 | 23,407 | 3,418 | 496 | 27,321
80% to 90% | 2,714 | 161 | 128 | 3,003 | 13,961 | 4,139 | 95 | 18,195
90% to 100% | 1,275 | - | - | 1,275 | 1,937 | 491 | - | 2,428
higher than 100% | 182,120 | 8,776 | 1,469 | 192,365 | 1,237 | 68 | - | 1,305
no collateral | 251 | - | 8 | 259 | 112 | 85 | 898 | 1,095
Total gross loans | 302,650 | 18,228 | 2,706 | 323,584 | 267,462 | 19,093 | 7,552 | 294,107

|  |  |  |  |  |  |  | Bank finance lease receivables – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 42,783 | 3,779 | 324 | 46,886 | 155,914 | 6,736 | 5,278 | 167,928
50% to 60% | 32,434 | 2,555 | 400 | 35,389 | 41,962 | 2,384 | 462 | 44,808
60% to 70% | 21,422 | 1,675 | 220 | 23,317 | 28,933 | 1,772 | 323 | 31,028
70% to 80% | 19,651 | 1,282 | 157 | 21,090 | 23,407 | 3,418 | 496 | 27,321
80% to 90% | 2,714 | 161 | 128 | 3,003 | 13,961 | 4,139 | 95 | 18,195
90% to 100% | 1,275 | - | - | 1,275 | 1,937 | 491 | - | 2,428
higher than 100% | 182,120 | 8,776 | 1,469 | 192,365 | 1,237 | 68 | - | 1,305
no collateral | 251 | - | 8 | 259 | 111 | - | 96 | 207
Total gross loans | 302,650 | 18,228 | 2,706 | 323,584 | 267,462 | 19,008 | 6,750 | 293,220

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
48
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  | Group finance lease receivables: Individuals – LTV distribution |  |  |  |
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 3,480 | 175 | 26 | 3,681 | 21,514 | 1,392 | 269 | 23,175
50% to 60% | 3,909 | 291 | 12 | 4,212 | 2,412 | 262 | 73 | 2,747
60% to 70% | 3,984 | 92 | 32 | 4,108 | 2,660 | 170 | 5 | 2,835
70% to 80% | 3,367 | 36 | - | 3,403 | 2,762 | 232 | 92 | 3,086
80% to 90% | 542 | 83 | 25 | 650 | 1,312 | 84 | 34 | 1,430
90% to 100% | 48 | - | - | 48 | 335 | 28 | - | 363
higher than 100% | 26,016 | 1,568 | 119 | 27,703 | 53 | 3 | - | 56
no collateral | 250 | - | 1 | 251 | 107 | - | 5 | 112
Total gross loans | 41,596 | 2,245 | 215 | 44,056 | 31,155 | 2,171 | 478 | 33,804

|  |  |  | Bank finance lease receivables: Individuals – LTV distribution |  |  |  |
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 3,480 | 175 | 26 | 3,681 | 21,514 | 1,392 | 269 | 23,175
50% to 60% | 3,909 | 291 | 12 | 4,212 | 2,412 | 262 | 73 | 2,747
60% to 70% | 3,984 | 92 | 32 | 4,108 | 2,660 | 170 | 5 | 2,835
70% to 80% | 3,367 | 36 | - | 3,403 | 2,762 | 232 | 92 | 3,086
80% to 90% | 542 | 83 | 25 | 650 | 1,312 | 84 | 34 | 1,430
90% to 100% | 48 | - | - | 48 | 335 | 28 | - | 363
higher than 100% | 26,016 | 1,568 | 119 | 27,703 | 53 | 3 | - | 56
no collateral | 250 | - | 1 | 251 | 107 | - | 5 | 112
Total gross loans | 41,596 | 2,245 | 215 | 44,056 | 31,155 | 2,171 | 478 | 33,804

|  |  |  |  |  |  |  | Group finance lease receivables: Business customers – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 39,304 | 3,604 | 298 | 43,206 | 134,399 | 5,344 | 5,009 | 144,752
50% to 60% | 28,526 | 2,264 | 388 | 31,178 | 39,550 | 2,122 | 389 | 42,061
60% to 70% | 17,438 | 1,583 | 188 | 19,209 | 26,273 | 1,602 | 318 | 28,193
70% to 80% | 16,284 | 1,246 | 157 | 17,687 | 20,645 | 3,186 | 404 | 24,235
80% to 90% | 2,172 | 78 | 103 | 2,353 | 12,649 | 4,055 | 61 | 16,765
90% to 100% | 1,227 | - | - | 1,227 | 1,602 | 463 | - | 2,065
higher than 100% | 156,102 | 7,208 | 1,350 | 164,660 | 1,184 | 65 | - | 1,249
no collateral | 1 | - | 7 | 8 | 5 | 85 | 893 | 983
Total gross loans | 261,054 | 15,983 | 2,491 | 279,528 | 236,307 | 16,922 | 7,074 | 260,303

|  |  |  |  |  |  |  | Bank finance lease receivables: Business customers – LTV distribution
|  |  |  | 2024 |  |  |  | 2023
LTV ratio: | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
lower than 50% | 39,304 | 3,604 | 298 | 43,206 | 134,400 | 5,344 | 5,009 | 144,753
50% to 60% | 28,526 | 2,264 | 388 | 31,178 | 39,550 | 2,122 | 389 | 42,061
60% to 70% | 17,438 | 1,583 | 188 | 19,209 | 26,273 | 1,602 | 318 | 28,193
70% to 80% | 16,284 | 1,246 | 157 | 17,687 | 20,645 | 3,186 | 404 | 24,235
80% to 90% | 2,172 | 78 | 103 | 2,353 | 12,649 | 4,055 | 61 | 16,765
90% to 100% | 1,227 | - | - | 1,227 | 1,602 | 463 | - | 2,065
higher than 100% | 156,102 | 7,208 | 1,350 | 164,660 | 1,184 | 65 | - | 1,249
no collateral | 1 | - | 7 | 8 | 4 | - | 91 | 95
Total gross loans | 261,054 | 15,983 | 2,491 | 279,528 | 236,307 | 16,837 | 6,272 | 259,416

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
49
FINANCIAL RISK MANAGEMENT (CONTINUED)
e) Finance lease receivables against which no impairment loss allowance is recognized
Finance lease receivables contain receivables against which no loss impairment loss allowance was recognized because of sufficiency
of collateral. Such receivables are summarized in the following table:

At 31 December 2024: |  |  |  | Gross value |
| Stage 1 | Stage 2 | Stage 3 | Total | LTV
Business customers | 7 | 500 | - | 507 | 7%
Individuals | 229 | 31 | - | 261 | 2%
Total | 237 | 531 | - | 768 | 4%

At 31 December 2023: |  |  |  | Gross value |
| Stage 1 | Stage 2 | Stage 3 | Total | LTV
Business customers | 1,217 | - | - | 1,217 | 28%
Individuals | 303 | - | - | 303 | 15%
Total | 1,519 | - | - | 1,519 | 24%

1.7. Other financial assets
Other financial assets consist of amounts receivable. Their performance is monitored based on the past due status.

|  |  |  |  |  | The Group
|  |  | 2024 |  |  | 2023
| Individuals | Business | Total | Individuals | Business | Total
|  | customers |  |  | customers |
Stage 1 | 731 | 7,502 | 8,233 | 1,010 | 7,458 | 8,468
Stage 2 | - | - | - | - | - | -
Stage 3 | - | - | - | - | - | -
Gross | 731 | 7,502 | 8,233 | 1,010 | 7,458 | 8,468
Less: allowance for impairment | - | (975) | (975) | - | (1,117) | (1,117)
Net | 731 | 6,527 | 7,258 | 1,010 | 6,341 | 7,351

|  |  |  |  |  | The Bank
|  |  | 2024 |  |  | 2023
| Individuals | Business | Total | Individuals | Business | Total
|  | customers |  |  | customers |
Stage 1 | 730 | 6,804 | 7,534 | 1,009 | 8,381 | 9,390
Stage 2 | - | - | - | - | - | -
Stage 3 | - | - | - | - | - | -
Gross | 730 | 6,804 | 7,534 | 1,009 | 8,381 | 9,390
Less: allowance for impairment | - | (975) | (975) | - | (1,101) | (1,101)
Net | 730 | 5,829 | 6,559 | 1,009 | 7,280 | 8,289

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
50
FINANCIAL RISK MANAGEMENT (CONTINUED)
1.8. Concentration of risks of financial assets with credit risk exposure
Industry sectors
The following table breaks down the main credit exposures at their carrying amounts, as categorized by the industry sectors of our
counterparties.

Group |  |  |  |  |  |  |  |  |  |  |  |
At 31 December 2024: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | 267,305 | - | - | - | - | - | 48,294 | - | - | - | - | 315,599
Loans and advances to banks | 3,121 | - | - | - | - | - | - | - | - | - | - | 3,121
Loans and advances to customers: | 142,308 | 173,943 | 253,294 | 459,133 | 147,226 | 91,894 | 37,968 | 41,377 | 62,398 | 1,431,482 | 276,677 | 3,117,700
Loans and advances to financial | 20,287 | - | - | - | - | - | - | - | - | - | - | 20,287
institutions |  |  |  |  |  |  |  |  |  |  |  |
Loans to individuals (Retail): | - | - | - | - | - | - | - | - | - | 1,431,482 | - | 1,431,482
Consumer loans - | - | - | - | - | - | - | - | - | - | 305,329 | - | 305,329
Mortgages - | - | - | - | - | - | - | - | - | - | 915,760 | - | 915,760
Other - | - | - | - | - | - | - | - | - | - | 210,393 | - | 210,393
Loans to business customers: | 122,021 | 173,943 | 253,294 | 459,133 | 147,226 | 91,894 | 37,968 | 41,377 | 62,398 | - | 276,677 | 1,665,931
Large corporates - | - | 1,692 | 123,779 | - | 19,162 | - | - | 7,815 | 49,255 | - | 14,953 | 216,656
SME - | 122,021 | 172,251 | 129,515 | 454,850 | 128,064 | 91,894 | - | 33,562 | 5,180 | - | 258,268 | 1,395,605
Central and local authorities, administrative bodies and other - | - | - | - | 4,283 | - | - | 37,968 | - | 7,963 | - | 3,456 | 53,670
Finance lease receivables: | 1,075 | 33,628 | 11,640 | 12,097 | 18,597 | 9,931 | 60,066 | 3,300 | - | 43,125 | 123,438 | 316,897
Individuals - | - | - | - | - | - | - | - | - | - | 43,125 | - | 43,125
Business customers - | 1,075 | 33,628 | 11,640 | 12,097 | 18,597 | 9,931 | 60,066 | 3,300 | - | - | 123,438 | 273,772
Securities in the trading book: | 174,911 | - | - | 1,507 | - | - | 23,059 | - | - | - | 35,633 | 235,110
Debt securities - | 7,939 | - | - | 1,504 | - | - | 23,059 | - | - | - | 24,115 | 56,617
Equity securities - | 166,972 | - | - | 3 | - | - | - | - | - | - | 11,519 | 178,493
Derivative financial instruments | 183 | - | - | - | - | - | - | - | - | - | 910 | 1,093
Investment securities at fair value: | 7,677 | 527 | - | - | - | - | 24,327 | - | - | - | 11,337 | 43,868
Equity securities - | 2,396 | - | - | - | - | - | - | - | - | - | 478 | 2,874
Debt securities - | 5,281 | 527 | - | - | - | - | 24,327 | - | - | - | 10,859 | 40,994
Investment securities at amortized | 10,247 | - | 8,585 | - | - | - | 695,622 | - | 1,202 | - | 11,281 | 726,937
cost: |  |  |  |  |  |  |  |  |  |  |  |
Debt securities - | 10,247 | - | 8,585 | - | - | - | 695,622 | - | 1,202 | - | 11,281 | 726,937
Other financial assets | 5,721 | 21 | 41 | 303 | 18 | 4 | 7 | 16 | 1 | - | 1,126 | 7,258
Credit risk exposures relating to off – |  |  |  |  |  |  |  |  |  |  |  | -
balance sheet items are as follows: |  |  |  |  |  |  |  |  |  |  |  |
Financial guarantees - | 10,371 | 11,705 | 5,896 | 1,499 | 12,311 | 600 | 298 | 1,396 | - | 217 | 43,692 | 87,985
Letters of credit - | - | - | 135 | - | - | - | - | - | - | - | - | 135
Loan commitments and other credit | 20,216 | 38,432 | 34,672 | 63,469 | 47,240 | 7,979 | 160 | 8,741 | 1,605 | 97,539 | 73,435 | 393,488
related liabilities - Total at 31 December 2024 | 647,370 | 258,256 | 314,263 | 538,008 | 225,392 | 110,408 | 889,801 | 54,830 | 65,206 | 1,572,363 | 573,294 | 5,249,191
At 31 December 2023: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | 608,675 | - | - | - | - | - | 71,135 | - | - | - | - | 679,810
Loans and advances to banks | 3,013 | - | - | - | - | - | - | - | - | - | - | 3,013
Loans and advances to customers: | 95,193 | 153,594 | 174,864 | 448,785 | 132,011 | 90,111 | 55,825 | 48,989 | 29,527 | 1,041,239 | 374,966 | 2,645,104
Loans and advances to financial | 26,413 | - | - | - | - | - | - | - | - | - | - | 26,413
institutions |  |  |  |  |  |  |  |  |  |  |  |
Loans to individuals (Retail): | - | 14 | - | 55,928 | 1,852 | 369 | - | - | - | 1,041,239 | 158,801 | 1,258,203
Consumer loans - | - | - | - | - | - | - | - | - | - | 260,902 | 12 | 260,914
Mortgages - | - | 14 | - | - | 25 | - | - | - | - | 772,076 | 6,816 | 778,931
Other - | - | - | - | 55,928 | 1,827 | 369 | - | - | - | 8,261 | 151,973 | 218,358
Loans to business customers: | 68,780 | 153,580 | 174,864 | 392,857 | 130,159 | 89,742 | 55,825 | 48,989 | 29,527 | - | 216,165 | 1,360,488
Large corporates - | - | - | 58,945 | 2,018 | 7,825 | - | - | 8,641 | 17,024 | - | 13,616 | 108,069
SME - | 68,780 | 153,576 | 115,919 | 386,106 | 122,334 | 89,742 | - | 40,348 | 6,301 | - | 200,733 | 1,183,839
Central and local authorities, administrative bodies and other - | - | 4 | - | 4,733 | - | - | 55,825 | - | 6,202 | - | 1,816 | 68,580
Finance lease receivables: | 1,232 | 25,171 | 11,380 | 15,204 | 15,510 | 13,510 | - | 58,740 | 3,474 | 33,281 | 109,031 | 286,533
Individuals - | - | - | - | - | - | - | - | - | - | 33,281 | - | 33,281
Business customers - | 1,232 | 25,171 | 11,380 | 15,204 | 15,510 | 13,510 | - | 58,740 | 3,474 | - | 109,031 | 253,252
Securities in the trading book: | 132,717 | 204 | 24 | 12,125 | 403 | - | 9,604 | 32 | - | - | 52,568 | 207,677
Debt securities - | 3,492 | 204 | - | 12,120 | 403 | - | 9,604 | - | - | - | 39,938 | 65,761
Equity securities - | 129,225 | - | 24 | 5 | - | - | - | 32 | - | - | 12,630 | 141,916
Derivative financial instruments | - | - | - | - | - | - | - | - | - | - | 251 | 251
Investment securities at fair value: | 7,597 | 522 | - | 1,927 | - | - | 53,949 | - | - | - | 10,505 | 74,500
Equity securities - | 2,588 | - | - | - | - | - | - | - | - | - | 172 | 2,760
Debt securities - | 5,009 | 522 | - | 1,927 | - | - | 53,949 | - | - | - | 10,333 | 71,740
Investment securities at amortized | 29,451 | 199 | 23,769 | - | - | - | 663,211 | - | 3,211 | - | 31,386 | 751,227
cost: |  |  |  |  |  |  |  |  |  |  |  |
Debt securities – | 29,451 | 199 | 23,769 | - | - | - | 663,211 | - | 3,211 | - | 31,386 | 751,227
Other financial assets | 3,732 | 116 | 47 | 271 | 20 | 4 | 6 | 16 | 1 | 42 | 3,096 | 7,351
Credit risk exposures relating to off – |  |  |  |  |  |  |  |  |  |  |  | -
balance sheet items are as follows: |  |  |  |  |  |  |  |  |  |  |  |
Financial guarantees - | 12,542 | 10,582 | 10,849 | 1,154 | 10,759 | 592 | 352 | 1,193 | - | 141 | 11,052 | 59,216
Letters of credit - | - | - | 538 | - | - | - | - | - | - | - | - | 538
Loan commitments and other credit | 25,464 | 41,871 | 82,600 | 77,162 | 50,727 | 7,575 | 2,392 | 11,933 | 3,493 | 21,442 | 157,368 | 482,027
related liabilities - Total at 31 December2023) | 919,616 | 232,259 | 304,071 | 556,628 | 209,430 | 111,792 | 856,474 | 120,903 | 39,706 | 1,096,145 | 750,223 | 5,197,247

Financial intermediation
Wholesale and retail
Manufacturing
Real estate and rent
Construction
Agriculture, hunting and
forestry
Public administration and
defense
, compulsory social
security
Transport, storage and
communication
Health and social work
Loans to individuals
Other
Total
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
51
FINANCIAL RISK MANAGEMENT (CONTINUED)

Bank |  |  |  |  |  |  |  |  |  |  |  |
At 31 December 2024: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | 258,887 | - | - | - | - | - | 48,294 | - | - | - | - | 307,181
Loans and advances to banks | 3,121 | - | - | - | - | - | - | - | - | - | - | 3,121
Loans and advances to customers: | 433,125 | 173,943 | 253,294 | 459,133 | 147,226 | 91,894 | 37,968 | 41,377 | 62,398 | 1,127,971 | 276,678 | 3,105,007
Loans and advances to financial | 311,104 | - | - | - | - | - | - | - | - | - | - | 311,104
institutions |  |  |  |  |  |  |  |  |  |  |  |
Loans to individuals (Retail): | - | - | - | - | - | - | - | - | - | 1,127,971 | - | 1,127,971
Consumer loans - | - | - | - | - | - | - | - | - | - | 1,818 | - | 1,818
Mortgages - | - | - | - | - | - | - | - | - | - | 915,760 | - | 915,760
Other - | - | - | - | - | - | - | - | - | - | 210,393 | - | 210,393
Loans to business customers: | 122,021 | 173,943 | 253,294 | 459,133 | 147,226 | 91,894 | 37,968 | 41,377 | 62,398 | - | 276,678 | 1,665,932
Large corporates - | - | 1,692 | 123,779 | - | 19,162 | - | - | 7,815 | 49,255 | - | 14,954 | 216,657
SME - | 122,021 | 172,251 | 129,515 | 454,850 | 128,064 | 91,894 | - | 33,562 | 5,180 | - | 258,268 | 1,395,605
Central and local authorities, administrative bodies and other - | - | - | - | 4,283 | - | - | 37,968 | - | 7,963 | - | 3,456 | 53,670
Finance lease receivables: | 1,075 | 33,628 | 11,640 | 12,097 | 18,597 | 9,931 | 60,066 | 3,300 | - | 43,125 | 123,438 | 316,897
Individuals - | - | - | - | - | - | - | - | - | - | 43,125 | - | 43,125
Business customers - | 1,075 | 33,628 | 11,640 | 12,097 | 18,597 | 9,931 | 60,066 | 3,300 | - | - | 123,438 | 273,772
Securities in the trading book: | 7,959 | - | - | 1,507 | - | - | - | - | - | - | 4,077 | 13,543
Debt securities - | 7,939 | - | - | 1,504 | - | - | - | - | - | - | 4,078 | 13,521
Equity securities - | 19 | - | - | 3 | - | - | - | - | - | - | - | 22
Derivative financial instruments | 183 | - | - | - | - | - | - | - | - | - | 910 | 1,093
Investment securities at fair value: | 7,677 | 527 | - | - | - | - | 24,327 | - | - | - | 11,089 | 43,620
Equity securities - | 2,396 | - | - | - | - | - | - | - | - | - | 230 | 2,626
Debt securities - | 5,281 | 527 | - | - | - | - | 24,327 | - | - | - | 10,859 | 40,994
Investment securities at amortized | 9,028 | - | 8,585 | - | - | - | 690,083 | - | 1,002 | - | 8,166 | 716,864
cost: |  |  |  |  |  |  |  |  |  |  |  |
debt securities - | 9,028 | - | 8,585 | - | - | - | 690,083 | - | 1,002 | - | 8,166 | 716,864
Other financial assets | 5,022 | 21 | 41 | 303 | 18 | 4 | 7 | 16 | 1 | - | 1,126 | 6,559
Credit risk exposures relating to off – |  |  |  |  |  |  |  |  |  |  |  |
balance sheet items are as follows: |  |  |  |  |  |  |  |  |  |  |  |
Financial guarantees - | 10,371 | 11,705 | 5,896 | 1,499 | 12,311 | 600 | 298 | 1,396 | - | 217 | 43,692 | 87,985
Letters of credit - | - | - | 135 | - | - | - | - | - | - | - | - | 135
Loan commitments and other credit | 37,844 | 38,432 | 34,672 | 63,469 | 47,240 | 7,979 | 160 | 8,741 | 1,605 | 97,540 | 66,029 | 403,711
related liabilities - Total at 31 December 2024: | 778,527 | 258,256 | 314,263 | 538,008 | 225,392 | 110,408 | 861,203 | 54,830 | 65,006 | 1,268,853 | 530,970 | 5,005,716
At 31 December 2023: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | 600,255 | - | - | - | - | - | 71,135 | - | - | - | - | 671,390
Loans and advances to banks | 3,013 | - | - | - | - | - | - | - | - | - | - | 3,013
Loans and advances to customers: | 342,746 | 153,594 | 174,864 | 448,785 | 132,011 | 90,111 | 55,825 | 48,989 | 29,527 | 782,065 | 374,965 | 2,633,482
Loans and advances to financial | 273,966 | - | - | - | - | - | - | - | - | - | - | 273,966
institutions |  |  |  |  |  |  |  |  |  |  |  |
Loans to individuals (Retail): | - | 14 | - | 55,928 | 1,852 | 369 | - | - | - | 782,065 | 158,800 | 999,028
Consumer loans - | - | - | - | - | - | - | - | - | - | 1,728 | 11 | 1,739
Mortgages - | - | 14 | - | - | 25 | - | - | - | - | 772,076 | 6,816 | 778,931
Other - | - | - | - | 55,928 | 1,827 | 369 | - | - | - | 8,261 | 151,973 | 218,358
Loans to business customers: | 68,780 | 153,580 | 174,864 | 392,857 | 130,159 | 89,742 | 55,825 | 48,989 | 29,527 | - | 216,165 | 1,360,488
Large corporates - | - | - | 58,945 | 2,018 | 7,825 | - | - | 8,641 | 17,024 | - | 13,616 | 108,069
SME - | 68,780 | 153,576 | 115,919 | 386,106 | 122,334 | 89,742 | - | 40,348 | 6,301 | - | 200,733 | 1,183,839
Central and local authorities, administrative bodies and other - | - | 4 | - | 4,733 | - | - | 55,825 | - | 6,202 | - | 1,816 | 68,580
Finance lease receivables: | 1,232 | 25,171 | 11,380 | 15,204 | 15,510 | 13,510 | - | 58,740 | 3,474 | 33,281 | 108,949 | 286,451
Individuals - | - | - | - | - | - | - | - | - | - | 33,281 | - | 33,281
Business customers - | 1,232 | 25,171 | 11,380 | 15,204 | 15,510 | 13,510 | - | 58,740 | 3,474 | - | 108,949 | 253,170
Securities in the trading book: | 3,593 | - | 24 | 12,125 | 151 | - | 2,637 | 32 | - | - | 1,840 | 20,402
Debt securities - | 3,492 | - | - | 12,120 | 151 | - | 2,637 | - | - | - | 1,840 | 20,240
Equity securities - | 101 | - | 24 | 5 | - | - | - | 32 | - | - | - | 162
Derivative financial instruments | - | - | - | - | - | - | - | - | - | - | 241 | 241
Investment securities at fair value: | 7,597 | 522 | - | 1,927 | - | - | 53,949 | - | - | - | 10,387 | 74,382
Equity securities - | 2,588 | - | - | - | - | - | - | - | - | - | 54 | 2,642
Debt securities - | 5,009 | 522 | - | 1,927 | - | - | 53,949 | - | - | - | 10,333 | 71,740
Investment securities at amortized | 28,639 | - | 23,769 | - | - | - | 657,445 | - | 3,004 | - | 27,012 | 739,869
cost: |  |  |  |  |  |  |  |  |  |  |  |
debt securities - | 28,639 | - | 23,769 | - | - | - | 657,445 | - | 3,004 | - | 27,012 | 739,869
Other financial assets | 5,022 | 27 | 43 | 271 | 20 | 4 | 6 | 16 | 1 | 42 | 2,837 | 8,289
Credit risk exposures relating to off – |  |  |  |  |  |  |  |  |  |  |  |
balance sheet items are as follows: |  |  |  |  |  |  |  |  |  |  |  |
Financial guarantees - | 12,582 | 10,582 | 10,849 | 1,154 | 10,759 | 592 | 352 | 1,193 | - | 141 | 11,052 | 59,256
Letters of credit - | - | - | 538 | - | - | - | - | - | - | - | - | 538
Loan commitments and other credit | 41,103 | 41,871 | 82,600 | 77,162 | 50,727 | 7,575 | 2,392 | 11,933 | 3,493 | 21,442 | 149,357 | 489,655
related liabilities - Total at 31 December 2023: | 1,045,782 | 231,767 | 304,067 | 556,628 | 209,178 | 111,792 | 843,741 | 120,903 | 39,499 | 836,971 | 686,640 | 4,986,968

Financial intermediation
Wholesale and retail
Manufacturing
Real estate and rent
Construction
Agriculture, hunting and
forestry
Public administration
and defense
, compulsory
social security
Transport, storage and
communication
Health and social work
Loans to individuals
Other
Total
As at 31 December 2024 and 31 December 2023 the Group and the Bank were compliant with the internal limits.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
52
FINANCIAL RISK MANAGEMENT (CONTINUED)
Concentration exposure
As at 31 December 2024, the largest single exposure comprising loans to several related borrowers treated as a single borrower
amounted to EUR 62,5 million, i.e. 11.3% of the Bank’s calculated Tier 1 capital (2023: EUR 68 million or 13.2% of the Bank’s calculated
Tier 1 capital).
2. MARKET RISK
The Group takes on exposure to market risk, which means the risk for the Group to incur losses due to the adverse fluctuations in the
market parameters such as currency exchange rates (foreign currency risk), interest rates (interest rate risk) or securities prices
(securities risk). Securities and interest rate risks are the most significant market risks for the Group while other market risks are of lower
significance.
2.1. Foreign exchange risk
The management of the currency exchange risk is regulated by the “Currency Exchange Risk Management Procedures” which specify
the principles allowing the Group to reduce the incurred foreign currency fluctuation risk to minimum. The Group is not engaged in any
speculative transactions through which it could expect to earn profit from the open currency positions after changes in currency rate. The
limits are imposed by the Risk Management Committee and subject to review on demand.
The Group and the Bank monitors the foreign currency risk by calculating open currency position. Open currency position (OCP) is equal
to assets in the balance sheet and off-balance sheet less balance sheet and off-balance sheet liabilities in a single currency. There are
two types of OCP, i.e. long and short. Long position means that Group’s assets exceed liabilities in given currency, whereas short position
means that liabilities exceed assets. The Group also calculates Overall net open position (ONOP), which is the higher of the total short
or total long positions. As at 31 December 2024 the Group’s ONOP to capital ratio was 0.40% (2023: 0.54%), the Bank’s ONOP to capital
ratio was 0.03% (2023: 0.03%).
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
53
FINANCIAL RISK MANAGEMENT (CONTINUED)
Open positions
The Group’s open positions of prevailing currencies were as follows:

| USD | Other | Total | EUR | Total
At 31 December 2024: |  | currencies | currencies |  |
Assets |  |  |  |  |
Cash and cash equivalents | 6,742 | 5,928 | 12,670 | 382,466 | 395,136
Due from other banks | - | - | - | 235,110 | 235,110
Securities in the trading book | - | - | - | 3,121 | 3,121
Derivative financial instruments | - | - | - | 1,093 | 1,093
Loans granted to customers, finance lease receivables | - | - | - | 3,434,597 | 3,434,597
Investment securities at fair value | 3,780 | 229 | 4,009 | 39,859 | 43,868
Investment securities at amortized cost | - | - | - | 726,937 | 726,937
Investments in subsidiaries | - | - | - | 270 | 270
Intangible assets | - | - | - | 43,617 | 43,617
Property, plant and equipment and investment property | - | - | - | 15,261 | 15,261
Other assets | 102 | 9 | 111 | 23,498 | 23,609
Total assets | 10,624 | 6,166 | 16,790 | 4,905,829 | 4,922,619
Liabilities and shareholders’ equity |  |  |  |  |
Due to other banks and financial institutions | 6,915 | 10 | 6,925 | 58,935 | 65,860
Derivative financial instruments | - | - | - | 123 | 123
Due to customers | 65,963 | 11,598 | 77,561 | 3,460,411 | 3,537,972
Debt securities in issue | - | - | - | 448,159 | 448,159
Special and lending funds | - | - | - | 23,037 | 23,037
Liabilities related to insurance activities | - | - | - | 198,432 | 198,432
Other liabilities | 4,037 | 85 | 4,122 | 59,742 | 63,864
Shareholders’ equity | - | - | - | 585,172 | 585,172
Total liabilities and shareholders’ equity | 76,915 | 11,693 | 88,608 | 4,834,011 | 4,922,619
Net balance sheet position | (66,291) | (5,527) | (71,818) | 71,818 | -
Open currency exchange transactions | 67,783 | 6,929 | 74,712 | (75,305) | (593)
Net open position | 1,492 | 1,402 | 2,894 | (3,487) | (593)
At 31 December 2023: |  |  |  |  |
Assets |  |  |  |  |
Cash and cash equivalents | 16,452 | 9,121 | 25,573 | 725,926 | 751,499
Due from other banks | 2,453 | 221 | 2,674 | 205,003 | 207,677
Securities in the trading book | 95 |  | 95 | 2,918 | 3,013
Derivative financial instruments | - | - | - | 251 | 251
Loans granted to customers, finance lease receivables | - | - | - | 2,931,637 | 2,931,637
Investment securities at fair value | 328 |  | 328 | 74,172 | 74,500
Investment securities at amortized cost | - | - | - | 751,227 | 751,227
Investments in subsidiaries | - | - | - | 100 | 100
Intangible assets | - | - | - | 45,138 | 45,138
Property, plant and equipment and investment property | - | - | - | 16,774 | 16,774
Other assets | 3 | 9 | 12 | 27,493 | 27,505
Total assets | 19,331 | 9,351 | 28,682 | 4,780,639 | 4,809,321
Liabilities and shareholders’ equity |  |  |  |  |
Due to other banks and financial institutions | 8,690 | 6 | 8,696 | 561,298 | 569,994
Derivative financial instruments | - | - | - | 1,041 | 1,041
Due to customers | 74,072 | 15,950 | 90,022 | 3,072,635 | 3,162,657
Debt securities in issue | - | - | - | 276,480 | 276,480
Special and lending funds | - | - | - | 15,718 | 15,718
Liabilities related to insurance activities | - | - | - | 179,318 | 179,318
Other liabilities | 1,959 | 103 | 2,062 | 58,923 | 60,985
Shareholders’ equity | - | - | - | 543,128 | 543,128
Total liabilities and shareholders’ equity | 84,721 | 16,059 | 100,780 | 4,708,541 | 4,809,321
Net balance sheet position | (65,390) | (6,708) | (72,098) | 72,098 | -
Open currency exchange transactions | 67,783 | 6,929 | 74,712 | (75,305) | (593)
Net open position | 2,393 | 221 | 2,614 | (3,207) | (593)

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
54
FINANCIAL RISK MANAGEMENT (CONTINUED)
The Bank’s open positions of prevailing currencies were as follows:

| USD | Other | Total | EUR | Total
At 31 December 2024: |  | currencies | currencies |  |
Assets |  |  |  |  |
Cash and cash equivalents | 6,671 | 5,921 | 12,592 | 373,773 | 386,365
Due from other banks | - | - | - | 13,543 | 13,543
Securities in the trading book | - | - | - | 3,121 | 3,121
Derivative financial instruments | - | - | - | 1,093 | 1,093
Loans granted to customers, finance lease receivables | - | - | - | 3,421,904 | 3,421,904
Investment securities at fair value | 236 |  | 236 | 43,384 | 43,620
Investment securities at amortized cost | - | - | - | 716,864 | 716,864
Investments in subsidiaries | - | - | - | 84,069 | 84,069
Intangible assets | - | - | - | 7,859 | 7,859
Property, plant and equipment and investment property | - | - | - | 14,689 | 14,689
Other assets | 102 | 9 | 111 | 17,819 | 17,930
Total assets | 7,009 | 5,930 | 12,939 | 4,698,118 | 4,711,057
Liabilities and shareholders’ equity |  |  |  |  |
Due to other banks and financial institutions | 6,915 | 10 | 6,925 | 61,562 | 68,487
Derivative financial instruments | - | - | - | 123 | 123
Due to customers | 65,963 | 11,598 | 77,561 | 3,465,730 | 3,543,291
Debt securities in issue | - | - | - | 448,159 | 448,159
Special and lending funds | - | - | - | 23,037 | 23,037
Other liabilities | 2,545 | 85 | 2,630 | 38,326 | 40,956
Shareholders’ equity | - | - | - | 587,004 | 587,004
Total liabilities and shareholders’ equity | 75,423 | 11,693 | 87,116 | 4,623,941 | 4,711,057
Net balance sheet position | (68,414) | (5,763) | (74,177) | 74,177 | -
Open currency exchange transactions | 67,783 | 6,929 | 74,712 | (75,305) | (593)
Net open position | (631) | 1,166 | 535 | (1,128) | (593)
At 31 December 2023: |  |  |  |  |
Assets |  |  |  |  |
Cash and cash equivalents | 16,413 | 9,117 | 25,530 | 717,439 | 742,969
Due from other banks | - | - | - | 20,402 | 20,402
Securities in the trading book | 95 | - | 95 | 2,918 | 3,013
Derivative financial instruments | - | - | - | 241 | 241
Loans granted to customers, finance lease receivables | - | - | - | 2,919,933 | 2,919,933
Investment securities at fair value | 328 |  | 328 | 74,054 | 74,382
Investment securities at amortized cost | - | - | - | 739,869 | 739,869
Investments in subsidiaries) | - | - | - | 76,672 | 76,672
Intangible assets | - | - | - | 8,149 | 8,149
Property, plant and equipment and investment property | - | - | - | 14,702 | 14,702
Other assets | 3 | 9 | 12 | 22,766 | 22,778
Total assets | 16,839 | 9,126 | 25,965 | 4,597,145 | 4,623,110
Liabilities and shareholders’ equity |  |  |  |  |
Due to other banks and financial institutions | 8,690 | 6 | 8,696 | 567,620 | 576,316
Derivative financial instruments | - | - | - | 1,041 | 1,041
Due to customers | 74,072 | 15,950 | 90,022 | 3,076,886 | 3,166,908
Debt securities in issue | - | - | - | 276,480 | 276,480
Special and lending funds | - | - | - | 15,718 | 15,718
Other liabilities | 1,959 | 103 | 2,062 | 40,144 | 42,206
Shareholders’ equity | - | - | - | 544,441 | 544,441
Total liabilities and shareholders’ equity | 84,721 | 16,059 | 100,780 | 4,522,330 | 4,623,110
Net balance sheet position | (67,882) | (6,933) | (74,815) | 74,815 | -
Open currency exchange transactions | 67,783 | 6,929 | 74,712 | (75,305) | (593)
Net open position | (99) | (4) | (103) | (490) | (593)

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
55
FINANCIAL RISK MANAGEMENT (CONTINUED)
The Bank has also granted loans in foreign currency. Although they are usually financed in the same currency, depending on the main
currency of the debtor’s cash flows, the strengthening of foreign currency against the local currency may adversely affect the debtors’
ability to repay the loans, which increases the probability of future losses from loans.
2.2. Interest rate risk in the banking book
An interest rate risk is a risk to incur losses because of the mismatch of re-evaluation possibility between the Bank’s and the Group’s
assets and liabilities.
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market
interest rates. The Bank and the Group takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on
both its fair value and cash flow risks.
The risk management is regulated by the Procedures for Interest Rate Risk Management, which were updated in 2023. Bank uses a
system of internal risk limits and indicators, which establish methods of risk measurement and set up measures for risk management.
These procedures are approved by the Board of the Bank and define that:
• the Bank observes the principle to avoid the speculation with future interest rates;
• the risk is evaluated using a system of internal key risk indicator;
• Risk Department provides the information on regular basis to Risk Management Committee about compliance with internal
risk limits.
. Sensitivity of interest rate risk
The table below summarizes Group’s interest rates sensitive assets and liabilities based on reprising dates based on which cash flow
interest rate risk is estimated.

Group | Overnight | Up to 1 | From 1 to | From 3 to | From 6 to | More than | Total
31 December 2024 |  | month | 3 months | 6 months | 12 months | 1 year |
Total cashflow from interest rate sensitive assets | 38,129 | 749,395 | 1,624,143 | 1,443,998 | 269,796 | 1,037,627 | 5,163,088
Total cashflow from interest rate sensitive liabilities | 1,077,544 | 164,179 | 294,067 | 613,427 | 613,817 | 1,386,223 | 4,149,257
Net interest sensitivity gap at 31 December 2024 | (1,039,415) | 585,216 | 1,330,076 | 830,571 | (344,021) | (348,596) | -
31 December 2023 |  |  |  |  |  |  |
Total cashflow from interest rate sensitive assets | 121,316 | 1,611,282 | 1,746,334 | 1,423,568 | 162,463 | 872,890 | 5,937,853
Total cashflow from interest rate sensitive liabilities | 1,055,306 | 121,331 | 259,950 | 491,233 | 1,558,071 | 990,553 | 4,476,444
Net interest sensitivity gap at 31 December 2023 | (933,990) | 1,489,951 | 1,486,384 | 932,335 | (1,395,608) | (117,663) | -

Assessing the sensitivity of the Group's profit and other components of equity towards the change of interest rates, it has been assumed
that interest is to change by 2 percentage point.
The table below summarizes the effect on the Group's profit and other components of equity of interest rate risk in the banking book as
at 31 December 2024 and 31 December 2023.

| Pre-tax | Pre-tax increase | 31 December 2024 | Pre-tax | Pre-tax increase | 31 December 2023)
|  | increase (decrease) in other | Total impact on | increase | (decrease) in other | Total impact on
| (decrease) in | components of | equity (post-tax) | (decrease) in | components of | equity (post-tax)
| profit | equity |  | profit | equity |
Interest rate increase by 2 p.p. | 38,408 | (2,415) | 35,993 | 31,866 | (3,207) | 28,659
Interest rate decrease by 2 | (38,867) | 2,650 | (36,217) | (31,867) | 3,555 | (28,312)
p.p. |  |  |  |  |  |

The shift of yield curve according to above mentioned parameters creates significant impact on Financial Group’s total comprehensive
income and makes EUR 35,993 thousand in 2024 (2023: EUR 28,659 thousand) higher impact and EUR 36,217 thousand in 2024 (2023:
EUR 28,312 thousand) lower impact on comprehensive income.
The table below summarizes the Bank’s interest rates sensitive assets and liabilities based on reprising dates based on which cash flow
interest rate risk is estimated.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
56
FINANCIAL RISK MANAGEMENT (CONTINUED)

Bank | Overnight | Up to 1 | From 1 to | From 3 to | From 6 to | More than | Total
31 December 2024 |  | month | 3 months | 6 months | 12 months | 1 year |
Total cashflow from interest rate sensitive assets | 38,091 | 737,290 | 1,600,832 | 1,411,361 | 213,726 | 817,713 | 4,819,013
Total cashflow from interest rate sensitive liabilities | 1,077,551 | 164,181 | 293,940 | 613,902 | 613,902 | 1,386,233 | 4,149,709
Net interest sensitivity gap at 31 December 2024 | (1,039,460) | 573,109 | 1,306,892 | 797,459 | (400,176) | (568,520) | -
31 December 2023 |  |  |  |  |  |  |
Total cashflow from interest rate sensitive assets | 121,282 | 1,601,042 | 1,726,659 | 1,396,374 | 116,178 | 690,087 | 5,651,622
Total cashflow from interest rate sensitive liabilities | 1,055,306 | 121,618 | 260,066 | 490,961 | 1,558,047 | 990,552 | 4,476,550
Net interest sensitivity gap at 31 December 2023 | (934,024) | 1,479,424 | 1,466,593 | 905,413 | (1,441,869) | (300,465) | -

Assessing the sensitivity of the Bank's profit and other components of equity towards the change of interest rates, it has been assumed
that interest is to change by 2 percentage point.
The table below summarizes the effect on the Bank's profit and other components of equity of interest rate risk in the banking book as at
31 December 2024 and 31 December 2023.

| Pre-tax | Pre-tax increase | 31 December 2024 | Pre-tax | Pre-tax increase | 31 December 2023)
|  | increase (decrease) in other | Total impact on | increase | (decrease) in other | Total impact on
| (decrease) in | components of | equity (post-tax) | (decrease) in | components of | equity (post-tax)
| profit | equity |  | profit | equity |
Interest rate increase by 2 p.p. | 38,250 | (2,360) | 35,890 | 31,826 | (3,207) | 28,619
Interest rate decrease by 2 | (38,914) | 2,592 | (36,322) | (31,826) | 3,555 | (28,271)
p.p. |  |  |  |  |  |

The shift of yield curve according to above mentioned parameters creates significant impact on Bank’s total comprehensive income and
makes EUR 35,890 thousand in 2024 (2023: EUR 28,619 thousand) higher impact and EUR 36,322 thousand in 2024 (2023: EUR 28,271
thousand) lower impact on comprehensive income.
2.3. Securities risk
Securities risk is the risk to incur losses from the investment in securities.
The management of the securities risk is regulated by the Investment in Securities Limits Procedure. In order to properly manage the
debt securities portfolio risk, the Bank uses an internal limit system that combines maturity/rating limits, geographical region limits imposed
on total debt securities portfolio, VaR ratio limits imposed on debt securities at amortized cost portfolio, and VaR and capital requirements
amount limits imposed on other debt securities portfolios. For the equity portfolio risk management, a limit system that combines decision
taking limits, issuer limits, portfolio limits is used. The compliance with limits must be checked before taking the investment decisions,
monthly reports on the compliance with the limits set are submitted to the Bank’s Risk Management Committee.
Securities concentrations
Sector concentration of the securities portfolio is disclosed in Financial Risk Management disclosure, section 1.8. Maturities concentration
of securities portfolio is disclosed in Financial Risk Management disclosure, section 3.2. Credit quality of the securities portfolio is
disclosed in Notes 12 and Note 15. Geographical concentration of the debt securities portfolio is presented in tables below, which contain
Top 20 countries in which the Group and the Bank have exposures:
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
57
FINANCIAL RISK MANAGEMENT (CONTINUED)

|  |  |  |  |  |  | Top 20 countries in which the Group has debt security exposures:
|  |  | 2024 |  |  |  | 2023
Name of the country | Public | Corporate | Total Name of the country | Public | Corporate | Total
1. Lithuania | 654,785 | 24,264 | 679,049 | Lithuania | 609,795 | 30,916 | 640,711
2. Netherlands | - | 6 453 | 6 453 | Latvia | 96,572 | 9,507 | 106,079
3. Germany | - | 2 077 | 2 077 | Netherlands | - | 16,340 | 16,340
4. USA | - | 5 422 | 5 422 | Poland | 11,119 | 4,593 | 15,712
5. Latvia | 70 486 | 9 873 | 80 359 | Germany | 702 | 14,043 | 14,745
6. Great Britain | - | 5 574 | 5 574 | France | 496 | 13,903 | 14,399
7. Estonia | 478 | 677 | 1 155 | USA | - | 11,395 | 11,395
8. France | - | 5 678 | 5 678 | Great Britain | 211 | 9,890 | 10,101
9. Italy | - | 1 189 | 1 189 | Romania | 6,034 | 2,813 | 8,847
10. Poland | 1 910 | 3 233 | 5 143 | Czech Republic | 211 | 6,429 | 6,640
11. Romania | 5 345 | 1 461 | 6 806 | Ireland | - | 5,251 | 5,251
12. Sweden | - | - |  | - Italy | 2,050 | 3,198 | 5,248
13. Ireland | - | 201 | 201 | Luxembourg | - | 5,246 | 5,246
14. Spain | 505 | 442 | 947 | Slovenia | 3,252 | 1,481 | 4,733
15. Czech Republic | 209 | 4 979 | 5 188 | Sweden | 2,067 | 1,012 | 3,079
16. Luxembourg | - | 2 250 | 2 250 | Estonia | - | 3,019 | 3,019
17. Finland | - | 205 | 205 | Finland | 496 | 2,218 | 2,714
18. Mexico | 2 025 | - | 2 025 | Peru | 2,160 | - | 2,160
19. Slovenia | 3 123 | - | 3 123 | Mexico | 1,686 | - | 1,686
20. Peru | 2 107 | - | 2 107 | Spain | 987 | 462 | 1,449
Other countries | 3 783 | 3 963 | 7 746 | Other countries | 6,251 | 3,044 | 9,295
Total | 744 756 | 77 941 | 822 697 | Total | 744,089 | 144,760 | 888,849

|  |  |  |  |  |  | Top 20 countries in which the Bank has debt security exposures:
|  |  | 2024 |  |  |  | 2023
Name of the country | Public | Corporate | Total Name of the country |  | Public | Corporate | Total
1. Lithuania | 636,140 | 22,686 | 658,826 | Lithuania | 595,133 | 25,764 | 620,897
2. Netherlands | - | 4,967 | 4,967 | Latvia | 96,572 | 9,507 | 106,079
3. Germany | - | 1,002 | 1,002 | Netherlands | - | 15,936 | 15,936
4. USA | - | 5,013 | 5,013 | Germany | - | 13,631 | 13,631
5. Latvia | 70,486 | 9,759 | 80,245 | France | - | 13,081 | 13,081
6. Great Britain | - | 4,941 | 4,941 | USA | - | 10,766 | 10,766
7. Estonia | - | 472 | 472 | Poland | 9,261 | - | 9,261
8. France | - | 5,065 | 5,065 | Great Britain | - | 8,648 | 8,648
9. Italy | - | 1,189 | 1,189 | Italy | 2,050 | 3,198 | 5,248
10. Poland | - | - | - Sweden | - | 5,050 | 5,050
11. Romania | 2,049 | - | 2,049 | Luxembourg | - | 4,996 | 4,996
12. Ireland | - | - | - Slovenia | 3,191 | - | 3,191
13. Sweden | - | - | - Romania | 3,089 | - | 3,089
14. Spain | 505 | - | 505 | Ireland | 2,067 | 1,012 | 3,079
15. Czech Republic | - | 2,090 | 2,090 | Czech Republic | - | 2,163 | 2,163
16. Luxembourg | - | 2,000 | 2,000 | Peru | 2,160 | - | 2,160
17. Finland | - | - |  | - Finland | - | 2,012 | 2,012
18. Austria | - | - |  | - Austria | - | 1,014 | 1,014
19. Slovenia | 3,123 | - | 3,123 | Estonia | - | 692 | 692
20. Peru | 2,107 | - | 2,107 | Spain | 507 | - | 507
Other countries | - | 434 | 434 | Other countries | - | 349 | 349
Total | 714,410 | 59,618 | 774,028 | Total | 714,030 | 117,819 | 831,849

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
58
FINANCIAL RISK MANAGEMENT (CONTINUED)
Sensitivity of securities risk
The sensitivity of debt securities portfolio (at fair value through profit or loss – i.e. trading book is included in profit and at fair value through
other comprehensive income is included in other components of equity) to parallel shift of the interest rate curve by 2 percentage point
is presented in the table below:

| Pre-tax | Pre-tax increase | 31 December 2024 | Pre-tax | Pre-tax increase | 31 December 2023
|  | increase (decrease) in other | Total impact on | increase | (decrease) in other | Total impact on
| (decrease) in | components of | equity (post-tax) | (decrease) in | components of | equity (post-tax)
Group: | profit | equity |  | profit | equity |
Interest rate increase by 2 p.p. | (206) | (2,415) | (2,621) | (283) | (3,207) | (3,490)
Interest rate decrease by 2 | 203 | 2,650 | 3,848 | 293 | 3,555 | 3,848
p.p. |  |  |  |  |  |
Bank: |  |  |  |  |  |
Interest rate increase by 2 p.p. | (206) | (2,360) | (2,566) | (283) | (3,207) | (3,490)
Interest rate decrease by 2 | 203 | 2,592 | 2,795 | 293 | 3,555 | 3,848
p.p. |  |  |  |  |  |

3. LIQUIDITY RISK
Liquidity risk means the risk that the Bank is unable to meet its financial obligations in time or that it will not manage to receive financial
resources during a short time by borrowing or selling the assets.
3.1. Liquidity risk management process
The liquidity risk management depends on the Bank’s ability to cover the cash shortage by borrowing from the market; and the liquidity
of the market itself. The Bank seeks not to depend on the ability to borrow in the market in case of liquidity problems and constructs its
liquidity strategy based on hypothetical scenario it does not have access to market funding. Due to that fact the Bank possesses a
significant debt securities portfolio, which is highly liquid and can be used either as collateral for borrowing by repos, or sold.
Liquidity risk management is regulated by the Procedures for Liquidity Risk Management approved by the Bank’s Board. Liquidity risk is
evaluated by analyzing the dynamics of various liquidity ratios. A list of these ratios as well as recommended limits to their change are
defined in the above-mentioned procedures. Decisions regarding liquidity management issues are made by the Bank’s Risk Management
Committee with reference to the information submitted by the Bank’s Risk Department or by the Bank’s Board with reference to the
information submitted by the Risk Management Committee. Current liquidity (up to 7 days) risk management is based on short-term cash
flow analysis and projections. The Market and Treasury Department is responsible for this.
The Group controls short-term and long-term liquidity risk through established ratios and limits.
Starting from 2015, the Bank is subject to regulatory Liquidity coverage ratio (LCR). The Bank complied with this ratio with a substantial
cushion (requirement for the LCR is set at 100%).
Internal liquidity limit system was updated in 2019. It includes normative, prospective, quality and concentration ratios.
3.2. Structure of assets and liabilities by maturity
The structure of the Group’s assets and liabilities by maturity is presented in the table below. Maturity bands used in the table represent
maturities of assets and liabilities under most likely scenario, which is contractual maturities scenario adjusted for expectations. For
liabilities and assets with no payment breaches, contractual terms are used as the representation of most likely scenario unless
information indicating otherwise is available.
Past due part of the assets with payment breaches over 30 days and total amount of assets past due over 90 days are included in
“Maturity undefined” band.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
59
FINANCIAL RISK MANAGEMENT (CONTINUED)
On demand
Less than 1
month
1 to 3
months
3 to 6
months
6 to 12
months
1 to 3 years
More than 3
years
Maturity
undefined
Total

At 31 December 2023: |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 395,136 | - | - | - | - | - | - | - | 395,136
Due from other banks | - | 179 | - | 2,520 | 332 | 90 | - | - | 3,121
Securities in the trading book | - | 5,193 | 1,164 | 2,130 | 8,503 | 15,200 | 24,427 | 178,493 | 235,110
Derivative financial instruments | - | 726 | 353 | 14 | - | - | - | - | 1,093
Loans to customers, finance lease | - | 98,735 | 143,190 | 131,888 | 262,744 | 1,021,645 | 1,757,317 | 19,078 | 3,434,597
receivables |  |  |  |  |  |  |  |  |
Investment securities at fair value | - | 144 | 615 | 76 | 1,530 | 14,808 | 23,950 | 2,745 | 43,868
Investment securities at amortized | - | 2,064 | 7,293 | 22,748 | 151,159 | 540,013 | 3,660 | - | 726,937
cost |  |  |  |  |  |  |  |  |
Investments in subsidiaries | - | - | - | - | - | - | - | 270 | 270
Intangible assets | - | - | - | - | - | - | - | 43,617 | 43,617
Property, plant and equipment and investment property | - | - | - | - | - | - | - | 15,261 | 15,261
Other assets | 154 | 8,961 | 605 | 831 | 1,028 | 3,586 | 77 | 8,367 | 23,609
Total assets | 395,290 | 116,002 | 153,220 | 160,207 | 425,296 | 1,595,342 | 1,809,431 | 267,831 | 4,922,619
Due to other banks and financial | 27,918 | 7,500 | 2,726 | 11,676 | 774 | 2,014 | 13,252 | - | 65,860
institutions |  |  |  |  |  |  |  |  |
Due to customers | 1,651,322 | 150,560 | 285,762 | 568,401 | 611,010 | 252,712 | 18,205 | - | 3,537,972
Special and lending funds | 23,037 |  |  |  |  |  |  |  | 23,037
Debt securities in issue | - | (125) | (251) | (376) | (738) | (359) | 450,008 | - | 448,159
Liabilities related to insurance |  | 4,091 | 233 | 469 | 1,763 | 11,321 | 180,555 |  | 198,432
activities |  |  |  |  |  |  |  |  |
Other liabilities | 35,520 | 14,023 | 650 | 1,776 | 6,559 | 3,312 | 2,147 |  | 63,987
Shareholders’ equity | - | - | - | - | - | - | - | 585,172 | 585,172
Total liabilities and shareholders’ | 1,737,797 | 176,049 | 289,120 | 581,946 | 619,368 | 269,000 | 664,167 | 585,172 | 4,922,619
equity |  |  |  |  |  |  |  |  |
Net liquidity gap (1,342,507) | (60,047) | (135,900) | (421,739) | (194,072) | 1,326,342 | 1,145,264 | (317,341) | -
At 31 December 2022: |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 751,499 | - | - | - | - | - | - | - | 751,499
Due from other banks | - | 393 | 2,520 | 4 | 5 | 90 | 1 | - | 3,013
Securities in the trading book | - | 577 | 1,733 | 13,771 | 1,201 | 13,433 | 35,046 | 141,916 | 207,677
Derivative financial instruments | - | 169 | 21 | 61 | - | - | - | - | 251
Loans to customers, finance lease | - | 77,529 | 125,566 | 124,389 | 258,024 | 821,828 | 1,512,652 | 11,649 | 2,931,637
receivables |  |  |  |  |  |  |  |  |
Investment securities at fair value | - | 133 | 17 | 19,712 | 13,513 | 13,448 | 25,035 | 2,642 | 74,500
Investment securities at amortized | - | 62,396 | 13,289 | 174,341 | 69,116 | 418,739 | 13,346 | - | 751,227
cost |  |  |  |  |  |  |  |  |
Investments in subsidiaries | - | - | - | - | - | - | - | 100 | 100
Intangible assets | - | - | - | - | - | - | - | 45,138 | 45,138
Property, plant and equipment and investment property | - | - | - | - | - | - | - | 16,774 | 16,774
Other assets | 275 | 8,412 | 413 | 535 | 5,228 | 796 | 91 | 11,755 | 27,505
Total assets | 751,774 | 149,609 | 143,559 | 332,813 | 347,087 | 1,268,334 | 1,586,171 | 229,974 | 4,809,321
Due to other banks and financial | 31,783 | 7,869 | 8,783 | 14,599 | 492,553 | 3,097 | 11,310 | - | 569,994
institutions |  |  |  |  |  |  |  |  |
Due to customers | 1,614,638 | 100,138 | 213,600 | 430,322 | 558,535 | 222,810 | 22,614 | - | 3,162,657
Special and lending funds | 15,718 | - | - | - | - | - | - | - | 15,718
Debt securities in issue | - | - | - | - | 203,617 | - | 72,863 | - | 276,480
Liabilities related to insurance | 92,322 | - | - | - | 1,050 | 2,366 | 83,580 | - | 179,318
activities |  |  |  |  |  |  |  |  |
Other liabilities | 29,079 | 11,664 | 934 | 7,248 | 5,882 | 5,171 | 2,048 | - | 62,026
Shareholders’ equity | - | - | - | - | - | - | - | 543,128 | 543,128
Total liabilities and shareholders’ | 1,783,540 | 119,671 | 223,317 | 452,169 | 1,261,637 | 233,444 | 192,415 | 543,128 | 4,809,321
equity |  |  |  |  |  |  |  |  |
Net liquidity gap (1,031,766) |  | 29,938 | (79,758) | (119,356) | (914,550) | 1,034,890 | 1,393,756 | (313,154) | -

On demand
Less than 1
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
FINANCIAL RISK MANAGEMENT (CONTINUED)
The Structure of the Bank's assets and liabilities by maturity was as follows:

At 31 December 2024: |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 386,365 | - | - | - | - | - | - | - | 386,365
Due from other banks | - | 179 | - | 2,520 | 332 | 90 | - | - | 3,121
Securities in the trading book | - | 677 | 1,078 | 1,966 | 7,181 | 2,619 | - | 22 | 13,543
Derivative financial instruments | - | 726 | 353 | 14 | - | - | - | - | 1,093
Loans to customers, finance lease | - | 89,808 | 414,469 | 106,240 | 218,560 | 908,373 | 1,676,938 | 7,516 | 3,421,904
receivables |  |  |  |  |  |  |  |  |
Investment securities at fair value | - | 15 | 615 | 76 | 1,530 | 14,808 | 23,950 | 2,626 | 43,620
Investment securities at amortized | - | 2,063 | 7,074 | 22,687 | 150,373 | 533,643 | 1,024 | - | 716,864
cost |  |  |  |  |  |  |  |  |
Investments in subsidiaries | - | - | - | - | - | - | - | 84,069 | 84,069
Intangible assets | - | - | - | - | - | - | - | 7,859 | 7,859
Property, plant and equipment and investment property | - | - | - | - | - | - | - | 14,689 | 14,689
Other assets | 154 | 8,106 | 605 | 829 | 938 | 204 | 77 | 7,017 | 17,930
Total assets | 386,519 | 101,574 | 424,194 | 134,332 | 378,914 | 1,459,737 | 1,701,989 | 123,798 | 4,711,057
Due to other banks and financial | 30,545 | 7,500 | 2,726 | 11,676 | 774 | 2,014 | 13,252 | - | 68,487
institutions |  |  |  |  |  |  |  |  |
Due to customers | 1,651,441 | 150,560 | 285,762 | 573,601 | 611,010 | 252,712 | 18,205 | - | 3,543,291
Special and lending funds | 23,037 | - | - | - | - | - | - | - | 23,037
Debt securities in issue | - | (125) | (251) | (376) | (738) | (359) | 450,008 | - | 448,159
Other liabilities | 31,087 | 1,211 | 588 | 1,322 | 1,917 | 3,062 | 1,892 | - | 41,079
Shareholders’ equity | - | - | - | - | - | - | - | 587,004 | 587,004
Total liabilities and shareholders’ | 1,736,110 | 159,146 | 288,825 | 586,223 | 612,963 | 257,429 | 483,357 | 587,004 | 4,711,057
equity |  |  |  |  |  |  |  |  |
Net liquidity gap (1,349,591) | (57,572) | 135,369 | (451,891) | (234,049) | 1,202,308 | 1,218,632 | (463,206) | -
At 31 December 2023: |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 742,969 | - | - | - | - | - | - | - | 742,969
Due from other banks | - | 393 | 2,520 | 4 | 5 | 90 | 1 | - | 3,013
Securities in the trading book | - | 255 | 10 | 13,455 | 751 | 5,768 |  | 163 | 20,402
Derivative financial instruments | - | 169 | 21 | 51 |  |  |  |  | 241
Loans to customers, finance lease | - | 69,465 | 351,975 | 102,330 | 225,087 | 727,726 | 1,442,278 | 1,072 | 2,919,933
receivables |  |  |  |  |  |  |  |  |
Investment securities at fair value | - | 15 | 17 | 19,712 | 13,513 | 13,448 | 25,035 | 2,642 | 74,382
Investment securities at amortized | - | 62,391 | 13,270 | 173,872 | 69,096 | 416,212 | 5,028 |  | 739,869
cost |  |  |  |  |  |  |  |  |
Investments in subsidiaries) | - | - | - | - | - | - | - | 76,672 | 76,672
Intangible assets | - | - | - | - | - | - | - | 8,149 | 8,149
Property, plant and equipment and investment property | - | - | - | - | - | - | - | 14,702 | 14,702
Other assets | 275 | 9,190 | 398 | 526 | 5,227 | 268 | 90 | 6,804 | 22,778
Total assets | 743,244 | 141,878 | 368,211 | 309,950 | 313,679 | 1,163,512 | 1,472,432 | 110,204 | 4,623,110
Due to other banks and financial | 38,105 | 7,869 | 8,783 | 14,599 | 492,553 | 3,097 | 11,310 | - | 576,316
institutions |  |  |  |  |  |  |  |  |
Due to customers | 1,614,638 | 100,138 | 214,100 | 434,073 | 558,535 | 222,810 | 22,614 | - | 3,166,908
Special and lending funds | 15,718 | - | - | - | - | - | - | - | 15,718
Debt securities in issue | - | - | - | - | 203,617 | - | 72,863 | - | 276,480
Other liabilities | 28,797 | 886 | 795 | 7,165 | 1,155 | 2,693 | 1,756 | - | 43,247
Shareholders’ equity | - | - | - | - | - | - | - | 544,441 | 544,441
Total liabilities and shareholders’ | 1,697,258 | 108,893 | 223,678 | 455,837 | 1,255,860 | 228,600 | 108,543 | 544,441 | 4,623,110
equity |  |  |  |  |  |  |  |  |
Net liquidity gap | (954,014) | 32,985 | 144,533 | (145,887) | (942,181) | 934,912 | 1,363,889 | (434,237) | -

month
1 to 3
months
3 to 6
months
6 to 12
months
1 to 3 years
More than 3
years
Maturity
undefined
Total
60
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
61
FINANCIAL RISK MANAGEMENT (CONTINUED)
3.3. Non - derivative cash flows
Undiscounted cash flows in the table below describe contractual liability side outflows which are stated including nominal contract
amounts together with interest till the end of the contract.
Group

31 December 2024 | undefined | Maturity Up to 1 month | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Total
Liabilities |  |  |  |  |  |  |
Due to banks | - | 33,362 | 2,850 | 12,594 | 2,063 | - | 50,869
Due to customers | - | 1,826,442 | 285,777 | 1,209,543 | 277,652 | 4,698 | 3,604,112
Debt securities in issue | - | 2,329 | 4,449 | 20,686 | 477,934 | 87,528 | 592,926
Special and lending funds | - | 23,037 | - | - | - | - | 23,037
Liabilities related to insurance | - | 4,091 | 233 | 2,232 | 22,434 | 169,442 | 198,432
activities |  |  |  |  |  |  |
Total liabilities (contractual | - | 1,889,261 | 293,309 | 1,245,055 | 780,083 | 261,668 | 4,469,376
maturity dates) |  |  |  |  |  |  |

Group

31 December 2023 | undefined | Maturity Up to 1 month | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Total
Liabilities |  |  |  |  |  |  |
Due to banks | - | 34,792 | 5,981 | 524,368 | 3,316 | 811 | 569,268
Due to customers | - | 1,715,713 | 215,814 | 1,010,423 | 254,513 | 3,961 | 3,200,424
Debt securities in issue | - | 186 | 360 | 217,741 | 26,420 | 95,256 | 339,963
Special and lending funds | - | 15,718 | - | - | - | - | 15,718
Liabilities related to insurance | - | 92,331 | - | 1,050 | 8,887 | 77,059 | 179,327
activities |  |  |  |  |  |  |
Total liabilities (contractual | - | 1,858,740 | 222,155 | 1,753,582 | 293,136 | 177,087 | 4,304,700
maturity dates) |  |  |  |  |  |  |

Bank

31 December 2024 | undefined | Maturity Up to 1 month | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Total
Liabilities |  |  |  |  |  |  |
Due to banks | - | 35,989 | 2,850 | 12,594 | 2,063 | - | 53,496
Due to customers | - | 1,826,576 | 289,497 | 1,211,044 | 277,652 | 4,698 | 3,609,467
Debt securities in issue | - | 2,329 | 4,449 | 20,686 | 477,934 | 87,528 | 592,926
Special and lending funds | - | 23,037 | - | - | - | - | 23,037
Total liabilities (contractual | - | 1,887,931 | 296,796 | 1,244,324 | 757,649 | 92,226 | 4,278,926
maturity dates) |  |  |  |  |  |  |

Bank

31 December 2023 | undefined | Maturity Up to 1 month | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Total
Liabilities |  |  |  |  |  |  |
Due to banks | - | 41,114 | 5,981 | 524,368 | 3,316 | 811 | 575,590
Due to customers | - | 1,715,713 | 216,314 | 1,014,174 | 254,513 | 3,961 | 3,204,675
Debt securities in issue | - | 186 | 360 | 217,741 | 26,420 | 95,256 | 339,963
Special and lending funds | - | 15,718 | - | - | - | - | 15,718
Total liabilities (contractual | - | 1,772,731 | 222,655 | 1,756,283 | 284,249 | 100,028 | 4,135,946
maturity dates) |  |  |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
62
FINANCIAL RISK MANAGEMENT (CONTINUED)
3.4. Remaining contractual maturity off - balance sheet items
Analysis of off-balance sheet items by the remaining maturity is as follows:
Group

At 31 December 2024 | Up to one | From 1 to 3 | From 3 to 6 | From 6 to 12 | From 1 | Over 5 | Total
| month | months | months | months | to 5 years | years |
Loan commitments | 393,325 | - | - | - | - | - | 393,325
Guarantees | 87,985 | - | - | - | - | - | 87,985
Other commitments | ,223 | 75 | - | - | - | - | ,298
Total | 481,533 | 75 | - | - | - | - | 481,608

Group

At 31 December 2023 | Up to one | From 1 to 3 | From 3 to 6 | From 6 to 12 | From 1 | Over 5 | Total
| month | months | months | months | to 5 years | years |
Loan commitments | 476,294 | - | - | - | - | - | 476,294
Guarantees | 59,216 | - | - | - | - | - | 59,216
Other commitments | 2,235 | 1,020 | 2,458 | 335 | 223 | - | 6,271
Total | 537,745 | 1,020 | 2,458 | 335 | 223 | - | 541,781

Bank

At 31 December 2024 | Up to one | From 1 to 3 | From 3 to 6 | From 6 to 12 | From 1 | Over 5 | Total
| month | months | months | months | to 5 years | years |
Loan commitments | 403,548 | - | - | - | - | - | 403,548
Guarantees | 87,985 | - | - | - | - | - | 87,985
Other commitments | 223 | 75 | - | - | - | - | 298
Total | 491,756 | 75 | - | - | - | - | 491,831

Bank

At 31 December 2023 | Up to one | From 1 to 3 | From 3 to 6 | From 6 to 12 | From 1 | Over 5 | Total
| month | months | months | months | to 5 years | years |
Loan commitments | 483,922 | - | - | - | - | - | 483,922
Guarantees | 59,256 | - | - | - | - | - | 59,256
Other commitments | 2,235 | 1,020 | 2,458 | 335 | 223 | - | 6,271
Total | 545,413 | 1,020 | 2,458 | 335 | 223 | - | 549,449

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
63
FINANCIAL RISK MANAGEMENT (CONTINUED)
4. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
4.1. Financial assets and liabilities not measured at fair value
The table below summarizes the carrying amounts and fair values of those financial assets and liabilities not presented on the Bank’s
and Group’s balance sheets at their fair value. The valuation methods for the assets and liabilities are summarized below.
a) Loans and advances to banks
The carrying amount of floating rate placements and overnight deposits is a reasonable approximation of fair value.
The fair value of fixed interest bearing deposits is estimated using valuation technique attributable to Level 3 in the fair value hierarchy,
based on discounted cash flows using prevailing money-market interest rates for debts with similar credit risk and remaining maturity.
b) Loans and advances to customers and finance lease receivables
Loans and advances and finance lease receivables are net of charges for impairment. The fair value of loans and advances to customers
and finance lease receivables is estimated using valuation technique attributable to Level 3 in the fair value hierarchy. The estimated fair
value of loans, advances and finance lease receivables represents the discounted amount of estimated future cash flows expected to be
received. Expected cash flows are discounted at current market rates (average interest rates on outstanding loans published by the Bank
of Lithuania) to determine fair value.
c) Investment securities
The fair value for held-to-collect assets is based on market prices or broker/dealer price quotations – i.e. it is estimated using valuation
technique attributable to Level 1 in the fair value hierarchy.
d) Deposits from banks, due to customers, debt securities in issue and special lending funds
The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is the amount repayable on
demand.
The fair value of fixed interest-bearing deposits, debt securities in issue and special and lending funds not quoted in an active market is
estimated using valuation technique attributable to Level 3 in the fair value hierarchy based on discounted cash flows using interest rates
for new debts with similar remaining maturity. Interest rates for new deposits of Šiaulių bankas are used for calculation purposes as
discount rates.
e) Other financial assets and other financial liabilities
The fair value of lease liabilities is estimated using valuation technique attributable to Level 3 in the fair value hierarchy based on
discounted cash flows using interest rates for new leases with similar remaining maturity. The estimated fair value of other financial
assets and liabilities is similar to the carrying value due to short maturities of these assets and liabilities.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
64
FINANCIAL RISK MANAGEMENT (CONTINUED)
Group

|  | As of 31 December 2024 |  | As of 31 December 2023
| Carrying | Fair value | Carrying | Fair value
Assets | amount |  | amount |
Due from other banks | 3,121 | 3,121 | 3,013 | 3,013
Loans | 3,117,700 | 3,091,524 | 2,645,104 | 2,680,780
Loans to individuals: | 1,431,482 | 1,437,497 | 1,258,203 | 1,284,883
Consumer loans - | 305,329 | 319,420 | 260,914 | 272,531
Mortgages - | 915,760 | 906,702 | 778,931 | 790,663
Other - | 210,393 | 211,375 | 218,358 | 221,689
Loans to business customers | 1,665,931 | 1,636,621 | 1,360,488 | 1,371,906
Central and other authorities - | 53,670 | 51,174 | 68,580 | 66,991
Large corporates - | 216,656 | 211,156 | 108,069 | 107,434
SME - | 1,395,605 | 1,374,292 | 1,183,839 | 1,197,481
Loans and advances to financial institutions | 20,287 | 17,405 | 26,413 | 23,991
Finance lease receivables | 316,897 | 348,540 | 286,533 | 326,840
Investment securities at amortized cost | 726,937 | 712,961 | 751,227 | 712,594
Government bonds - | 695,622 | 686 774 | 663,211 | 633,163
Corporate bonds - | 31,315 | 26 187 | 88,016 | 79,431
Other financial assets | 7,258 | 7,258 | 7,351 | 7,351
Liabilities |  |  |  |
Due to other banks and financial institutions | 65,860 | 65,353 | 569,994 | 557,412
Due to customers | 3,537,972 | 3,547,785 | 3,162,657 | 3,161,733
Due to individuals | 2,187,936 | 2,196,105 | 1,912,137 | 1,910,526
Due to private companies | 1,067,440 | 1,068,879 | 965,352 | 966,058
Due to other enterprises | 282,596 | 282,801 | 285,168 | 285,149
Debt securities in issue | 448,159 | 450,008 | 276,480 | 263,810
Special and lending funds | 23,037 | 23,037 | 15,718 | 15,718
Other financial liabilities | 46,426 | 47,228 | 40,017 | 40,317

Bank

|  | As of 31 December 2024 |  | As of 31 December 2023
| Carrying | Fair value | Carrying | Fair value
Assets | amount |  | amount |
Due from other banks | 3,121 | 3,121 | 3,013 | 3,013
Loans | 3,105,007 | 3,066,230 | 2,633,482 | 2,658,814
Loans to individuals: | 1,127,971 | 1,119,880 | 999,028 | 1,014,079
Consumer loans - | 1,818 | 1,803 | 1,739 | 1,727
Mortgages - | 915,760 | 906,702 | 778,931 | 790,663
Other - | 210,393 | 211,375 | 218,358 | 221,689
Loans to business customers | 1,665,932 | 1,636,621 | 1,360,488 | 1,371,906
Central and other authorities - | 53,670 | 51,174 | 68,580 | 66,991
Large corporates - | 216,657 | 211,156 | 108,069 | 107,434
SME - | 1,395,605 | 1,374,292 | 1,183,839 | 1,197,481
Loans and advances to financial institutions | 311,104 | 309,728 | 273,966 | 272,829
Finance lease receivables | 316,897 | 348,539 | 286,451 | 326,754
Investment securities at amortized cost | 716,864 | 713,387 | 739,869 | 713,437
Government bonds - | 690,083 | 687 045 | 657,445 | 633,642
Corporate bonds - | 26,781 | 26 342 | 82,424 | 79,795
Other financial assets | 6,559 | 6,559 | 8,289 | 8,289
Liabilities |  |  |  |
Due to other banks and financial institutions | 68,487 | 67,980 | 576,316 | 563,734
Due to customers | 3,543,291 | 3,553,104 | 3,166,908 | 3,165,984
Due to individuals | 2,187,936 | 2,196,105 | 1,912,137 | 1,910,526
Due to private companies | 1,072,759 | 1,074,198 | 969,103 | 969,809
Other | 282,596 | 282,801 | 285,668 | 285,649
Debt securities in issue | 448,159 | 450,008 | 276,480 | 263,810
Special and lending funds | 23,037 | 23,037 | 15,718 | 15,718
Other financial liabilities | 39,245 | 40,039 | 34,359 | 34,687

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
65
FINANCIAL RISK MANAGEMENT (CONTINUED)
4.2. Financial assets and liabilities measured at fair value
a) Fair value hierarchy
The table below analyzes financial instruments carried at fair value, by a hierarchy of valuation techniques based on whether the inputs
to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources;
unobservable inputs reflect the Group’s market assumptions. These two types of inputs have created the following fair value hierarchy:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities. This level includes listed equity
securities and debt instruments on exchanges (for example, NASDAQ Stock Exchange, London Stock Exchange, Frankfurt
Stock Exchange) or public price quotations (for example, for Lithuanian government bonds, average price quotations from the
most active banks that participate in the primary placement auctions of the Lithuanian Government securities are used).
• Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices). The Group uses fair value calculated based on Level 2 inputs for
accounting of currency derivatives and derivatives related to prices of equity instruments.
• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). This level
includes Group’s investments into unlisted equity securities, derivatives related to interest rate floor in variable rate loan
contracts and liabilities designated at fair value through profit or loss. Details on fair value measurement of these instruments
are described in subsection “Details on the main models used in valuation of Level III instruments” (Financial Risk
Management disclosure, section 4.2.b), below.
b) Measurement of financial assets and liabilities according to the fair value hierarchy

|  | 2024 |  | 2023
LEVEL I | Group | Bank | Group | Bank
Financial assets in the trading book |  |  |  |
Listed equity securities | 1,858 | 22 | 2,748 | 162
Units of investment funds | 163,435 | - | 87,049 | -
Government bonds | 10,789 | - | 26,306 | 2,637
Corporate bonds | 17,758 | 149 | 24,215 | 2,615
Investment securities at fair value |  |  |  |
Government bonds | - | - | 53,949 | 53,949
Corporate bonds | 10,255 | 10,255 | 16,105 | 16,105
Investment fund units | - | - | - | -
Total Level I financial assets | 204,095 | 10,426 | 210,372 | 75,468
LEVEL II |  |  |  |
Financial assets in the trading book |  |  |  |
Derivative financial instruments | 1,093 | 1,093 | 251 | 241
Corporate bonds | 5,271 | 5,271 |  |
Investment securities at fair value |  |  |  |
Government bonds | 36,597 | 24,327 |  |
Corporate bonds | 9,084 | 6,657 |  |
Investment fund units | 1,169 | - |  |
Total Level II financial assets | 53,213 | 37,348 | 251 | 241
Financial liabilities at fair value through profit or loss |  |  |  |
Derivative financial instruments | 123 | 123 | 1,041 | 1,041
Total Level II financial liabilities | 123 | 123 | 1,041 | 1,041
LEVEL III |  |  |  |
Financial assets in the trading book |  |  |  |
Corporate bonds | 8,101 | 8,101 | 15,240 | 14,988
Units of investment funds | 12,032 | - | 51,862 | -
Unlisted equity securities | - | - | 257 | -
Investment securities at fair value |  |  |  |
Corporate bonds | - | - | 1,927 | 1,927
Unlisted equity securities | 541 | 293 | 501 | 383
Investment fund units | 2,088 | 2,088 | 2,018 | 2,018
Securitization related financial assets (see Notes 13, 16) |  |  |  |
Unlisted equity securities | 270 | 270 | 100 | 100
Loans granted | 6,137 | 6,137 | 3,208 | 3,208
Total Level III financial assets | 29,169 | 16,889 | 75,113 | 22,624

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
66
FINANCIAL RISK MANAGEMENT (CONTINUED)
Following a review of asset valuation models and available information on the value of assets, reclassifications of the Bank's financial
assets took place during 2024, with EUR 33 694 thousand reclassified from level 1 to level 2 and EUR 2 561 thousand reclassified from
level 3 to level 2. Correspondingly, in the Group, EUR 48 391 thousand was reclassified from level 1 to level 2 and EUR 39 559 thousand
was reclassified from level 3 to level 1 (EUR 38 430 thousand) and to level 2 (EUR 1 169 thousand).
The following table presents the changes in Level III instruments during 2024 and 2023:
The Group

|  |  |  |  |  | Financial assets in the trading book |  |  |  | Investment securities at fair value |  |
| Corporate bonds |  |  | Investment fund units |  | Unlisted equities |  | Corporate |  | Unlisted Investment fund |  |
|  |  |  |  |  |  |  | bonds |  | equities |  | units
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023
Value as of 1 January | 15,240 | 19,126 | 51,862 | 27,191 | 257 | 18 | 1,927 | 1,935 | 501 | 243 | 2,018 | 4,425
Additions / Recognition | 16,770 | 18,313 | 1,412 | 2,290 | - | 278 | - | - | - | - | - | -
Disposals | (20,223) | (19,416) | (807) | (22) | (257) | (48) | (1,927) | - | (90) | - | - | (2,058)
Obtained during business |  |  |  |  |  |  |  |  |  |  |  |
acquisition transaction | - | - | - | 35,835 | - | - | - | - | - | - | - | -
(see Note 16) |  |  |  |  |  |  |  |  |  |  |  |
Reclassification | (2,561) | (983) | (39,599) | (13,585) | - | - | - | - | - | - | - | -
Derecognition | (1,111) | - | - | - | - | - | - | - | - | - | - | -
Changes due to interest | (165) | 309 | - | - | - | - | - | 56 | - | - | - | -
accrued/paid |  |  |  |  |  |  |  |  |  |  |  |
Revaluations through | 151 | (2,109) | (836) | 153 | - | 9 | - | (64) | 130 | 258 | 70 | (349)
profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Value as of 31 | 8,101 | 15,240 | 12,032 | 51,862 | - | 257 | - | 1,927 | 541 | 501 | 2,088 | 2,018
December |  |  |  |  |  |  |  |  |  |  |  |

The Bank

| Financial assets in the trading book |  |  |  |  |  |  |  |  | Investment securities at fair value
| Corporate bonds |  |  | Unlisted equities | Corporate bonds |  | Unlisted equities |  |  | Investment fund
|  |  |  |  |  |  |  |  |  | units
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023
Value as of 1 January | 14,988 | 17,888 | - | 18 | 1,927 | 1,935 | 383 | 243 | 2,018 | 4,425
Additions / Recognition | 16,770 | 18,313 | - | 21 | - | - | - | - | - | -
Disposals | (19,973) | (19,416) | - | (48) | (1,927) | - | (90) | - | - | (2,058)
Conversion to shares | - | - | - | - | - | - | - | - | - | -
Reclassification | (2,561) | - | - | - | - | - | - | - | - | -
Derecognition | (1,111) |  | - | - | - | - | - | - | - | -
Changes due to interest | (158) | 301 | - | - | - | 56 | - | - | - | -
accrued/paid |  |  |  |  |  |  |  |  |  |
Revaluations through profit or loss | 146 | (2,098) | - | 9 | - | (64) | - | 140 | (70) | (349)
Value as of 31 December | 8,101 | 14,988 | - | - | - | 1,927 | 293 | 383 | 2,088 | 2,018

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Total result from revaluation of Level III instruments included in the income statement | 1,768 | 301 | (2,102) | (2,362)
from trading securities (corporate bonds) | 146 | 146 | (2,109) | (2,098)
from investment securities at fair value (corporate bonds) | (64) | (64) | (64) | (64)
from trading securities (unlisted equities) | 9 | 9 | 9 | 9
from investment securities at fair value (unlisted equities) | 258 | 140 | 258 | 140
from trading securities (investment fund units) | 1,349 | - | 153 |
from investment securities at fair value (investment fund units) | 70 | 70 | (349) | (349)

Details on the main models used in valuation of Level III instruments:
Unlisted debt securities. Most commonly used fair value measures in the Group are assessment of discounted cash flows from the
security carried out by employees of the Group.
Unlisted equity securities. Most commonly used fair value measures in the Group are valuations from external independent certified
appraisers or assessment of discounted cash flows from the security carried out by employees of the Group.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
67
FINANCIAL RISK MANAGEMENT (CONTINUED)
Investments funds that are not publicly traded and/or whose net asset value or unit value is not determined daily are valued based on
the most recently determined net asset value or the last published/submitted unit value. This value may be adjusted to reflect changes,
such as significant events, capital calls, distributions of liabilities, income distributions, or other relevant factors. The Group's valuation is
based on information provided by asset managers regarding net asset value or unit price.

| 2024 | 2023
Unobservable Input | Estimate Range | Estimate Range
Unlisted debt securities |  |
Probability of Default (PD) | 0.5 – 6 % | 0.5 – 8 %
Discount Rate | 4 – 14 % | 5 – 15 %
Unlisted equity securities |  |
Discount Rate (WACC) | 8 – 15 % | 8 – 16 %
Investments funds |  |
Fund-reported NAV | Investment based | Investment based

4.3. Offsetting financial assets and financial liabilities
As of 31 December 2024 and 31 December 2023, only currency derivative instruments were subject to master netting arrangements and
similar arrangements. As of 31 December 2024, derivative financial instruments classified as assets in amount of EUR 123 thousand
and derivative financial instruments classified as liabilities in amount of EUR 1,093 thousand were subject to those agreements. As of 31
December 2023, derivative financial instruments classified as assets in amount of EUR 251 thousand and derivative financial instruments
classified as liabilities in amount of EUR 1,041 thousand were subject to those agreements.
The Group receives collateral in the form of marketable securities in respect of reverse repurchase agreements, which are included in
loans to customers. Gross amount of reverse repurchase agreements: 31 December 2024: EUR 30,189 thousand; 31 December 2023:
EUR 2,920 thousand. Securities received as a collateral for reverse repurchase agreements can be pledged or sold during the term of
transaction but have to be returned on maturity of the transaction. The Group did not pledge or sell any collateral received for reverse
repurchase agreements during 2024 and 2023.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
68
FINANCIAL RISK MANAGEMENT (CONTINUED)
4.4. Classes of financial instruments
A table below provides reconciliation of items of financial assets and liabilities as presented in Statement of Financial Position to classes
of financial instruments:

|  | 31 December 2024 |  | 31 December 2023
FINANCIAL ASSETS | Group | Bank | Group | Bank
Financial assets mandatorily measured at fair value through profit or loss: | 245,214 | 23,399 | 213,896 | 26,493
Trading securities | 76,517 | 13,543 | 63,190 | 20,402
trading debt securities: government bonds - | 23,059 | - | 24,839 | 2,637
trading debt securities: corporate bonds - | 33,558 | 13,521 | 38,189 | 17,603
trading equities - | 19,900 | 22 | 162 | 162
Other trading book securities | 158,593 | - | 144,487 | -
other trading book debt securities: government bonds - | - | - | 2,733 | -
Investment funds - | 149 863 | - | 138 790 | -
other trading book equities - | 8 730 | - | 2 964 | -
Investment securities at fair value | 2,874 | 2,626 | 2,760 | 2,642
non-trading equities - | 2,874 | 2,626 | 2,760 | 2,642
Derivative financial instruments | 1,093 | 1,093 | 251 | 241
Investment securities at fair value | 6,137 | 6,137 | 3,208 | 3,208
loans granted - | 6,137 | 6,137 | 3,208 | 3,208
Financial assets measured at fair value through other comprehensive income: | 40,994 | 40,994 | 71,740 | 71,740
Debt securities at fair value through other comprehensive income | 40,994 | 40,994 | 71,740 | 71,740
government bonds - | 24,327 | 24,327 | 53,949 | 53,949
corporate bonds - | 16,667 | 16,667 | 17,791 | 17,791
Financial assets measured at amortized cost: | 4,244,015 | 4,211,779 | 4,154,986 | 4,124,414
Cash and cash equivalents | 395,136 | 386,365 | 751,499 | 742,969
Due from other banks | 3,121 | 3,121 | 3,013 | 3,013
Loans to customers | 3,111,563 | 3,098,870 | 2,641,896 | 2,630,274
loans to financial institutions - | 14,150 | 304,967 | 23,205 | 270,758
loans to individuals (retail): consumer loans - | 305,329 | 1,818 | 260,914 | 1,739
loans to individuals (retail): mortgages - | 915,760 | 915,760 | 778,931 | 778,931
loans to individuals (retail): other - | 210,393 | 210,393 | 218,358 | 218,358
loans to business customers: SME - | 1,395,605 | 1,395,605 | 1,183,839 | 1,183,839
loans to business customers: large corporates - | 216,656 | 216,657 | 108,069 | 108,069
loans to business customers: central and local authorities and other - | 53,670 | 53,670 | 68,580 | 68,580
Investment securities at amortized cost | 726,937 | 716,864 | 751,227 | 739,869
government bonds - | 695,622 | 690,083 | 663,211 | 657,445
corporate bonds - | 31,315 | 26,781 | 88,016 | 82,424
Other financial assets | 7,258 | 6,559 | 7,351 | 8,289
Finance lease receivables: | 316,897 | 316,897 | 286,533 | 286,451
Finance lease receivables | 316,897 | 316,897 | 286,533 | 286,451
individuals - | 43,125 | 43,125 | 33,281 | 33,281
business customers - | 273,772 | 273,772 | 253,252 | 253,170
TOTAL FINANCIAL ASSETS | 4,847,120 | 4,593,069 | 4,727,155 | 4,509,098
FINANCIAL LIABILITIES |  |  |  |
Financial liabilities mandatorily measured at fair value through profit or loss: | 123 | 123 | 1,041 | 1,041
Derivative financial instruments | 123 | 123 | 1,041 | 1,041
Financial liabilities measured at authorized cost: | 4,121,454 | 4,122,219 | 4,064,866 | 4,069,781
Due to banks and financial institutions | 65,860 | 68,487 | 569,994 | 576,316
Due to customers | 3,537,972 | 3,543,291 | 3,162,657 | 3,166,908
due to individuals - | 2,187,936 | 2,187,936 | 1,912,137 | 1,912,137
due to private companies - | 1,067,440 | 1,072,759 | 965,352 | 969,103
other - | 282,596 | 282,596 | 285,168 | 285,668
Special and lending funds | 23,037 | 23,037 | 15,718 | 15,718
Debt securities in issue | 448,159 | 448,159 | 276,480 | 276,480
Other financial liabilities | 46,426 | 39,245 | 40,017 | 34,359
TOTAL FINANCIAL LIABILITIES | 4,121,577 | 4,122,342 | 4,065,907 | 4,070,822

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
69
FINANCIAL RISK MANAGEMENT (CONTINUED)
5. THE RISK INHERENT IN INSURANCE ACTIVITIES
The Bank’s subsidiary GD UAB SB Draudimas (hereinafter - the Company) is engaged in life insurance business.
Insurance risk
An insurance risk is a loss risk, or a risk associated with adverse changes in the value of insurance obligations, which are caused by
improper pricing and provisioning assumptions. Based on the insurance contract, the Company assumes the protection of a person's
financial interests for the insurance premium in the event of insured events, therefore, there is a risk of incurring losses due to improper
assessment of the assumed insurance risk, calculated insurance premiums, which may not be sufficient to cover the actual insurance
benefits and expenses, in case of insurance risk assumed by the Company.
The Company assumes the risks of mortality, morbidity, survival, mortality and injuries due to accidents, termination, expenses,
catastrophes.
The risks of mortality, morbidity, injuries are due to optimistic assumptions about future mortality, morbidity, and frequency of injuries,
used in the calculations of insurance premiums, which would lead to the fact that future insurance premiums will be insufficient to cover
future benefits in case of death, illness, injury. The increase in the risk of mortality, morbidity can be influenced by epidemics (AIDS,
SARS), pandemics, lifestyle changes - a change in the habits of eating, smoking, moving. The risk of survival is due to longer life
expectancy than planned. This increase is due to the development of medical science, the improvement of the health care system, the
growing standard of living. The increase in the risk of injury can be influenced by non-compliance with occupational safety in workplaces,
the use of outdated technologies, increasing accident rates.
The Company manages the assumed insurance risks by assessing the state of health of the insured person, life habits, history of the
state of family health. The company has a multi-level risk assessment system, depending on the size of the risks assumed. This system
ensures that the insurance premium paid by the policyholder corresponds to the insured person's health.
Concentration of risk is measured by the insurance amount of the accepted risks:

Risk | 2024 | 2024 (%) | 2023 | 2023 (%)
Death | 545,553 | 0.27 | 545,586 | 0.27
Critical illness | 368,154 | 0.17 | 341,672 | 0.17
Death due to accident | 286,798 | 0.14 | 299,249 | 0.15
Trauma | 880,049 | 0.42 | 822,483 | 0.41
Total | 2,080,554 | 100 | 2,008,990 | 100

The Company manages these risks through its underwriting strategy and reinsurance arrangements.
The underwriting strategy is intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of
insured benefits.
The Company follows the principles of conservatism and prudence to settle the price for insurance risk therefore the increase in loss rate
of any insurance risk would not impact the result of the Group significantly.
Insurance risk sensitivity analysis
Sensitivity analysis is carried out by changing the corresponding assumption with the indicated value, leaving the sizes of other variables
unchanged. The reinsurance effect on the performed sensitivity analysis is immaterial.
The Company's sensitivity to changes in variables that have a significant impact on December 31, 2024:

In thousand EUR | Change in variables | Change Contractual | service margin Change in Profit or loss | Change in Equity
Mortality rates | +10% | (1,395) | (827) | 827
Mortality rates | -10% | 1,324 | 756 | (756)
Disability/Morbidity | +10% | (1,714) | (689) | 689
Disability/Morbidity | -10% | 1,717 | 690 | (690)
Lapse rates | +10% | (4,286) | (530) | 530
Lapse rates | -10% | 5,416 | 727 | (727)
Expenses | +10% | (2,751) | (1,303) | 1,303
Expenses | -10% | 2,781 | 1,272 | (1,272)

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
70
FINANCIAL RISK MANAGEMENT (CONTINUED)
The Company's sensitivity to changes in variables that have a significant impact on 31 December 2023:

In thousand EUR | Change in variables | Change Contractual | service margin Change in Profit or loss | Change in Equity
Mortality rates | +10% | (1,961) | (162) | 162
Mortality rates | -10% | 1,849 | 160 | (160)
Disability/Morbidity | +10% | (1,830) | (207) | 207
Disability/Morbidity | -10% | 1,831 | 207 | (207)
Lapse rates | +10% | (2,723) | (59) | 59
Lapse rates | -10% | 3,085 | 60 | (60)
Expenses | +10% | (3,120) | (695) | 695
Expenses | -10% | 3,130 | 684 | (684)

6. OPERATIONAL RISK
Operational risk is the risk of experiencing losses due to improper or unimplemented internal control processes, employee errors and/or
illegal actions, disruptions in information system operations, or the influence of external events. Operational risk, unlike other types of
risks (credit, market, liquidity), is not intentionally assumed with the expectation of gaining benefits; it arises naturally in the course of
the Bank's activities.
In 2024, the Bank focused on strengthening the operational and reputational risk culture across the entire Bank Group. At the
beginning of the year, the operational risk management e-learning modules were updated for all Group companies.
A significant emphasis was also placed on improving the management processes for outsourced services. These processes were
extended to all Group companies, and the process was updated in accordance with the requirements for ICT services set out in the
Digital Operational Resilience Act (DORA) for the financial sector.
Business continuity management remains one of the Bank's key areas. In 2024, a Comprehensive business continuity test was
successfully conducted, and no significant shortcomings in ensuring business continuity were identified.
To enhance resilience and ensure operational stability, the Bank will continue to improve and comprehensively ensure business
continuity, management of critical outsourced services, and the strengthening of operational and reputational risk culture across the
entire Group in the coming year.
7. ICT RISK
Information and communication technology (ICT) risk means any reasonably identifiable circumstance in relation to the use of network
and information systems which, if materialized, may compromise the security of the network and information systems, of any
technology dependent tool or process, of operations and processes, or of the provision of services by producing adverse effects in the
digital or physical environment.
Main goal of Bank’s ICT risk management – to assess probability of possible losses, balance risk and investments to ICT risk
management, to detect and manage weak points early, ensure effectiveness of ICT risk management measures (in line with appetite of
ICT risk of Bank’s group and legal requirements) and permanent improvement of it, provide timely information to management of
Bank’s group. ICT risk management goal is accomplished by employing risk management and control system, which include
implementation of ICT risk management functions, processes and management measures, monitoring system of ICT risk management
indicators and set limits, also ICT risk identification, monitoring and risk management internal control. Risk management and control
system is permanently improved according to best practices of the world and experience gained while implementing and exercising
monitoring of this system.
Digital technologies not only increase efficiency of operational processes and improve experience of users of financial services but also
contribute to increase in ICT risk therefore the Bank reacting to changes in digital environment and trends improves and develops
process and systems continuously ensuring Bank’s digital resilience towards cyber threats and ICT disorders. Priority is given to
organizational and technical ICT and information security including cyber security risk management measures (preventive, detective
and corrective) installation and reinforcement. Effectiveness of these measures is regularly reviewed by organizing tests of operational
continuity of critical systems, cyber resilience tests, performing other reviews, looking for high availability, safety and continuous
improvement of data handled and systems used.
ICT risks arise from vulnerabilities in networks and systems that can affect the security and stability of operations. The Group continuously
strengthens its cyber resilience, invests in preventive and corrective security measures, carries out regular testing and assesses the
robustness of systems. The Digital Operational Resilience Act (DORA) strategy implemented in 2024 continued to improve the availability
of systems, the continuous monitoring of the operational and security status of systems and the response to security threats.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
71
.FINANCIAL RISK MANAGEMENT (CONTINUED)
8. COMPLIANCE RISK
Compliance Risk – the risk that the Bank’s activities or inaction may fail to comply with the laws governing the Bank’s operations, other
applicable legal acts, and/or the guidelines and positions of the Bank of Lithuania and/or other supervisory authorities, as well as internal
regulations and conduct standards. Such non-compliance may result in enforcement measures, financial losses, or reputational and
credibility damage to the Bank. The Bank ensures compliance oversight and aims to prevent legal violations that could harm the interests
of the Bank and its clients, damage the Bank’s reputation, result in fines or other enforcement actions, and lead to financial or other
losses for the Bank.
The scope of compliance functions within the Bank is determined based on the scale of operations, the complexity of activities, the nature
of transactions conducted, and their associated risk levels. The compliance function conducts an annual compliance risk assessment
using a risk-based approach and informs the Bank’s management about identified risks and corresponding mitigation measures.
In 2024, the compliance function continued to play an active role in the areas of anti-money laundering (AML) and counter-terrorist
financing (CTF), sanctions screening, data protection, financial markets regulation, anti-corruption, and market abuse prevention, among
others. Particular focus was placed on strengthening the compliance control function and implementing a training program to ensure
adherence to compliance requirements across various areas.
Within the structure of the Legal, Compliance, and Prevention Division, the compliance function is divided into two departments: the
Compliance Department and the Anti-Money Laundering Compliance Department. The Compliance Department performs second-line
(compliance assurance) functions in the areas of general regulatory compliance and investment services compliance. The Anti-Money
Laundering Compliance Department performs second-line (compliance assurance) functions in the areas of AML/CTF and the
implementation of international sanctions areas.
Compliance risk arises if the Group's activities do not comply with legal or regulatory requirements. To mitigate this risk, the Group carries
out ongoing supervision, assessments and training of its employees, and ensures the prevention of money laundering and terrorist
financing and compliance with international sanctions.
9. MODEL RISK
The Bank defines model risk as the risk to incur a financial loss or to make incorrect business decisions, publish false reporting
disclosures because of the usage of models. Model risk management is regulated by model risk policy which is regularly reviewed and
enhanced. Model risk is managed within the Bank using risk-based approach - the Bank maintains a model inventory and performs
assessment of model’s importance based on which independent validation of the selected models is prioritized. Acceptable level of
model risk is defined in risk appetite statement. Use of unsatisfactory models is not tolerated in the Bank, timely remediation of
identified deficiencies is ensured.
Model risk can lead to incorrect decisions or financial losses due to inappropriate application of models. The Group systematically
assesses the robustness of its models using risk-based methodologies and independent verification procedures.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
72
FINANCIAL RISK MANAGEMENT (CONTINUED)
10. ESG RISK
ESG (Environmental, social and governance) risks are the risks of any negative financial impact on the Bank stemming from the current
or prospective impacts of ESG factors on its counterparties or invested assets. The Environmental risk is further mainly defined as
Climate-related and environmental risk, consisting of physical and transition risk:
• Physical risk, which is the risks of any negative financial impact on the institution stemming from the current or prospective impacts of
the physical effects of environmental factors on its counterparties or invested assets.
• Transition risk, which is the risks of any negative financial impact on the institution stemming from the current or prospective impacts of
the transition to an environmentally sustainable economy on its counterparties or invested assets. Detailed information on ESG risk and
its management in the Group is provided in Sustainability Report.
11. STRESS TESTS
The Group develops test scenarios and assesses the solvency position under the identified stress scenarios, taking into account possible
internal and external environmental changes, historical data, market forecasts and other relevant criteria. The results of the testing shall
be analyzed, documented and used for risk and strategy review as well as business plan development.
Stress testing is an integral part of the Bank's Internal Capital Adequacy Assessment Process (ICAAP), covering risks identified as
material. It assesses whether the Group's capital would be sufficient to absorb potential losses in the event of a deterioration in its financial
condition. In accordance with supervisory requirements, all risks are tested once a year.
The Group also employs the Own Risk and Solvency Assessment (ORSA) process as part of its risk management system. This process
determines the projected solvency position of the Company, as well as the amount of own funds required to ensure that overall solvency
needs are met throughout the planning period. It takes into account the nature, scale, and complexity of the risks inherent to the business.
The ORSA process begins with business planning. Based on the objectives set out in the Company’s business plan, financial
performance, and projected asset and insurance liability volumes, a forward-looking solvency capital assessment is conducted.
Additionally, adverse scenario testing is performed, considering potential internal and external environmental changes, historical data,
market forecasts, and other relevant factors for the Company, to evaluate solvency under predefined stress test.
Ad hoc stress tests for separate risks are performed in case there is a need to understand the possible impacts of underlying factors.
12. CAPITAL MANAGEMENT
The capital of the Bank and its subsidiaries in the prudential scope of calculation (Financial Group, please see Note 31) is calculated and
allocated for the risk coverage following the Capital requirements regulation and directive – CRR/CRD IV. The Bank’s objectives when
managing own funds are as follows:
• to comply with the own funds requirements set by the European Parliament and the Council of the European Union as well as
the internal target capital requirements;
• to safeguard the Bank’s and the Financial Group’s ability to continue as a going concern so that it can provide returns for
shareholders and benefits for other stakeholders;
• to support the development of the Group’s business with the help of the strong capital base.
Information regarding capital adequacy is submitted to the supervising authority quarterly in accordance with the CRR/CRD IV
requirements.
During the years ended 31 December 2024 and 31 December 2023, the Bank and the Financial Group complied with capital requirements
to which it was subject.
According to Solvency II directive Bank’s subsidiary SB Draudimas GD UAB has to ensure that all the time its own funds must be higher
than Solvency Capital Requirement and Minimum Capital Requirement, which enables the company to cover potential losses and
reasonably assure policyholders that payables will be paid out. Solvency II ratio is being calculated and reported quarterly to supervisory
authority, the Bank of Lithuania. During the years ended 31 December 2024 and 31 December 2023, Company complied with the
Solvency II ratio requirements to which it was subject.
Capital requirement applicable also to UAB "SB Assets Management" has been approved by the Bank of Lithuania. According to this
requirement, the capital ratio cannot be lower than 1.4.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
73
12. CAPITAL MANAGEMENT (CONTINUED)
Other companies comprising the Group are not subject to supervisory requirements on a company level. General principles stipulated in
the Republic of Lithuania Law on Limited Liability Companies apply – i.e. share capital of the company cannot be less than EUR 2.5
thousand, it the company’s shareholders’ equity becomes less than ½ of the share capital in the charter of the company, the company
has to remediate the situation over the prescribed period of time.
During the years ended 31 December 2024 and 31 December 2023, the Group and the Bank complied with prudential requirements to
which it was subject .
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Impairment losses on loans and finance lease receivables. The Bank and the Group review their loan and finance lease portfolios to
assess impairment at least on a quarterly basis. In determining the impairment loss amount, the Group makes multiple judgements and
estimates, including forward looking assumptions. When making expected credit loss estimate, the Bank and the Group analyze financial
information received from a client and client’s performance in servicing its loans. The methodology and assumptions used (the credit
rating of the client; usage of low credit risk exemption for the loans that have 'standard' internal ratings; the recoverability ratio applied;
discounted market value of pledged assets) for assessment of client’s ability to service debt and estimating both the amount and timing
of future cash flows are reviewed regularly to reduce any difference between loss estimates and actual loss experience. However due to
inherent limitations of the methodology, the calculated impairment loss as at 31 December 2024 may be inadequate to reflect the losses
of the loan portfolio. Please see section 1.3.b of Financial risk management disclosure for the impairment loss sensitivity analysis.
Impairment losses on investments in subsidiaries. The Bank tests investments in its subsidiaries for impairment when impairment
indicators are identified. The Bank establishes recoverable amount of investments in subsidiary companies based on discounted future
estimated net cash flows to be earned by a subsidiary. Future net cash flows to be earned by funds management and real estate
development subsidiaries are based on estimated inflow from management and sales of financial and other assets held by these
subsidiaries less estimated cash outflow related to management and development costs. Future net cash flows from subsidiary involved
in leasing operations are estimated based on future expected interest income to be earned on lease portfolio less cash outflows related
to financing activities and administration costs. Discount rates are based on current cost of capital used for investments in these
subsidiaries. The Group’s management applies judgement in estimating cash flows and discount rates used in impairment testing.
Impairment of goodwill. Goodwill is tested for impairment annually. In order to determine if the value of goodwill has been impaired, the
cash-generating unit to which goodwill has been allocated is valued using present value techniques, which are further described in Note
17. The Group’s management applies judgement in estimating cash flows and discount rates used in impairment testing, changes in
these judgements and estimates can significantly affect the assessed value of goodwill. An increase of 2% in the discount rate used for
impairment testing in 2023 and 2024, assuming all other factors remain constant, would not result in any additional impairment of
goodwill..
Liabilities related to insurance activities. The value of liabilities related to insurance activities is determined by making assumptions and
estimates that have impact on the reported amounts. These estimates and assumptions are regularly reviewed and based on historic
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Please
see section 5. of Financial risk management disclosure for the liabilities related to insurance activities sensitivity analysis.
Fair value measurements for Level 3 assets or liabilities. Measurement of the fair value of assets or liabilities assigned to Level 3 requires
usage of inputs that are not based on observable market data (unobservable inputs). The Group’s management applies judgement in
choosing appropriate methodology, estimating cash flows, discount rates and other parameters used in such valuations. Please see
section 4. of Financial risk management disclosure for the fair value approaches used.
Taxes. The tax authorities may at any time inspect the books and records within 5 years subsequent to the reported tax year and may
impose additional tax assessments and penalties. The Bank's management is not aware of any circumstances which may give rise to a
potential material liability in this respect. The deferred tax assets recognized at 31 December 2024 have been based on future profitability
assumptions of the Bank over a five-year horizon. In the event of changes to these profitability assumptions, the tax assets recognized
may be adjusted.
Non-consolidated entities. In 2024, the Bank established a subsidiary, UAB "SB modernizavimo fondas 2" in which it holds a 100% share.
The operating principles of this entity do not significantly differ from those of UAB " SB modernizavimo fondas" a subsidiary established
by the Bank in 2022, where the Bank also holds a 100% share. Both of these Group entities (hereinafter – the Funds) are not consolidated
in the Group consolidated Financial Statements. The Bank’s management has determined that due to the restrictions imposed on the
Funds' activities under the Cooperation Agreement concluded between the Bank and the European Investment Bank (hereinafter – EIB),
as well as agreements with investors investing in the Funds' activities, the Bank does not receive variable returns in its capacity as a
shareholder of the Funds. The Bank acts as an agent for the EIB and other investors rather than as a principal in the operations of the
Funds, and therefore, it is not required to consolidate these subsidiaries. Further information on activities related to the Funds and
transactions with UAB " SB modernizavimo fondas" and UAB "SB modernizavimo fondas 2" is provided in Notes 13, 16, and 30.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
74
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Business combinations. During year 2023 Group companies have acquired two separate business units (see Note 16). Both business
units were acquired during single transaction. Group management has applied judgement in defining if business units acquired meet
definition of business as described in IFRS 3 also if from Group perspective separate business units acquisition should be accounted as
one transaction. Significant inputs and assumptions were applied to perform purchase price allocation and calculate fair value of net
assets acquired during business combination. Changes in these judgements and estimates can significantly affect amounts accounted
because of this business combination. Decrease of discount rate used in fair value assessment of assets and liabilities acquired through
business combination by 0.5% (other factors held constant) would decrease goodwill accounted from the business combination in 2023
by EUR 2,131 thousand.
SEGMENT INFORMATION
In relation to adjusted strategy of the Bank, business model and strategic decisions are divided into three business lines – corporate,
private and investment. Due to such reasons Group’s segment information is provided in different form if compared to previous periods
starting from 1 January 2024. Comparable segmentation information for 2023 is also provided using new form.
A summary of major indicators for the main business segments of the Group included in the Statement of financial position as at 31
December 2024 and in the Statement of comprehensive income for 2024 period then ended is presented in the table below.

|  |  | 2024-12-31 |
|  |  | Segmentation by profit centers |
| Corporate | Private | Investment | Total
Net interest income | 90,664 | 54,065 | 15,479 | 160,209
Net fee and commission income | 13,742 | 9,373 | 5,965 | 29,080
Net gain from insurance activities | - | 1,078 | 4,572 | 5,650
Other income | 2,912 | 1,416 | 3,699 | 8,027
Salaries and related expenses | (21,651) | (20,305) | (7,551) | (49,507)
Other expenses | (16,911) | (22,842) | (6,364) | (46,117)
Impairment expenses | (5,092) | (5,926) | 122 | (10,896)
Profit before income tax | 63,665 | 16,859 | 15,922 | 96,446
Income tax |  |  |  | (17,659)
Net profit center result |  |  |  | 78,786
Total segment assets | 2,113,076 | 1,314,491 | 1,495,053 | 4,922,619

A summary of major indicators (restated) for the main business segments of the Group included in the Statement of financial position as
at 31 December 2023 and in the Statement of comprehensive income for 2023 period then ended is presented in the table below.

|  |  | 2023-12-31 |
|  |  | Segmentation by profit centers |
| Corporate | Private | Investment | Total
Net interest income | 66,435 | 38,011 | 52,407 | 156,853
Net fee and commission income | 11,799 | 5,105 | 3,348 | 20,251
Net gain from insurance activities | - | (8) | (1,464) | (1,472)
Other income | 2,733 | 2,830 | 2,614 | 8,177
Salaries and related expenses | (16,218) | (15,680) | (4,328) | (36,226)
Other expenses | (12,010) | (19,645) | (4,955) | (36,610)
Impairment expenses | (6,610) | (8,614) | (9) | (15,232)
Profit before income tax | 46,129 | 2,000 | 47,613 | 95,742
Income tax |  |  |  | (20,367)
Net profit center result |  |  |  | 75,375
Total segment assets | 1,782,081 | 1,089,423 | 1,937,826 | 4,809,331

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
75
NOTE 1
NET INTEREST INCOME

|  | 2024 |  | 2023
Interest revenue calculated using the effective interest method (on financial | Group | Bank | Group | Bank
assets at amortized cost and fair value through other comprehensive income): | 243,478 | 227,237 | 195,726 | 181,049
on loans to other banks and financial institutions and placements with credit institutions | 21,001 | 35,202 | 13,022 | 22,124
on loans to customers | 208,163 | 177,861 | 173,748 | 150,290
on debt securities at amortized cost | 13,933 | 13,793 | 8,265 | 8,080
on debt securities at fair value through other comprehensive income | 381 | 381 | 691 | 555
Other similar income: | 26,735 | 24,953 | 21,242 | 21,070
on debt securities at fair value through profit or loss | 3,072 | 1,292 | 1,887 | 1,741
on loans at fair value through profit or loss | - | - | 374 | 374
on finance leases | 22,829 | 22,827 | 18,981 | 18,955
other interest income | 834 | 834 | - | -
Total interest income | 270,213 | 252,190 | 216,968 | 202,119
Interest expense: |  |  |  |
on financial liabilities designated at fair value through profit or loss | - | - | - | -
on financial liabilities measured at authorized cost | (109,985) | (110,138) | (60,083) | (60,172)
on other liabilities | (19) | (8) | (32) | (17)
| , | , |  |
Total interest expense | (110,004) | (110,146) | (60,115) | (60,189)
| , | , |  |
Net interest income | 160,209 | 142,044 | 156,853 | 141,930

NOTE 2
NET FEE AND COMMISSION INCOME

|  | 2024 |  | 2023
Fee and commission income: | Group | Bank | Group | Bank
for administration of loans of third parties | 7,526 | 7,526 | 5,249 | 5,249
for settlement services | 5,144 | 5,146 | 5,428 | 5,443
for cash operations | 4,097 | 4,097 | 4,750 | 4,750
for account administration | 6,545 | 6,545 | 6,271 | 6,271
for guarantees, letters of credit, documentary collection | 1,072 | 1,072 | 888 | 888
for collection of utility and similar payments | 254 | 254 | 259 | 259
for services related to securities | 4,896 | 4,947 | 3,978 | 3,980
for services related to pension and investment funds management | 7,548 | - | 795 | 290
other fee and commission income | 939 | 3,000 | 992 | 1,838
Total fee and commission income | 38,021 | 32,587 | 28,610 | 28,968
Fee and commission expense: |  |  |  |
for payment cards | (5,435) | (5,434) | (5,126) | (5,126)
for cash operations | (632) | (632) | (838) | (838)
for correspondent bank and payment system fees | (619) | (483) | (583) | (458)
for services of financial data vendors | - | - | (304) | (304)
for services related to securities | (1,027) | (1,027) | (888) | (938)
for services related to pension and investment funds management | (65) | - | (49) | -
other fee and commission expenses | (1,163) | (468) | (570) | (450)
Total fee and commission expense | (8,941) | (8,044) | (8,358) | (8,114)
Net fee and commission income | 29,080 | 24,543 | 20,252 | 20,854

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
76
NOTE 3
NET GAIN FROM TRADING ACTIVITIES

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Net gain (losses) from operations with securities | 13,708 | 551 | 4,471 | (1,738)
Net gain from foreign exchange and related derivatives | 421 | 404 | 8,574 | 8,567
Net gain (loss) from other derivatives | 5,293 | 5,293 | (1,097) | (1,097)
Total net gain from trading activities | 19,422 | 6,248 | 11,948 | 5,732

NET GAIN FROM OPERATIONS WITH SECURITIES

|  | 2024 |  | 2023
Securities in the trading book: | Group | Bank | Group | Bank
Realized gain (loss) on equity securities | 6,152 | (67) | 161 | (135)
Unrealized gain (loss) on equity securities | 5,170 | 7 | 5,481 | 16
Realized gain on debt securities | 880 | 290 | 148 | 98
Unrealized gain (loss) on debt securities | 1,026 | 31 | (1,229) | (1,628)
Dividend and other income from equity securities in the trading book | 2 | 3 | 2 | 3
Net gain (loss) on securities in the trading book | 13,230 | 264 | 4,563 | (1,646)
| - | - |  |
Investment securities: | - |  |  |
Realized gain (loss) on investment equities at fair value through profit or loss | 253 | 253 | 158 | 158
Unrealized gain on investment equities at fair value through profit or loss | 23 | 23 | (249) | (249)
Realized gain on debt securities at fair value through other comprehensive income | - | - | (13) | (13)
Realized gain on debt securities at amortized cost | - | - | - | -
Dividend and other income from investment equities | 202 | 11 | 12 | 12
Net gain on investment securities | 478 | 287 | (92) | (92)
Total | 13,708 | 551 | 4,471 | (1,738)

Bank's internal policy allows frequent, but strictly limited in scale and infrequent but larger scale sales of debt securities at amortized cost.
NET GAIN FROM FOREIGN EXCHANGE AND RELATED DERIVATIVES

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Net gain from foreign exchange | 421 | 404 | 8,574 | 8,567
Net gain (loss) from derivatives related with foreign exchange | 5,293 | 5,293 | (1,097) | (1,097)
Total | 5,714 | 5,697 | 7,477 | 7,470

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
77
NOTE 4
OTHER OPERATING EXPENSES

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Rent of buildings and premises | (411) | (394) | (300) | (304)
Utility services for buildings and premises | (1,294) | (1,274) | (1,292) | (1,252)
Other expenses related to buildings and premises | (812) | (809) | (781) | (781)
Transportation expenses | (447) | (366) | (391) | (309)
Legal costs | (117) | (117) | (703) | (703)
Personnel and training expenses | (2,047) | (1,995) | (1,414) | (1,344)
IT and communication expenses | (16,697) | (14,864) | (11,987) | (10,983)
Marketing and charity expenses | (6,434) | (4,086) | (5,331) | (2,524)
Service organization expenses | (4,761) | (4,389) | (4,099) | (3,611)
Non-income taxes, fines | (2,862) | (2,220) | (2,404) | (1,803)
Costs incurred due to debt recovery | (862) | (576) | (923) | (675)
Other expenses | (1,367) | (1,312) | (1,622) | (1,268)
Total | (38,111) | (32,402) | (31,247) | (25,557)

NOTE 5
REVENUE AND EXPENSES RELATED TO INSURANCE ACTIVITIES
Bank’s subsidiary SB Draudimas GD UAB (hereinafter - insurance company) is engaged in life insurance business. Revenue and
expenses from main activities of this company are presented in the tables below.
REVENUE RELATED TO INSURANCE ACTIVITIES

|  | 2024 | 2023
Amounts relating to changes in LFRC |  | Group | Group
- Expected benefits incurred |  | 3,017 | 1,661
- Expected expenses incurred |  | 3,390 | 1,766
- Change in the risk adjustment |  | 268 | (236)
- CSM recognized |  | 2,780 | 835
Recovery of acquisition cash flows |  | 996 | 919
Other insurance related revenue |  | 2,639 | 739
| Total | 13,090 | 5,684

EXPENSES RELATED TO INSURANCE ACTIVITIES

|  | 2024 |  | 2023
Expenses related to insurance activities: | Group | Bank | Group | Bank
Incurred claims expenses | (2 472) | - | (2,186) | -
Losses on onerous contracts and reversal of those losses | (354) | - | (927) | -
Insurance acquisition costs | (435) | - | (519) | -
Other expenses | (3 652) | - | (1,878) | -
Interest accrued to insurance contracts | (2 762) | - | (1,018) | -
Change in financial assumptions through P&L | (10 092) | - | (4,972) | -
Changes related to effect of discount rates applied on initial recognition | 32 | - | 122 | -
Change in financial liabilities | 11 | - | (35) | -
Commissions for investment contracts | (1 023) | - | (1,100) | -
Costs of insurance policies | - | - | (1) | -
Total | (20 747) | - | (12,514) | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
78
NOTE 5
REVENUE AND EXPENSES RELATED TO INSURANCE ACTIVITIES (CONTINUED)
RESULT FROM REINSURANCE CONTRACTS HELD

| 2024 | 2023
Amounts relating to changes in LFRC | Group | Group
- Expected recovery of claims and other expenses | (133) | (196)
- Change in the risk adjustment | (2) | (5)
- CSM recognized | (7) | 26
Allocation of reinsurer premium | (142) | (175)
Amounts recovered for claims and other expenses | 41 | 95
Incurred directly attributable expenses | - | -
Changes that relate to past service - recoverable claims and other expenses | 17 | (68)
Amounts recoverable from reinsurer and incurred expenses | 58 | 27
Total | (84) | (148)

INSURANCE FINANCE RESULT

| 2024 | 2023
| Group | Group
Interest accrued to insurance contracts | (2,762) | (1,018)
Change in financial assumptions through P&L | (10,092) | (4,972)
Effect of unlocking CSM at locked-in rates and FCF at current rates | 32 | 122
Change in assets covering insurance contract liabilities | 13,616 | 6,027
Insurance finance result | 794 | 159

| 2024 | 2023
| Group | Group
Interest accrued to insurance contracts | 1 | 1
Change in financial assumptions through P&L | - | -
Effect of unlocking CSM at locked-in rates and FCF at current rates | - | -
Change in assets covering reinsurance contract liabilities |  |
Reinsurance finance result | 1 | 1

Expenses related to insurance activities

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Part of the change of insurance contract liabilities that covers the result of investment of assets under unit-linked contracts* | (13,307) | - | (7,738) | -
Other changes of insurance contract liabilities and other expenses related to insurance activities | (7,440) | - | (4,776) | -
Total expenses related to insurance activities | (20,747) | - | (12,514) | -

* The investment result of the insurance company assets under unit-linked contracts is included in the following income statement lines:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Interest and similar income | 1,602 | - | 136 | -
Net gain (loss) from operations with securities | 11,705 | - | 7,602 | -
Net gain (loss) from foreign exchange | - | - | - | -
Total | 13,307 | - | 7,738 | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
79
NOTE 6
OTHER INCOME
NET GAIN FROM DISPOSAL OF TANGIBLE ASSETS
In 2023 net gain on disposal of tangible assets (mostly real estate, accounted for as Property, plant and equipment, Investment property
or Inventories in the statement of financial position) at the Group amounted to EUR 593 thousand (Bank: net gain of EUR 141 thousand).
In 2023 net gain on disposal of tangible assets (mostly real estate, accounted for as Property, plant and equipment, Investment property
or Inventories in the statement of financial position) at the Group amounted to EUR 864 thousand (Bank: net gain of EUR 97 thousand).
NET GAIN FROM DERECOGNITION OF FINANCIAL ASSETS
Net gain from derecognition of financial assets (for the year ended 31 December 2024: Group EUR 544 thousand, Bank EUR 778
thousand; for the year ended 31 December 2023: Group EUR 809 thousand, Bank EUR 532 thousand) is based on the difference of the
carrying value of loans to customers (accounted at amortized cost) at the moment of sale and the proceeds from sale. Loans to customers
facing credit difficulties sold as part of the Group's problem loan recovery activities comprise the major part of loans sold.
Net gain from sale of debt securities at amortized cost as well as from other securities in included in trading income (Note 3).
OTHER OPERATING INCOME

|  | 2024 |  | 2023
Income from rent of investment property and other income from investment | Group | Bank | Group | Bank
property | 108 | - | 171 | -
Income from rent of other assets | 672 | 819 | 92 | 286
Net gain (loss) from modification of financial assets | (40) | - | (11) | (20)
Other income | 35 | 565 | (211) | 1,456
Total | 775 | 1,384 | 41 | 1,722

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
80
NOTE 7
IMPAIRMENT LOSSES

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Impairment losses on loans: |  |  |  |
Impairment charge for the year, net (see Note 13) | 11,575 | 5,187 | 13,198 | 5,745
Recoveries of loans previously written off | (176) | (161) | (210) | (208)
Total impairment losses (reversals) on loans | 11,399 | 5,026 | 12,988 | 5,537
Impairment losses on finance lease receivables: |  |  |  |
Impairment charge for the year, net (see Note 14) | (82) | (81) | 2,273 | 2,274
Recovered previously written-off finance lease receivables | - | - | - | -
Total impairment losses (reversals) on finance lease receivables | (82) | (81) | 2,273 | 2,274
Total impairment losses (reversals) on loans and finance lease | 11,317 | 4,945 | 15,261 | 7,811
receivables |  |  |  |
Impairment losses on financial assets other than loans and finance |  |  |  |
lease receivables: |  |  |  |
Due from other banks: impairment charge, net (see Note 10) | (42) | (42) | 8 | 8
Debt securities: impairment charge, net (see Note 15) | (150) | (148) | (369) | (378)
Other financial assets: impairment charge, net (see Note 19) | (120) | (120) | 618 | 618
Total impairment losses on financial assets other than loans and finance lease receivables: | (312) | (310) | 257 | 248
Non-financial assets: |  |  |  |
Goodwill: impairment charge | - | - | - | -
Non-financial assets other than goodwill: impairment charge | - | - | - | -
Non-financial assets other than goodwill: reversal of impairment charge | - | - | - | -
Total impairment losses on non-financial assets: | - | - | - | -
Provisions (see Note 25): |  |  |  |
Provisions for pending legal issues: charge | - | - | - | -
Provisions for commitments and guarantees given: charge / (reversal) | (109) | - | (286) | -
Total provisions: | (109) | - | (286) | -
Total impairment losses on other assets | (421) | (310) | (29) | 248
Impairment losses on subsidiaries (see Note 16): |  |  |  |
Investments in subsidiaries: impairment charge | - | - | - | -
Investments in subsidiaries: reversal of impairment charge | - | - | - | -
Total impairment losses on subsidiaries | - | - | - | -
Total | 10,896 | 4,635 | 15,232 | 8,059

The Bank and the Group held no significant direct loan positions in Russia, Belarus and Ukraine. However, in 2022, the Bank carried out
an additional customer analysis due to geopolitical risks and the indirect impact of the Russia/Ukraine war. Since then financial position
of part of clients improved and risks related to geopolitical circumstances were managed therefore carrying value of loans still in Watch
List decreased to EUR 406 thousand as at 31 December 2023. Due to NPE status removal or partial repayment of loans there were no
loans included in NPE list as at 31 December. 31 December 2024, the positions that were included in the Watch List decreased to EUR
8 thousand, No new clients were added to Watchlist during year 2024 because of geopolitical situation. Of the impairment losses of EUR
390 thousand recognized, an impairment reversal for the full amount of the impairment charge was recognized at 31 December 2024.
Impairment losses on other non-financial assets other than goodwill include impairment of investment properties (Note 26), investments
classified as held for sale and other non-financial assets (Note 19).
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
81
NOTE 8
INCOME TAX

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Current tax | 17,403 | 16,078 | 19,662 | 18,608
Deferred taxes | 857 | 333 | 984 | 905
Deferred tax adjustment due to change in tax rate | - | - | - | -
Adjustment of previous year income tax | (601) | (601) | (279) | (279)
Total | 17,659 | 15,810 | 20,367 | 19,234

The tax on the Bank’s and the Group’s profit before tax differs from the theoretical amount that would arise using the basic tax rate as
follows:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Profit before income tax from continuing operations | 96,447 | 95,096 | 95,742 | 94,854
Tax calculated at a tax rate of 15% | 14,467 | 14,264 | 14,361 | 14,228
Tax calculated at a tax rate of 5% | 4,755 | 4,755 | 4,346 | 4,346
Income not subject to tax | (10,506) | (1,410) | (2,866) | (300)
Expenses not deductible for tax purposes | 10,905 | 163 | 4,971 | 1,405
Additional deduction of film, charity expenses | (1,361) | (1,361) | (166) | (166)
Adjustments of previous year income tax | (601) | (601) | (279) | (279)
Unrecognized deferred tax assets for recognized tax losses | - | - | - | -
Income tax charge | 17,659 | 15,810 | 20,367 | 19,234

Deferred tax assets

|  |  |  |  |  |  | Group |  |  |  | Bank
At 1 January 2023 | 4,326 | 208 | 902 | 7 | - | 215 | 5,658 | 900 | 7 | 4,326 | 5,233
To be credited/(charged) to net profit | (776) | (2) | (126) | - | - | (7) | (911) | (125) | (3) | (776) | (904)
To be credited/ (charged) to other comprehensive income | (671) | - | - | - | 3,501 | - | 2,830 | - | - | (671) | (671)
At 31 December 2023 | 2,879 | 206 | 776 | 7 | 3,501 | 208 | 7,577 | 775 | 4 | 2,879 | 3,658
To be credited/(charged) to net profit | (979) | (118) | 380 | 33 | - | (208) | (892) | 615 | 31 | (979) | (333)
To be credited/ (charged) to other comprehensive income | (609) | - | - | - | - | - | (609) | - |  | (609) | (609)
At 31 December 2024 | 1,291 | 88 | 1,156 | 40 | 3,501 | - | 6,076 | 1,390 | 35 | 1,291 | 2,716

Revaluation of
financial instruments
and other assets
Impairment of
investment property
and inventories
Accruals
Right of use
Goodwill (see Note
16)
Carry forward
of
unused tax losses
Total
Accruals
Right of use
Revaluation of
financial instruments
and other assets
Total
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
82
NOTE 8
INCOME TAX (CONTINUED)
Deferred tax liabilities

Group | Funds management | Revaluation of financial |
|  | instruments and other | Total
| rights (see Note 16) | assets |
At 1 January 2023 | - | (1,463) | (1,463)
To be credited/(charged) to net profit | (4,574) | (88) | (4,662)
To be credited/ (charged) to other comprehensive income | - | - | -
At 31 December 2023 | (4,574) | (1,551) | (6,125)
To be credited/(charged) to net profit | 183 | (199) | (16)
To be credited/ (charged) to other comprehensive income | - | - | -
At 31 December 2024 | (4,391) | (1,750) | (6,141)

Taxable losses of the Group and the Bank are carried forward for indefinite term through the use of future taxable profits. Management
of the Bank has estimated that future taxable profits of the Bank and the Group will be sufficient to realize the accumulated tax losses.
Therefore deferred tax asset from the accumulated tax losses was recognized.
Projected terms of expected utilization of deferred tax assets, netted with projected payment of deferred tax liabilities, are presented in
the table below:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Up to 1 year | (65) | 2,168 | 1,225 | 3,227
2-5 years | - | 548 | 227 | 431
Total | (65) | 2,716 | 1,452 | 3,658

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities. In Group DTL and DTA not be offset due to differences in their origin. The following amounts are shown in the balance
sheet:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Deferred tax assets | 6,076 | 2,716 | 7,577 | 3,658
Deferred tax liabilities | (6,141) | - | (6,125) | -

NOTE 9
EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit for the period by the weighted average number of ordinary shares in
issue during the period. There were no potential ordinary shares at 31 December 2024 and 31 December 2023, therefore the Group had
no dilutive potential ordinary shares and diluted earnings per share are equal to basic earnings per share.
The number of shares in issue for the year ended 31 December 2024 was 662.997 and for the year ended 31 December 2023 was
662,997 thousand. Weighted average number of shares in issue for the year ended 31 December 2023 was 662.318 thousand (2023:
602,693 thousand).
Basic earnings per share
Group

| 2024 | 2023
Net profit from continuing operations attributable to equity holders | 78,787 | 75 375
Net profit (loss) from discontinued operations attributable to equity holders | - | -
Net profit attributable to equity holders | 78,787 | 75 375
Weighted average number of shares in issue during the period (thousand units) | 662 318 | 602 693
Basic earnings per share (EUR) | 0.12 | 0,13
Basic earnings per share (EUR) from continuing operations | 0.12 | 0,13
Basic earnings per share (EUR) from discontinued operations | - | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
83
NOTE 10
CASH AND CASH EQUIVALENTS

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Cash and other valuables | 79,537 | 79,184 | 71,689 | 71,579
Balances in bank correspondent accounts: |  |  |  |
Gross value | 267,311 | 258,891 | 608,719 | 600,299
Allowance for impairment | (6) | (4) | (44) | (44)
Total balances in bank correspondent accounts, net value | 267,305 | 258,887 | 608,675 | 600,255
Placements with Central Bank: |  |  |  |
Correspondent account with Central Bank | 28,106 | 28,106 | 40,519 | 40,519
Mandatory reserves in local currency, gross value | 20,190 | 20,190 | 30,618 | 30,618
Mandatory reserves in local currency, allowance for impairment | (2) | (2) | (2) | (2)
Total placements with Central Bank, net value | 48,294 | 48,294 | 71,135 | 71,135
Total | 395,136 | 386,365 | 751,499 | 742,969

The compulsory reserves held in the Bank of Lithuania are estimated on a monthly basis based on the value of indicated liabilities using
the established compulsory reserve rate. With effect from 1 January 2015, the compulsory reserve rate was set at 1%. The mandatory
reserves are held with the Bank of Lithuania in the form of current deposits. The Bank is free to use the funds held in the current account
with the Bank of Lithuania, the average monthly amount of which may be not less than the estimated compulsory reserves.
The balances in bank correspondent accounts and placements with Central Bank are classified as Stage 1 financial assets. Breakdown
of balances in bank correspondent accounts by credit rating is presented in the table below:
Rating *

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
From AA- to AA+ | 12,030 | 4,296 | 9,981 | 2,727
From A- to A+ | 9,096 | 8,458 | 27,051 | 25,890
From BBB- to BBB+ | - | - | 1,935 | 1,935
Lower than BBB- | 2 | 2 | 10 | 10
No external credit rating (Standard internal rating) | 109 | 109 | 209 | 209
No external rating (Substandard internal rating) | 47 | 1 | 332 | 327
Total | 21,284 | 12,866 | 39,518 | 31,098

* for local banks that are subsidiaries of foreign banks, credit rating of the parent institution is used in case no credit rating of the local
institution is available.
Reconciliation of allowance for impairment of cash and cash equivalents (including due from banks presented in Note 11) is presented
in the table below:

| Group | Bank
Allowance for impairment of cash equivalents and due from banks as of 1 January 2023: | 38 | 38
Change in allowance for impairment | 8 | 8
FX and other movements | - | -
Allowance for impairment of cash equivalents and due from banks as of 31 December 2023: | 46 | 46
Change in allowance for impairment | (38) | (40)
FX and other movements | - | -
Allowance for impairment of cash equivalents and due from banks as of 31 December 2024: | 8 | 6

As of 31 December 2024, balances in correspondent accounts in amount of EUR 585 thousand (as of 31 December 2023 - EUR 1,199
thousand) were pledged for derivatives contracts.
Liabilities from financing activities
The table below sets out movements in the Group’s liabilities from financing activities for each of the periods presented. The items of
these liabilities are those that are reported as financing activities in the statement of cash flows.

| Dividends | Debt | Lease | 2024 | Dividends | Debt | Lease | 2023
|  | securities in |  | Total |  | securities in | Total
| payable | issue | liabilities |  | payable | issue liabilities |
As at 1 January | 94 | 283,312 | 7,224 | 290,630 | 94 | 180,422 | 7,603 | 188,119
Dividends declared | 32,095 | - | - | 32,095 | 15,919 | - | - | 15,919
Issuance in cash | - | 375,000 | - | 375,000 | - | 100,000 | - | 100,000
Contract additions / terminations | - | (210,000) | 1,063 | (208,937) | - | - | 653 | 653
Payment in cash | (32,159) | - | (1,039) | (33,198) | (15,919) | - | (1,066) | (16,985)
Redemption in cash | - | - | - | - | - | - | - | -
Accrued interest | - | 13,166 | 41 | 13,207 | - | 5,795 | 34 | 5,829
Coupon payments in cash | - | (13,387) | - | (13,387) | - | (2,905) | - | (2,905)
As at of 31 December | 30 | 448,091 | 7,289 | 455,410 | 94 | 283,312 | 7,224 | 290,630

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
84
NOTE 10
CASH AND CASH EQUIVALENTS (CONTINUED)
The table below sets out movements in the Bank’s liabilities from financing activities for each of the periods presented. The items of these
liabilities are those that are reported as financing activities in the statement of cash flows.

| Dividends | Debt | Lease | 2024 | Dividends | Debt | Lease | 2023
|  | securities in |  | Total |  | securities in | Total
| payable | issue | liabilities |  | payable | issue liabilities |
As at 1 January | 94 | 283,312 | 6,393 | 289,799 | 94 | 180,422 | 7,328 | 187,844
Dividends declared | 32,095 | - | - | 32,095 | 15,919 | - | - | 15,919
Issuance in cash | - | 375,000 | - | 375,000 | - | 100,000 | - | 100,000
Contract additions / terminations | - | (210,000) | 2,063 | (207,937) | - | - | 559 | 559
Payment in cash | (32,159) | - | (2,038) | (34,197) | (15,919) | - | (1,524) | (17,443)
Redemption in cash | - | - | - | - | - | - | - | -
Accrued interest | - | 13,166 | 35 | 13,201 | - | 5,795 | 30 | 5,825
Coupon payments in cash | - | (13,387) | - | (13,387) | - | (2,905) | - | (2,905)
As at of 31 December | 30 | 448,091 | 6,453 | 454,574 | 94 | 283,312 | 6,393 | 289,799

NOTE 11
DUE FROM OTHER BANKS

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Pledged deposits | 2,520 | 2,520 | 2,520 | 2,520
Term deposits | 97 | 97 | 109 | 109
Loans | 504 | 504 | 384 | 384
Gross value | 3,121 | 3,121 | 3,013 | 3,013
Allowance for impairment | - | - | - | -
Net value | 3,121 | 3,121 | 3,013 | 3,013
Breakdown due from other banks by the maturity: |  |  |  |
Short-term (up to 1 year) | 3,031 | 3,031 | 2,922 | 2,922
Long-term (over 1 year) | 90 | 90 | 91 | 91
Total | 3,121 | 3,121 | 3,013 | 3,013

As of 31 December 2024 pledged deposits consisted of funds pledged for derivatives contracts. As of 31 December 2024, term deposits
amounting to EUR 90 thousand were pledged for the guarantees or letters of credit issued for the Bank’s clients. As of 31 December
2023, term deposits amounting to EUR 109 thousand were pledged for the guarantees or letters of credit issued for the Bank’s clients.
All amounts due from banks are classified as Stage 1 financial assets. Breakdown of balances due from banks by credit rating is presented
in the table below:
Rating *

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
From AA- to AA+ | 90 | 90 | 99 | 99
From A- to A+ | 2,870 | 2,870 | 2,787 | 2,787
From BBB- to BBB+ | 161 | 161 | 127 | 127
Total | 3,121 | 3,121 | 3,013 | 3,013

* for local banks that are subsidiaries of foreign banks, credit rating of the parent institution is used in case no credit rating of the local
institution.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
85
NOTE 12
FINANCIAL ASSETS AND LIABILITIES IN THE TRADING BOOK
Total balances of financial assets and liabilities in the trading book are presented in the table below:

|  | 2024 |  | 2023
Assets: | Group | Bank | Group | Bank
Derivatives: | 1,093 | 1,093 | 251 | 241
currency derivatives | 1,093 | 1.093 | 251 | 241
derivatives related to prices of financial instruments | - | - | - | -
Securities in the trading book | 235,110 | 13,543 | 207,677 | 20,402
Liabilities: |  |  |  |
Derivatives: | (123) | (123) | (1,041) | (1,041)
currency derivatives | (123) | (123) | (1,041) | (1,041)
derivatives related to prices of financial instruments | - | - | - | -

Derivative Financial Instruments – Currency Derivatives
As of 31 December 2024 and 31 December 2023, the Group and the Bank had exposure to currency forwards, which represent
commitments to purchase and/or sell foreign and local currency in the future at a fixed price.

|  | 2024 |  | 2023
Currency forwards: | Group | Bank | Group | Bank
Assets | 1,093 | 1,093 | 251 | 241
Liabilities | (123) | (123) | (1,041) | (1,041)
Notional amount | 93,434 | 93,434 | 127,829 | 127,799
Net gain (loss) from currency derivatives in profit or loss | 5,293 | 5,293 | (1,097) | (1,097)

Securities in the Trading Book

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Trading debt securities: | 56,617 | 13,521 | 65 761 | 20 240
Government bonds | 23,059 | - | 24 839 | 2 637
Corporate bonds | 33,558 | 13,521 | 40 922 | 17 603
Trading equity securities | 19,900 | 22 | 162 | 162
Units of investment funds | 158,593 | - | 141,754 | -
Total securities in the trading book | 235,110 | 13,543 | 207 677 | 20 402

Securities in the trading book are comprised of trading securities and other securities that cover technical insurance provisions under
unit-linked insurance contracts of life insurance subsidiary. These securities are measured at fair value through profit or loss.
Securities in the trading book have not been pledged as at 31 December 2024 and 2023.
All of the securities in the trading book, except for unlisted securities, are accounted at fair value that is determined using level 1
requirements as described in fair value hierarchy in Section 4.2 of Financial Risk Management, i.e. fair value is based on quoted prices
in active markets for identical assets and liabilities. Unlisted securities are accounted at fair value that is determined using level 3
requirements.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
86
NOTE 12
FINANCIAL ASSETS AND LIABILITIES IN THE TRADING BOOK (CONTINUED)
Breakdown of securities in the trading book as at 31 December 2024 and 2023:

|  | 2024 |  | 2023
Trading securities: | Group | Bank | Group | Bank
Debt securities | 28,828 | 13,521 | 27,663 | 20,240
from AA- to AAA | 3,492 | - | 1,588 | -
from A- to A+ | 9,571 | - | 8,016 | 2,637
from BBB- to BBB+ | 1,812 | - | 204 | -
from BB- to BB+ | 580 | 148 | - | -
lower than BB- | - | - | - | -
no rating | 13,373 | 13,373 | 17,855 | 17,603
Equity securities | 22 | 22 | 162 | 162
listed | 22 | 22 | 162 | 162
unlisted | - | - | - | -
units of investment funds | 19,878 | - | - | -
Total trading securities | 48,728 | 13,543 | 27,825 | 20,402
Other trading book securities: |  |  |  |
Debt securities | 27,789 | - | 38,098 | -
from AA- to AAA | - | - | 106 | -
from A- to A+ | 10,210 | - | 12,296 | -
from BBB- to BBB+ | 10,591 | - | 17,826 | -
from BB- to BB+ | 6,454 | - | 7,804 | -
lower than BB- | 384 | - | - | -
no rating | 150 | - | 66 | -
Equity securities | 8,730 | - | 2.964 | -
listed |  | - | 2,843 | -
unlisted | 8,730 | - | 121 | -
Total other trading book securities | 36,519 | - | 41,062 | -
units of investment funds | 149,863 | - | 138,790 | -
TOTAL | 235,110 | 13,543 | 207,677 | 20,402

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
87
NOTE 13
LOANS TO CUSTOMERS

|  | 2023 |  | 2022
| Group | Bank | Group | Bank
Gross loans to customers | 3,161,288 | 3,132,437 | 2,685,454 | 2,661,035
Allowance for loan impairment | (49,725) | (33,567) | (43,558) | (30,761)
Net loans at amortized cost | 3,111,563 | 3,098,870 | 2,641,896 | 2,630,274
Loans at fair value | 6,137 | 6,137 | 3,208 | 3,208
NET LOANS TO CUSTOMERS | 3,117,700 | 3,105,007 | 2,645,104 | 2,633,482
Breakdown of loans to customers according to maturity |  |  |  |
Short-term (up to 1 year) | 533,451 | 725,971 | 490,392 | 653,801
Long-term (over 1 year) | 2,584,249 | 2,379,036 | 2,154,712 | 1,979,681
Total | 3,117,700 | 3,105,007 | 2,645,104 | 2,633,482

Due to the macroeconomic situation, the Group maintained a cautious approach to lending in 2024 – the Group’s loan portfolio grew by
18% in 2024, primarily driven by strong demand for retail loans, particularly housing and consumer loans (in 2023, the Group’s loan
portfolio increased by 11%). Despite the accelerated growth, the main focus remained on maintaining the quality of the loan portfolio,
ensuring that the share of Stage 2 and Stage 3 loans increased only marginally.
The Bank has provided loans as investment to securitization vehicle through Banks’s subsidiaries SB Modernizavimo Fondas UAB and
SB Modernizavimo Fondas 2 UAB for financing multiapartment buildings renovation projects. Bank’s investments in securitization are
provided in several tranches to different investment layers bearing different risk levels.
Reconciliation of the gross loan amount is presented in the following tables.

|  |  |  |  |  |  |  | Group gross loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January 2,410,184 |  | 200,739 | 77,737 | 2,688,660 | 2,182,994 | 175,801 | 67,067 | 2,425,862
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (87,951) | 87,951 | - | - | (113,847) | 113,847 | - | -
from Stage 1 to Stage 3 | (12,880) | - | 12,880 | - | (15,963) | - | 15,963 | -
from Stage 2 to Stage 1 | 46,910 | (46,910) | - | - | 69,792 | (69,792) | - | -
from Stage 2 to Stage 3 | - | (15,575) | 15,575 | - | - | (22,264) | 22,264 | -
from Stage 3 to Stage 1 | 8,724 | - | (8,724) | - | 1,849 | - | (1,849) | -
from Stage 3 to Stage 2 | - | 3,336 | (3,336) | - | - | 13,642 | (13,642) | -
New loans originated or loan amounts increased 1,127,742 |  | 38,395 | 5,539 | 1,171,676 | 918,841 | 48,687 | 13,939 | 981,467
Loans derecognized during the period (other than write-offs) | (608,537) | (60,289) | (18,682) | (687,508) | (633,478) | (59,131) | (22,190) | (714,799)
Loans written-off during the period | (4) | (84) | (5,311) | (5,399) | (4) | (51) | (3,815) | (3,870)
Reclassifications, FX and other movements | - | (4) | 4 | - | - | - | - | -
Gross carrying amount as at 31 December 2,884,188 |  | 207,559 | 75,682 | 3,167,429 | 2,410,184 | 200,739 | 77,737 | 2,688,660

|  |  |  |  |  |  |  | Bank gross loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 2,165,922 | 428,156 | 70,164 | 2,664,242 | 1,986,715 | 349,388 | 61,368 | 2,397,471
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (78,855) | 78,855 | - | - | (101,434) | 101,434 | - | -
from Stage 1 to Stage 3 | (8,864) | - | 8,864 | - | (11,657) | - | 11,657 | -
from Stage 2 to Stage 1 | 40,380 | (40,380) | - | - | 69,074 | (69,074) | - | -
from Stage 2 to Stage 3 | - | (12,635) | 12,635 | - | - | (21,357) | 21,357 | -
from Stage 3 to Stage 1 | 7,586 | - | (7,586) | - | 1,200 | - | (1,200) | -
from Stage 3 to Stage 2 | - | 2,467 | (2,467) | - | - | 13,118 | (13,118) | -
New loans originated or loan amounts increased | 977,242 | 73,523 | 3,117 | 1,053,882 | 775,147 | 109,289 | 12,347 | 896,783
Loans derecognized during the period (other than write-offs) | (508,541) | (51,866) | (16,770) | (577,177) | (553,123) | (54,642) | (20,556) | (628,321)
Loans written-off during the period | - | - | (2,372) | (2,372) | - | - | (1,690) | (1,690)
Reclassifications, FX and other movements | - | - | - | - | - | - | (1) | (1)
Gross carrying amount as at 31 December | 2,594,870 | 478,120 | 65,585 | 3,138,575 | 2,165,922 | 428,156 | 70,164 | 2,664,242

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
88
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Group gross loans to individuals (retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 1,201,489 | 44,713 | 31,762 | 1,277,964 | 1,091,641 | 18,135 | 15,721 | 1,125,497
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (34,270) | 34,270 | - | - | (24,011) | 24,011 | - | -
from Stage 1 to Stage 3 | (11,150) | - | 11,150 | - | (15,003) | - | 15,003 | -
from Stage 2 to Stage 1 | 15,882 | (15,882) | - | - | 4,486 | (4,486) | - | -
from Stage 2 to Stage 3 | - | (5,542) | 5,542 | - | - | (4,168) | 4,168 | -
from Stage 3 to Stage 1 | 8,672 | - | (8,672) | - | 1,771 | - | (1,771) | -
from Stage 3 to Stage 2 | - | 3,211 | (3,211) | - | - | 1,808 | (1,808) | -
New loans originated or loan amounts increased | 415,324 | 11,054 | 4,656 | 431,034 | 387,341 | 16,058 | 6,881 | 410,280
Loans derecognized during the period (other than write-offs) | (231,874) | (13,148) | (5,937) | (250,959) | (244,732) | (6,594) | (4,239) | (255,565)
Loans written-off during the period | (4) | (84) | (3,128) | (3,216) | (4) | (51) | (2,193) | (2,248)
Reclassifications, FX and other movements | - | (4) | 4 | - | - | - | - | -
Gross carrying amount as at 31 December | 1,364,069 | 58,588 | 32,166 | 1,454,823 | 1,201,489 | 44,713 | 31,762 | 1,277,964

|  |  |  |  |  |  |  | Bank gross loans to individuals (retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 957,227 | 24,577 | 24,189 | 1,005,993 | 895,362 | 14,449 | 10,022 | 919,833
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (25,174) | 25,174 | - | - | (11,598) | 11,598 | - | -
from Stage 1 to Stage 3 | (7,134) | - | 7,134 | - | (10,697) | - | 10,697 | -
from Stage 2 to Stage 1 | 9,352 | (9,352) | - | - | 3,768 | (3,768) | - | -
from Stage 2 to Stage 3 | - | (2,602) | 2,602 | - | - | (3,261) | 3,261 | -
from Stage 3 to Stage 1 | 7,534 | - | (7,534) | - | 1,122 | - | (1,122) | -
from Stage 3 to Stage 2 | - | 2,342 | (2,342) | - | - | 1,284 | (1,284) | -
New loans originated or loan amounts increased | 264,824 | 2,917 | 2,233 | 269,974 | 243,647 | 6,380 | 5,289 | 255,316
Loans derecognized during the period (other than write-offs) | (131,877) | (4,725) | (4,025) | (140,627) | (164,377) | (2,105) | (2,605) | (169,087)
Loans written-off during the period | - | - | (189) | (189) | - | - | (68) | (68)
Reclassifications, FX and other movements | - | - | - | - | - | - | (1) | (1)
Gross carrying amount as at 31 December | 1,074,752 | 38,331 | 22,068 | 1,135,151 | 957,227 | 24,577 | 24,189 | 1,005,993

|  |  |  |  |  |  |  | Group gross loans to individuals (retail): Consumer loans
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 245,875 | 20,289 | 7,752 | 273,916 | 199,202 | 3,767 | 5,886 | 208,855
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (9,153) | 9,153 | - | - | (12,533) | 12,533 | - | -
from Stage 1 to Stage 3 | (4,081) | - | 4,081 | - | (4,429) | - | 4,429 | -
from Stage 2 to Stage 1 | 6,565 | (6,565) | - | - | 728 | (728) | - | -
from Stage 2 to Stage 3 | - | (2,997) | 2,997 | - | - | (946) | 946 | -
from Stage 3 to Stage 1 | 1,146 | - | (1,146) | - | 650 | - | (650) | -
from Stage 3 to Stage 2 | - | 872 | (872) | - | - | 528 | (528) | -
New loans originated or loan amounts increased | 151,393 | 8,206 | 2,464 | 162,063 | 144,610 | 9,749 | 1,627 | 155,986
Loans derecognized during the period (other than write-offs) | (100,755) | (8,466) | (2,041) | (111,262) | (82,349) | (4,563) | (1,796) | (88,708)
Loans written-off during the period | (4) | (84) | (2,950) | (3,038) | (4) | (51) | (2,162) | (2,217)
Reclassifications, FX and other movements | - | (4) | 4 | - | - | - | - | -
Gross carrying amount as at 31 December | 290,986 | 20,404 | 10,289 | 321,679 | 245,875 | 20,289 | 7,752 | 273,916

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
89
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Bank gross loans to individuals (retail): Consumer loans
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 1,613 | 153 | 179 | 1,945 | 2,924 | 81 | 186 | 3,191
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (57) | 57 | - | - | (120) | 120 | - | -
from Stage 1 to Stage 3 | (65) | - | 65 | - | (123) | - | 123 | -
from Stage 2 to Stage 1 | 35 | (35) | - | - | 10 | (10) | - | -
from Stage 2 to Stage 3 | - | (57) | 57 | - | - | (39) | 39 | -
from Stage 3 to Stage 1 | 8 | - | (8) | - | 1 | - | (1) | -
from Stage 3 to Stage 2 | - | 3 | (3) | - | - | 4 | (4) | -
New loans originated or loan amounts increased | 893 | 69 | 43 | 1,005 | 915 | 71 | 35 | 1,021
Loans derecognized during the period (other than write-offs) | (757) | (43) | (130) | (930) | (1,994) | (74) | (162) | (2,230)
Loans written-off during the period | - | - | (11) | (11) | - | - | (37) | (37)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 1,670 | 147 | 192 | 2,009 | 1,613 | 153 | 179 | 1,945

|  |  |  | Group gross loans to individuals (retail): Mortgages |  |  |  |
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 752,135 | 18,379 | 10,929 | 781,443 | 649,660 | 9,828 | 5,762 | 665,250
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (23,237) | 23,237 | - | - | (9,904) | 9,904 | - | -
from Stage 1 to Stage 3 | (4,686) | - | 4,686 | - | (5,462) | - | 5,462 | -
from Stage 2 to Stage 1 | 5,874 | (5,874) | - | - | 2,890 | (2,890) | - | -
from Stage 2 to Stage 3 | - | (1,831) | 1,831 | - | - | (1,073) | 1,073 | -
from Stage 3 to Stage 1 | 1,843 | - | (1,843) | - | 392 | - | (392) | -
from Stage 3 to Stage 2 | - | 1,402 | (1,402) | - | - | 1,063 | (1,063) | -
New loans originated or loan amounts increased | 217,890 | 1,754 | 420 | 220,064 | 179,876 | 3,120 | 997 | 183,993
Loans derecognized during the period (other than write-offs) | (78,315) | (3,393) | (1,762) | (83,470) | (65,317) | (1,573) | (910) | (67,800)
Loans written-off during the period | - | - | (102) | (102) | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 871,504 | 33,674 | 12,757 | 917,935 | 752,135 | 18,379 | 10,929 | 781,443

|  |  |  |  |  |  |  | Bank gross loans to individuals (retail): Mortgages
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 752,135 | 18,379 | 10,929 | 781,443 | 649,660 | 9,828 | 5,762 | 665,250
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (23,237) | 23,237 | - | - | (9,904) | 9,904 | - | -
from Stage 1 to Stage 3 | (4,686) | - | 4,686 | - | (5,462) | - | 5,462 | -
from Stage 2 to Stage 1 | 5,874 | (5,874) | - | - | 2,890 | (2,890) | - | -
from Stage 2 to Stage 3 | - | (1,831) | 1,831 | - | - | (1,073) | 1,073 | -
from Stage 3 to Stage 1 | 1,843 | - | (1,843) | - | 392 | - | (392) | -
from Stage 3 to Stage 2 | - | 1,402 | (1,402) | - | - | 1,063 | (1,063) | -
New loans originated or loan amounts increased | 217,890 | 1,754 | 419 | 220,063 | 179,876 | 3,120 | 997 | 183,993
Loans derecognized during the period (other than write-offs) | (78,315) | (3,393) | (1,762) | (83,470) | (65,317) | (1,573) | (910) | (67,800)
Loans written-off during the period | - | - | (102) | (102) | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 871,504 | 33,674 | 12,756 | 917,934 | 752,135 | 18,379 | 10,929 | 781,443

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
90
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Group gross loans to individuals (retail): Other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 203,479 | 6,045 | 13,081 | 222,605 | 242,779 | 4,540 | 4,073 | 251,392
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (1,880) | 1,880 | - | - | (1,574) | 1,574 | - | -
from Stage 1 to Stage 3 | (2,383) | - | 2,383 | - | (5,112) | - | 5,112 | -
from Stage 2 to Stage 1 | 3,443 | (3,443) | - | - | 868 | (868) | - | -
from Stage 2 to Stage 3 | - | (714) | 714 | - | - | (2,149) | 2,149 | -
from Stage 3 to Stage 1 | 5,683 | - | (5,683) | - | 729 | - | (729) | -
from Stage 3 to Stage 2 | - | 937 | (937) | - | - | 217 | (217) | -
New loans originated or loan amounts increased | 46,041 | 1,094 | 1,772 | 48,907 | 62,855 | 3,189 | 4,257 | 70,301
Loans derecognized during the period (other than write-offs) | (52,804) | (1,289) | (2,134) | (56,227) | (97,066) | (458) | (1,533) | (99,057)
Loans written-off during the period | - | - | (76) | (76) | - | - | (31) | (31)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 201,579 | 4,510 | 9,120 | 215,209 | 203,479 | 6,045 | 13,081 | 222,605

|  |  |  |  |  |  |  | Bank gross loans to individuals (retail): Other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 203,479 | 6,045 | 13,081 | 222,605 | 242,779 | 4,540 | 4,073 | 251,392
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (1,880) | 1,880 | - | - | (1,574) | 1,574 | - | -
from Stage 1 to Stage 3 | (2,383) | - | 2,383 | - | (5,112) | - | 5,112 | -
from Stage 2 to Stage 1 | 3,443 | (3,443) | - | - | 868 | (868) | - | -
from Stage 2 to Stage 3 | - | (714) | 714 | - | - | (2,149) | 2,149 | -
from Stage 3 to Stage 1 | 5,683 | - | (5,683) | - | 729 | - | (729) | -
from Stage 3 to Stage 2 | - | 937 | (937) | - | - | 217 | (217) | -
New loans originated or loan amounts increased | 46,041 | 1,094 | 1,771 | 48,906 | 62,855 | 3,189 | 4,257 | 70,301
Loans derecognized during the period (other than write-offs) | (52,805) | (1,289) | (2,133) | (56,227) | (97,066) | (458) | (1,533) | (99,057)
Loans written-off during the period | - | - | (76) | (76) | - | - | (31) | (31)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 201,578 | 4,510 | 9,120 | 215,208 | 203,479 | 6,045 | 13,081 | 222,605

|  |  |  |  |  |  |  | Group gross loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 26,596 | - | - | 26,596 | 18,088 | - | - | 18,088
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | - | - | - | - | - | - | - | -
from Stage 1 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 2 | - | - | - | - | - | - | - | -
New loans originated or loan amounts increased | 20,314 | (1) | - | 20,313 | 26,596 | - | - | 26,596
Loans derecognized during the period (other than write-offs) | (26,596) | - | - | (26,596) | (18,088) | - | - | (18,088)
Loans written-off during the period | - | - | - | - | - | - |  | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 20,314 | (1) | - | 20,313 | 26,596 | - | - | 26,596

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
91
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Bank gross loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 26,596 | 247,553 | - | 274,149 | 18,088 | 177,273 | - | 195,361
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | - | - | - | - | - | - | - | -
from Stage 1 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 2 | - | - | - | - | - | - | - | -
New loans originated or loan amounts increased | 20,314 | 43,264 | - | 63,578 | 26,596 | 70,280 | - | 96,876
Loans derecognized during the period (other than write-offs) | (26,596) | - | - | (26,596) | (18,088) | - | - | (18,088)
Loans written-off during the period | - | - | - | - | - | - |  | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 20,314 | 290,817 | - | 311,131 | 26,596 | 247,553 | - | 274,149

|  |  |  |  |  |  |  | Group gross loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 1,182,099 | 156,026 | 45,975 | 1,384,100 | 1,073,265 | 157,666 | 51,346 | 1,282,277
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (53,681) | 53,681 | - | - | (89,836) | 89,836 | - | -
from Stage 1 to Stage 3 | (1,730) | - | 1,730 | - | (960) | - | 960 | -
from Stage 2 to Stage 1 | 31,028 | (31,028) | - | - | 65,306 | (65,306) | - | -
from Stage 2 to Stage 3 | - | (10,033) | 10,033 | - | - | (18,096) | 18,096 | -
from Stage 3 to Stage 1 | 52 | - | (52) | - | 78 | - | (78) | -
from Stage 3 to Stage 2 | - | 125 | (125) | - | - | 11,834 | (11,834) | -
New loans originated or loan amounts increased | 692,104 | 27,342 | 883 | 720,329 | 504,904 | 32,629 | 7,058 | 544,591
Loans derecognized during the period (other than write-offs) | (350,067) | (47,141) | (12,745) | (409,953) | (370,658) | (52,537) | (17,951) | (441,146)
Loans written-off during the period | - | - | (2,183) | (2,183) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 1,499,805 | 148,972 | 43,516 | 1,692,293 | 1,182,099 | 156,026 | 45,975 | 1,384,100

|  |  |  |  |  |  |  | Bank gross loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 1,182,099 | 156,026 | 45,975 | 1,384,100 | 1,073,265 | 157,666 | 51,346 | 1,282,277
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (53,681) | 53,681 | - | - | (89,836) | 89,836 | - | -
from Stage 1 to Stage 3 | (1,730) | - | 1,730 | - | (960) | - | 960 | -
from Stage 2 to Stage 1 | 31,028 | (31,028) | - | - | 65,306 | (65,306) | - | -
from Stage 2 to Stage 3 | - | (10,033) | 10,033 | - | - | (18,096) | 18,096 | -
from Stage 3 to Stage 1 | 52 | - | (52) | - | 78 | - | (78) | -
from Stage 3 to Stage 2 | - | 125 | (125) | - | - | 11,834 | (11,834) | -
New loans originated or loan amounts increased | 692,104 | 27,342 | 884 | 720,330 | 504,904 | 32,629 | 7,058 | 544,591
Loans derecognized during the period (other than write-offs) | (350,068) | (47,141) | (12,745) | (409,954) | (370,658) | (52,537) | (17,951) | (441,146)
Loans written-off during the period | - | - | (2,183) | (2,183) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 1,499,804 | 148,972 | 43,517 | 1,692,293 | 1,182,099 | 156,026 | 45,975 | 1,384,100

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
92
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Group gross loans to business customers: Large corporates
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 89,586 | 3,058 | 17,209 | 109,853 | 74,257 | 29,964 | 1,596 | 105,817
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (1,771) | 1,771 | - | - | (4,808) | 4,808 | - | -
from Stage 1 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 1 | 1,768 | (1,768) | - | - | 8,005 | (8,005) | - | -
from Stage 2 to Stage 3 | - | - | - | - | - | (15,558) | 15,558 | -
from Stage 3 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 2 | - | - | - | - | - | - | - | -
New loans originated or loan amounts increased | 156,440 | 3,457 | 97 | 159,994 | 52,549 | - | 1,575 | 54,124
Loans derecognized during the period (other than write-offs) | (48,487) | (1,068) | (120) | (49,675) | (40,417) | (8,151) | (1,520) | (50,088)
Loans written-off during the period | - | - | (924) | (924) | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 197,536 | 5,450 | 16,262 | 219,248 | 89,586 | 3,058 | 17,209 | 109,853

|  |  |  |  |  |  |  | Bank gross loans to business customers: Large corporates
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 89,586 | 3,058 | 17,209 | 109,853 | 74,257 | 29,964 | 1,596 | 105,817
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (1,771) | 1,771 | - | - | (4,808) | 4,808 | - | -
from Stage 1 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 1 | 1,768 | (1,768) | - | - | 8,005 | (8,005) | - | -
from Stage 2 to Stage 3 | - | - | - | - | - | (15,558) | 15,558 | -
from Stage 3 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 2 | - | - | - | - | - | - | - | -
New loans originated or loan amounts increased | 156,440 | 3,457 | 97 | 159,994 | 52,549 | - | 1,575 | 54,124
Loans derecognized during the period (other than write-offs) | (48,487) | (1,068) | (120) | (49,675) | (40,417) | (8,151) | (1,520) | (50,088)
Loans written-off during the period | - | - | (924) | (924) | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 197,536 | 5,450 | 16,262 | 219,248 | 89,586 | 3,058 | 17,209 | 109,853

|  |  |  |  |  |  |  | Group gross loans to business customers: SME
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 1,029,699 | 148,125 | 27,423 | 1,205,247 | 918,608 | 125,779 | 48,308 | 1,092,695
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (51,451) | 51,451 | - | - | (81,238) | 81,238 | - | -
from Stage 1 to Stage 3 | (1,730) | - | 1,730 | - | (960) | - | 960 | -
from Stage 2 to Stage 1 | 25,405 | (25,405) | - | - | 57,301 | (57,301) | - | -
from Stage 2 to Stage 3 | - | (10,033) | 10,033 | - | - | (2,538) | 2,538 | -
from Stage 3 to Stage 1 | 52 | - | (52) | - | 78 | - | (78) | -
from Stage 3 to Stage 2 | - | 125 | (125) | - | - | 11,834 | (11,834) | -
New loans originated or loan amounts increased | 527,750 | 23,885 | 786 | 552,421 | 433,108 | 32,321 | 5,483 | 470,912
Loans derecognized during the period (other than write-offs) | (279,691) | (45,395) | (12,581) | (337,667) | (297,198) | (43,208) | (16,332) | (356,738)
Loans written-off during the period | - | - | (1,259) | (1,259) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 1,250,034 | 142,753 | 25,955 | 1,418,742 | 1,029,699 | 148,125 | 27,423 | 1,205,247

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
93
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Bank gross loans to business customers: SME
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 1,029,699 | 148,125 | 27,423 | 1,205,247 | 918,608 | 125,779 | 48,308 | 1,092,695
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (51,451) | 51,451 | - | - | (81,238) | 81,238 | - | -
from Stage 1 to Stage 3 | (1,730) | - | 1,730 | - | (960) | - | 960 | -
from Stage 2 to Stage 1 | 25,405 | (25,405) | - | - | 57,301 | (57,301) | - | -
from Stage 2 to Stage 3 | - | (10,033) | 10,033 | - | - | (2,538) | 2,538 | -
from Stage 3 to Stage 1 | 52 | - | (52) | - | 78 | - | (78) | -
from Stage 3 to Stage 2 | - | 125 | (125) | - | - | 11,834 | (11,834) | -
New loans originated or loan amounts increased | 527,750 | 23,885 | 787 | 552,422 | 433,108 | 32,321 | 5,483 | 470,912
Loans derecognized during the period (other than write-offs) | (279,691) | (45,395) | (12,581) | (337,667) | (297,198) | (43,208) | (16,332) | (356,738)
Loans written-off during the period | - | - | (1,259) | (1,259) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 1,250,034 | 142,753 | 25,956 | 1,418,743 | 1,029,699 | 148,125 | 27,423 | 1,205,247

|  |  |  |  |  |  |  | Group gross loans to business customers: Central and local authorities and other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 62,814 | 4,843 | 1,343 | 69,000 | 80,400 | 1,923 | 1,442 | 83,765
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (459) | 459 | - | - | (3,790) | 3,790 | - | -
from Stage 1 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 1 | 3,855 | (3,855) | - | - | - | - | - | -
from Stage 2 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 2 | - | - | - | - | - | - | - | -
New loans originated or loan amounts increased | 7,914 | - | - | 7,914 | 19,247 | 308 | - | 19,555
Loans derecognized during the period (other than write-offs) | (21,889) | (678) | (44) | (22,611) | (33,043) | (1,178) | (99) | (34,320)
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 52,235 | 769 | 1,299 | 54,303 | 62,814 | 4,843 | 1,343 | 69,000

|  |  |  |  |  |  |  | Bank gross loans to business customers: Central and local authorities and other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Gross carrying amount as at 1 January | 62,814 | 4,843 | 1,343 | 69,000 | 80,400 | 1,923 | 1,442 | 83,765
Transfer between stages: |  |  |  |  |  |  |  |
from Stage 1 to Stage 2 | (459) | 459 | - | - | (3,790) | 3,790 | - | -
from Stage 1 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 2 to Stage 1 | 3,855 | (3,855) | - | - | - | - | - | -
from Stage 2 to Stage 3 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 1 | - | - | - | - | - | - | - | -
from Stage 3 to Stage 2 | - | - | - | - | - | - | - | -
New loans originated or loan amounts increased | 7,914 | - | - | 7,914 | 19,247 | 308 | - | 19,555
Loans derecognized during the period (other than write-offs) | (21,890) | (678) | (44) | (22,612) | (33,043) | (1,178) | (99) | (34,320)
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Gross carrying amount as at 31 December | 52,234 | 769 | 1,299 | 54,302 | 62,814 | 4,843 | 1,343 | 69,000

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
94
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)
Movements in allowance for loan impairment by separate class are provided below:

|  |  |  |  |  |  |  | Group loss allowance against loans to customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 21,262 | 6,284 | 16,010 | 43,556 | 13,539 | 2,412 | 18,282 | 34,233
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 16,095 | 1,408 | 598 | 18,101 | 10,088 | 1,220 | 122 | 11,430
Loans derecognized during the period (other than write- offs) | (2,712) | (1,239) | (5,376) | (9,327) | (1,683) | (1,043) | (4,548) | (7,274)
Changes due to change in credit risk (net) | (9,583) | (865) | 10,667 | 219 | (6,107) | 1,041 | 6,929 | 1,863
Update in the methodology for loss allowance estimation | 297 | (174) | 2,465 | 2,588 | 5,429 | 2,705 | (960) | 7,174
Total movements with impact to profit or loss: | 4,097 | (870) | 8,354 | 11,581 | 7,727 | 3,923 | 1,543 | 13,193
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | (4) | (84) | (5,311) | (5,399) | (4) | (51) | (3,815) | (3,870)
Reclassifications, FX and other movements | (6) | (3) | - | (9) | - | - | - | -
Total movements without impact to profit or loss: | (10) | (87) | (5,311) | (5,408) | (4) | (51) | (3,815) | (3,870)
Amount as at 31 December | 25,349 | 5,327 | 19,053 | 49,729 | 21,262 | 6,284 | 16,010 | 43,556

|  |  |  | Bank loss allowance against loans to customers |  |  |  |
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 15,954 | 2,279 | 12,527 | 30,760 | 9,427 | 1,676 | 15,606 | 26,709
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 12,289 | 45 | 468 | 12,802 | 7,162 | 585 | 31 | 7,778
Loans derecognized during the period (other than write- offs) | (1,997) | (183) | (3,126) | (5,306) | (1,158) | (503) | (2,931) | (4,592)
Changes due to change in credit risk (net) | (7,342) | (741) | 4,454 | (3,629) | (4,903) | 131 | 2,868 | (1,904)
Update in the methodology for loss allowance estimation | (506) | (602) | 2,431 | 1,323 | 5,427 | 390 | (1,357) | 4,460
Total movements with impact to profit or loss: | 2,444 | (1,481) | 4,227 | 5,190 | 6,528 | 603 | (1,389) | 5,742
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (2,372) | (2,372) | - | - | (1,690) | (1,690)
Reclassifications, FX and other movements | (7) | (3) | - | (10) | (1) | - | - | (1)
Total movements without impact to profit or loss: | (7) | (3) | (2,372) | (2,382) | (1) | - | (1,690) | (1,691)
Amount as at 31 December | 18,391 | 795 | 14,382 | 33,568 | 15,954 | 2,279 | 12,527 | 30,760

|  |  |  |  |  |  |  | Group loss allowance against loans to customers: Loans to individuals (Retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 8,968 | 4,195 | 6,598 | 19,761 | 5,964 | 814 | 4,750 | 11,528
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 4,172 | 1,389 | 173 | 5,734 | 3,969 | 671 | 106 | 4,746
Loans derecognized during the period (other than write- offs) | (756) | (1,069) | (2,725) | (4,550) | (573) | (543) | (1,821) | (2,937)
Changes due to change in credit risk (net) | (3,335) | (137) | 6,336 | 2,864 | (2,183) | 1,020 | 6,796 | 5,633
Update in the methodology for loss allowance estimation | 1,136 | 373 | 1,243 | 2,752 | 1,794 | 2,284 | (1,040) | 3,038
Total movements with impact to profit or loss: | 1,217 | 556 | 5,027 | 6,800 | 3,007 | 3,432 | 4,041 | 10,480
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | (4) | (84) | (3,128) | (3,216) | (4) | (51) | (2,193) | (2,248)
Reclassifications, FX and other movements | (2) | (2) | - | (4) | 1 | - | - | 1
Total movements without impact to profit or loss: | (6) | (86) | (3,128) | (3,220) | (3) | (51) | (2,193) | (2,247)
Amount as at 31 December | 10,179 | 4,665 | 8,497 | 23,341 | 8,968 | 4,195 | 6,598 | 19,761

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
95
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Bank loss allowance against loans to customers: Loans to individuals (Retail)
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 3,660 | 190 | 3,115 | 6,965 | 1,852 | 78 | 2,074 | 4,004
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 365 | 26 | 43 | 434 | 1,043 | 36 | 15 | 1,094
Loans derecognized during the period (other than write- offs) | (41) | (13) | (475) | (529) | (48) | (3) | (204) | (255)
Changes due to change in credit risk (net) | (1,094) | (13) | 125 | (982) | (979) | 110 | 2,735 | 1,866
Update in the methodology for loss allowance estimation | 333 | (55) | 1,209 | 1,487 | 1,792 | (31) | (1,437) | 324
Total movements with impact to profit or loss: | (437) | (55) | 902 | 410 | 1,808 | 112 | 1,109 | 3,029
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (189) | (189) | - | - | (68) | (68)
Reclassifications, FX and other movements | (3) | (2) | - | (5) | - | - | - | -
Total movements without impact to profit or loss: | (3) | (2) | (189) | (194) | - | - | (68) | (68)
Amount as at 31 December | 3,220 | 133 | 3,828 | 7,181 | 3,660 | 190 | 3,115 | 6,965

Group loss allowance against loans to customers: Loans to individuals (Retail) – Consumer loans |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 5,370 | 4,026 | 3,606 | 13,002 | 4,169 | 739 | 2,795 | 7,703
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 3,823 | 1,364 | 136 | 5,323 | 2,936 | 636 | 99 | 3,671
Loans derecognized during the period (other than write- offs) | (728) | (1,058) | (2,308) | (4,094) | (535) | (541) | (1,701) | (2,777)
Changes due to change in credit risk (net) | (2,242) | (127) | 6,248 | 3,879 | (1,221) | 922 | 4,174 | 3,875
Update in the methodology for loss allowance estimation | 815 | 430 | 34 | 1,279 | 24 | 2,321 | 401 | 2,746
Total movements with impact to profit or loss: | 1,668 | 609 | 4,110 | 6,387 | 1,204 | 3,338 | 2,973 | 7,515
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | (4) | (84) | (2,950) | (3,038) | (4) | (51) | (2,162) | (2,217)
Reclassifications, FX and other movements | - | (1) | - | (1) | 1 | - | - | 1
Total movements without impact to profit or loss: | (4) | (85) | (2,950) | (3,039) | (3) | (51) | (2,162) | (2,216)
Amount as at 31 December | 7,034 | 4,550 | 4,766 | 16,350 | 5,370 | 4,026 | 3,606 | 13,002

Bank loss allowance against loans to customers: Loans to individuals (Retail) – Consumer loans |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 62 | 21 | 123 | 206 | 57 | 3 | 119 | 179
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 17 | 1 | 6 | 24 | 10 | 1 | 8 | 19
Loans derecognized during the period (other than write- offs) | (12) | (2) | (58) | (72) | (10) | (1) | (84) | (95)
Changes due to change in credit risk (net) | (1) | (3) | 36 | 32 | (17) | 12 | 113 | 108
Update in the methodology for loss allowance estimation | 11 | 2 | 1 | 14 | 22 | 6 | 4 | 32
Total movements with impact to profit or loss: | 15 | (2) | (15) | (2) | 5 | 18 | 41 | 64
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (11) | (11) | - | - | (37) | (37)
Reclassifications, FX and other movements | (1) | (1) | - | (2) | - | - | - | -
Total movements without impact to profit or loss: | (1) | (1) | (11) | (13) | - | - | (37) | (37)
Amount as at 31 December | 76 | 18 | 97 | 191 | 62 | 21 | 123 | 206

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
96
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

Group loss allowance against loans to customers: Loans to individuals (Retail) – Mortgages |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 177 | 45 | 2,290 | 2,512 | 759 | 37 | 1,126 | 1,922
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 116 | 2 | 35 | 153 | 329 | 2 | 7 | 338
Loans derecognized during the period (other than write- offs) | (8) | (10) | (353) | (371) | (29) | (2) | (109) | (140)
Changes due to change in credit risk (net) | (109) | (1) | 10 | (100) | (183) | 111 | 1,254 | 1,182
Update in the methodology for loss allowance estimation | 20 | (7) | 71 | 84 | (699) | (103) | 12 | (790)
Total movements with impact to profit or loss: | 19 | (16) | (237) | (234) | (582) | 8 | 1,164 | 590
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (102) | (102) | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | - | - | - | -
Total movements without impact to profit or loss: | (1) | - | (102) | (103) | - | - | - | -
Amount as at 31 December | 195 | 29 | 1,951 | 2,175 | 177 | 45 | 2,290 | 2,512

Bank loss allowance against loans to customers: Loans to individuals (Retail) – Mortgages |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 177 | 45 | 2,290 | 2,512 | 759 | 37 | 1,126 | 1,922
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 116 | 2 | 35 | 153 | 329 | 2 | 7 | 338
Loans derecognized during the period (other than write- offs) | (8) | (10) | (353) | (371) | (29) | (2) | (109) | (140)
Changes due to change in credit risk (net) | (109) | (1) | 11 | (99) | (183) | 111 | 1,254 | 1,182
Update in the methodology for loss allowance estimation | 20 | (7) | 70 | 83 | (699) | (103) | 12 | (790)
Total movements with impact to profit or loss: | 19 | (16) | (237) | (234) | (582) | 8 | 1,164 | 590
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (102) | (102) | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | - | - | - | -
Total movements without impact to profit or loss: | (1) | - | (102) | (103) | - | - | - | -
Amount as at 31 December | 195 | 29 | 1,951 | 2,175 | 177 | 45 | 2,290 | 2,512

Group loss allowance against loans to customers: Loans to individuals (Retail) – Other |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 3,421 | 124 | 702 | 4,247 | 1,036 | 38 | 829 | 1,903
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 233 | 23 | 2 | 258 | 704 | 33 | - | 737
Loans derecognized during the period (other than write- offs) | (20) | (1) | (64) | (85) | (9) | - | (11) | (20)
Changes due to change in credit risk (net) | (984) | (9) | 78 | (915) | (779) | (13) | 1,368 | 576
Update in the methodology for loss allowance estimation | 301 | (50) | 1,138 | 1,389 | 2,469 | 66 | (1,453) | 1,082
Total movements with impact to profit or loss: | (470) | (37) | 1,154 | 647 | 2,385 | 86 | (96) | 2,375
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (76) | (76) | - | - | (31) | (31)
Reclassifications, FX and other movements | (1) | (1) | - | (2) | - | - | - | -
Total movements without impact to profit or loss: | (1) | (1) | (76) | (78) | - | - | (31) | (31)
Amount as at 31 December | 2,950 | 86 | 1,780 | 4,816 | 3,421 | 124 | 702 | 4,247

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
97
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Bank loss allowance against loans to customers: Loans to individuals (Retail) – Other
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 3,421 | 124 | 702 | 4,247 | 1,036 | 38 | 829 | 1,903
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 232 | 23 | 2 | 257 | 704 | 33 | - | 737
Loans derecognized during the period (other than write- offs) | (21) | (1) | (64) | (86) | (9) | - | (11) | (20)
Changes due to change in credit risk (net) | (984) | (9) | 78 | (915) | (779) | (13) | 1,368 | 576
Update in the methodology for loss allowance estimation | 302 | (50) | 1,138 | 1,390 | 2,469 | 66 | (1,453) | 1,082
Total movements with impact to profit or loss: | (471) | (37) | 1,154 | 646 | 2,385 | 86 | (96) | 2,375
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (76) | (76) | - | - | (31) | (31)
Reclassifications, FX and other movements | (1) | (1) | - | (2) | - | - | - | -
Total movements without impact to profit or loss: | (1) | (1) | (76) | (78) | - | - | (31) | (31)
Amount as at 31 December | 2,949 | 86 | 1,780 | 4,815 | 3,421 | 124 | 702 | 4,247

|  |  |  |  |  |  |  | Group loss allowance against loans to customers: Loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 183 | - | - | 183 | 9 | - | - | 9
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 27 | - | - | 27 | 15 | 54 | - | 69
Loans derecognized during the period (other than write- offs) | (154) | - | - | (154) | (8) | (1) | - | (9)
Changes due to change in credit risk (net) | 11 | - | - | 11 | 22 | (53) | - | (31)
Update in the methodology for loss allowance estimation | (40) | - | - | (40) | 145 | - | - | 145
Total movements with impact to profit or loss: | (156) | - | - | (156) | 174 | - | - | 174
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | - | - | - | -
Total movements without impact to profit or loss: | (1) | - | - | (1) | - | - | - | -
Amount as at 31 December | 26 | - | - | 26 | 183 | - | - | 183

|  |  |  |  |  |  |  | Bank loss allowance against loans to customers: Loans to financial institutions
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 183 | - | - | 183 | 9 | - | - | 9
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 28 | - | - | 28 | 15 | 54 | - | 69
Loans derecognized during the period (other than write- offs) | (154) | - | - | (154) | (8) | (1) | - | (9)
Changes due to change in credit risk (net) | 11 | - | - | 11 | 22 | (53) | - | (31)
Update in the methodology for loss allowance estimation | (40) | - | - | (40) | 145 | - | - | 145
Total movements with impact to profit or loss: | (155) | - | - | (155) | 174 | - | - | 174
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | - | - | - | -
Total movements without impact to profit or loss: | (1) | - | - | (1) | - | - | - | -
Amount as at 31 December | 27 | - | - | 27 | 183 | - | - | 183

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
98
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

|  |  |  |  |  |  |  | Group loss allowance against loans to customers: Loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 12,111 | 2,089 | 9,412 | 23,612 | 7,566 | 1,598 | 13,532 | 22,696
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 11,896 | 19 | 425 | 12,340 | 6,104 | 495 | 16 | 6,615
Loans derecognized during the period (other than write- offs) | (1,802) | (170) | (2,651) | (4,623) | (1,102) | (499) | (2,727) | (4,328)
Changes due to change in credit risk (net) | (6,259) | (728) | 4,331 | (2,656) | (3,946) | 74 | 133 | (3,739)
Update in the methodology for loss allowance estimation | (799) | (547) | 1,222 | (124) | 3,490 | 421 | 80 | 3,991
Total movements with impact to profit or loss: | 3,036 | (1,426) | 3,327 | 4,937 | 4,546 | 491 | (2,498) | 2,539
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (2,183) | (2,183) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | (3) | (1) | - | (4) | (1) | - | - | (1)
Total movements without impact to profit or loss: | (3) | (1) | (2,183) | (2,187) | (1) | - | (1,622) | (1,623)
Amount as at 31 December | 15,144 | 662 | 10,556 | 26,362 | 12,111 | 2,089 | 9,412 | 23,612

|  |  |  |  |  |  |  | Bank loss allowance against loans to customers: Loans to business customers
|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 12,111 | 2,089 | 9,412 | 23,612 | 7,566 | 1,598 | 13,532 | 22,696
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 11,896 | 19 | 425 | 12,340 | 6,104 | 495 | 16 | 6,615
Loans derecognized during the period (other than write- offs) | (1,802) | (170) | (2,651) | (4,623) | (1,102) | (499) | (2,727) | (4,328)
Changes due to change in credit risk (net) | (6,259) | (728) | 4,329 | (2,658) | (3,946) | 74 | 133 | (3,739)
Update in the methodology for loss allowance estimation | (799) | (547) | 1,222 | (124) | 3,490 | 421 | 80 | 3,991
Total movements with impact to profit or loss: | 3,036 | (1,426) | 3,325 | 4,935 | 4,546 | 491 | (2,498) | 2,539
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (2,183) | (2,183) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | (3) | (1) | - | (4) | (1) | - | - | (1)
Total movements without impact to profit or loss: | (3) | (1) | (2,183) | (2,187) | (1) | - | (1,622) | (1,623)
Amount as at 31 December | 15,144 | 662 | 10,554 | 26,360 | 12,111 | 2,089 | 9,412 | 23,612

Group loss allowance against loans to customers: Loans to business customers – Large corporates |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 651 | 6 | 1,127 | 1,784 | 301 | 273 | 1,596 | 2,170
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 148 | - | 347 | 495 | 385 | 221 | 16 | 622
Loans derecognized during the period (other than write- offs) | (133) | (1) | (1,086) | (1,220) | (39) | (272) | (1) | (312)
Changes due to change in credit risk (net) | (81) | (8) | 2,602 | 2,513 | 292 | (214) | (581) | (503)
Update in the methodology for loss allowance estimation | (90) | 6 | 29 | (55) | (288) | (2) | 97 | (193)
Total movements with impact to profit or loss: | (156) | (3) | 1,892 | 1,733 | 350 | (267) | (469) | (386)
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (924) | (924) | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | - | - | - | -
Total movements without impact to profit or loss: | (1) | - | (924) | (925) | - | - | - | -
Amount as at 31 December | 494 | 3 | 2,095 | 2,592 | 651 | 6 | 1,127 | 1,784

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
99
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

Bank loss allowance against loans to customers: Loans to business customers – Large corporates |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 651 | 6 | 1,127 | 1,784 | 301 | 273 | 1,596 | 2,170
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 148 | - | 347 | 495 | 385 | 221 | 16 | 622
Loans derecognized during the period (other than write- offs) | (133) | (1) | (1,087) | (1,221) | (39) | (272) | (1) | (312)
Changes due to change in credit risk (net) | (81) | (8) | 2,602 | 2,513 | 292 | (214) | (581) | (503)
Update in the methodology for loss allowance estimation | (90) | 6 | 29 | (55) | (288) | (2) | 97 | (193)
Total movements with impact to profit or loss: | (156) | (3) | 1,891 | 1,732 | 350 | (267) | (469) | (386)
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (924) | (924) | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | - | - | - | -
Total movements without impact to profit or loss: | (1) | - | (924) | (925) | - | - | - | -
Amount as at 31 December | 494 | 3 | 2,094 | 2,591 | 651 | 6 | 1,127 | 1,784

Group loss allowance against loans to customers: Loans to business customers – SME |  |  |  | 2024 |  |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 |  | Total
Loss allowance as at 1 January | 11,312 | 2,069 | 8,027 | 21,408 | 7,200 | 1,312 | 10,917 |  | 19,429
Movements with impact to profit or loss: |  |  |  |  |  |  |  |  |
New loans originated | 11,626 | 19 | 78 | 11,723 | 5,603 | 274 | - |  | 5,877
Loans derecognized during the period (other than write- offs) | (1,665) | (114) | (1,565) | (3,344) | (1,059) | (227) | (2,726) |  | (4,012)
Changes due to change in credit risk (net) | (6,128) | (755) | 1,771 | (5,112) | (4,234) | 303 | 1,496 |  | (2,435)
Update in the methodology for loss allowance estimation | (669) | (560) | 952 | (277) | 3,802 | 407 | (38) |  | 4,171
Total movements with impact to profit or loss: | 3,164 | (1,410) | 1,236 | 2,990 | 4,112 | 757 | (1,268) |  | 3,601
Movements without impact to profit or loss: |  |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (1,259) | (1,259) | - | - | (1,622) |  | (1,622)
Reclassifications, FX and other movements | (1) | (1) | - | (2) | - - | - |  | - |
Total movements without impact to profit or loss: | (1) | (1) | (1,259) | (1,261) | - | - | (1,622) |  | (1,622)
Amount as at 31 December | 14,475 | 658 | 8,004 | 23,137 | 11,312 | 2,069 | 8,027 |  | 21,408

-

| Bank loss allowance against loans to customers: Loans to business customers – SME |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 11,312 | 2,069 | 8,027 | 21,408 | 7,200 | 1,312 | 10,917 | 19,429
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 11,626 | 19 | 78 | 11,723 | 5,603 | 274 | - | 5,877
Loans derecognized during the period (other than write- offs) | (1,665) | (114) | (1,564) | (3,343) | (1,059) | (227) | (2,726) | (4,012)
Changes due to change in credit risk (net) | (6,128) | (755) | 1,770 | (5,113) | (4,234) | 303 | 1,496 | (2,435)
Update in the methodology for loss allowance estimation | (669) | (560) | 952 | (277) | 3,802 | 407 | (38) | 4,171
Total movements with impact to profit or loss: | 3,164 | (1,410) | 1,236 | 2,990 | 4,112 | 757 | (1,268) | 3,601
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (1,259) | (1,259) | - | - | (1,622) | (1,622)
Reclassifications, FX and other movements | (1) | (1) | - | (2) | - | - | - |
Total movements without impact to profit or loss: | (1) | (1) | (1,259) | (1,261) | - | - | (1,622) | (1,622)
Amount as at 31 December | 14,475 | 658 | 8,004 | 23,137 | 11,312 | 2,069 | 8,027 | 21,408

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
100
NOTE 13
LOANS TO CUSTOMERS (CONTINUED)

Group loss allowance against loans to customers: Loans to business customers – Central and local authorities and other |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 148 | 14 | 258 | 420 | 65 | 13 | 1,019 | 1,097
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 122 | - | - | 122 | 116 | - | - | 116
Loans derecognized during the period (other than write- offs) | (4) | (55) | - | (59) | (4) | - | - | (4)
Changes due to change in credit risk (net) | (50) | 35 | (42) | (57) | (4) | (15) | (782) | (801)
Update in the methodology for loss allowance estimation | (40) | 7 | 241 | 208 | (24) | 16 | 21 | 13
Total movements with impact to profit or loss: | 28 | (13) | 199 | 214 | 84 | 1 | (761) | (676)
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | (1) | - | - | (1)
Total movements without impact to profit or loss: | (1) | - | - | (1) | (1) | - | - | (1)
Amount as at 31 December | 175 | 1 | 457 | 633 | 148 | 14 | 258 | 420

Bank loss allowance against loans to customers: Loans to business customers – Central and local authorities and other |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 148 | 14 | 258 | 420 | 65 | 13 | 1,019 | 1,097
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 122 | - | - | 122 | 116 | - | - | 116
Loans derecognized during the period (other than write- offs) | (4) | (55) | - | (59) | (4) | - | - | (4)
Changes due to change in credit risk (net) | (50) | 35 | (43) | (58) | (4) | (15) | (782) | (801)
Update in the methodology for loss allowance estimation | (40) | 7 | 241 | 208 | (24) | 16 | 21 | 13
Total movements with impact to profit or loss: | 28 | (13) | 198 | 213 | 84 | 1 | (761) | (676)
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | (1) | - | - | (1) | (1) | - | - | (1)
Total movements without impact to profit or loss: | (1) | - | - | (1) | (1) | - | - | (1)
Amount as at 31 December | 175 | 1 | 456 | 632 | 148 | 14 | 258 | 420

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
101
NOTE 14
FINANCE LEASE RECEIVABLES
As part of its lending services, the Bank offers its customers various types of finance lease contracts. Main finance lease model of the
Bank is to finance goods or services sold by vendors to the customers. The Bank acts as a lender, although legally it is the owner of the
assets leased.
No other material income except for the finance income (included in net interest income - see Note 1) is earned by the Bank from the
finance lease. The Bank does not provide any buy-back guarantees or residual value guarantees at its own risk. In some cases when
such guarantees are offered to customers that use Bank‘s finance lease products, the vendor of the assets leased provides such
guarantees. In such cases the Bank additionally assesses the vendor‘s capacities to meet such obligations.
Risk profile of finance lease contracts is described in detail in part 1.6. of the Financial Risk Management disclosure.
The Group

Gross investments in leasing: | Up to 1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | Over 5 years | Total
Balance at 31 December 2023 | 116,565 | 84,125 | 66,276 | 41,377 | 22,029 | 3,313 | 333,685
Change during 2024 | 5,593 | 11,932 | 3,123 | 4,360 | 415 | 1,129 | 26,552
Balance at 31 December 2024 | 122,158 | 96,057 | 69,399 | 45,737 | 22,444 | 4,442 | 360,237
Unearned finance income on finance |  |  |  |  |  |  |
leases: |  |  |  |  |  |  |
Balance at 31 December 2023 | (17,646) | (11,317) | (6,575) | (2,979) | (894) | (167) | (39,578)
Change during 2024 | 1,066 | 835 | 680 | 204 | 159 | (19) | 2,925
Balance at 31 December 2024 | (16,580) | (10,482) | (5,895) | (2,775) | (735) | (186) | (36,653)
Net investments in leasing before provisions: |  |  |  |  |  |  |
At 31 December 2023 | 98,919 | 72,808 | 59,701 | 38,398 | 21,135 | 3,146 | 294,107
At 31 December 2024 | 105,578 | 85,575 | 63,504 | 42,962 | 21,709 | 4,256 | 323,584
Changes in provisions: |  |  |  |  |  |  |
Balance at 31 December 2023 | (3,034) | (1,629) | (1,336) | (854) | (470) | (251) | (7,574)
Provisions reversed / (additional provisions | 1,035 | 63 | 174 | 73 | 75 | (533) | 887
charged) |  |  |  |  |  |  |
Provisions for finance lease debts written | - | - | - | - | - | - | -
off Balance at 31 December 2024 | (1,999) | (1,566) | (1,162) | (781) | (395) | (784) | (6,687)
| , | , | , | , | , | , | ,
Net investments in leasing after provisions: | , | , | , | , | , | , | ,
At 31 December 2023 | 95,885 | 71,179 | 58,365 | 37,544 | 20,665 | 2,895 | 286,533
At 31 December 2024 | 103,579 | 84,009 | 62,342 | 42,181 | 21,314 | 3,472 | 316,897

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
102
NOTE 14
FINANCE LEASE RECEIVABLES (CONTINUED)
The Bank

Gross investments in leasing: | Up to 1 year | 1-2 years | 2-3 years | 3-4 years |  | 4-5 years Over 5 years | Total
Balance at 31 December 2023 | 115,673 | 84,125 | 66,276 | 41,377 | 22,029 | 3,313 | 332,793
Change during 2024 | 6,484 | 11,932 | 3,123 | 4,360 | 415 | 1,129 | 27,443
Balance at 31 December 2024 | 122,157 | 96,057 | 69,399 | 45,737 | 22,444 | 4,442 | 360,236
Unearned finance income on finance |  |  |  |  |  |  |
leases: |  |  |  |  |  |  |
Balance at 31 December 2023 | (17,642) | (11,317) | (6,575) | (2,979) | (894) | (167) | (39,574)
Change during 2024 | 1,063 | 835 | 680 | 204 | 159 | (19) | 2,922
Balance at 31 December 2024 | (16,579) | (10,482) | (5,895) | (2,775) | (735) | (186) | (36,652)
Net investments in leasing before provisions: |  |  |  |  |  |  |
At 31 December 2023 | 98,031 | 72,808 | 59,701 | 38,398 | 21,135 | 3,146 | 293,219
At 31 December 2024 | 105,578 | 85,575 | 63,504 | 42,962 | 21,709 | 4,256 | 323,584
Changes in provisions: |  |  |  |  |  |  |
Balance at 31 December 2023 | (2,225) | (1,629) | (1,336) | (854) | (470) | (254) | (6,768)
Provisions reversed / (additional provisions | 229 | 63 | 174 | 73 | 75 | (533) | 81
charged) |  |  |  |  |  |  |
Provisions for finance lease debts written | - | - | - | - | - | - | -
off Balance at 31 December 2024 | (1,996) | (1,566) | (1,162) | (781) | (395) | (787) | (6,687)
Net investments in leasing after provisions: |  |  |  |  |  |  |
At 31 December 2023 | 95,806 | 71,179 | 58,365 | 37,544 | 20,665 | 2,892 | 286,451
At 31 December 2024 | 103,582 | 84,009 | 62,342 | 42,181 | 21,314 | 3,469 | 316,897

Movements in provision for impairment of finance lease receivables by class are as follows:
Group loss allowance against finance lease receivables

|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 2,941 | 1,077 | 3,556 | 7,574 | 1,881 | 285 | 3,134 | 5,300
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 2,182 | 66 | 30 | 2,278 | 2,734 | 474 | 171 | 3,379
Loans derecognized during the period (other than write- offs) | (500) | (236) | (3,841) | (4,577) | (1,385) | (89) | (297) | (1,771)
Changes due to change in credit risk (net) | (548) | (157) | 1,670 | 965 | (757) | 304 | 1,257 | 804
Update in the methodology for loss allowance estimation | 886 | (30) | 396 | 1,252 | 468 | 103 | (709) | (138)
Total movements with impact to profit or loss: | 2,020 | (357) | (1,745) | (82) | 1,060 | 792 | 422 | 2,274
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (805) | (805) | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Total movements without impact to profit or loss: | - | - | (805) | (805) | - | - | - | -
Loss allowance as at 31 December | 4,961 | 720 | 1,006 | 6,687 | 2,941 | 1,077 | 3,556 | 7,574

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
NOTE 14
FINANCE LEASE RECEIVABLES (CONTINUED)

Bank loss allowance against finance lease receivables |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 2,941 | 1,074 | 2,754 | 6,769 | 1,881 | 280 | 2,333 | 4,494
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 2,183 | 66 | 29 | 2,278 | 2,733 | 465 | 170 | 3,368
Loans derecognized during the period (other than write- offs) | (501) | (235) | (3,039) | (3,775) | (1,385) | (88) | (297) | (1,770)
Changes due to change in credit risk (net) | (548) | (155) | 866 | 163 | (756) | 308 | 1,257 | 809
Update in the methodology for loss allowance estimation | 886 | (30) | 396 | 1,252 | 468 | 109 | (709) | (132)
Total movements with impact to profit or loss: | 2,020 | (354) | (1,748) | (82) | 1,060 | 794 | 421 | 2,275
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Total movements without impact to profit or loss: | - | - | - | - | - | - | - | -
Loss allowance as at 31 December | 4,961 | 720 | 1,006 | 6,687 | 2,941 | 1,074 | 2,754 | 6,769

Group loss allowance against finance lease receivables - individuals |  |  |  | 2024 |  |  |  | 2023
| Stage1 | Stage2 | Stage3 | Total | Stage1 | Stage2 | Stage3 | Total
Loss allowance as at 1 January | 332 | 70 | 121 | 523 | 82 | 22 | 98 | 202
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 277 | 5 | - | 282 | 247 | 39 | 78 | 364
Loans derecognized during the period (other than write- offs) | (33) | (6) | (39) | (78) | (114) | (16) | (74) | (204)
Changes due to change in credit risk (net) | 203 | (15) | (34) | 154 | (130) | (23) | 46 | (107)
Update in the methodology for loss allowance estimation | 8 | 5 | 37 | 50 | 247 | 48 | (27) | 268
Total movements with impact to profit or loss: | 455 | (11) | (36) | 408 | 250 | 48 | 23 | 321
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Total movements without impact to profit or loss: | - | - | - | - | - | - | - | -
Loss allowance as at 31 December | 787 | 59 | 85 | 931 | 332 | 70 | 121 | 523

Bank loss allowance against finance lease receivables – individuals |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 332 | 70 | 121 | 523 | 82 | 22 | 98 | 202
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 278 | 5 | - | 283 | 247 | 39 | 78 | 364
Loans derecognized during the period (other than write- offs) | (34) | (6) | (39) | (79) | (114) | (16) | (74) | (204)
Changes due to change in credit risk (net) | 203 | (15) | (34) | 154 | (130) | (23) | 46 | (107)
Update in the methodology for loss allowance estimation | 8 | 5 | 37 | 50 | 247 | 48 | (27) | 268
Total movements with impact to profit or loss: | 455 | (11) | (36) | 408 | 250 | 48 | 23 | 321
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Total movements without impact to profit or loss: | - | - | - | - | - | - | - | -
Loss allowance as at 31 December | 787 | 59 | 85 | 931 | 332 | 70 | 121 | 523

103
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
104
NOTE 14
FINANCE LEASE RECEIVABLES (CONTINUED)
Group loss allowance against finance lease receivables – business customers

|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 2,609 | 1,007 | 3,435 | 7,051 | 1,799 | 263 | 3,036 | 5,098
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 1,905 | 61 | 30 | 1,996 | 2,487 | 435 | 93 | 3,015
Loans derecognized during the period (other than write- offs) | (467) | (230) | (3,802) | (4,499) | (1,271) | (73) | (223) | (1,567)
Changes due to change in credit risk (net) | (751) | (142) | 1,704 | 811 | (627) | 327 | 1,211 | 911
Update in the methodology for loss allowance estimation | 878 | (35) | 359 | 1,202 | 221 | 55 | (682) | (406)
Total movements with impact to profit or loss: | 1,565 | (346) | (1,709) | (490) | 810 | 744 | 399 | 1,953
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | (805) | (805) | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Total movements without impact to profit or loss: | - | - | (805) | (805) | - | - | - | -
Loss allowance as at 31 December | 4,174 | 661 | 921 | 5,756 | 2,609 | 1,007 | 3,435 | 7,051

Bank loss allowance against finance lease receivables – business customers

|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Loss allowance as at 1 January | 2,609 | 1,004 | 2,633 | 6,246 | 1,799 | 258 | 2,235 | 4,292
Movements with impact to profit or loss: |  |  |  |  |  |  |  |
New loans originated | 1,905 | 61 | 29 | 1,995 | 2,486 | 426 | 92 | 3,004
Loans derecognized during the period (other than write- offs) | (467) | (229) | (3,000) | (3,696) | (1,271) | (72) | (223) | (1,566)
Changes due to change in credit risk (net) | (751) | (140) | 900 | 9 | (626) | 331 | 1,211 | 916
Update in the methodology for loss allowance estimation | 878 | (35) | 359 | 1,202 | 221 | 61 | (682) | (400)
Total movements with impact to profit or loss: | 1,565 | (343) | (1,712) | (490) | 810 | 746 | 398 | 1,954
Movements without impact to profit or loss: |  |  |  |  |  |  |  |
Loans written-off during the period | - | - | - | - | - | - | - | -
Reclassifications, FX and other movements | - | - | - | - | - | - | - | -
Total movements without impact to profit or loss: | - | - | - | - | - | - | - | -
Loss allowance as at 31 December | 4,174 | 661 | 921 | 5,756 | 2,609 | 1,004 | 2,633 | 6,246

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
105
NOTE 15
INVESTMENT SECURITIES
Investment securities are comprised of:
• non-trading equities. The Group chose to measure these securities at fair value through profit or loss;
• Investments in units of funds;
• Investments in alternative fund units;
• debt securities at fair value through other comprehensive income;
• debt securities at amortized cost (held to collect cash flows).

|  | 2024 |  | 2023
INVESTMENT SECURITIES AT FAIR VALUE: | Group | Bank | Group | Bank
Non-trading securities at fair value: |  |  |  |
Debt securities at fair value through other comprehensive income: | 40,994 | 40,994 | 71,740 | 71,740
Government bonds | 24,327 | 24,327 | 53,949 | 53,949
Corporate bonds | 16,667 | 16,667 | 17,791 | 17,791
Non-trading equity securities at fair value through profit or loss | 2,874 | 2,626 | 2,760 | 2,642
Total non-trading securities at fair value | 43,868 | 43,620 | 74,500 | 74,382
TOTAL INVESTMENT SECURITIES AT FAIR VALUE | 43,868 | 43,620 | 74,500 | 74,382
INVESTMENT SECURITIES AT AMORTIZED COST: |  |  |  |
Securities at amortized cost: |  |  |  |
Debt securities: | 726,937 | 716,864 | 751,227 | 739,869
Government bonds | 695,622 | 690,083 | 663,211 | 657,445
Corporate bonds | 31,315 | 26,781 | 88,016 | 82,424
Total securities at amortized cost | 726,937 | 716,864 | 751,227 | 739,869
TOTAL INVESTMENT SECURITIES AT AMORTIZED COST | 726,937 | 716,864 | 751,227 | 739,869
Breakdown of debt securities by time remaining to maturity: |  |  |  |
Debt securities at fair value through other comprehensive income: |  |  |  |
Short-term (up to 1 year) | 11,770 | 11,770 | 11,770 | 11,770
Long-term (over 1 year) | 29,224 | 29,224 | 59,970 | 59,970
Total debt securities at fair value through other comprehensive income | 40,994 | 40,994 | 71,740 | 71,740
Debt securities at amortized cost: |  |  |  |
Short-term (up to 1 year) | 196,312 | 195,334 | 274,369 | 273,965
Long-term (over 1 year) | 530,625 | 521,530 | 476,858 | 465,904
Total debt securities at amortized cost | 726,937 | 716,864 | 751,227 | 739,869

There were no pledged bonds as of December 31, 2024. As at 31 December 2023 government bonds at amortized cost with a carrying
value of EUR 517,148 thousand were pledged for the borrowing under third series of the targeted longer-term refinancing operations
(TLTRO-III) program of the European Central Bank (see Note 20).
Staging and impairment of the Group‘s/Bank’s investment debt securities:
Group investment debt securities at fair value through other comprehensive income

|  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Government bonds, gross | 24,327 | - | - | 24,327 | 53,949 | - | - | 53,949
Less: allowance for impairment | - | - | - | - | - | - | - | -
Government bonds, net | 24,327 | - | - | 24,327 | 53,949 | - | - | 53,949
Corporate bonds, gross | 15,756 | 964 | - | 16,720 | 14,986 | 2,969 | - | 17,955
Less: allowance for impairment | (18) | (35) | - | (53) | (19) | (145) | - | (164)
Corporate bonds, net | 15,738 | 929 | - | 16,667 | 14,967 | 2,824 | - | 17,791
Total, gross | 40,083 | 964 | - | 41,047 | 68,935 | 2,969 | - | 71,904
Less: allowance for impairment | (18) | (35) | - | (53) | (19) | (145) | - | (164)
Total, net | 40,065 | 929 | - | 40,994 | 68,916 | 2,824 | - | 71,740

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
106
NOTE 15
INVESTMENT SECURITIES (CONTINUED)

Bank investment debt securities at fair value through other comprehensive income |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Government bonds, gross | 24,327 | - | - | 24,327 | 53,949 | - | - | 53,949
Less: allowance for impairment | - | - | - | - | - | - | - | -
Government bonds, net | 24,327 | - | - | 24,327 | 53,949 | - | - | 53,949
Corporate bonds, gross | 15,756 | 964 | - | 16,720 | 14,986 | 2,969 | - | 17,955
Less: allowance for impairment | (18) | (35) | - | (53) | (19) | (145) | - | (164)
Corporate bonds, net | 15,738 | 929 | - | 16,667 | 14,967 | 2,824 | - | 17,791
Total, gross | 40,083 | 964 | - | 41,047 | 68,935 | 2,969 | - | 71,904
Less: allowance for impairment | (18) | (35) | - | (53) | (19) | (145) | - | (164)
Total, net | 40,065 | 929 | - | 40,994 | 68,916 | 2,824 | - | 71,740

Group investment debt securities at amortized cost |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Government bonds, gross | 695,628 | - | - | 695,628 | 663,221 | - | - | 663,221
Less: allowance for impairment | (6) | - | - | (6) | (10) | - | - | (10)
Government bonds, net | 695,622 | - | - | 695,622 | 663,211 | - | - | 663,211
Corporate bonds, gross | 31,335 | - | 1,023 | 32,358 | 88,071 | - | 1,020 | 89,091
Less: allowance for impairment | (20) | - | (1,023) | (1,043) | (55) | - | (1,020) | (1,075)
Corporate bonds, net | 31,315 | - | - | 31,315 | 88,016 | - | - | 88,016
Total, gross | 726,963 | - | 1,023 | 727,986 | 751,292 | - | 1,020 | 752,312
Less: allowance for impairment | (26) | - | (1,023) | (1,049) | (65) | - | (1,020) | (1,085)
Total, net | 726,937 | - | - | 726,937 | 751,227 | - | - | 751,227

Bank investment debt securities at amortized cost |  |  |  | 2024 |  |  |  | 2023
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total
Government bonds, gross | 690,087 | - | - | 690,087 | 657,451 | - | - | 657,451
Less: allowance for impairment | (4) | - | - | (4) | (6) | - | - | (6)
Government bonds, net | 690,083 | - | - | 690,083 | 657,445 | - | - | 657,445
Corporate bonds, gross | 26,796 | - | - | 26,796 | 82,474 | - | - | 82,474
Less: allowance for impairment | (15) | - | - | (15) | (50) | - | - | (50)
Corporate bonds, net | 26,781 | - | - | 26,781 | 82,424 | - | - | 82,424
Total, gross | 716,883 | - | - | 716,883 | 739,925 | - | - | 739,925
Less: allowance for impairment | (19) | - | - | (19) | (56) | - | - | (56)
Total, net | 716,864 | - | - | 716,864 | 739,869 | - | - | 739,869

Reconciliation of allowance for impairment of investment debt securities is presented in the table below:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Allowance for impairment of investment debt securities as of 1 | 1,249 | 220 | 1,629 | 599
January: |  |  |  |
Change in allowance for impairment | (147) | (147) | (379) | (379)
Update in the methodology for loss allowance estimation | - | - | - | -
Change in FX rates |  | - | (1) | -
Impact of IFRS 9 application together with IFRS 17 |  |  | - | -
Allowance for impairment of investment debt securities as of 31 | 1,102 | 73 | 1,249 | 220
December: |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
107
NOTE 15
INVESTMENT SECURITIES (CONTINUED)
Breakdown of the Group‘s/Bank’s investment securities as at 31 December 2024 and 2023:

|  | 2024 |  | 2023
Investment securities at fair value: | Group | Bank | Group | Bank
Debt securities | 40,994 | 40,994 | 71,740 | 71,740
AAA | - | - | - | -
from AA- to AA+ | - | - | - | -
from A- to A+ | 29,517 | 29,517 | 58,981 | 58,981
from BBB- to BBB+ | 5,854 | 5,854 | 5,591 | 5,591
from BB- to BB+ | 4,695 | 4,695 | 4,345 | 4,345
lower than BB- | - | - | - | -
no rating | 928 | 928 | 2,823 | 2,823
Equities | 2,874 | 2,626 | 2,760 | 2,642
listed | 246 | 246 | 241 | 241
unlisted | 540 | 292 | 501 | 383
units of investment funds | 2,088 | 2,088 | 2,018 | 2,018
Total investment securities at fair value | 43,868 | 43,620 | 74,500 | 74,382
Investment securities at amortized cost: |  |  |  |
Debt securities | 726,937 | 716,864 | 751,227 | 739,869
AAA | - | - | - | -
from AA- to AA+ | 203 | - | 2,271 | 2,067
from A- to A+ | 699,217 | 694,562 | 670,920 | 664,946
from BBB- to BBB+ | 26,402 | 22,302 | 76,919 | 72,856
from BB- to BB+ | 1,115 | - | 1,117 | -
lower than BB- | - | - | - | -
no rating | - | - | - | -
Total investment securities at amortized cost | 726,937 | 716,864 | 751,227 | 739,869

No material reclassifications between securities portfolios were performed during 2024 and 2023.
Movements in the financial instruments revaluation reserve:

|  |  | The Group |  |  | The Bank
| Financial | Financial | Financial | Financial
| instruments Deferred income | instruments | instruments Deferred income | instruments
| revaluation | tax asset | revaluation | revaluation | tax asset | revaluation
| reserve, before | (liabilities) | reserve, after | reserve, before | (liabilities) | reserve, after
| taxes |  | taxes | taxes |  | taxes
1 January 2023 | (10,139) | 2,028 | (8,111) | (10,139) | 2,028 | (8,111)
Revaluation | 716 | - | 716 | 716 | - | 716
Sale or redemption of securities | 2,640 | - | 2,640 | 2,640 | - | 2,640
Deferred income tax | - | (671) | (671) | - | (671) | (671)
31 December 2023 | (6,783) | 1,357 | (5,426) | (6,783) | 1,357 | (5,426)
Revaluation | 3,026 | - | 3,026 | 3,026 | - | 3,026
Sale or redemption of securities | 20 | - | 20 | 20 | - | 20
Deferred income tax | - | (609) | (609) | - | (609) | (609)
31 December 2024 | (3,737) | 748 | (2,989) | (3,737) | 748 | (2,989)

Bank’s and Group’s cash flows and other movements of investment securities at amortized cost:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
As at 1 January | 751,227 | 739,869 | 969,036 | 956,332
Acquisitions | 438,515 | 316,044 | 91,408 | 64,157
Redemptions | (430,154) | (313,350) | (292,941) | (279,209)
Disposals | (22,591) | (21,781) | - | -
Accrued interest | 14,042 | 13,820 | 8,343 | 8,090
Received coupon payment | (19,620) | (17,776) | (10,082) | (9,777)
Foreign currency exchange rate impact | - | - | - | -
Impairment | (22) | 38 | 277 | 276
Reclassifications | (4,460) | - | (14,814) | -
As at 31 December | 726,937 | 716,864 | 751,227 | 739,869

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
108
NOTE 16
INVESTMENTS IN SUBSIDIARIES
The Group consists of the Bank and its subsidiaries listed below in this note. All of the entities comprising the Group operate in Lithuania,
except for SB Draudimas GD UAB which operates in Latvia and Estonia through branches.
Carrying amount

|  | Share in |  |  | 31 December 2024 |  |  | 31 December 2023
|  | equity | Gross amount | Impairment | Net carrying | Gross amount | Impairment | Net carrying
Bank |  |  |  |  | amount |  |  | amount
Investments in consolidated directly controlled |  |  |  |  |  |  |  |
subsidiaries: |  |  |  |  |  |  |  |
SB Draudimas GD UAB | 100.00 | % | 37,910 | - | 37,910 | 32,528 | - | 32,528
SB Lizingas UAB | 100.00 | % | 3,106 | - | 3,106 | 2,964 | - | 2,964
SB Asset Management UAB | 100.00 | % | 37,458 |  | 37,458 | 35,997 | - | 35,997
SB Turto Fondas UAB | 100.00 | % | 5,325 | - | 5,325 | 5,083 | - | 5,083
Total investments in subsidiaries using equity |  |  | 83,799 | - | 83,799 | 76,572 | - | 76,572
method |  |  |  |  |  |  |  |
Investment in non-consolidated subsidiaries |  |  |  |  |  |  |  |
SB Modernizavimo Fondas UAB | 100.00 | % | 170 | - | 170 | 100 | - | 100
SB Modernizavimo Fondas 2 UAB | 100.00 | % | 100 | - | 100 | - | - | -
Total investments in subsidiaries at fair value |  |  | 270 | - | 270 | 100 | - | 100
Total investments in subsidiaries |  |  | 84,069 | - | 84,069 | 76,672 | - | 76,672

Reconciliation of Bank’s investment in subsidiary amounts is presented in the table below:

| 2024 | 2023
Net book value at 1 January | 76,672 | 32,668
Share of the profit or loss of investments in subsidiaries accounted for using the equity method | 7,227 | (4,267)
Establishment of subsidiary | 100 | 400
Dividends paid by the subsidiaries | - | (10,000)
Increase of share capital in subsidiaries in cash | 70 | 17,706
Increase of share capital in subsidiaries due to capitalization of liabilities payable for Bank’s shares | - | 40,165
Net book value at 31 December | 84,069 | 76,672

Business combination transaction
On 1 December 2023 the Group has completed merger of retail businesses with Invalda INVL. After completion of this transaction Group
entities have acquired parts of insurance and pension funds and investment funds for retail clients’ management businesses from Invalda
INVL. Group’s management has concluded that during this transaction economic resources, processes and possibility to generate
economic benefits using economic resources and processes were obtained therefore according to criteria set in IFRS 3 it is considered
that during transaction businesses meeting business definition in IFRS 3 were acquired. Transaction price – EUR 41,760 thousand. From
this amount EUR 40,165 thousand was paid using new 62,270,383 units share emission issued by the Bank (see Note 27), remaining
part (EUR 1,595 thousand) was paid in cash. After this transaction Bank’s subsidiary SB Asset Management UAB is managing second-
and third-pillar pension funds and investment funds in Lithuania and Bank’s subsidiary GD SB draudimas UAB has significantly expanded
its life insurance business in Baltic countries (operating in Latvia and Estonia through its own branches). The Bank has capitalized
liabilities of subsidiaries arising from the transaction during December 2023, also due to regulatory requirements share capitals of these
subsidiaries were increased by cash as well, because of these reasons value of subsidiaries in Bank’s stand-alone financial statements
have increased significantly as the Bank is accounting subsidiaries at equity method. The business combination was accounted using
acquisition method. Minority interest has not originated because of this transaction. Acquisition costs directly attributable with the
transaction amounting to EUR 2,500 thousand, were expensed and accounted within Group’s income statement item ‘Other operating
expenses’.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
109
NOTE 16
INVESTMENTS IN SUBSIDIARIES (CONTINUED)
According to clauses in IFRS 3 ‘Business combinations’ the Group management has decided two account for in Group’s consolidated
financial statements and measure two separate businesses acquired as one transaction. Fair values of assets, liabilities and net assets
of this business acquisition transaction are provided in table below.

|  |  |  | In thousand EUR
|  | Acquisition date for consolidation purposes |  | 1 December 2023
Fair value | Group | Insurance business | Funds management | Retail support
|  |  | business |
Funds management rights | 30,598 | - | 30,598 | -
Intangible assets | 196 | 73 | 123 | -
Property, plant and equipment | 105 | 76 | 26 | 3
Identified deferred tax assets | 3,501 | - | 3,501 | -
Financial assets accounted at fair value through profit and loss | 133,240 | 133,126 | 114 | -
Reinsurance assets | 4 | 4 | - | -
Trade amounts receivable | 63 | 54 | 9 | -
Prepayments | 46 | 38 | 8 | -
Cash and cash equivalents | 7,203 | 6,652 | 551 | -
Total assets | 174,956 | 140,023 | 34,930 | 3
Liabilities for remaining coverage | 47,775 | 47,775 | - | -
Liabilities for incurred claims | 1,148 | 1,148 | - | -
Investments contracts liabilities | 82,983 | 82,983 | - | -
Identified deferred tax liabilities | 4,589 | - | 4,589 | -
Trade accounts payable | 66 | 43 | 23 | -
Other amounts payable | 914 | 255 | 659 | -
Accrued expenses | 11 | 11 | - | -
Total liabilities | 137,486 | 132,215 | 5,271 | -
Total net assets | 37,470 | 7,808 | 29,659 | 3
Goodwill | 4,290 | 1,147 | 3,143 | -
Total consideration paid | 41,760 | 8,955 | 32,802 | 3
Consideration paid in cash | 1,595 | 1,595 | - | -
Other nettings of mutual transactions | 40,165 | 7,360 | 32,802 | -
Less: cash acquired | (7,203) | (6,652) | (551) | -
Total consideration paid in cash less | (5,608) | (5,057) | (551) | -
cash acquired |  |  |  |

Group’s management decided to account for goodwill arising from this business combination transaction in its financial statements as
significant synergies and increased efficiency is expected from the transaction through usage of broad retail outlets network of the Group
for distribution of products which were previously not distributed proposing broader product portfolio to existing and new clients, using
possibilities of cross-selling, using knowledge and experience of employees, joining Group from Invalda INVL, using increased scale of
activities of subsidiary distributing insurance products. Funds management rights recognized from this transaction include pensions funds
and investment funds management rights accounted on funds management business acquisition moment. Funds management rights
acquired during business combination transaction were capitalized at fair value determined on acquisition date and allocated to intangible
assets. After initial recognition funds management rights are accounted at acquisition cost less amortization and impairment losses
accrued. Funds management rights are amortized over 25 years based on average time left till pension age for existing client base.
Methods used to determine fair value of assets acquired and liabilities assumed during the business combination are described in table
below:

Assets acquired and liabilities assumed | Valuation
Financial assets | Financial assets were assessed based on quoted prices in active markets. Price of financial
| assets was determined in sell and buy prices range calculating average price.
Other assets | Due to insignificance and/or nature of other assets it was considered that carrying values of
| other assets acquired approximate their fair values.
| For valuation of theses liabilities Solvency II technical provision valuation methodology was
Liabilities for remaining coverage | used with some corrections (limits for contributions not used, different capital cost rate and
| increased target solvency ratio used)
Liabilities for damage incurred | These liabilities were assessed based on future expected cashflows and in addition
| increased by risk adjustment calculated based on technics of solvency level.
| For valuation of theses liabilities Solvency II technical provision valuation methodology was
Investments contracts liabilities | used with some corrections (limits for contributions not used, different capital cost rate and
| increased target solvency ratio used)
Other liabilities | Due to insignificance and/or nature of other liabilities it was considered that carrying values
| of other liabilities assumed approximate their fair values.

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
110
NOTE 16
INVESTMENTS IN SUBSIDIARIES (CONTINUED)
In tables below information on revenue of insurance business acquired and revenue and profit (loss) of funds management business
during period after business acquisition transaction is disclosed. Operating results of insurance business after the business combination
and revenue as well as operating results before the business combination together with revenue and operating results of funds
management business before the business combination are not disclosed as due to technical and administrative limitations it is not
possible to obtain such information without disproportionately large costs.

In thousand EUR | 2023.12.01-20 | 23.12.31
Amounts relating to changes in LFRC |  |
- Expected benefits incurred |  | 258
- Expected expenses incurred |  | 328
- Change in the risk adjustment |  | (623)
- CSM recognized |  | 172
Recovery of acquisition cash flows |  | 3
Total insurance revenue for portfolio acquired on 1 December 2023 |  | 138

In thousand EUR | 2023.12.01-20 | 23.12.31
Revenue of fund management business |  | 505
The business combination costs attributed to fund management business |  | (1 016)
Net losses of fund management business |  | (1 230)
Net losses of fund management business less the business combination costs |  | (214)

Special purpose entity - securitization
On April 5, 2022, the Bank established a special purpose entity – UAB "SB Modernization Fund," and on February 21, 2024, a second
special purpose entity – the Securitization UAB "SB Modernization Fund 2" (hereinafter collectively referred to as the SBMF Funds). The
purpose of establishing both special purpose entities, the SBMF Funds, is to manage financing funds for multi-apartment building
renovation projects, which lend the attracted funds from commercial and institutional investors to energy efficiency improvement projects
for multi-apartment buildings in Lithuania. As the leading financier of multi-apartment building renovations in the country, the Bank is the
founder of the SBMF Funds and the administrator of renovation loans, while the SBMF Funds act as legal managers. The Bank earns
revenue from its participation in this activity through administration fees for loans (claims) transferred to the SBMF Funds, as well as
interest income from loans granted to the SBMF Funds. According to agreements with investors and the provisions of IFRS 10, the Bank
does not have control over the SBMF Funds; therefore, these entities are not consolidated in the Group's consolidated financial
statements.
The table below represents maximum credit risk exposure of Bank at 31 December 2024 related to securitization project for which
implementation SB Modernizavimo Fondas UAB was established without taking into account any collateral held or other credit
enhancements attached. For on-balance sheet assets, the exposures presented above are net carrying amount as reported in the balance
sheet. In addition to items disclosed in table below, SB Modernizavimo Fondas UAB together with SB Modernizavimo Fondas 2, UAB
held deposits in amount of EUR 52 665 thousand at Bank as Bank’s liabilities disclosed in financial position statement line “Due to
customers” at 31 December 2024. For more information on SB Modernizavimo Fondas UAB and SB Modernizavimo Fondas 2, UAB
balances please see also Notes 13 and 30.

| Statement of financial position line | Carrying value
Shares in equity of subsidiary | Investments in subsidiaries and associates | 270
Loans to subsidiary | Loans to customers | 6,137
Off-balance commitments to grant loans to subsidiary | - | 12,000
Off-balance commitments to grant loans to users | - | 76,458
of renovation loans |  |

During years 2024 and 2023 the Group has sold claims rights to multi-apartment buildings renovation loans (retaining loans servicing
rights) to unconsolidated special purpose entity SB Modernizavimo Fondas UAB. Carrying value of such claim rights on sale date
amounted to EUR 198,471 thousand in 2024 (in 2023 – EUR 142,196 thousand). Due to sale of these claim rights no gain or loss was
recognized. For the year ended 31 December 2024 the Group has generated management fees of EUR 4,264 thousand for management
of transferred claim rights portfolios (in 2023 – EUR 1,742 thousand). Fair value of managed claim rights portfolios amounted to EUR
350,830 thousand as at 31 December 2024 (as at 31 December 2023 – EUR 185,028 thousand). In 2024 the Group recognized EUR
2,761 thousand interest income from loans granted to SB Modernizavimo Fondas UAB (in 2023 – EUR 925 thousand).
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
111
NOTE 16
INVESTMENTS IN SUBSIDIARIES (CONTINUED)
Changes in Group structure
Following strategy to optimize Group's structure Sandworks UAB was liquidated in first quarter of 2022, Šiaulių Banko Investicijų
Valdymas UAB was liquidated in first quarter of 2023. In 2024 subsidiary of the Bank Šiaulių banko lizingas UAB was liquidated.
Tests of subsidiaries impairment
Bank’s subsidiary SB Draudimas GD UAB was tested for impairment using embedded value approach as of 31 December 2024 and 31
December 2023. No impairment was determined at these dates. Embedded value equals to the value of in-force business plus the value
of the free capital. Value of in-force business is calculated using management estimations of the cash flows from the insurance portfolio
and the income from capital-in-lock discounted to net present value using the discount rate (2024: 9.40%, 2023: 9.58%) that reflects
current market assessment of the time value of money and the related risks. The assumption used is that inflation will be 2% throughout
the entire forecast period. When performing a sensitivity analysis on the discount rate and testing the asset value with a 2% increased
discount rate, no indications of impairment were identified, and the calculated value remained reasonable and economically justified. This
analysis confirms that the asset value remains stable despite changes in the discount rate, ensuring that there is no need to recognize
an impairment loss.
Bank’s subsidiary SB Asset Management UAB was tested for impairment using discounted cash flows approach as of 31 December
2024. No impairment was determined at this date. For the sensitivity analysis for individual cash generating units, a discount rate of 2%
was applied. The analysis did not reveal any signs of depreciation, and the estimated value remained reasonable and without loss of
economic rationale. Cash flows used in the calculation were based on forecasts in budget for 2025-2030 approved by the subsidiary’s
senior management. The long-term growth rate used is 2% but reducing it to 1% or even zero does not show indications of impairment.
Forecasted cash flows were discounted to net present value using the discount rate equal 13% (2023: 16.88%) that reflects current
market assessment of the time value of money and the related risks.
No impairment triggers were identified regarding other subsidiaries.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
112
NOTE 17
INTANGIBLE ASSETS

|  | Software and licenses |  |  | Funds management rights |  | Goodwill |  | Total
As at 1 January 2023: | Group | Bank |  | Group | Bank | Group | Bank | Group | Bank
Cost | 15,452 | 14,360 |  | - | - | 1,352 | - | 16,804 | 14,360
Accumulated amortization | (8,521) | (7,910) |  | - | - | - | - | (8,521) | (7,910)
Net book value | 6,931 | 6,450 |  | - | - | 1,352 | - | 8,283 | 6,450
Year ended 31 December 2023: |  |  |  |  |  |  |  |  |
Net book value at 1 January | 6,931 | 6,450 |  | - | - | 1,352 | - | 8,283 | 6,450
Acquisitions | 5,356 | 5,029 |  | - | - | - | - | 5,356 | 5,029
Acquisitions (from business | 196 | - |  | 30,598 | - | 4,290 |  | 35,084 | -
combination, see Note 16) |  |  |  |  |  |  |  |  |
Write-offs | (1,952) | (1,931) |  | - | - | - | - | (1,952) | (1,931)
Amortization charge | (1,531) | (1,399) |  | (102) | - | - | - | (1,633) | (1,399)
Net book value at 31 December | 9,000 | 8,149 |  | 30,496 | - | 5,642 | - | 45,138 | 8,149
As at 31 December 2023: |  |  |  |  |  |  |  |  |
Cost | 19,052 | 17,458 |  | 30,598 | - | 5,642 | - | 55,292 | 17,458
Accumulated amortization | (10,052) | (9,309) |  | (102) | - | - | - | (10,154) | (9,309)
Net book value | 9,000 | 8,149 |  | 30,496 | - | 5,642 | - | 45,138 | 8,149
Year ended 31 December 2024: |  |  |  |  |  |  |  |  |
Net book value at 1 January | 9,000 | 8,149 |  | 30,496 | - | 5,642 | - | 45,138 | 8,149
Acquisitions | 4,524 | 4,032 |  | - | - | - | - | 4,524 | 4,032
Acquisitions (from business | - | - |  | - | - | - |  | - | -
combination, see Note 16) |  |  |  |  |  |  |  |  |
Write-offs | (2,167) | (2,163) |  | - | - | - | - | (2,167) | (2,163)
Amortization charge | (2,655) | (2,159) |  | (1,223) | - | - | - | (3,878) | (2,159)
Net book value at 31 December | 8,702 | 7,859 |  | 29,273 | - | 5,642 | - | 43,617 | 7,859
As at 31 December 2024: |  |  |  |  |  |  |  |  |
Cost | 21,409 | 19,327 |  | 30,598 | - | 5,642 | - | 57,649 | 19,327
Accumulated amortization | (12,707) | (11,468) |  | (1,325) | - | - | - | (14,032) | (11,468)
Net book value | 8,702 | 7,859 |  | 29,273 | - | 5,642 | - | 43,617 | 7,859
Economic life (in years) |  | 3–9 | 3–9 | 25 |  |  |  |  |

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
113
NOTE 17
INTANGIBLE ASSETS (CONTINUED)
Goodwill and funds management rights impairment test
For the purpose of impairment testing, goodwill and fund management rights are allocated to two cash generating units - subsidiaries of
the Bank GD SB Draudimas UAB and SB Asset Management UAB. Recoverable amount of GD SB Draudimas UAB is determined by
applying the embedded value calculations. Embedded value equals to the value of in-force business plus the value of the free capital.
Value of in-force business is calculated using management estimations of the cash flows from the insurance portfolio and the income
from capital-in-lock discounted to net present value using the discount rate of 9.40% (2023: 9.58%) that reflects current market
assessment of the time value of money and the risks related to this cash generating unit.
Recoverable amount of SB Draudimas UAB is determined by applying the discounted cash flows calculations. Cash flows used in the
calculation were based on forecasts in budget for 2025-2030 approved by the subsidiary’s senior management. Forecasted cash flows
were discounted to net present value using the discount rate equal 13% (2023: 16.88%) that reflects current market assessment of the
time value of money and the risks related to this cash generating unit.
No impairment loss for goodwill and funds management rights was identified in 2024 and 2023 as a result of the impairment test.
NOTE 18
PROPERTY, PLANT AND EQUIPMENT

| Buildings, |  | Office | Construction in |
Group | premises and | Vehicles |  |  | Total
As at 1 January 2023: | land |  | equipment | progress |
Cost | 7,580 | 2,709 | 6,634 | 76 | 16,999
Accumulated depreciation | (2,608) | (1,125) | (4,782) | - | (8,515)
Net book value | 4,972 | 1,584 | 1,852 | 76 | 8,484
Year ended 31 December 2023: |  |  |  |  |
Net book value at 1 January | 4,972 | 1,584 | 1,852 | 76 | 8,484
Acquisitions | 279 | 756 | 592 | - | 1,627
Acquisitions (from business combination, see Note 16) | - | - | 12 | - | 12
Reclassifications | - | (19) | - | - | (19)
Disposals and write-offs | (11) | (383) | (442) | (76) | (912)
Depreciation charge | (166) | (380) | (768) | - | (1,314)
Net book value at 31 December | 5,074 | 1,558 | 1,246 | - | 7,878
As at 31 December 2023: |  |  |  |  |
Cost | 7,848 | 3,063 | 6,796 | - | 17,707
Accumulated depreciation | (2,774) | (1,505) | (5,550) | - | (9,829)
Net book value | 5,074 | 1,558 | 1,246 | - | 7,878
Year ended 31 December 2024: |  |  |  |  |
Net book value at 1 January | 5,074 | 1,558 | 1 246 | - | 7,878
Acquisitions | - | 86 | 811 | - | 897
Acquisitions (from business combination, see Note 16) | - | - | - | - | -
Reclassifications | - | 12 | - | - | 12
Disposals and write-offs | - | (179) | (299) | - | (478)
Depreciation charge | (166) | (244) | (335) | - | (745)
Net book value at 31 December | 4,908 | 1,233 | 1 423 | - | 7,564
As at 31 December 2024: |  |  |  |  |
Cost | 7,848 | 2,982 | 7,308 | - | 18,138
Accumulated depreciation | (2,940) | (1,749) | (5,885) | - | (10,574)
Net book value | 4,908 | 1,233 | 1,423 | - | 7,564
Economic life (in years) | 15-50 | 5-12 | 3-20 | - | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
114
NOTE 18
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Right-of-use assets and lease liabilities
From 1 January 2019, leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group. The Group leases various offices, equipment and vehicles. Lease terms are negotiated on an individual
basis and contain a wide range of different terms and conditions. Rental contracts are typically made for fixed periods of 4 months to 8
years but may have extension options. The terminations of agreements by lessee mostly from 3 to 6 months notice. The lease agreements
do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not
be used as security for borrowing purposes.

Group: right-of-use assets | Buildings, premises | Vehicles | Office | Total
As at 1 January 2024 | and land |  | equipment |
Cost | 16,063 | 511 | 1,597 | 18,171
Accumulated depreciation | (9,271) | (183) | (814) | (10,268)
Net book value | 6,792 | 328 | 783 | 7,903
Year ended 31 December 2024: |  |  |  |
Net book value at 1 January | 6,792 | 328 | 783 | 7,903
Contract additions | 3,115 | 3 | 315 | 3,433
Contract terminations | (584) | - | - | (584)
Depreciation charge | (2,178) | (74) | (803) | (3,055)
Net book value at 31 December | 7,145 | 257 | 295 | 7,697
As at 31 December 2024: |  |  |  |
Cost | 18,594 | 514 | 1,912 | 21,020
Accumulated depreciation | (11,449) | (257) | (1,617) | (13,323)
Net book value | 7,145 | 257 | 295 | 7,697
Economic life (in years) | 2-20 | 2-7 | 3 | -

Amounts of lease liabilities recognized in Group’s statement of financial position:

| 31 December 2024 | 31 December 2023
Lease liabilities before prepayments | 8,060 | 7,923
Short-term (up to 1 year) | 3,121 | 2,965
Long-term (2-5 years) | 4,918 | 4,958
Long-term (over 5 years) | 21 | -
Prepayments paid | (771) | (699)
Lease liabilities, carrying value | 7,289 | 7,224

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
115
NOTE 18
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Bank | Buildings and |  | Vehicles Office equipment | Construction in | Total
As at 1 January 2023: | premises |  |  | progress |
Cost | 7,580 | 2,079 | 6,220 | 76 | 15,955
Accumulated depreciation | (2,608) | (772) | (4,484) | - | (7,864)
Net book value | 4,972 | 1,307 | 1,736 | 76 | 8,091
Year ended 31 December 2023: |  |  |  |  |
Net book value at 1 January | 4,972 | 1,307 | 1,736 | 76 | 8,091
Acquisitions | 279 | 676 | 535 | - | 1,490
Disposals and write-offs | - | (19) | - | - | (19)
Depreciation charge | (11) | (222) | (437) | (76) | (746)
Reclassification to assets held for sale | (166) | (308) | (725) | - | (1,199)
Net book value at 31 December | 5,074 | 1,434 | 1,109 | - | 7,617
As at 31 December 2023: |  |  |  |  |
Cost | 7,848 | 2,514 | 6,318 | - | 16,680
Accumulated depreciation | (2,774) | (1,080) | (5,209) | - | (9,063)
Net book value | 5,074 | 1,434 | 1,109 | - | 7,617
Year ended 31 December 2024: |  |  |  |  |
Net book value at 1 January | 5,074 | 1,434 | 1,109 | - | 7,617
Acquisitions | - | 86 | 776 | - | 862
Disposals and write-offs | - | 12 | - | - | 12
Depreciation charge | - | (159) | (189) | - | (348)
Reclassifications | (166) | (210) | (373) | - | (749)
Net book value at 31 December | 4,908 | 1,163 | 1,323 | - | 7,394
As at 31 December 2024: |  |  |  |  |
Cost | 7,848 | 2,453 | 6,905 | - | 17,206
Accumulated depreciation | (2,940) | (1,290) | (5,582) | - | (9,812)
Net book value | 4,908 | 1,163 | 1,323 | - | 7,394
Economic life (in years) | 15-50 | 5-12 | 3-20 | - | -

Bank: right-of-use assets | Buildings, premises | Vehicles | Office equipment | Total
As at 1 January 2024: | and land |  |  |
Cost | 14,322 | 511 | 1,597 | 16,430
Accumulated depreciation | (8,348) | (183) | (814) | (9,345)
Net book value | 5,974 | 328 | 783 | 7,085
Year ended 31 December 2024: |  |  |  |
Net book value at 1 January | 5,974 | 328 | 783 | 7,085
Contract additions | 2,864 | 3 | 315 | 3,182
Contract terminations | - | - | - | -
Depreciation charge | (2,095) | (74) | (803) | (2,972)
Net book value at 31 December | 6,743 | 257 | 295 | 7,295
As at 31 December 2024: |  |  |  |
Cost | 17,186 | 514 | 1,912 | 19,612
Accumulated depreciation | (10,443) | (257) | (1,617) | (12,317)
Net book value | 6,743 | 257 | 295 | 7,295
Economic life (in years) | 2-20 | 2-7 | - | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
116
NOTE 18
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Amounts of lease liabilities recognized in Bank’s statement of financial position:

| 31 December 2024 | 31 December 2023
Lease liabilities before prepayments | 7,229 | 7,085
Short-term (up to 1 year) | 2,800 | 2,611
Long-term (2-5 years) | 4,429 | 4,474
Long-term (over 5 years) | - | -
Prepayments received | (776) | (692)
Lease liabilities, carrying value | 6,453 | 6,393

Please see Note 10 for reconciliation of movements lease liabilities.
As at 31 December 2024 and 31 December 2023, there were no property, plant and equipment pledged to third parties.
Future minimum lease payments to be received under non-cancellable lease agreements for the Bank and the Group were as follows
(this includes investment property disclosed in Note 26):

|  |  | 2024 |  |  | 2023
| up to 1 year | 1-5 years | over 5 years | up to 1 year | 1-5 years | over 5 years
Group | 149 | 370 | 27 | 161 | 128 | 5
Bank | 149 | 370 | 27 | 157 | 482 | 97

NOTE 19
OTHER ASSETS

|  | 2024 |  | 2023
Financial assets: | Group | Bank | Group | Bank
Amounts receivable | 7,258 | 6,559 | 7,351 | 8,289
Breakdown of financial assets according to maturity |  |  |  |
Short-term (up to 1 year) | 4,922 | 4,223 | 5,517 | 6,455
Long-term (over 1 year) | 2,336 | 2,336 | 1,834 | 1,834
Non-financial assets: | 10,043 | 8,505 | 12,392 | 10,681
Breakdown of non-financial assets according to maturity |  |  |  |
Short-term (up to 1 year) | 7,565 | 6,232 | 10,261 | 8,685
Long-term (over 1 year) | 2,478 | 2,273 | 2,131 | 1,996
Inventories | 114 | - | 114 | -
Deferred charges | 4,222 | 3,674 | 3,529 | 3,424
Assets under reinsurance and insurance contracts | 121 | - | 153 | -
Prepayments | 1,533 | 782 | 2,225 | 1,000
Foreclosed assets | 228 | 224 | 168 | 164
Other | 3,825 | 3,825 | 6,203 | 6,093
TOTAL OTHER ASSETS | 17,301 | 15,064 | 19,743 | 18,970

Balances of other financial assets include impairment. Reconciliation of allowance for impairment of other financial assets is presented
in the table below:

| Group | Bank
Allowance for impairment of other financial assets as of 1 January 2023: | 506 | 489
Change in allowance for impairment | 618 | 618
Other financial assets written-off during the period | (12) | (12)
Reclassifications and other movements | 6 | 6
Allowance for impairment of other financial assets as of 31 December 2023 | 1,118 | 1,101
Change in allowance for impairment | (120) | (120)
Other financial assets written-off during the period | (23) | (6)
Reclassifications and other movements | - | -
Allowance for impairment of other financial assets as of 31 December 2024: | 975 | 975

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
117
NOTE 19
OTHER ASSETS (CONTINUED)
Inventories relate to real estate projects under development and real estate held for sale by the Bank’s subsidiary SB turto fondas UAB.
All inventories are accounted at lower of cost and net realizable value. Inventories are not pledged.
Assets held for sale and liabilities related to assets held for sale
Assets held for sale consist of:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Assets related to subsidiaries classified as held for sale | - | - | - | -
Real estate classified as held for sale | 150 | 150 | 150 | 150
Total assets classified as held for sale | 150 | 150 | 150 | 150
Liabilities attributable to subsidiaries classified as held for sale | - | - | - | -

Real estate properties that are planned to be sold within one year are included in assets classified as held for sale. They are included in
Traditional banking operations and lending segment. As of 31 December 2024, such real estate assets consisted of one property with a
fair value of EUR 180 thousand (as of 31 December 2023: one property with a fair value of EUR 180 thousand). No impairment expense
related to the revaluation these properties down to the realizable value was recognized in 2024 (2023: no impairment expense was
recognized). No income or expenses related to these properties were recorded in profit or loss of discontinued operations. Valuations
performed by Group’s employees are used to assess the realizable value of these properties. Comparative price methods, i.e. valuation
techniques attributable to Level 3 are mostly used valuation techniques.
NOTE 20
DUE TO OTHER BANKS AND FINANCIAL INSTITUTIONS

|  | 2024 |  | 2023
Correspondent accounts and deposits of other banks and financial institutions: | Group | Bank | Group | Bank
Correspondent accounts and demand deposits | 27,918 | 30,545 | 27,572 | 33,894
Term deposits | 18,729 | 18,729 | 25,047 | 25,047
Total correspondent accounts and deposits of other banks and financial | 46,647 | 49,274 | 52,619 | 58,941
institutions |  |  |  |
Due to central bank | - | - | 491,757 | 491,757
Loans received from: |  |  |  |
Other organizations | 4,315 | 4,315 | 8,106 | 8,106
International organizations | 14,898 | 14,898 | 17,512 | 17,512
Total loans received | 19,213 | 19,213 | 25,618 | 25,618
Total | 65,860 | 68,487 | 569,994 | 576,316
Breakdown of due to other banks and financial institutions according to maturity |  |  |  |
Short-term (up to 1 year) | 50,596 | 53,223 | 555,587 | 561,909
Long-term (over 1 year) | 15,264 | 15,264 | 14,407 | 14,407
Total | 65,860 | 68,487 | 569,994 | 576,316

On 28th June 2023 the Bank has repaid a EUR 150 million loan borrowed under the ECB's TLTRO III program. After this repayment the
outstanding borrowing on the balance sheet under third series of the targeted longer-term refinancing operations (TLTRO-III) program of
the European Central Bank as at 31 December 2023 amounted to EUR 479 million. All obligations related to the TLTRO III program are
set to be fulfilled by December 31, 2024. As of December 31, 2023, Securities with a carrying value of EUR 517,148 thousand were
placed as a collateral for these borrowings.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
118
NOTE 21
DUE TO CUSTOMERS

|  | 2024 |  | 2023
Demand deposits: | Group | Bank | Group | Bank
National government institutions | 52,292 | 52,292 | 56,135 | 56,135
Local government institutions | 125,605 | 125,605 | 121,886 | 121,886
Governmental and municipal companies | 25,049 | 25,049 | 38,209 | 38,209
Corporate entities | 693,342 | 693,461 | 628,408 | 632,159
Non-profit organizations | 34,370 | 34,370 | 35,780 | 35,780
Individuals | 707,909 | 707,909 | 711,184 | 711,184
Unallocated amounts due to customers | 9,421 | 9,421 | 16,214 | 16,714
Total demand deposits | 1,647,988 | 1,648,107 | 1,607,816 | 1,612,067
Term deposits: |  |  |  |
National government institutions | 8,879 | 8,879 | 2,519 | 2,519
Local government institutions | 2,436 | 2,436 | 2,316 | 2,316
Governmental and municipality companies | 6,657 | 6,657 | 3,831 | 3,831
Corporate entities | 374,098 | 379,298 | 336,944 | 336,944
Non-profit organizations | 17,887 | 17,887 | 8,278 | 8,278
Individuals | 1,480,027 | 1,480,027 | 1,200,953 | 1,200,953
Total term deposits | 1,889,984 | 1,895,184 | 1,554,841 | 1,554,841
Total | 3,537,972 | 3,543,291 | 3,162,657 | 3,166,908
Breakdown of due to customers according to maturity |  |  |  |
Short-term (up to 1 year) | 3,267,055 | 3,272,374 | 2,917,233 | 2,921,484
Long-term (over 1 year) | 270,917 | 270,917 | 245,424 | 245,424
Total | 3,537,972 | 3,543,291 | 3,162,657 | 3,166,908

NOTE 22
SPECIAL AND LENDING FUNDS

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Special funds | 23,037 | 23,037 | 15,718 | 15,718
Lending funds | - | - | - | -
Total | 23,037 | 23,037 | 15,718 | 15,718
Breakdown of special and lending funds according to maturity |  |  |  |
Short-term (up to 1 year) | 23,037 | 23,037 | 15,718 | 15,718
Long-term (over 1 year) | - | - | - | -
| 23,037 | 23,037 | 15,718 | 15,718

The special funds consist of the funds from the mandatory social and health insurance funds. The special funds have to be returned to
the institutions which have placed them upon the first requirement of the latter.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
119
NOTE 23
DEBT SECURITIES IN ISSUE
As of 31 December 2020 Bank had 10 year bond issue of EUR 20,000 thousand (ISIN code LT0000404287). The bonds were issued on
23 December 2019, annual interest rate is 6.15%. The Bank has a right to call the bonds after 5 years. From 29 April 2020 this issue was
listed on Nasdaq Baltic Bond List.
On 29 September 2021 Bank has issued EUR 75,000 thousand senior preferred debt securities (ISIN code LT0000405771) with maturity
term of 4 years and annual interest rate of 1.05%. The Bank has a right to call the bonds after 3 years. From 8 October 2021 these bonds
are listed on Nasdaq Baltic Bonds List.
On 29 November 2022 Bank has completed a tap issue of EUR 85,000 thousand senior preferred debt bonds (ISIN code LT0000405771).
A tap issue was placed with yield to maturity of 6.4%. Bonds maturity date is 7th October 2025. From 9 December 2022 these bonds are
listed on Nasdaq Baltic Bonds List.
On 15 June 2023 Bank has successfully completed a 10-year subordinated bond issue (ISIN code LT0000407751) with a nominal value
of EUR 50 million in the international financial markets, which bear a coupon of 10.75%. Subordinated bonds are included into the bank's
Tier 2 capital. The bonds maturity date is on 22 June 2033. The bonds were issued with the issuer's right of early redemption after five
years, on 22 June 2028. On this date, the Bank will have two options: to redeem the issued bonds early or to set a new coupon consisting
of a fixed and a floating part (750bps + 5-year Mid-Swap Rate). From 27 June 2023 these bonds are listed on Nasdaq Baltic Bonds List.
On 16 November 2023 Bank has successfully concluded a tap issue of EUR 50 million of senior preferred bonds (ISIN code
LT0000405771) in the international financial markets. With a tap issue the amount of the total outstanding bonds increased from EUR
160 million to EUR 210 million. The bonds were issued with the aim of meeting future minimum requirement for own funds and eligible
liabilities (MREL requirements) set by the Bank's supervisory authorities. The additional bonds were issued at a yield to maturity of 6.7%.
Maturity date of these bonds is 7 October 2025. From 27 November 2023 these bonds are listed on Nasdaq Baltic Bonds List. This bond
was fully redeemed in 2024.
On May 22, 2024, Šiaulių Bankas successfully issued €25 million subordinated bonds (ISIN code LT0000409013) in the international
financial markets. This issuance aims to strengthen the bank's capital base and support future growth initiatives. The bonds carry an
annual interest rate of 7.7%, with interest payments scheduled quarterly. The maturity date for these bonds is May 22, 2034. Starting
from May 28, 2024, these bonds are listed on the Nasdaq Baltic Bond List. On September 5, 2024, Šiaulių Bankas issued €300 million
senior preferred bonds fixed rate reset bonds (ISIN code XS2887816564) in the international financial markets. This issuance was
conducted to meet the future Minimum Requirement for Own Funds and Eligible Liabilities (MREL) as set by the bank's supervisory
authorities. The annual fixed rate coupon on the notes up to the reset date will be 4.853 %. The maturity date for these bonds is December
5, 2028. From September 5, 2024, these bonds are listed on the Euronext Dublin.
On 7 October 2024 Šiaulių Bankas has redeemed €210 million 1.047% senior preferred bonds (ISIN: LT0000405771). Accordingly, from
7 October 2024 these bonds are removed from Nasdaq Vilnius Bond List and deleted from Nasdaq CSD central securities depository.
On October 2024, Šiaulių Bankas successfully completed the issuance of €50 million in Fixed Rate Reset Perpetual Additional Tier 1
(AT1) Temporary Write Down Notes (ISIN code XS2922133363) in the international financial markets. The bonds bear a coupon of
8.75% per annum and are structured as perpetual instruments with a fixed rate reset mechanism. The notes are listed on Euronext
Dublin's Global Exchange Market and qualify as Additional Tier 1 capital, reinforcing the bank’s capital adequacy position. The issuance
includes an issuer call option after 5 years, allowing the bank to either redeem the bonds early or reset the coupon rate. The purpose of
this issuance was to further strengthen the bank's capital structure in line with regulatory requirements. Starting from November 8, 2024,
these bonds are admitted to the official list of Euronext Dublin and to trading on the Global Exchange Market of Euronext Dublin
administered by the Irish Stock Exchange plc.
Cash flows and other movements of issued debt securities:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
As at 1 January | 276,480 | 276,480 | 171,231 | 171,231
Issuance | 375,000 | 375,000 | 100,000 | 100,000
Redemptions | (210,000) | (210,000) | - | -
Accrued interest | 13,166 | 13,166 | 5,795 | 5,795
Coupon payments | (13,387) | (13,387) | (2,905) | (2,905)
Discount | 6,900 | 6,900 | 2,359 | 2,359
As at 31 December | 448,159 | 448,159 | 276,480 | 276,480

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
NOTE 24
ASSETS AND LIABILITIES RELATED TO INSURANCE ACTIVITIES
Bank’s subsidiary SB Draudimas UAB is engaged in life insurance business. For the years ended 31 December 2024 and 2023 insurance
and investment contracts liabilities and their changes were as follows:

| Estimate of present |  |  |  | Advances |
| value of future cash | Risk adjustment for non- | Contractual service | Investment | paid by |
Gross: | flows | financial risks | margin |  | units policyholders | Total
At 1 January 2023 | 23,025 | 2,571 | 4,360 | 6,229 | - | 36,185
Change during period | 16,697 | 14,443 | 25,899 | 86,093 | - | 143,132
At 31 December 2023 | 39,722 | 17,014 | 30,259 | 92,322 | - | 179,317
Change during period | 10,997 | 1,509 | 2,157 | 4,364 | 88 | 19,115
At 31 December 2024 | 50,719 | 18,523 | 32,416 | 96,686 | 88 | 198,432
Reinsurance share: |  |  |  |  |  |
At 1 January 2023 | - | - | - | - | - | -
Change during period | 1 | - | - | - | - | 1
At 31 December 2023 | 1 | - | - | - | - | 1
Change during period | (1) | - | - | - | - | (1)
At 31 December 2024 | - | - | - | - | - | -
Net value |  |  |  |  |  |
At 31 December 2023 | 39,723 | 17,014 | 30,259 | 92,322 | - | 179,318
At 31 December 2024 | 50,719 | 18,523 | 32,416 | 96,686 | 88 | 198,432

Reconciliation of the components of insurance contract assets and liabilities
In table below liabilities are disclosed with opposite signs than shown in the balance sheet.

EUR | Best | Risk | Contractual | 2023-12-31
| estimate | Adjustment | Service | Total
| liability |  | Margin |
Opening insurance contract assets | 8,731 | (1,095) | (3,144) | 4,492
Opening insurance contract liabilities | (48,453) | (15,919) | (27,115) | (91,487)
Net opening position of insurance contracts | (39,722) | (17,014) | (30,259) | (86,995)
Changes related to current services |  |  |  |
- CSM recognized in profit and loss | - | - | 2,780 | 2,780
- Risk Adjustment recognized in profit and loss | - | 289 | - | 289
- Experience adjustments | 1,349 | (1,563) | - | (214)
Changes related to future services |  |  |  |
- Contracts initially recognized in the period | 6,272 | (2,174) | (4,587) | (489),
- Changes in estimates that adjust CSM | (263) | 354 | (91) | -
- Changes in estimates that result in onerous contracts or reversal of losses | (338) | 34 | - | (304)
Changes that relate to past service |  |  |  |
Changes that relate to past service - adjustments to LIC | (571) | 1,551 | - | 980
Insurance finance expenses through profit and loss | (12,563) | - | (259) | (12,822)
Total changes in statement of profit and loss and OCI | (6,114) | (1,509) | (2,157) | (9,780)
Premiums received | (25,861) | - | - | (25,861)
Claims paid | 12,332 | - | - | 12,332
Directly attributable expenses paid | 3,652 | - | - | 3,652
Acquisition cost paid | 4,994 | - | - | 4,994
Total cash flows | (4,883) | - | - | (4,883)
Closing insurance contract assets | 15,745 | (3,042) | (6,642) | 6,061
Closing insurance contract liabilities | (66,464) | (15,481) | (25,774) | (107,719)
Net closing position of insurance contracts | (50,719) | (18,523) | (32,416) | (101,658)

120
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
121
NOTE 24
ASSETS AND LIABILITIES RELATED TO INSURANCE ACTIVITIES (COTINUED)

2024-12-31 | Liability for Remaining |  | LIC for contracts measured | Total
| Coverage |  | under GM/VFA |
| Excl. LC | LC |  |
Opening insurance contract assets | 5,019 | (342) | (185) | 4,492
Opening insurance contract liabilities | (87,798) | (2,306) | (1,383) | (91,487)
Net opening position of insurance contracts | (82,779) | (2,648) | (1,568) | (86,995)
Insurance revenue | 10,516 | - | - | 10,516
Insurance service expenses |  |  |  |
- Incurred benefits and expenses | - | - | (7,104) | (7,104)
- Changes that relate to past service - adjustments to LIC | - | - | 979 | 979
- Losses on onerous contracts and reversal of those losses | - | (354) | - | (354)
- Amortization of insurance acquisition cash flows | (995) | - | - | (995)
Insurance finance expenses through profit and loss | (12,770) | (41) | (11) | (12,822)
Investment components | 10,080 | - | (10,080) | -
Total changes in statement of profit and loss | 6,831 | (395) | (16,216) | (9,780)
Premiums received | (25,861) | - | - | (25,861)
Claims paid | - | - | 12,332 | 12,332
Directly attributable expenses paid | - | - | 3,652 | 3,652
Acquisition cost paid | 4,994 | - | - | 4,994
Total cash flows | (20,867) | - | 15,984 | (4,883)
Closing insurance contract assets | 7,085 | (800) | (223) | 6,062
Closing insurance contract liabilities | (103,900) | (2,243) | (1,577) | (107,720)
Net closing position of insurance contracts | (96,815) | (3,043) | (1,800) | (101,658)

2023-12-31 | Liability for Remaining |  | LIC for contracts measured | Total
| Coverage |  | under GM/VFA |
| Excl. LC | LC |  |
Opening insurance contract assets | 1 634 | (573) | 16 | 1,077
Opening insurance contract liabilities | (29,181) | (1,121) | (731) | (31,033)
Net opening position of insurance contracts | (27,547) | (1,694) | (715) | (29 956)
Insurance revenue | 4,945 | - | - | 4,945
Insurance service expenses |  |  |  |
- Incurred benefits and expenses | - | - | (1,097) | (1,097)
- Changes that relate to past service - adjustments to LIC | - | - | (2,967) | (2,967)
- Losses on onerous contracts and reversal of those losses | - | (927) | - | (927)
- Amortization of insurance acquisition cash flows | (919) | - | - | (919)
Insurance finance expenses through profit and loss | (5,817) | (27) | (23) | (5,867)
Investment components | 3,032 | - | (3,032) | -
Total changes in statement of profit and loss | 1,241 | (954) | (7,119) | (6,832)
Premiums received | (58,589) | - | - | (58,589)
Claims paid | - | - | 4,388 | 4,388
Directly attributable expenses paid | - | - | 1,878 | 1,878
Acquisition cost paid | 2,116 | - | - | 2,116
Total cash flows | (56,473) | - | 6,266 | (50,207)
Closing insurance contract assets | 5,019 | (342) | (185) | 4,492
Closing insurance contract liabilities | (87,798) | (2,306) | (1,383) | (91,487)
Net closing position of insurance contracts | (82,779) | (2,648) | (1,568) | (86,995)

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
122
NOTE 25
OTHER LIABILITIES

|  | 2024 |  | 2023
Financial liabilities: | Group | Bank | Group | Bank
Trade payables | 3,462 | - | 4,034 | 1,424
Accrued charges | 36,256 | 32,792 | 28,849 | 26,542
Lease liabilities (see Note 18) | 6,708 | 6,453 | 7,224 | 6,393
Total financial liabilities | 46,426 | 39,245 | 40,107 | 34,359
Breakdown of other financial liabilities according to maturity |  |  |  |
Short-term (up to 1 year) | 41,425 | 34,530 | 35,156 | 30,149
Long-term (over 1 year) | 5,001 | 4,715 | 4,951 | 4,210
Non-financial liabilities: |  |  |  |
Advance amounts received from the buyers of assets | 5,702 | - | 5,887 | -
Deferred income | 4,033 | 719 | 1,534 | 698
Provisions | 74 | - | 183 | -
Other liabilities | 1,185 | 944 | 737 | 737
Total non-financial liabilities | 10,994 | 1,663 | 8,341 | 1,435
Breakdown of other non-financial liabilities according to maturity |  |  |  |
Short-term (up to 1 year) | 9,858 | 1,424 | 7,622 | 1,195
Long-term (over 1 year) | 1,136 | 239 | 719 | 240
Total non-financial liabilities | 10,994 | 1,663 | 8,341 | 1,435

Provisions are recognized as the Group‘s subsidiaries involved in the real estate activities grant service commitments for the properties
they develop and sell or for pending legal issues against the Group companies. The movement of provisions is presented in the table
below:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Provisions at 1 January | 183 | - | 469 | -
Additions/(reversals), including increases (decreases) in existing | (109) | - | (286) | -
provisions |  |  |  |
Amounts used | - | - | - | -
Other movements (reclassifications) | - | - | - | -
Provisions at 31 December | 74 | - | 183 | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
123
NOTE 26
INVESTMENT PROPERTY
Investment property

| Group | Bank
Year ended 31 December 2023: |  |
Carrying amount at 1 January | 1,827 |
Acquisitions | - | -
Reclassifications | - | -
Impairment | - | -
Depreciation charge | (39) |
Disposals and write-offs | (795) | -
Carrying amount at 31 December 2023 | 993 | -
As at 31 December 2023: |  |
Cost | 2,530 | -
Accumulated depreciation | (1,537) | -
Net carrying amount | 993 | -
Estimated fair value at 31 December 2023 | 1,203 | -
Year ended 31 December 2024: |  |
Carrying amount at 1 January | 993 | -
Acquisitions | - | -
Reclassifications | - | -
Impairment | - | -
Depreciation charge | (27) | -
Disposals and write-offs | (966) | -
Carrying amount at 31 December 2024 | - | -
As at 31 December 2024: |  |
Cost | 1,564 | -
Accumulated depreciation | (1,564) | -
Net carrying amount | - | -
Estimated fair value at 31 December 2024 | - | -
Economic life (in years) | 20-50 |

The Group tests the investment property for impairment mainly using valuations from external independent certified appraisers or
valuations performed by Group’s employees (as of 31 December 2023 100% of the carrying value of the investment property was tested
for impairment using valuations from external independent certified appraisers). Income or comparative price methods, i.e. valuation
techniques attributable to Level 3 (income method or comparative price method) are mostly used valuation techniques to test the
investment property for impairment both by external and internal valuators.
NOTE 27
CAPITAL
As of 31 December 2022 share capital of the Bank amounted to EUR 174,211 thousand, it comprised 600,726,263 ordinary registered
shares with par value of EUR 0.29 each.
On 22 November the Bank and Invalda INVL signed an agreement according which segments of their retail businesses were merged on
1 December 2023. After closing the transaction, 62,270,383 newly issued shares of the Bank which represents 9,39% of the Bank
shareholding were transferred to Invalda INVL on 15 December 2023. After this issue of shares as of 31 December 2023 share capital
of the Bank amounted to EUR 192,269 thousand , it comprised 662,996,646 ordinary registered shares with par value of EUR 0.29 each.
At 31 May 2024 The European Bank for Reconstruction and Development (EBRD), together with asset management group Invalda INVL,
Tesonet Global, a member of the Tesonet group of companies, and Willgrow, the holding company that manages Girteka Logistics, have
finalized a series of planned transactions, which together dispose of a total of 16.33% of the shares of Šiaulių bankas. 31 December
2020 The European Bank for Reconstruction and Development (EBRD) held 26.02% of the Bank's share capital and votes. On 22
December 2021, the EBRD announced its decision to sell its 18% stake in the Bank. The EBRD has signed 3 separate agreements for
the sale of the Bank's shares: with the asset management group Invalda INVL, Tesonet Global belonging to the Tesonet group of
companies, and Willgrow, a holding company managed by Girteka Logistics. The respective shareholdings to be sold are 5,87 %, 5,87
% and 6,29 %. The acquisition process was carried out through a series of transactions which lasted until June 2024. 29 December 2021.
"Willgrow announced the acquisition of a 5.71% stake in the Bank. On 30 June 2024, following the completion of the transaction
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
124
milestones, Invalda INVL Group’s shareholding in Šiaulių Bankas increased to 19.93%, Willgrow's to 8.97% and Tesonet Global's to
5.32%. As a result of these transactions, the EBRD owns 7.25% of the Bank's share capital and voting rights..
NOTE 27
CAPITAL (CONTINUED)
As of 31 December 2023 share capital of the Bank amounted to EUR 192,269 thousand it comprised 662,996,646 ordinary registered
shares with par value of EUR 0.29 each. During the year 2024 there were no additional share capital increase.
As at 31 December 2024, the Bank had 18,774 shareholders (as at 31 December 2023: 19,087).
Share premium
The share premium represents the difference between the issue price and nominal value of the shares issued by the Bank. Share
premium can be used to increase the Bank’s authorized share capital. In 2018, the share premium of EUR 3,428 thousand was
recognized in the subordinated loan conversion process. In 2023 share premium has increased to EUR 25,534 due to business
combination in more detail described in section above of this note and Note 16. During the year 2024 there were no additional share
premium increase.
Reserve capital
The reserve capital is formed from the Bank’s profit and its purpose is to ensure the financial stability of the Bank. The shareholders may
decide to use the reserve capital to cover losses incurred.
Statutory reserve
According to the Law of the Republic of Lithuania on Banks, allocations to the statutory reserve shall be compulsory and shall not be less
than 1/20 of the profit available for appropriation. The statutory reserve may, by a decision of extraordinary general or annual meeting of
the shareholders, be used only to cover losses of the activities.
Reserve for acquisition of own shares
On 30 March 2022, at the annual general meeting of shareholders, a decision was made to increase the reserve for the repurchase of
the Bank's own shares by EUR 10,000 thousand (the reserve was established on March 28, 2019, by a decision of the general meeting
of shareholders). The reserve formed amounts to EUR 20,000 thousand. It can be used for two purposes: to support the Bank's share
price and to purchase shares that will be transferred to Group employees as part of variable remuneration. As of December 31, 2024,
the carrying value of the reserve for the repurchase of own shares is EUR 20,000 thousand (as of December 31, 2023 - EUR 20,000
thousand).
On 15 August 2024, the Bank received authorization from the European Central Bank (ECB) to repurchase up to 13,745 thousand of its
own shares. According to the Bank's share buyback program, announced on October 31, 2024, the Bank had acquired 3,093 thousand
shares by December 31, 2024, paying EUR 2,555 thousand for them. The sole purpose of the program is to reduce the Bank's share
capital.
During twelve months period ended 31 December 2024 the Bank acquired 10,343 thousand units of own shares for EUR 8,375 thousand.
2,273 thousand units of own shares acquired in 2023 were granted to the employees of the Bank and its subsidiaries as a deferred part
of variable remuneration for 2020. As of 31 December 2024 the Bank held 10,343 thousand own shares with carrying value of EUR 8,375
thousand.
During twelve months period ended 31 December 2023 the Bank acquired 4,764 thousand units of own shares for EUR 3,368 thousand.
Part of acquired shares were granted to the employees of the Bank and its subsidiaries as a deferred part of variable remuneration for
2019. As of 31 December 2023 the Bank held 2,273 thousand own shares with carrying value of EUR 1,500 thousand.
Other equity
Other equity consists of amount that corresponds to the obligation to present Bank‘s shares to Group‘s employees as part of variable
remuneration.
The Group’s remuneration policy prescribes two main elements of remuneration – fixed remuneration and variable remuneration, and
various additional benefits. Employees whose professional activities and/or decisions might have a significant impact on the risk accepted
by the Group, receive deferred variable remuneration. The remuneration amounts are accrued as staff expenses in income statement.
Until 2018, Group’s incentive scheme included deferred payments in shares and cash of not less than 40% of variable remuneration
being paid in equal instalments during three-year period. From 2019 under the Group's incentive scheme employees whose professional
activities and/or decisions may have a significant impact on the risk assumed be the Group receive 50% of the annual long term incentive
program in cash and 50% in form of Bank's shares options executable after 3 years. The number of share options is based on the
currency value of the achieved results divided by the weighted average price at which the Bank's shares are traded on Nasdaq Vilnius
during the period of five months prior the approval of renumeration. Each option is convertible into one ordinary share.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
125
NOTE 27
CAPITAL (CONTINUED)
The Group has assessed fair value of shares option by the Black-Scholes model which is attributable to Level 3 in fair value hierarchy.
The model inputs include:
• For the option granted 31 March 2024: grant date (31 March 2023), expiry days (14 April 2028 and 29 April 2029), share price
0.71 on grant day, exercise price 0.58, expected price volatility of the bank's shares 25%, risk free interest rates – 3,5% and
2.3%;
• For the option granted 31 March 2023: grant date (31 March 2023), expiry days (9 April 2027 and 14 April 2028), share price
0.747 on grant day, exercise price 0.65, expected price volatility of the bank's shares 26%, risk free interest rates - 5% and
2.3%;
• For the option granted 30 March 2022: grant date (30 March 2022), expiry day (11 April 2025), share price 0.66 on grant day,
exercise price 0.59, expected price volatility of the bank's shares 28%, risk free interest rate – 0.1%;
• For the option granted 31 March 2021: grant date (31 March 2021), expiry day (12 April 2024), share price 0.54 on grant day,
expected price volatility of the bank's shares 25%, risk free interest rate - 0.1%.
The value of the option is included in other equity line in the statement of financial position. Other equity consists of.

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Options | 1,480 | 1,019 | 1,697 | 1,209
Shares distributable to the employees | - | - | - | -
Total | 1,480 | 1,019 | 1,697 | 1,209

No options were forfeited or expired during years ended 31 December 2024 and 31 December 2023. During 12 months period ended 31
December 2024 2,273 thousand units of share options were exercised for benefit of Group’s defined employees (for benefit of Bank’s
defined employees – 1,991 thousand units) on exercise date at weighted average share price of 0.66 EUR.
NOTE 28
CONTINGENT LIABILITIES AND COMMITMENTS
Contingent tax liabilities
The Tax Authorities have not carried out a full-scope tax audit of the Bank for the period from 2020 to 2024. The Tax Authorities may at
any time during 5 successive years after the end of the reporting tax year carry out an inspection of the Bank‘s books and accounting
records and impose additional taxes or fines. Management is not aware of any circumstances that might result in a potential material
liability in this respect.
Guarantees issued, letters of credit, commitments to grant loans and other commitments

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Financial guarantees issued | 87,985 | 87,985 | 59,216 | 59,256
Letters of credit | 135 | 135 | 538 | 538
Commitments to grant loans | 393,190 | 403,413 | 473,095 | 480,723
Other commitments | 298 | 298 | 8,932 | 8,932
Total | 481,608 | 491,831 | 541,781 | 549,449

Fair value of the guarantees amounts to EUR 511 thousand at 31 December 2024 (31 December 2023: EUR 418 thousand). It is
estimated as the amount of the guarantee fee to be paid by the customers less amortization over the contract period.
Staging of guarantees issued, letters of credit, commitments to grant loans and other commitments:

|  | 2024 |  | 2023
| Group | Bank | Group | Bank
Financial guarantees issued: | 87,985 | 87,985 | 59,216 | 59,256
Stage 1 | 87,985 | 87,985 | 59,216 | 59,256
Letters of credit: | 135 | 135 | 538 | 538
Stage 1 | 135 | 135 | 538 | 538
Commitments to grant loans: | 393,190 | 403,413 | 473,095 | 480,723
Stage 1 | 371,314 | 363,909 | 466,672 | 458,661
Stage 2 | 19,570 | 37,198 | 6,115 | 21,754
Stage 3 | 2,306 | 2,306 | 308 | 308
Other commitments: | 298 | 298 | 8,932 | 8,932
Stage 1 | 298 | 298 | 8,932 | 8,932
Total | 481,608 | 491,831 | 541,781 | 549,449

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
126
NOTE 28
CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
As the guarantees and letters of credit are either 100% secured by cash collaterals pledged by the customers to the Bank, or are issued
using the credit line that the Bank has granted to the customer (which has its own collaterals and impairment is calculated for the credit
line), no ECL impairment provisions are formed against these obligations. Commitments to grant loans are included in the EAD model in
loan ECL calculations and the impairment is calculated for the whole instrument that includes both on-balance and off-balance sheet
amounts, therefore the impairment for commitments to grant loans is included in the loan impairment amount.
The Group‘s liabilities include provisions for other contingent liabilities that are recognized using IAS 37 approach. Such provisions are
disclosed in Note 25.
NOTE 29
DIVIDENDS
Dividends are declared during the annual general meeting of shareholders of the Bank when appropriation of profit for the reporting
period is performed.
On 29 March 2024 ordinary general meeting of shareholders made a decision to pay EUR 0. 0485 (i.e. 16.72%) dividends per one ordinary
registered share with EUR 0.29 nominal value each.
On 31 March 2023 ordinary general meeting of shareholders made a decision to pay EUR 0.0265 (i.e. 9.1%) dividends per one ordinary
registered share with EUR 0.29 nominal value each.
The table below demonstrates movements in dividends for the years 2024 and 2023:

| 2024 | 2023
Unpaid dividend amount at 1 January: | 94 | 84
Dividends declared | 32,095 | 15,919
Dividends paid | (32,159) | (15,909)
Unpaid dividend amount at 31 December: | 30 | 94

NOTE 30
RELATED-PARTY TRANSACTIONS
Related parties with the Bank are classified as follows:
a) members of the Bank’s Supervisory Council and Board (which also are the main decision makers of the Group), their close
family members and companies that are controlled, jointly controlled over by these related parties;
b) subsidiaries of the Bank, includes SB draudimas GD UAB, SB Lizingas UAB, SB turto fondas UAB, SB modernizavimo fondas
UAB, SB Asset Management UAB;
c) the shareholders holding over 20% of the Bank’s share capital or being a part of a voting group acting in concert that holds over
20% of voting rights therefore presumed to have a significant influence over the Group.
During 2024 and 2023, a certain number of banking transactions were entered into with related parties in the ordinary course of business.
These transactions include settlements, loans, deposits and foreign currency transactions .
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
127
NOTE 30
RELATED-PARTY TRANSACTIONS (CONTINUED)
The year-end balances of loans (incl. off-balance sheet commitments) granted to and deposits accepted from the Bank’s related parties,
except for subsidiaries, and ranges of annual interest rates were as follows (data of the Bank):

|  | Deposits, at the | Range of annual |  |  | Loans, at the | Range of annual |  |  | Off-balance sheet
|  |  |  |  |  |  |  |  |  | commitments, at the
|  | year-end | interest rates, % |  |  | year-end | interest rates, % |  |  | year-end
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023
Members of the Council and the Board | 576 | 424 | 0,00-4,30 | 0,00-4,30 | 765 | 274 | 4,37-4,66 | 5,63 | 44 | 25
Other related parties | 708 | 225 | 0,00-4,75 | 0,00-4,30 | 8,722 | 9 171 | 0,69-5,343 | 0,69-6,80 | 1 | 1
(excluding subsidiaries of the Bank) |  |  |  |  |  |  |  |  |  |
Total | 1,284 | 649 | - | - | 9,487 | 9 445 | - | - | 45 | 26
% of regulatory capital | 0,00% | 0,00% |  |  | 0,01% | 0,02% |  |  | 0,00% | 0,00%

In 2024 EUR 42 thousand interest income were generated from transactions with related parties (except for subsidiaries, in 2023 – EUR
55 thousand).
As at 31 December 2024 loans to related parties (except for subsidiaries) with gross value before impairment provisions of EUR 9,487
thousand (31 December 2023: EUR 9,455 thousand) had collaterals.
At 31 December 2024 and 2023 Bank’s subsidiaries had no material transactions with the related parties except for the Bank and its
subsidiaries.
Transactions with subsidiaries:
Balances of Bank’s transactions with the subsidiaries are given below:

|  |  |  |  |  |  |  |  |  | Off-balance sheet
|  | Deposits, at the | Range of annual |  |  | Loans, at the | Range of annual |  |  | commitments, at the
|  | year-end | interest rates, % |  |  | year-end | interest rates, % |  |  | year-end
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023
Non-financial institutions | 60 598 | 35,155 | 0-3.750 | 0.00-4.15 | 63 211 | 30,070 | 4.55-15.40 5.28-16.13 | 12 000 | 13,750
Financial institutions | 13 | 52 | 0.00 | 0.00 | 290 817 | 247,553 | 2,6 | 4.35-5.80 | 17 628 | 15,639

No collateral is obtained on loans to subsidiaries.
Increase of balances of loans in table above in 2024 if compared to 2023 is related with transactions with UAB SB modernizavimo fondas
2 established in 2024 operations. This entity is not consolidated due to IFRS 10 requirements however considered as related party under
IAS 24 requirements.
Bank’s total balances with subsidiaries (see Note 16 for details on investment in subsidiaries):

Assets | 2024 | 2023
Loans | 354,028 | 277,623
Other assets | - | -
Bank’s investment in subsidiaries | 84,069 | 76,672
Liabilities | - | -
Term deposits |  | 540
Demand deposits | 60,611 | 34,667
Other liabilities | - | -

Income and expenses arising from transactions with subsidiaries:

Income | 2024 | 2023
Interest | 16,898 | 10,314
Commission income | 6,432 | 2,711
Income (losses) from foreign exchange operations | - | -
Share of the profit or loss of investments in subsidiaries accounted for using the equity method | 7,227 | (4,267)
Other income | 785 | 2,001
Expenses |  |
Interest | (153) | (88)
Operating expenses | 940 | 155
Impairment (reversal of impairment) of loans | 150 | (162)
Impairment of an investment to subsidiaries | - | -

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
128
NOTE 30
RELATED-PARTY TRANSACTIONS (CONTINUED)
Remuneration of the management of the Group/Bank
According to the Bank's Remuneration Policy, the members of the management bodies are paid a fixed and annual variable remuneration.
The annual variable remuneration fund is formed based on the Bank's performance, taking into account current and future risks. During
2024 the total amount of fixed and annual variable renumeration (total of payments in cash and in shares of the Bank) to the Bank’s
Board members amounted to EUR 2,033 thousand (2023: EUR 1,598 thousand).

| 2024 | 2023
Fixed renumeration in cash | 1,428 | 1,122
Variable renumeration in cash | - | 52
Variable renumeration in shares of Bank | 605 | 424
Total | 2,033 | 1,598

No other post-employment benefit or long-term benefit were paid to members of Board (including management).
Liabilities related to long term benefits related to remuneration are presented in the table below:
2024

|  | 2023
Short-term (up to 1 year) | 597 | 678
Long-term (over 1 year) | 1,543 | 1,172
Total | 2,140 | 1,850

|  |  |  | Payment in cash due in: |  |  |  | Payment in shares due in: | Total
| Up to 1 | From 1 to | From 2 to | Total |  |  | Up to 1 From 1 to From 2 to | Total |
31 December 2023: | year | 2 years | 3 years | year | 2 years | 3 years |  |
for year 2020 salaries and bonuses | - | - | - | - | 678 | - | - | 678 | 678
for year 2021 salaries and bonuses | - | - | - | - | - | 597 | - | 597 | 597
for year 2022 salaries and bonuses | - | - | - | - | - | - | 575 | 575 | 575
Total liability at 31 December 2023 | - | - | - | - | 678 | 597 | 575 | 1 850 | 1,850
31 December 2024: |  |  |  |  |  |  |  |  |
for year 2021 salaries and bonuses | - | - | - | - | 597 | - | - | 597 | 597
for year 2022 salaries and bonuses | - | - | - | - | - | 573 | - | 573 | 573
for year 2023 salaries and bonuses | - | - | - | - | - | - | 970 | 970 | 970
Total liability at 31 December 2024 | - | - | - | - | 597 | 573 | 970 | 2,140 | 2,140

NOTE 31
FINANCIAL GROUP INFORMATION
According to local legislation the Bank is required to disclose certain information for the Financial group. As of 31 December 2024 the
Bank owned the following controlled subsidiaries included in the prudential scope of consolidation (the Bank and four subsidiaries
comprised the Financial group, all of the entities attributable to Financial Group operate in Lithuania):
1. SB Turto Fondas UAB (real estate management activities),
2. SB Lizingas UAB (consumer financing activities),
3. SB Asset Management UAB (fund management activities).
As of 31 December 2023 the Bank owned the following subsidiaries included in the prudential scope of consolidation (the Bank and four
subsidiaries comprised the Financial group, all of the entities attributable to Financial Group operate in Lithuania):
1. Šiaulių Banko Lizingas UAB (lease activities),
2. Šiaulių Banko Investicijų Valdymas UAB (investment management activities),
3. SB Turto Fondas UAB (real estate management activities),
4. SB Lizingas UAB (consumer financing activities).
In the Financial Group financial statements, the subsidiaries of the Bank that are not included in the Financial Group are not consolidated
in full as would be required by IFRS 10 but presented on the consolidated balance sheet of the Financial Group as investments in
subsidiaries at cost less impairment, in the same way as presented on the balance sheet of the Bank. This presentation is consistent
with the regulatory reporting made by the Bank according to the Regulation (EU) No 575/2013 on prudential requirements for credit
institutions and investment firms (CRR).
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
129
NOTE 31
FINANCIAL GROUP INFORMATION (CONTINUED)
STATEMENT OF FINANCIAL POSITION

|  | 31 December 2024 |  | 31 December 2023
| Fin. Group | Bank | Fin. Group | Bank
ASSETS |  |  |  |
Cash and cash equivalents | 387,680 | 386,365 | 743,733 | 742,969
Securities in the trading book | 18,020 | 13,543 | 20,522 | 20,402
Due from other banks | 3,121 | 3,121 | 3,013 | 3,013
Derivative financial instruments | 1,093 | 1,093 | 241 | 241
Loans to customers | 3,117,700 | 3,105,007 | 2,645,104 | 2,633,482
Finance lease receivables | 316,897 | 316,897 | 286,533 | 286,451
Investment securities at fair value | 43,868 | 43,620 | 74,500 | 74,382
Investment securities at amortized cost | 716,864 | 716,864 | 739,869 | 739,869
Investments in subsidiaries | 38,180 | 84,069 | 32,628 | 76,672
Intangible assets | 40,569 | 7,859 | 41,919 | 8,149
Property, plant and equipment | 15,070 | 14,689 | 15,116 | 14,702
Investment property | - | - | 993 | -
Current income tax prepayment | 82 | - | 9 | -
Deferred income tax asset | 6,074 | 2,716 | 7,575 | 3,658
Other financial assets | 7,403 | 6,559 | 7,780 | 8,289
Other non-financial assets | 9,790 | 8,505 | 12,084 | 10,681
Assets classified as held for sale | 150 | 150 | 150 | 150
Total assets | 4,722,561 | 4,711,057 | 4,631,769 | 4,623,110
LIABILITIES |  |  |  |
Due to other banks and financial institutions | 67,926 | 68,487 | 571,750 | 576,316
Derivative financial instruments | 123 | 123 | 1,041 | 1,041
Due to customers | 3,537,972 | 3,543,291 | 3,163,157 | 3,166,908
Special and lending funds | 23,037 | 23,037 | 15,718 | 15,718
Debt securities in issue | 448,159 | 448,159 | 276,480 | 276,480
Current income tax liabilities | 206 | 48 | 6,412 | 6,412
Deferred income tax liabilities | 6,141 | - | 6,125 | -
Other financial liabilities | 43,812 | 39,245 | 38,217 | 34,359
Other non-financial liabilities | 8,680 | 1,663 | 8,386 | 1,435
Total liabilities | 4,136,056 | 4,124,053 | 4,087,286 | 4,078,669
EQUITY |  |  |  |
Capital and reserves attributable to owners of the Bank |  |  |  |
Share capital | 192,269 | 192,269 | 192,269 | 192,269
Share premium | 25,534 | 25,534 | 25,534 | 25,534
Treasury shares (-) | (8,375) | (8,375) | (1,500) | (1,500)
Reserve capital | 756 | 756 | 756 | 756
Statutory reserve | 60,903 | 60,805 | 47,681 | 47,605
Reserve for acquisition of own shares | 20,000 | 20,000 | 20,000 | 20,000
Financial instruments revaluation reserve | (2,989) | (2,989) | (5,426) | (5,426)
Other equity | 1,404 | 1,019 | 1,603 | 1,209
Retained earnings | 297,003 | 297,985 | 263,566 | 263,994
Total equity | 586,505 | 587,004 | 544,483 | 544,441
Total liabilities and equity | 4,722,561 | 4,711,057 | 4,631,769 | 4,623,110

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
130
NOTE 31
FINANCIAL GROUP INFORMATION (CONTINUED)
INCOME STATEMENT

|  | 2024 |  | 2023
Continuing operations | Fin. Group | Bank | Fin. Group | Bank
Interest revenue calculated using the effective interest method | 243,291 | 227,237 | 195,477 | 181,049
Other similar income | 24,955 | 24,953 | 21,096 | 21,070
Interest expense and similar charges | (110,002) | (110,146) | (60,113) | (60,189)
Net interest income | 158,244 | 142,044 | 156,460 | 141,930
| , |  |  |
Fee and commission income | 38,442 | 32,587 | 28,642 | 28,968
Fee and commission expense | (8,871) | (8,044) | (8,207) | (8,114)
Net fee and commission income | 29,571 | 24,543 | 20,435 | 20,854
Net gain from trading activities | 6,304 | 6,248 | 5,481 | 5,358
Net gain (loss) from derecognition of financial assets | 544 | 778 | 809 | 532
Net gain (loss) from disposal of tangible assets | 593 | 141 | 864 | 97
Other operating income | 982 | 1,384 | 881 | 2,096
Salaries and related expenses | (48,844) | (43,840) | (35,531) | (33,004)
Depreciation and amortization expenses | (7,893) | (6,392) | (5,386) | (5,126)
Other operating expenses | (37,674) | (32,402) | (30,569) | (25,557)
Operating profit before impairment losses | 101,827 | 92,504 | 113,444 | 107,180
Allowance for impairment losses on loans and other assets | (10,898) | (4,635) | (15,509) | (8,059)
(Allowance for)/ reversal of allowance for impairment losses on other assets | - | - | 286 | -
Allowance for impairment losses on investments in subsidiaries | - | - | - | -
Share of the profit or loss of investments in subsidiaries accounted for using | 5,429 | 7,227 | (2,471) | (4,267)
the equity method |  |  |  |
Profit from continuing operations before income tax | 96,358 | 95,096 | 95,750 | 94,854
| , | , |  |
Income tax expense | (17,608) | (15,810) | (20,366) | (19,234)
Net profit from continuing operations for the year | 78,750 | 79,286 | 75,384 | 75,620
Profit (loss) from discontinued operations, net of tax | - | - | - | -
Net profit for the year | 78,750 | 79,286 | 75,384 | 75,620
Net profit attributable to: |  |  |  |
Owners of the Bank | 78,750 | 79,286 | 75,384 | 75,620
From continuing operations | 78,750 | 79,286 | 75,384 | 75,620
From discontinued operations | - | - | - | -
Non-controlling interest | - | - | - | -

STATEMENT OF COMPREHENSIVE INCOME

|  | 2024 |  | 2023
| Fin. Group | Bank | Fin. Group | Bank
Profit for the year | 78,750 | 79,286 | 75,384 | 75,620
Other comprehensive income (loss): |  |  |  |
Items that may be subsequently reclassified to profit or loss: |  |  |  |
Financial assets valuation gains taken to other comprehensive income | 3,026 | 3,026 | 716 | 716
Financial assets valuation result transferred to profit or loss | 20 | 20 | 2,640 | 2,640
Deferred income tax on gain (loss) from revaluation of financial asset | (609) | (609) | (671) | (671)
Items that may not be subsequently reclassified to profit or loss: | - | - |  |
Fair value changes of financial liabilities at fair value through profit or loss | - | - | - | -
attributable to changes in their credit risk |  |  |  |
Other comprehensive income (loss), net of deferred tax | 2,437 | 2,437 | 2,685 | 2,685
Total comprehensive income | 81,187 | 81,723 | 78,069 | 78,305
Total comprehensive income (loss) attributable to: |  |  |  |
Owners of the Bank | 81,187 | 81,723 | 78,069 | 78,305
Non-controlling interest | - | - | - | -
| 81,187 | 81,723 | 78,069 | 78,305

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
131
NOTE 31
FINANCIAL GROUP INFORMATION (CONTINUED)
STATEMENT OF CASH FLOWS

|  |  |  |  | Year ended
|  |  | 31 December 2024 |  | 31 December 2023
Operating activities |  | Fin. Group | Bank | Fin. Group | Bank
Interest received on loans and advances |  | 225,951 | 209,897 | 177,561 | 163,133
Interest received on finance leases |  | 22,958 | 22,956 | 18,678 | 18,652
Interest received on debt securities in the trading book |  | 1,292 | 1,292 | 1,741 | 1,741
Interest paid |  | (103,744) | (104,419) | (29,587) | (29,633)
Fees and commissions received |  | 38,442 | 32,587 | 28,642 | 28,968
Fees and commissions paid |  | (8,871) | (8,044) | (8,207) | (8,114)
Net cash inflows from trade in securities in the trading book |  | 7,172 | 7,116 | 1,725 | 1,602
Net inflows from foreign exchange trading |  | 5,218 | 5,218 | 6,975 | 6,975
Net inflows from derecognition of financial assets |  | 544 | 779 | 809 | 532
Net inflows from disposal of tangible assets |  | 593 | 141 | 864 | 97
Cash inflows related to other activities of Group companies |  | 983 | 1,384 | 882 | 2,096
Recoveries on loans previously written off |  | 285 | 161 | 210 | 208
Salaries and related payments to and on behalf of employees |  | (44,956) | (39,952) | (33,677) | (31,150)
Payments related to operating and other expenses |  | (37,674) | (32,402) | (30,631) | (25,557)
Income tax (paid) |  | (23,581) | (22,442) | (17,563) | (16,200)
Net cash flow from operating activities before change in operating assets and liabilities |  | 84,612 | 74,272 | 118,422 | 113,350
Change in operating assets and liabilities: |  |  |  |  |
Decrease in due from other banks |  | (108) | (108) | (280) | (280)
Increase in loans to customers |  | (483,005) | (475,529) | (256,841) | (263,910)
Increase in finance lease receivable |  | (30,412) | (30,494) | (47,511) | (47,685)
Decrease (increase) in other financial assets |  | 377 | 1,730 | 8,622 | (2,669)
Decrease (increase) in other non-financial assets |  | 16,543 | 16,894 | 860 | 9,743
Increase in due to banks and financial institutions |  | (487,134) | (491,139) | (128,349) | (124,862)
Increase in due to customers |  | 362,470 | 364,038 | 361,761 | 361,653
Increase (decrease) in special and lending funds |  | 6,679 | 7,319 | 1,534 | 1,534
Increase (decrease) in other financial liabilities |  | 5,452 | 4,743 | 12,620 | 10,203
Increase (decrease) in other non-financial liabilities |  | (6,968) | (3,655) | (13,910) | (3,155)
Change |  | (616,106) | (606,201) | (61,494) | (59,428)
Net cash flow from operating activities |  | (531,494) | (531,929) | 56,928 | 53,922
Investing activities |  |  |  |  |
(Acquisition) of property, plant and equipment, investment property and intangible assets |  | (5,179) | (4,893) | (7,393) | (7,299)
Disposal of property, plant and equipment, investment property and intangible assets |  | 207 | 187 | 3,796 | 2,215
(Acquisition) of investment securities at amortized cost |  | (316,044) | (316,044) | (64,157) | (64,157)
Proceeds from redemption or sale of investment securities at amortized cost |  | 335,131 | 335,131 | 279,209 | 279,209
Interest received on investment securities at amortized cost |  | 17,776 | 17,776 | 9,777 | 9,777
Dividends received |  | 13 | 13 | 14 | 10,014
(Acquisition) of investment securities at fair value |  | 382 | - | 547 | -
Sale or redemption of investment securities at fair value |  | 33,645 | 33,645 | 16,824 | 16,824
Interest received on investment securities at fair value |  | 639 | 639 | 758 | 758
Business acquired net of cash acquired during transaction | 16 | - | - | 551 | -
Establishment of subsidiaries | 16 | (100) | (100) | - | (400)
Increase in share capital of subsidiaries in cash | 16 | (70) | (70) | (13,206) | (17,706)
Net cash flow from (used in) investing activities |  | 66,400 | 66,284 | 226,720 | 229,235
Financing activities |  |  |  |  |
Payment of dividends |  | (32,159) | (32,159) | (15,909) | (15,909)
Acquisition of own shares |  | (8,375) | (8,375) | (3,368) | (3,368)
Interest on debt securities in issue |  | (13,387) | (13,387) | (2,905) | (2,905)
Issue of debt securities |  | 375,000 | 375,000 | 100,000 | 100,000
Redemption of debt securities issued |  | (210,000) | (210,000) | - | -
Principal elements of lease payments |  | (2,038) | (2,038) | (1,567) | (1,524)
Net cash flow (used in) from financing activities |  | 109,041 | 109,041 | 76,251 | 76,294
Net increase (decrease) in cash and cash equivalent |  | (356,053) | (356,604) | 359,899 | 359,451
Cash and cash equivalents at 1 January |  | 743,733 | 742,969 | 383,834 | 383,518
Cash and cash equivalents at 31 December |  | 387,680 | 386,365 | 743,733 | 742,969

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024
(All amounts are in EUR thousand, unless otherwise stated)
132
NOTE 31
FINANCIAL GROUP INFORMATION (CONTINUED)
FINANCIAL GROUP‘S STATEMENT OF CHANGES IN EQUITY
Share capital
Share premium
Treasury shares
(-)
Reserve capital
Financial
instruments
revaluation
reserve
Statutory reserve
Reserve for
acquisition of
own shares
Other equity
Retained
earnings
Total

31 December 2022 | 174,211 | 3,428 | - | 756 | (8,111) | 36,990 | 20,000 | 2,287 | 214,704 | 444,265
Impact of change in accounting principles | - | - | - | - | - | - | - | - | - | -
1 January 2023 | 174,211 | 3,428 | - | 756 | (8,111) | 36,990 | 20,000 | 2,287 | 214,704 | 444,265
Transfer to/from statutory reserve | - | - | - | - | - | 10,691 | - | - | (10,691) | -
Transfer to/from share acquisition reserve | 18,058 | 22,106 | - | - | - | - | - | - | - | 40,164
Acquisition of own shares | - | - | (3,368) | - | - | - | - | - | - | (3,368)
Share-based payment | - | - | 1,868 | - | - | - | - | (684) | 88 | 1,272
Payment of dividends | - | - | - | - | - | - | - | - | (15,919) | (15,919)
Total comprehensive income | - | - | - | - | 2,685 | - | - | - | 75,384 | 78,069
Net profit | - | - | - | - | - | - | - | - | 75,384 | 75,384
Other comprehensive income | - | - | - | - | 2,685 | - | - | - | - | 2,685
31 December 2023 | 192,269 | 25,534 | (1,500) | 756 | (5,426) | 47,681 | 20,000 | 1,603 | 263,566 | 544,483
Transfer to statutory reserve | - | - | - | - | - | 13,222 | - | - | (13,222) | -
Transfer to reserve for acquisition of own shares | - | - | - | - | - | - | - | - | - | -
Acquisition of own shares | - | - | (8,375) | - | - | - | - |  | - | (8,375)
Share-based payment | - | - | 1,500 | - | - |  | - | (199) | 4 | 1,305
Payment of dividends | - | - | - | - | - | - | - | - | (32,095) | (32,095)
Total comprehensive income | - | - | - | - | 2,437 | - | - | - | 78,750 | 81,187
Net profit | - | - | - | - | - | - | - | - | 78,750 | 78,750
Other comprehensive income | - | - | - | - | 2,437 | - | - | - | - | 2,437
31 December 2024 | 192,269 | 25,534 | (8,375) | 756 | (2,989) | 60,903 | 20,000 | 1,404 | 297,003 | 586,505

COMPLIANCE WITH PRUDENTIAL REQUIREMENTS
During the years ended 31 December 2024 and 31 December 2023, the Financial group and the Bank complied with prudential requirements to which it
was subject.
NOTE 32
EVENTS AFTER BALANCE SHEET DATE
In January 2025, the Bank purchased 2 million of its own shares, for which a payment of 1.8 million EUR was made. The purpose of acquisition of own
shares is to reduce the authorized capital of the Bank by cancelling the shares purchased by the Bank.
After end of reporting period there were no other significant events which would have impact to these financial statements.
CONSOLIDATED MANAGEMENT REPORT
FOR 2024
31 December 2024
Tilžės 149, LT-76348 Šiauliai
Tel. (8 41) 595 607, faks. (8 41) 430 774
Email info@sb.lt
www.sb.lt
CONSOLIDATED MANAGEMENT REPORT FOR 2024
134
The consolidated report of Šiaulių Bankas AB (hereinafter ― the Bank) covers the period 01 January 2024 to 31 December 2024.
The description of alternative performance indicators is available on the Bank's website at:
Homepage › Bank Investors › Financial Information › Alternative Performance Measures.
ANNUAL ACTIVITY RESULTS
• Financial targets. Šiaulių Bankas Group demonstrated strong performance and successfully achieved all its financial targets
for 2024, delivering on its guidance
• Profit. Šiaulių Bankas Group earned a record net profit of €78.8 million
• Loan portfolio. The loan portfolio grew by 17% year-on-year to over €3.4 billion
• Deposits. The deposit portfolio grew by 12% over the year to almost €3.6 billion at the end of 2024
• Fee & commission income. Net fee and commission income grew by 44% year-on-year to over €29 million
• Dividends. Šiaulių Bankas Group intends to propose a distribution of 50% of its 2024 net profit, or €0.061 dividend per share
• Share buybacks. Will allocate up to 5% of the 2024 net profit for own share buybacks
• Rebranding. A rebranding of Šiaulių Bankas will be proposed for the upcoming shareholders' meeting
Overview of the key performance indicators
“In 2024, we have successfully integrated INVL's retail business into Šiaulių Bankas Group, updated our long-term vision and strategy,
and initiated a business transformation that we believe will bring greater value to our customers, shareholders, and society.
While launching strategic projects such as the replacement of the core banking platform and rebranding preparation, we maintained high
profitability and service quality, effectively managing risk and costs.
The successful implementation of our first international bond issuances and the updated dividend policy demonstrate our commitment to
efficient capital utilization and delivering high returns to shareholders during the transformation period," says Vytautas Sinius, CEO of
Šiaulių Bankas.
Šiaulių Bankas Group earned an unaudited net profit of €78.8 million in 2024 which is 5% more than in 2023. Operating profit before
allowance for impairment losses and income tax amounted to €107.3 million, a 3% decrease compared to operating profit of €111.0
million in 2023. Increased operating expenses reflect larger group size post-merger with INVL Retail in 2023 and ongoing business
investments.
55,0 59,3 72,4 90,6 89,7
-12,0
-4,1
-4,9
-15,2
-10,9
43,0
55,2
67,4
75,4
78,8
-20
-5
10
25
40
55
70
85
100
2020 2021 2022 2023 2024
EUR m
Impairment
losses
Net profit before
impairment
Net profit
75,7
80,9
106,8
156,9
160,2
16,0
17,2
18,8
20,3
29,1
11,6
11,9
10,8
11,9
19,4
9,7
17,5
9,9
7,4
15,0
-23,5
-27,1
-30,7
-36,2
-49,5
-24,7
-29,1
-30,2
-49,3
-66,9
-130
-100
-70
-40
-10
20
50
80
110
140
170
200
230
2020 2021 2022 2023 2024
EUR m
Other expenses
Salary and related
expenses
Other income
Net gain from trading
activities
Net fee and commission
income
Net interest income
CONSOLIDATED MANAGEMENT REPORT FOR 2024
135
Net interest income grew by 2% year-on-year to €160.2 million, while net fee and commission income grew by 44% to over €29 million.
The latter increased 11% in the last quarter of 2024 alone, compared to Q3 2024.
All loan book segments grew during the year, with the total loan portfolio increasing by 17% (€503 million) to €3.43 billion. New credit
agreements worth €1.5 billion were signed during the year, 14% more than in 2023 (€1.3 billion).
The quality of the loan portfolio remains strong, with provisions of €11.3 million made in 2024, €4 million less than in 2023. The Cost of
Risk (CoR) of the loan portfolio for year 2024 was 0.35% (0.54% for the 2023).
The deposit portfolio grew by 12% since the beginning of the year (€383 million) and exceeded €3.5 billion at the end of the year. The
amount of term deposits grew by 22% (€348 million) to over €1.9 billion during the year and their share in the total deposit portfolio
increased by 5 percentage points to 54%.
The bank's capital structure was enhanced by an additional issue of Tier 1 (AT1) bonds of €50 million in the fourth quarter. All issuances
made in 2024 have significantly strengthened and diversified the capital base, which allows for continued rapid growth while ensuring
high returns for investors.
The Bank’s Management Board, taking into the account the updated dividend policy, the bank’s strong performance in 2024, its robust
capital position, and the favorable outlook for the operating environment, has decided to propose a dividend of 50% of the 2024 net profit
(€0.061 per share) for approval at the Bank’s Annual General Meeting.
Šiaulių Bankas has repurchased own shares worth €10.2 million and is planning to continue with buyback programs, in line with the
existing the European Central Bank's (ECB's) authorization granted on 15th August 2024. The bank will also propose to allocate up to
5% of its 2024 net profit for the share buybacks for the capital reduction purpose, and to grant shares as part of the deferred variable
remuneration for the employees of the Šiaulių Bankas Group.
The group's cost/income ratio (C/I) was 49.0%
1
(41.2%
1
in 2023) and the return on equity (RoE) was 14.0% (15.5% in 2023) at the end
of the year. The capital and liquidity position remained strong and prudential ratios are being met by a wide margin. The capital adequacy
ratio (CAR) stood at 22.8%
2
and the liquidity coverage ratio (LCR) at 232%
2
.
1
after eliminating the impact of the client portfolio of SB Draudimas
2
preliminary data
Overview of Business Segments
Corporate Client Segment
Šiaulių Bankas has significantly increased the volume of corporate financing over the year – in 12 months new corporate financing
agreements worth of €960 million were signed in 2024, 29% increase compared to previous year. In the 2024 the portfolio has grown by
20% (€308 million) to over €1.8 billion. Growth has been well-diversified across several strategic sectors, including manufacturing, retail,
and renewable energy. A favorable business environment has encouraged investment and created additional opportunities for expansion.
1 761 2 104 2 634 2 932 3 435
+19%
+25%
+11%
+17%
0
400
800
1 200
1 600
2 000
2 400
2 800
3 200
3 600
2020-12-31 2021-12-31 2022-12-31 2023-12-31 2024-12-31
EUR m
Loan and
finance lease
portfolio
2 353 2 685 2 799 3 178 3 561
+14%
+4%
+14%
+12%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2020-12-31 2021-12-31 2022-12-31 2023-12-31 2024-12-31
EUR m
Deposit
portfolio
CONSOLIDATED MANAGEMENT REPORT FOR 2024
136
Šiaulių Bankas continued its commitments to promote sustainability and signed amendments to the Pre-financing and Contingent loan
agreements with the European Investment Bank (EIB) concluded in 2016 to increase the Bank's investment up to €255 million from €195
million – to finance the modernization program of multi-apartment buildings in Lithuania.
Private Client Segment
In 2024, Šiaulių Bankas has successfully implemented key strategic initiatives that strengthened its market position and ensured
sustainable growth. The successful integration of INVL retail business was a major accomplishment, which enabled the bank to expand
its service offering and provide customers with even more opportunities. The implementation of new core banking platform is on track,
promising a greater efficiency and an improves customer experience.
To strengthen its image and further meet the expectations of its customers, Šiaulių Bankas has also started preparations for the
rebranding. A rebranding of Šiaulių Bankas will be proposed for the upcoming shareholders' meeting.
The volume of new mortgage contracts in 2024 increased by 21% year-on-year to €213 million. In 2024 the mortgage portfolio has grown
by 17% (€136 million) reaching €0.9 billion. The volume of new consumer loan contracts increased by 5% year-on-year to €232 million.
Since the beginning of 2024, the consumer loan portfolio has grown by 19% (€57 million) to over €0.35 billion.
Investment Client Segment
The bank has remained active in the local corporate bond market, originating €42 million in corporate bonds across 10 issuances for its
clients in Q4 2024. Total corporate bond issuance for the year reached €227 million. According to Nasdaq Baltics, Šiaulių Bankas is
leading security issuer in Lithuania and the Baltic States and maintains the largest share of securities trading on the Lithuanian stock
exchange.
Šiaulių Bankas demonstrated strong performance in asset management business in 2024. Client assets under management (AuM)
reached €1.46 billion and grew by €277 million year-on-year. Growth was driven by new client investment flows and investment
performance. In 2024, Šiaulių Bankas asset management company, earned €164.4 million for Tier II pension fund clients and €19.8
million for Tier III clients. In total, the profit generated for clients during the year was €184.2 million.
SB Alternative Investment Fund III, providing new investment opportunities for Lithuanian retail investors, has enjoyed a successful
launch, attracting over €6 million in 2024. Distribution of units of the investment fund is ongoing.
The Life Insurance segment also showed steady growth, Risk Under Management (RUM) reaching EUR 1.7 billion in the fourth quarter,
EUR 174 million more than a year ago.
REGARDING EXTERNAL ENVIRONMENT FACTORS
The Bank monitors the tense geopolitical situation in order to properly and timely assess and identify the potential impact of Russia’s
invasion of Ukraine on the Bank’s operations and the quality of its portfolio due to the risks it poses to clients. The Bank has no operations
in Russia, Belarus or Ukraine and does not have significant direct exposures in these countries. The Bank considers the secondary risk
of direct insolvency of clients operating in Lithuania due to the geopolitical situation to be low: the Bank’s largest clients are aware of the
threats, the number of clients dependent on business relations with Ukraine and Russia is low, and clients with business relations in the
countries mentioned above are reducing their dependence of their income on business transactions. To identify in a timely manner a
potential increase in the risk of its clients, the Bank applies the procedures set out in the Bank’s internal regulations, records Early
Warning Indicators (EWI) for the impact of the geopolitical situation on the clients that have a moderate or greater dependence on the
aforementioned countries through their supply or sales chains, or through their shareholding structure, and, in the event of a potentially
significant risk, puts the client on the Watch List and implements enhanced monitoring for these clients, and approves action plans for
the mitigation of risk. The greatest uncertainties and potential negative impacts arise from tertiary effects, i.e., the impact of Russia’s
invasion of Ukraine on the overall state of the economy. The Bank uses scenario assessments and stress testing to assess these impacts.
These assessments indicate that the Bank’s capital position is strong and that the Bank would be able to withstand significant shocks
related to economic downturns.
The increased monitoring is not limited to credit risk, but also includes a stronger monitoring of the bank's liquidity position (except for
the increased cash withdrawals a few days after the start of the invasion, there were no negative trends related to the invasion), increased
focus on business continuity and IT security (business continuity plans have been updated with a number of additional scenarios,
cybersecurity status is constantly being monitored, additional cyber-protection measures have been implemented, and testing of
measures and plans is ongoing). Also, due to the rapidly changing situation and the introduction of new sanction packages, the processes
and procedures for complying with the sanctions for clients and payments are under considerable scrutiny, which may in some cases
lead to longer process time.
The Russian invasion of Ukraine may further contribute to increased market volatility. The Bank has no direct investments (securities or
other financial instruments) in Russia, Belarus or Ukraine. The Bank has no or close to zero open currency exposure in these countries.
The Bank is closely monitoring the situation regarding other geopolitical factors and is in position to quickly react in case of material
changes.
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137
RATINGS
On June 7 2023 the international rating agency Moody’s Investor Service has upgraded Šiaulių Bankas long-term deposit ratings from
Baa2 to Baa1. The outlook on the long-term deposit ratings is affirmed as stable. This is the highest rating in the bank’s history. Moody’s
has also upgraded the long-term Counterparty Risk Ratings from Baa1 to A3. The long-term Counterparty Risk Assessments (CR
Assessments) were upgraded from Baa1(cr) to A3(cr). Moody’s has affirmed short-term deposit ratings of Šiaulių Bankas at P-2 and the
short-term CR Assessments at P-2(cr). The Baseline Credit Assessment has also been upgraded from Ba1 to Baa3.
RISK MANAGEMENT, COMPLIANCE WITH PRUDENTIAL REQUIREMENTS
A complete disclosure of all significant risks incurred by the Group is provided in the chapter Financial Risk Management of the
explanatory note of the financial statement for 2024.
Capital and liquidity position remain robust - prudential requirements are implemented with adequate reserve. According to the data as
of 31 December 2024 the Bank complied with all the prudential requirements set out by the supervisory authority.
The main financial indicators of the Group:
31/12/2020
31/12/2021
31/12/2022
31/12/2023
31/12/2024
ROAA, %
1.5
1.6
1.7
1.7
1.6
ROAE, %
12.7
14.3
16.1
15.5
14.0
Cost to income ratio, %
42.7
44.1
41.7
43.5
52.0
Cost to income ratio (adjusted due to the impact of
the SB draudimas clients' portfolio), %
42.9
42.8
43.4
41.2
49.0
Loan to deposit ratio, %
75.0
78.6
94.6
92.7
97.1
At the end of Q4 2024 were effective MREL requirements determined in February, 2024 at Financial group level, which shall be met from
1 January 2025:
• The minimum requirement for own funds and eligible liabilities of the resolution entity with which the Financial group shall comply
is 22,67% of total risk exposure (MREL-TREA) and 7.09% of leverage ratio exposure (MREL-LRE);
• Subordinated instruments shall comprise 13.50% of total risk exposure (MREL-TREA, subordinated) and 5.95% of leverage
ratio exposures (MREL-LRE, subordinated).
In September 2024, Šiaulių Bankas AB successfully placed in the international financial markets, new 300 million euros nominal value
MREL eligible bond issue and redeemed 210 million euros of MREL eligible bonds issued earlier. In May 2024, the Bank successfully
placed a 10-year subordinated bond issue of EUR 25 million in the Baltic financial markets, which attracted more investor attention than
expected. In October 2024, 50 million Euros Fixed Rate Reset Perpetual Additional Tier 1 Temporary Write Down Notes was issued in
international markets. The funds raised will help the Bank to maintain its lending volumes to Lithuanian businesses, to achieve an efficient
capital structure, to meet the requirements (including MREL) of the supervisory authority and to maintain the continuity of its dividend
policy.
Data on indicators are also available on the website of Šiaulių Bankas:
- on operating profitability indicators:
Homepage › Bank Investors › Financial Information › Profitability Ratios
- prudential requirements:
Homepage › Bank Investors › Financial Information › Prudential Standards
- the description of alternative performance indicators:
Homepage › Bank Investors › Financial Information › Alternative Performance Measures
ACTIVITY PLANS AND FORECASTS
The Bank Group aims to become a new generation financial services provider, offering broader services, flexibility and unique solutions.
Having implemented the retail business merger transaction, it expanded the range of services provided, including second and third pillar
pension and investment funds as well as wider life insurance services.
Having identified the Bank's long-term vision, we looked for a way to express an intermediate ambitious goal that would unite the entire
newly created organization after the retail business merger. To this end, we set an ambitious goal - to become the best bank in Lithuania
by 2029.
Having assessed all the circumstances and assumptions of future scenarios, in 2024 the Bank Group's strategy was updated for the
period 2025–2027, in which the foundation of the Bank's strategy remains continuous in achieving long-term goals. The direction to
actively shape the future of financial services, taking into account the needs and expectations of customers, remains relevant.
As a bank with Lithuanian roots, we have been building on our bold and character since our founding day and are even more firmly
articulating our core purpose - our mission is Banking that empowers. We understand and create modern banking as progressive,
close, human, nurturing and, above all, allowing to make dreams come true.
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138
During this strategic planning exercise, we have also renewed our focus on the vision, which includes perspectives on customer
relationship, reputation and visibility, and the bank's performance. Our vision - A bank one wants to grow with. For us, this means
realizing our ambition to be a bank that is loved and recognized by our customers, employees, and investors, and that encourages (and
helps) financial and professional growth.
Strategic ambition and objectives
Having identified a longer-term vision for the Bank, we also looked for a way to express an intermediate, ambitious goal of bringing
together the entire, newly created organization after the merger of the retail businesses. To this end, we have set ourselves the ambitious
goal of becoming the Best Bank in Lithuania by 2029. Achievements (desired results) that detail this ambition:
▪ From a customer perspective, to become No.1 in customer satisfaction in the banking sector;
▪ In terms of growth, to grow faster than the market in terms of number of active clients and loan portfolio;
▪ From an employee's perspective, the goal is to become a TOP3 employer in the financial sector;
▪ In terms of awareness, to become the first brand in the minds of consumers in the banking sector;
▪ From the investors' perspective, to deliver a 20% rate of return to investors.
In a fast-growing bank, risk management plays a crucial role in balancing ambitious growth with stability and compliance. While pursuing
expansion, the bank must ensure adherence to regulatory requirements, ethical standards, and internal controls to prevent financial and
operational risks. A systematic risk management approach involves continuous monitoring, stress testing, and proactive mitigation
strategies to safeguard assets and maintain trust. By integrating risk awareness into decision-making, the bank can achieve sustainable
growth while maintaining resilience against potential threats .
Strategic areas and objectives
In line with the Bank's business context, assumptions and market potential identified at the time of strategy development, and its stated
ambition and objectives, the Bank's strategy is shaped in three horizontal (cross-functional) and four vertical areas:
The horizontal strategic areas are essential and fundamental elements for the realization of this strategy, without which the strategic
objectives would be impossible to achieve or would be fundamentally changed:
▪ Compliance assurance, risk management and ESG implementation;
▪ Changing the technology platform;
▪ Rebranding.
The vertical strategic areas are breakthrough goals and strategic initiatives in specific perspectives:
▪ Customer perspective (divided into three business lines: corporate clients, private clients and investment clients);
▪ Employee perspective;
▪ Public (awareness) perspective;
▪ Investor perspective.
Summarizing the Bank's planned strategic period 2025-2027, it is necessary to emphasize that, taking into account market trends,
changing customer expectations, intensifying competitive environment, the Bank's strengths and weaknesses and other factors relevant
to the Bank's operations, this phase is considered to be a period of fundamental transformation for the Bank.
AUTHORIZED CAPITAL, SHAREHOLDERS
As of 31 December 2024, the authorized capital of the Bank totaled to EUR 192,269,027.34 and is divided into 662,996,646 units of
ordinary registered shares with a nominal value of EUR 0.29 each (ISIN LT0000102253 Nasdaq CSD Lithuanian branch). The Charter
of the Bank were registered in the Register of Legal Entities on 15 December 2023 after the last increase of the authorized capital by
additional contributions.
The rights granted by the Bank's shares are specified in the Bank's Charter, which is available on the Bank's website at:
Homepage › About Us › Important Documents
Authorized capital:
01/06/2018
13/12/2018
15/12/2023
Capital, EUR
157,639,187.74
174,210,616.27
192,269,027.34
As of 31 December 2024 the number if the Bank's shareholders was 18,774 (as of 31 December 2023 – 19,087). All issued shares grant
the shareholders equal rights foreseen by the Law on Companies of the Republic of Lithuania of Lithuania and the Charter of the Bank:
Homepage › About Us › Important Documents
CONSOLIDATED MANAGEMENT REPORT FOR 2024
139
Shareholders owning more than 5% of the Bank‘s shares and votes as of 31 December 2024:
Share of shares and votes, %
Invalda INVL AB, c.c. 121304349
19.93*
UAB Willgrow, c.c.. 302489393
8.97
EBRD, LEI code 549300HTGDOVDU60GK19
7.25
Tesonet Global, UAB, c.c.. 305475420
5.32
Algirdas Butkus
5.06**
* Pursuant to the Law on Securities of the Republic of Lithuania, the shareholder's votes are counted together with the controlled company: INVL Asset Management UAB, c.c.
126263073 - 0.30% of the votes
** Votes are counted together with controlled companies: Prekybos namai AIVA UAB, c.c. 144031190 – 1.81%, Mintaka UAB, c.c. 144725916 - 0.79
%
Restrictions on the transfer of securities apply. Employees who receive Bank shares as part of their annual variable remuneration, the
shares received have a retention period. Shares may be transferred, pledged or otherwise disposed of only one year after the date of
grant.
Information on shares:
2020
2021
2022
2023
2024
Capitalization, M EUR
299.2
457.2
412.1
459.5
546.3
Turnover, M Eur
84.5
134.8
101.9
52.0
53.1
Share price on the last trading session day
0.498
0.761
0.686
0.693
0.824
Lowest share price during the reporting period
0.320
0.493
0.511
0.606
0.658
Highest share price during the reporting period
0.558
0.890
0.794
0.754
0.833
Average share price during the reporting period
0.442
0.663
0.624
0.667
0.738
Share book value
0.592
0.678
0.739
0.822
0.885
P/BV
0.8
1.1
0.9
0.8
0.9
P/E
7.0
8.3
6.1
6.1
6.9
Capital increase from retained earnings, %
-
-
-
-
-
*
description of indicators is provided on the Bank's website:
Homepage › Bank Investors › Financial Information › Alternative Performance Measures
Turnover and price of the Bank's shares 2022-2024:
Legal
67%
Natural
33%
Shareholders by type
LT investors
72%
Foreign
investors
28%
Shareholders by residence
0,000
0,500
1,000
1,500
2,000
2,500
3,000
0,3
0,4
0,5
0,6
0,7
0,8
0,9
Volume, m SAB OMXBBPI
CONSOLIDATED MANAGEMENT REPORT FOR 2024
140
As one of the most traded stocks in the Baltic market, the Bank's shares are included in the following Nasdaq indices:
• OMX Baltic Benchmark (OMXBBGI, OMXBBPI, OMXBBCAPGI, OMXBBCAPPI) - the Baltic benchmark index consists of the
largest and most traded stocks on the Nasdaq Baltic Market representing all sectors;
• OMX Baltic 10 (OMXB10) - is a tradable index of the Baltic states consisting of the 10 most actively traded stocks on the Baltic
exchanges;
• OMX Baltic (OMXBGI, OMXBPI) – is an all-share index consisting of all the shares listed on the Main and Secondary lists of
the Baltic exchanges with exception of the shares of the companies where a single shareholder controls at least 90% of the
outstanding shares;
• OMX Vilnius (OMXVGI) – is an all-share index which includes all the shares listed on the Main and Secondary lists on the
Nasdaq Vilnius with exception of the shares of the companies where a single shareholder controls at least 90% of the
outstanding shares;
• OMX Baltic Financials (B8000GI, B8000PI, B40PI) – an index of the Baltic financial institutions;
• OMX Baltic Banks (B300GI, B8300PI) - an index of the Baltic banks.
Return indices (RIs) represent the total return on the shares included in the index and reflect not only stock price movements but also
the dividends paid, making these indices a more complete measure of market performance than price indices. Price indices (PIs) only
reflect changes in the price of shares included in the index, regardless of dividends. There is a cap on the weight of the shares (CAP)
forming indices of a limited number of shares above which the number of shares included in the index is reduced to a cap.
Besides, the Bank's shares are included into such indices as STOXX All Europe Total Market, STOXX EU Enlarged TMI, STOXX Eastern
Europe 300, STOXX Eastern Europe 300 Banks, STOXX Eastern Europe Mid 100, STOXX Eastern Europe TMI, STOXX Eastern Europe
TMI Small, STOXX Global Total Market, STOXX Lithuania Total Market, Bloomberg ESG Data Index, Bloomberg ESG Coverage Index,
S&P Frontier BMI Index, MSCI Frontier and Emerging Markets Select Index, FCI EMU MIDSMALLCAP MKTCAP-CONSTRAINED
(FREE-FLOAT UNADJUSTED) 400 (NET) Index and in some FTSE Russell Frontier indices.
ACQUISITION OF OWN SHARES
On 15 August 2024, the Bank received permission from the European Central Bank (ECB) to buy back up to 13,745,114 of its own
shares. As at 31 December 2024, the Bank had 10,342,927 units of its own shares. According to the Bank’s share buyback program
announced on 31 October 2024, the Bank purchased 3,092,927 units of its own shares for EUR 2,554,962.75. The sole purpose of the
program is to reduce the Bank's capital.
DIVIDENDS
30th of September 2024 Supervisory Council approved new Dividend Policy of the Bank. According to the new Dividend Policy, Šiaulių
bankas undertakes to pay out at least 50% of the previous year's net profit. Dividends would be paid under the following assumptions:
• Bank meets external and internal capital and liquidity and other regulatory requirements on a sustainable basis.
• Level of capital, after payment of the proposed dividends, remains sufficient for investments, expansion plans and other
capital-intensive activities.
The General Meeting of Shareholders held on 29 March 2024 decided on the allocation of the Bank's profits. Dividends of EUR 0.0485
per ordinary registered share with a nominal value of EUR 0.29.
Information on the dividends paid:
2019
2020
2021
2022
2023
Per cent from nominal value
-
1.90
11.72
9.14
16.72
Dividend amount per share, Eur
-
0.0055
0.034
0.0265
0.0485
Dividend amount, Eur
-
3,303,994
20,424,693
15,919,246
32,094,273
Yields from dividends, %
-
1.1
4.5
3.9
7.0
Dividends to Group net profit, per cent
-
7.7
37.0
25.0
37.3
The description of alternative performance indicators is available on the Bank's website at:
Homepage › Bank Investors › Financial Information › Alternative Performance Measures.
AGREEMENTS WITH SECURITIES
PUBLIC TRADING INTERMEDIARIES
CONSOLIDATED MANAGEMENT REPORT FOR 2024
141
Agreements with public circulation intermediaries regarding the accounting of securities issued by the Bank are, not concluded, this
accounting is managed by the Bank's Securities Accounting Department. The Bank has not entered into market-making agreements with
respect to securities issued by the Bank.
According to data as of 31 December 2024 the Bank itself, as an intermediary of public trading, under agreements with the companies
issuing securities conducted accounting of 800 companies which totaled to 1255 securities issues (including shares of public and private
companies, debt securities, investment fund units). The Bank also conducts market making on the Nasdaq Baltic under a market making
program and under agreements with issuers. As of the end of 2024, the Bank was the market maker of 4 securities issues.
MANAGEMENT OF THE BANK
The Management Board bodies of the Bank are as follows: the General Meeting of the Shareholders of the Bank, Supervisory Council
of the Bank, Management Board of the Bank and Chief Executive Officer (CEO).
The General Meeting of Shareholders shall be convened annually, at the latest within 3 months after the end of the financial year. The
Board of the Bank, the Supervisory Council and the shareholders having at least 1/10 of all votes have the right to convene the Meeting.
The General Meeting of Shareholders is organized, voting is carried out at it, decisions are made in accordance with the procedure
established by the Law on Companies. More information on the rights of the General Meeting of Shareholders is provided in the annex
“Governance Report” to the consolidated management report for 2024.
The Supervisory Council of the Bank is a collegial body supervising the activities of the Bank. The Supervisory Council is chaired by
the Chairperson. The Bank's Supervisory Council, consisting of eight members, is elected by the General Meeting of Shareholders for a
term of four years. The members of the Supervisory Council are nominated for the meeting by the initiators of the meeting or shareholders
holding 1/20 of the bank's shares. The Charter of the Bank provide that the number of terms of office of a member of the Supervisory
Council is not limited.
More information on the functions of the Supervisory Council is provided in the annex “Governance Report” to the consolidated
management report for 2024.
29 March 2024 The General Meeting of Shareholders of Šiaulių Bankas AB elected the Supervisory Council of the Bank for a new four-
year term of office (2024-2028). Valdas Vitkauskas, Susan Gail Buyske, Tomas Okmanas, Mindaugas Raila, Darius Šulnis, Gintaras
Kateiva were re-elected to the Supervisory Council of Šiaulių Bankas and a new independent member of the Supervisory Council, Monika
Nachyła was elected, and took up her duties on 26 June 2024, after obtaining the permission of the Bank's supervisory authority. Valdas
Vitkauskas was elected Chairman of the newly elected Supervisory Council. The selection of the eighth member of the Supervisory
Council continues.
The Bank’s Supervisory Council, whose term of office expires on the day of the Ordinary General Meeting of Shareholders of
the Bank in 2028, composition and other information for 31/12/2024 date was:
Name, Surname
Duties at the Supervisory
Council
Other current leading positions
Share of capital
under the right of
ownership, %
(31/12/2024)
Share of votes
together with the
related persons, %
(31/12/2024)
Valdas Vitkauskas
Independent member since 2022
Chairman since 05/08/2022
-
-
-
Gintaras Kateiva
Member since 2008
LITAGRA UAB 304564478 Savanorių pr. 173, Vilnius
(Chairman of the Board)
4.89
4.91*
Darius Šulnis
Member since 2016
Invalda INVL AB 121304349 Gynėjų str. 14, Vilnius (CEO);
INVL Asset Management UAB 126263073 Gynėjų str. 14,
Vilnius (Chairman of the Board),
LITAGRA UAB 304564478 Savanorių pr. 173, Vilnius
(Board member);
FERN Group 306110392 Granito str. 3-101, Vilnius (Chair of
the Supervisory Council)
UAB „Galinta” No. 134568135, Veiverių str. 51C, Kaunas
(member of the Board)
-
19.93**
Susan Gail Buyske
Independent member since 2020
America for Bulgaria Foundation (Chair of the Board)
-
-
Tomas Okmanas
Independent member since 2023
UAB „Hostinger“ 302710386 Jonavos str. 60C, Kaunas (Board
member)
Tesonet global, UAB 305475420 Švitrigailos str. 36, Vilnius
(Board member and CEO )
Tesonet Ventures, UAB 305600105 Švitrigailos str. 36, Vilnius
(CEO)
Hypervisor X, UAB 305449429 Švitrigailos g. 36, Vilnius
(CEO)
Nord Security Group (Board member and CEO)
DATAQUAKE B.V. (Oxylabs
Group) (member of the Founding Board)
VU TSPMI Board of Trustees Vokiečių str. 10, Vilnius (member
of the Board of Trustees)
-
5.32***
Mindaugas Raila
Member since 2023
Willgrow UAB, 302489393 Vilniaus str. 18, Vilnius
(Chairman of the Board)
ME Holding NT , UAB 302636473 A. Vivulskio str. 7-1 Vilnius
(Chairman of the Board)
-
8.97****
CONSOLIDATED MANAGEMENT REPORT FOR 2024
142
Stichting Pinetree Family Foundation
(member of the Board)
Monika Nachyła
Independent member since
26/06/2024
Orange Polska S.A.(member of the Supervisory Council and
Audit Committee)
Abris Capital Partners (Partner and member of the
Management Committee)
* Pursuant to the Law on Securities of the Republic of Lithuania, votes are counted together with the votes held by the spouse
** Mr. Šulnis is the CEO and indirect shareholder of Invalda INVL AB. Under the right of ownership Invalda INVL AB holds 19.63% of the shares of Šiaulių Bankas AB,
together with the controlled company INVL Asset Management UAB it holds 19.93% of the shares and voting rights of Šiaulių Bankas AB.
*** Mr. Okmanas is member of the Management Board, CEO and indirect shareholder of Tesonet Global UAB, which owns 5.32% of Šiaulių bankas AB shares and voting
rights
**** Pursuant to the Law on Securities of the Republic of Lithuania, votes are counted together with the votes held by the controlled company Willgrow UAB
The Management Board of the Bank is a collegial management body of the Bank consisting of 8 members. The rules of procedure of
the Management Board shall determine the Rules of Procedure of the Management Board. The Management Board of the Bank is elected
for four years. The members of the Management Board are elected, recalled and supervised by the Bank's Supervisory Council. The
term of office of the Management Board shall be four years and the number of terms is not limited. If individual members of the
Management Board are elected, they are elected until the end of the term of office of the existing Management Board. The General
Meeting of Shareholders approved amendments to the Bank's Articles of Association according to which the Bank's Management Board
will consist of 8 members instead of 7, as before.
At the first meeting of the newly elected Supervisory Council on 29 March 2024, a new Management Board was also elected for a new
four-year term of office (2024-2028).
Vytautas Sinius, Mindaugas Rudys, Donatas Savickas, Daiva Šorienė, Algimantas Gaulia and Agnė Duksienė were re-elected to the
Šiaulių bankas Management Board. Two new members have also been elected to the Management Board - Tomas Varenbergas, Head
of the Bank's Investment Management Division, who took up his duties on 4 June 2024, after obtaining permission from the Bank's
Supervisory Authority, and Laura Križinauskienė, Head of the Private Clients' Division, who took up her duties on 7 June 2024, after
obtaining permission from the Supervisory Authority.
Vytautas Sinius was elected Chairman of the newly elected Management Board.
More information on the functions of the Management Board is provided in the annex “Governance Report” to the consolidated
management report for 2024.
The Bank’s Management Board, whose term of office expires on the day of the Ordinary General Meeting of Shareholders of
the Bank in 2028, composition for 31/12/2024 date was:
Name, Surname
Duties at the Board
Other current leading positions at the
Bank
Share of capital under the
right of ownership, %
(31/12/2024)
Share of votes together with
the related persons, %
(31/12/2024)
Vytautas Sinius
Chairman since 19/08/2022
Chief Executive Officer
0.30
0.30
Donatas Savickas
Deputy Chairman since 1995
Deputy Chief Executive Officer,
Head of Finance Division
0.13
0.13
Daiva Šorienė
Member since 2005
Deputy Chief Executive Officer,
Head of Corporate Clients Division
0.07
0.07
Mindaugas Rudys
Member since 2020
Head of Service Development Division
0.07
0.07
Algimantas Gaulia
Member since 2021
Head of Risk Management Division
0.02
0.02
Agnė Duksienė
Member since 2023
Head of the Legal, Compliance and
Prevention Division
-
-
Tomas Varenbergas
Member since 04/06/2024
Head of Investments Management Division
0.01
0.01
Laura Križinauskienė
Member since 07/06/2024
Head of Private Clients Division
-
-
THE COMMITTEES FORMED WITHIN THE BANK,
AREAS OF THEIR ACTIVITIES
Functions, procedures of formation and the policy of activities of the bank's committees are defined by the legal acts of the Republic of
Lithuania, legal acts of the Bank of Lithuania as well as provisions of the certain committees approved by the Management Board or
Supervisory Council of the Bank.
COMMITTEES UNDER AUTHORITY OF THE BANK'S SUPERVISORY COUNCIL
For the effective exercise of the functions and duties of the Supervisory Council, the Bank shall establish standing committees of the
Supervisory Council: (i) the Risk Committee; (ii) the Audit Committee; (iii) the Nomination Committee; (iv) the Remuneration Committee,
the members whereof shall be appointed by decision of the Supervisory Council. A new committee of the Supervisory Council – Corporate
Affairs Committee, has been established and started its activity as of 1 January 2024. Following the election of the Council in 2024 for a
new term of office from 2024 to 2028, the composition of the Supervisory Council Committees was also updated (effective from 29 March
2024)
CONSOLIDATED MANAGEMENT REPORT FOR 2024
143
Information on the committee members as of 31 December 2024:
The Risk Committee advises the management bodies of the Bank on the overall current and future risk acceptable to the Bank and
strategy and assist in overseeing the implementation of the strategy at the Bank, verifies whether prices of liabilities and assets offered
to clients take fully into account the Bank’s business model and risk strategy and shall also carries out other functions provided for in its
provisions.
Name, surname
Chairman
Susan Gail Buyske
Independent member of the Supervisory Council
Members:
Darius Šulnis
Member of the Supervisory Council
Valdas Vitkauskas
Independent member of the Supervisory Council
The Audit Committee main role in ensuring financial integrity and compliance under the Law on the Audit of Financial Statements. It is
responsible for overseeing financial reporting processes, ensuring compliance with accounting standards, and monitoring the
effectiveness of internal control and risk management systems. The committee also supervises the financial statements audit and
sustainability report limited assurance audit process, ensuring auditor independence, and provides opinions on related party transactions
as required by the Law on Companies of the Republic of Lithuania. By performing these functions, the Audit Committee enhances
transparency, accountability, and stakeholder confidence in the organization’s financial practices. In compliance with the legal acts of
supervisory authorities, the audit committee shall be formed, its competence and performance shall be defined, regulations approved
and performance supervised by the Council.
Name, surname
Chairwoman
Monika Nachyła
Independent member of the Supervisory Council
Members:
Valdas Vitkauskas
Independent member of the Supervisory Council
Susan Gail Buyske
Independent member of the Supervisory Council
The Nomination Committee shall nominate and recommend, for the approval of the bodies of the Bank or for the approval of the General
Meeting of Shareholders, candidates to fill the vacancies in the Bank’s bodies, shall evaluate the balance of the skills, evaluate the target
number of the underrepresented gender within the Bank’s bodies, knowledge and experience of the members of the bodies of the Bank
and suitability for the position, shall submit respective comments and findings, shall assess the structure, size, composition, performance
results and shall carry out other functions provided for in its regulations.
Name, surname
Chairman
Valdas Vitkauskas
Independent member of the Supervisory Council
Members:
Darius Šulnis
Member of the Supervisory Council
Monika Nachyła
Independent member of the Supervisory Council
The Remuneration Committee shall assess the variable remuneration policy, practices and incentives established for the management
of the Bank’s risks, capital and liquidity, supervise the independent control functions including remuneration to managers in charge of
risk management and compliance function, draft resolutions on variable remuneration, advise the Council on the gender neutrality of
remuneration policies and perform other functions provided for in its regulations.
Name, surname
Chairman
Valdas Vitkauskas
Independent member of the Supervisory Council
Members:
Gintaras Kateiva
Member of the Supervisory Council
Tomas Okmanas
Independent member of the Supervisory Council
The Corporate Affairs Committee shall participate in the development/review of the annual objectives of the Group, also participate in
the preparation/review of the strategy of the Group and provide comments and proposals to the Council and perform other functions
provided for in its regulations.
Name, surname
Chairman
Darius Šulnis
Member of the Supervisory Council
Members:
Mindaugas Raila
Member of the Supervisory Council
Tomas Okmanas
Independent member of the Supervisory Council
Valdas Vitkauskas
Independent member of the Supervisory Council
COMIMITTEES UNDER AUTHORITY OF THE BANK'S MANAGEMENT BOARD
Information on the committee members as of 31 December 2024:
The Loan Committee evaluates loan granting material / documents and loan risk, approves / rejects lending decisions and / or
amendments to terms and conditions, suggests regarding loan granting, loan interest rates, improvement of loan administration
procedures and performs other functions foreseen by its provisions.
Name, surname
Position
Chairman
Edas Mirijauskas
Director of Credit Department
Deputy
Diana Leonavičienė
Director of Regional Lending Unit
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Members:
Dominykas Gesevičius
Director of Corporate Clients management Department
Denis Zubovas
Director of Credit Risk Management and Control Department
Ramūnas Dešukas
Director of the Special Assets Department
Aurelija Geležiūnė
Director of the Legal Department
The Risk Management Committee performs functions related to the organization, coordination and control of the Bank's risk
management system, determines and controls risk measurement indicators corresponding to the risk appetite acceptable to the Bank,
as well as performs other functions provided for in its regulations:
Name, surname
Position
Chairman
Algimantas Gaulia
Head of Risk Management Division
Deputy
Dalia Udrienė
Director of Risk Department
Members:
Tomas Dautoras
Director of Non-Financial Risk Department
Agnė Duksienė
Head of Legal, Compliance and Prevention Division
Edas Mirijauskas
Director of Credit Department
Donatas Savickas
Head of Finance Division
Daiva Šorienė
Head of Corporate Clients Division
Denis Zubovas
Director of Credit Risk Management & Control Department
The Asset and Liability Management Committee’s main purpose is to ensure sustainable management of the Bank's and its
subsidiaries assets, liabilities, and capital, implementing the Bank's Group strategic business plan.
Name, surname
Position
Chairman
Donatas Savickas
Head of Finance Division
Deputy
Vaidotas
Head of Treasury Unit
Members:
Dalia Udrienė
Director of Risk Department
Algimantas Gaulia
Head of Risk Management Division
Mantas Valukonis
Head of Financial Risk Management Unit
Kristina Lazdauskė
Director of Management Reporting & Planning Department
Tomas Varenbergas
Head of Investments Management Division
NPE (Non-Performing Exposures) Committee’s main purpose is to address issues related to NPE restructuring, additional funding,
recovery, etc., to ensure the proper implementation of the NPE strategy, to actively reduce the Bank’s NPE portfolio, and to carry out
other functions set out in its regulations.
Name, surname
Position
Chairman
Ramūnas Dešukas
Director of the Special Assets Department
Deputy
Aušra Laurinavičienė
Head of Debt Recovery Unit
Members:
Daiva Šorienė
Head of Corporate Clients Division
Denis Zubovas
Director of Credit Risk Management and Control Department
Edas Mirijauskas
Director of Credit Department
Justina Stuknienė
Head of Asset Restructuring & Realization Unit
Asta Rasiulienė
Deputy Director of the Special Assets Department
INTERNAL CONTROL ASSESSMENT
The risk management and internal control process in the Bank is based on a three-level defense model. The first level of defense includes
the entire risk management activities of the Bank group, carried out directly by the units serving customers and their managers. The
second level of defense in the Bank is ensured by the Bank's Risk Management Division units and employees performing risk control
functions and Compliance assurance and risk control functions. In the Bank group's companies, this involves the Bank group's company
branches and employees working in risk management, compliance, and actuarial functions. The third level of defense is carried out by
the Internal Audit Division, which conducts periodic independent audits of the Bank group's governance and internal control.
The Bank has approved the Internal Control Organization Procedure, which regulates the objectives and principles of internal control,
the structure of the internal control system, its elements, and the organization of their implementation across the Bank Group. The Bank
Group continues to pay special attention to fostering a culture of risk management and compliance, as well as strengthening the second
line of defense.
EXTERNAL AUDIT
In 2024, the Bank was audited by KPMG Baltics UAB (company address: Lvivo str. 101, LT-08104 Vilnius, tel. (8 5) 2102 600, fax (8 5)
2012 659, the company was registered on June 24, 1994, company code 111494971).
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145
The General Meeting of Shareholders of the Bank held on 29 March 2024 adopted a resolution to elect KPMG Baltics UAB for auditing
the consolidated annual financial statements of the Bank for 2024 and 2025 and the consolidated management report.
EUR thousands (excluding VAT costs)
Group
The Bank
2024
2023
2024
2023
Contractual auditing of financial statements
401
360
150
114
Cost for assurance and other related services
223
60
127
60
Costs for tax advice issues
-
-
-
-
Costs for other services
90
-
88
-
Total
634
420
365
174
EMPLOYEES
As of 31 December 2024, the Bank had 1 090 employees and the Group had 1 239 employees (including those working under fixed-term
and open-ended employment contracts, as well as employees on maternity, paternity, and parental leave). Compared to 31 December
2023, the number of employees in the Bank increased by 10%, while in the Group, the number of employees grew by 8.2%. As of 31
December 2024, women accounted for 78.4% and men for 21.6% of the Group's workforce. The gender distribution remains similar to
the previous year, with a slight increase in the number of men.
HR Strategy
Taking into account the newly approved Šiaulių Bankas business strategy for 2024-2029, investor ambitions and objectives, the potential
of existing employees, and the Group’s unique position in the financial sector – providing the freedom to create solutions and influence
decision-making – the HR management strategy for the next six years will focus on expanding professional development opportunities.
Our goal is to become the best place for professional growth in Lithuania’s financial sector.
Relationships with employees
The Bank fosters long-term employment relationships with its staff. As of 31 December 2024, 25.7% of Bank employees had been with
the company for 10 years or more. In 2024, the overall employee turnover rate in the Bank was 13.69% (compared to 9.8% in 2023).
As a Group-wide initiative, employees are granted additional leave for continuous service within the Bank Group. This leave is awarded
after one year of service and continues to accrue thereafter (1 day after 1 year of service, 2 days after 2 years, 3 days after 3 years, 4
days after 4 years, and 5 days after 5 or more years of service). These additional leave days are cumulative and may be carried over to
subsequent years; however, in the event of employment termination, any unused balance is not compensated. Employees may use these
additional leave days if they have accrued fewer than 30 days of annual leave.
In 2024, a new Bank Employee Council was elected by secret ballot, consisting of 11 Bank employees holding various positions within
the organization. The Employee Council operates in accordance with the Employee Council’s regulations. The Council actively
collaborates with the Bank’s HR and other departments, providing recommendations and seeking the best solutions for the Bank’s
employees.
Performance evaluation
Once a year, the Bank conducts a formal annual employee performance evaluation process. To ensure the successful implementation
of the Bank’s strategic objectives and a fair, effective, and sustainable performance evaluation process, in 2024, goal communication
87%
4%
2%
7%
Distribution of the Group's employees
by education, per cent
Higher Post-secondary
Professional Secondary
20%
34%
27%
15%
4%
Distribution of the Group's employees
by age, per cent
<30 years 31-40 years 41-50 years
51-60 years >61 years
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146
and cascading within the Bank were strengthened through various actions and measures. This helped employees better understand how
their daily activities contribute to achieving the Bank’s strategic objectives.
During the performance evaluation process, managers and employees discuss and assess the achievement of annual goals, completed
projects, and competencies, highlighting strengths and areas for development. Specific development measures are agreed upon, and
career opportunities are discussed. The conversation encourages mutual feedback, fostering open and value-driven communication and
collaboration. To ensure that every employee feels their work contributes to and influences the Bank’s overall results, and that all efforts
are aligned in the same direction, annual goals are set by mutual agreement between the manager and the employee. These goals
contribute to the Bank’s overall objectives and performance results.
In addition, the Bank organizes semi-annual performance review meetings to assess the progress of annual goals, identify additional
measures if needed, and take actions to ensure goal achievement.
In 2024, the Bank introduced a new performance evaluation platform to meet the expectations of both managers and employees, digitize
the process, ensure timely analysis of performance evaluations, and integrate additional assessment tools into a single platform. The
new performance evaluation platform will enable the efficient organization and optimization of the performance evaluation process,
ensuring the smooth execution of evaluation stages, timely and accurate data integration, and opportunities to further develop and
enhance the process.
Engagement
The Bank strives to engage employees and their representatives in decision-making on various important matters. As in previous years,
in 2024, an employee engagement process was carried out to ensure that employees have the opportunity to actively participate and
express their opinions. This process allows the Bank to consider employees' perspectives in decision-making, ensuring that their voices
are heard and taken into account.
One of the engagement methods used in the Bank is the real-time feedback tool "Pulse" surveys, which allow for regular (monthly)
assessments of employee job satisfaction and team well-being. This tool helps monitor whether employees receive sufficient
communication from both the organization and their managers, identify the prevailing mood within teams, and respond quickly to any
arising situations. Through these surveys, employees can provide direct feedback, and the organization can react promptly without having
to wait for annual survey results.
The annual employee engagement survey plays a crucial role in the sustainable growth of the Bank.
In 2024, the Bank conducted its annual employee engagement survey, which serves as a key tool for improving organizational
performance. It helps not only to monitor employee engagement levels but also to identify strengths and areas for improvement to support
long-term growth.
Structure and objectives of the survey
The annual employee engagement survey was conducted for the fifth consecutive year to gather employee insights on organizational
changes and the work environment. The survey consisted of two main parts:
▪ Organizational perspective: Four key elements were assessed – engagement culture, strategic alignment, motivation, and
relationships, along with change implementation.
▪ Employee perspective: Engagement levels were analyzed based on three categories: Engaged, in-between, and disengaged
employees.
The objective of the 2024 survey was to assess employee sentiment, identify organizational strengths, and determine areas for
improvement to create a more effective and employee-friendly work environment.
Results of the 2024 survey
An impressive 90% of Bank employees participated in the 2024 survey. This demonstrates a high level of interest and willingness to
contribute to the organization’s growth. Key insights: Employees value the meaningfulness of their work, the broad scope of
responsibilities, and the organization’s focus on customer needs. Managers trust their teams, empower independent decision-making,
and provide valuable feedback. Job roles encourage problem-solving, foster creativity, and promote accountability. Additionally, the
flexibility to work both in the office and remotely remains one of the organization’s key strengths.
At the same time, the survey highlighted areas for improvement. The organization’s goals and priorities could be more clearly defined to
ensure better alignment across teams. More attention is needed to workload balance and employee well-being, while cross-functional
collaboration should be enhanced to facilitate better knowledge sharing among teams. Furthermore, career management processes
should be more transparent and consistent to provide employees with greater opportunities for structured professional growth.
Based on the survey results and identified areas for improvement, the Bank has refined and approved action plans and implementation
tasks aimed at addressing these areas. The first change initiatives have already been launched, with implementation planned until the
first quarter of 2025. Regular quarterly performance reviews are scheduled to monitor progress and adjust actions accordingly.
Employee Emotional Well-being.
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147
Amid the ongoing war in Ukraine and the organizational changes resulting from the merger of two businesses, in 2024, we continued to
actively discuss and educate employees on emotional well-being, aiming to raise awareness and care for their psychological health.
“Labas po pietų, Bendruoli” (Good Afternoon, Co-workers) addressed various relevant topics such as "How to strengthen personal
psychological safety and stress resilience," "What does our body want to tell us?" "Summer 'Vitamins' – how to dose them when returning
to ensure they last long?" and "How to effectively manage your energy levels in the modern hybrid work and life environment." These
lectures were held remotely, allowing all employees in the organization to join the sessions on Friday afternoons. The lectures provided
not only theoretical knowledge but also practical advice on how to take better care of oneself. We also shared podcasts from the Tech
Kinship community, which delve into the importance of emotional health. Additionally, employees were reminded about the website "Self
Help – Towards Emotional Health", which is dedicated to recognising and helping find the right ways to feel better. Similarly to last year,
psychological consultations were included in the employee health insurance. These initiatives encouraged employees to pay more
attention to their emotional health. In the autumn, we encouraged employees to make time for physical activity by inviting everyone to
participate in the Sustainable Business League 2024 step challenge. Together, we walked almost 30 million steps! In December, we held
numerous Christmas initiatives, with Christmas events for employees and their children, and gifts were presented to everyone. Each
year, we also encourage Bank employee teams to engage in joint activities, allocating a budget for this purpose.
Organizational structure
In 2024, to enhance the synergy and efficiency of the Bank’s units, ensure the effectiveness of Bank operations and processes, the
interchangeability of existing competencies, and the consolidation of related functions, as well as to manage and improve the quality of
operations, the Bank's organizational structure was updated. To achieve these objectives, structural changes were made to the Bank's
business units:
▪ a new Real-Time Monitoring Unit was established within the Legal, Compliance, and Prevention Division’s Financial Crime
Prevention Department. This unit is responsible for monitoring client operations and transactions in real time for sanctions and
money laundering risk management, ensuring the full process from warning analysis to investigation and decision-making
regarding the execution of the transaction and reporting to the Financial Crime Investigation Service, as well as competency
development in sanctions, money laundering, and terrorist financing prevention.
▪ A new Retrospective Monitoring Unit was established within the Legal, Compliance, and Prevention Division’s Financial Crime
Prevention Department. This unit is responsible for retrospectively monitoring client operations and transactions for sanctions
and money laundering risk management, transferring the functions of the existing Retrospective Group, aiming to more clearly
distinguish between competencies for regular monitoring (scenarios) and case investigations based on situations identified from
external sources.
In 2024, considering the launch of the core banking system change project and aiming to ensure focused and specialized attention to
the management of this project, which goes beyond the scope of usual IT updates or typical project management teams, compatibility,
data integrity, and the uninterrupted functionality of all platforms.
▪ A new Strategic Technology Development Department was established within the Business Development Division. This
department is responsible for the implementation of the core banking system change.
▪ The Daily Banking Department was abolished in order to consolidate all the functions related to the development, support,
documentation preparation, monitoring, and regulatory compliance of daily banking products into a single department. The
functions of the Daily Banking Department’s daily banking products development, support, documentation preparation,
monitoring, and regulatory compliance were transferred to the Financing Services Development Department, which was
renamed to the Product Development Department.
Structural changes within the Bank were only implemented after assessing their impact on the Bank's operations and the effectiveness
of risk management processes. Before the Bank's Board made decisions regarding changes to the Bank’s organizational structure, a risk
assessment was conducted involving individuals responsible for internal control functions.
Professional development of employees
2024 at the Bank was marked by an intensive and consistent development process, which, as in previous years, was closely linked to the
organization’s strategic goals and employee needs. Learning took place in various forms – from traditional to electronic training and self-
directed knowledge enhancement. This flexible and diverse approach to development ensured that every employee could find the most
suitable way to grow and improve.
To meet ambitious strategic goals and strengthen the organization's leadership, special attention was given to leadership development
this year. Strengthening leadership competencies became a key link, enabling not only more effective implementation of the Bank's
strategy but also creating added value for the organization and its employees. The training provided was based on the latest educational
trends in the market and globally, with a focus on the measurable happiness index results, engagement survey data, and the needs
expressed by the leaders.
Taking into account the collective assessments of the Bank’s Board and the Supervisory Council, as well as the expressed educational
needs, it was decided to allow members of the Bank's Board and Supervisory Council to independently plan their individual development
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148
plan according to their specific needs. Additionally, training was organized for members of the Bank's Board and service leaders on topics
such as PPTF prevention, competition and lobbying, client centrism, and the provisions of the Code of Conduct.
In 2024, we continued the Leadership Clubs program for middle management. The Leadership Clubs format allowed us to successfully
create and maintain strong interpersonal relationships between leaders, encouraging club members to share acquired knowledge, best
practices, and daily challenges with each other; to create a safe environment where, through discussions and reflections, each individual
could analyze and assess their experiences, achievements, reconsider their assumptions, and deepen learning. Within the club, group
coaching was used to strengthen the leadership competencies of the Bank’s middle management. The club helped maintain leaders'
resilience during organizational changes and reinforced self-confidence, team trust, and confidence in the organization’s direction. The
Leadership Club meetings were held throughout the year, with four leader groups meeting 3-4 times per year. Each meeting lasted a full
workday. A total of 67 leaders participated in the club. The first 2024 Leadership Club meetings began with a theme of trust, which was
crucial in the context of change. Then, each Leadership Club group, within their team framework, agreed on which theme(s) they would
like to develop in the subsequent club meetings. The topics varied: team management, internal communication, resilience in uncertainty,
my leadership philosophy and recipes, DISC methodology and its practical application, etc. However, the majority of the time in the club
meetings was dedicated to sharing experiences, discussions, and seeking effective solutions.
All newly joined employees or newly appointed leaders to managerial positions were invited to participate in Situational Leadership
training, designed for all Bank leaders. This training helps leaders work more effectively with teams, apply an individual approach to each
employee, and strengthen one-on-one communication to foster greater engagement and collective results. In the autumn, the heads of
the Bank’s departments, groups, and client servicing were invited to the Effective Leadership in Ongoing Change training. The training
lasted for two days and was attended by more than 100 leaders. Before the live training, the leaders were also required to complete
homework, i.e. to review the Feedback e-learning course, in which they learned about providing appropriate and supportive feedback,
how to offer it to each team member, and how to give constructive comments that would allow employees to improve. During the live
training, the leaders learned about developmental conversations, the benefits they can bring, and the GROW model was also introduced.
The leaders also got acquainted with the One-on-One conversation and discussed the practical part of the Feedback e-learning course.
As in 2023, in 2024, we aimed to strengthen leadership competencies and invited leaders of all levels to two Leadership Breakfast
sessions. The first breakfast topic was Trust. During the training, the five key waves for strengthening trust were presented: personal
trust, relationships, the organization, the market, and society. Each wave was examined, discussing how to build trust and create positive
relationships and reputation both personally and professionally. The second breakfast topic was "How to Create Psychological Safety in
a Team?"
Since the team leader plays a crucial role in creating psychological safety, the concept of psychological safety was discussed during the
meeting, along with the leader's role in influencing the team’s microclimate. Leadership practices were examined, which help to create
psychological safety within a team, and the four key leader practices for ensuring psychological safety were presented.
In accordance with the 2024 development plan aimed at strengthening knowledge in the prevention of money laundering and terrorist
financing (AML/CFT), internal and external experts were engaged to conduct more than one training session for target groups on the
topics outlined in the plan. Targeted employees were invited to attend training, such as: "Financial Crime Prevention and Sanctions (FNS)
– Current Issues and Trends," "Sanctions Training: Practices and Case Analysis." During the latter training, employees examined the
most relevant case law in sanctions cases. During case analysis, based on anonymized and real examples from our work, participants
had the opportunity to ask relevant questions, consult with the lawyer, and practically apply the acquired knowledge in daily operations,
thus strengthening their competencies and abilities to handle real-life situations. As every year, in order to enhance the competencies of
compliance specialists, employees working in the areas of money laundering and prevention, customer due diligence, and financial
settlements, we provided them with the opportunity to acquire appropriate knowledge and best global practices on how to manage risk,
fight money laundering, and apply financial crime prevention in practice. We ensured that some of them could obtain ICA, CFA, and
CAMS certifications, which are recognized as the highest level of competency standards worldwide, and also participate in AML Centre
training sessions and conferences.
In 2024, the Bank implemented the first pilot project of this kind by acquiring access to the Udemy online learning platform. 20 licenses
were purchased. The target audience of the project was the Service Development Department, whose employees had the opportunity to
voluntarily study on this platform for 3 months or more. The objective of the project was to strengthen the learning culture within the
organization and expand the availability of professional training, i.e. to enhance employee competencies. Udemy is an online learning
platform that provides access to thousands of courses in various fields. It offers over 155,000 courses on a wide range of topics and
languages, taught by subject matter experts. This project garnered significant employee interest as it allowed them to individually choose
courses according to their interests and professional goals, promoting continuous learning and personal growth. The project is not yet
complete and will continue until June 2025, but employees already dedicated over 200 hours to learning in the first half of the year.
Bank employees were also invited to take advantage of the opportunity to strengthen their competencies and develop professionally by
choosing to participate in Turing College programs funded by the Employment Service. The selected programs – Data Analytics, Data
Science, Business Analytics & AI, etc. – provided the opportunity to deepen knowledge and develop practical skills in the fields of data
analysis, artificial intelligence, and business analytics. These initiatives contributed to the growth of employee competencies, encouraging
them to apply the latest technologies and methodologies in daily operations.
In 2024, we took a significant step in developing a competency model for sales teams, which enables more effective usage of employee
potential, strengthens motivation, and ensures a purposeful investment in training. Over the year, the competencies for the sales team
positions were established, described in detail, an evaluation tool was created, and a successful pilot testing was carried out. Based on
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149
the analysis, a further action plan was developed, with the main focus being the integration of competency measurement into the employee
evaluation system.
An important part of the sales team development was the "Sales Success Formula" – a two-day practical training program focused on
mastering the sales process, persuasive communication, and addressing customer needs. The program was created based on the Bank's
customer service standards and external experts' knowledge. During the program, participants deepened their understanding of the sales
stages, learned from real-life situations, and strengthened their influencing skills. The training started in November 2024, and all sales
team employees will complete the program in the first quarter of 2025. Once this phase is completed, the training will become periodic –
with employees joining the sales team at the Bank receiving it consistently, based on a chosen frequency.
Employees from the Bank's headquarters and network branches enhanced their competencies by participating in external conferences
(e.g.: LOGIN 2024, HR Week, Digital Product Conference, Sales Formula, Vmware, Turning Point, LiMA DAY'24: ANNUAL (OUT) SALES,
Big Data CONFERENCE Europe 2025, etc.) and various seminars covering topics relevant to their job functions.
To further develop the Šiauliai Bank Academy – the digital learning platform, six mandatory training courses were created and launched
in 2024 to strengthen employee competencies and ensure compliance with regulatory requirements. Fire safety training was aimed at
increasing employee awareness of fire prevention measures and behavioral rules during emergencies, in order to ensure their own and
others' safety. Conflict of interest training was designed to develop the ability to recognize and manage situations where personal interests
may conflict with the organization's interests, thus ensuring transparency. Insider information training focused on the responsible handling
of confidential information and its protection from potential misuse. Data quality and management training aimed at promoting responsible
data management and ensuring their accuracy. Finally, customer due diligence and identity verification training strengthened employees'
ability to carry out customer data verification and identity checks, in order to comply with anti-money laundering standards and ensure
safe financial transactions. The implementation of these trainings contributed to the professionalism and confidence in the Bank's
operations.
The continuous update of already released e-learning courses is crucial to ensure that employees have access to the most relevant and
up-to-date information that meets current requirements. The Digital Security e-learning courses were updated, with an increased focus
on the latest cybersecurity challenges and preventive measures. The Operational Risk e-learning courses were improved by incorporating
new cases and methodologies to help employees effectively identify and manage risks. Additionally, the PPPTF training was updated to
further expand employees' knowledge in the field of money laundering and terrorism financing prevention.
The New Employee Orientation Program – Tumas was updated, which has been successfully greeting newcomers and guiding each new
employee through the first three months of their probationary period throughout the year. This program aims to ensure smoother
integration of newcomers into the organization, providing them with comprehensive information about the Bank’s activities, values, and
core processes. The program became even more comprehensive and informative with the addition of 11 new videos that provide more
detailed insight into the Šiauliai Bank Group. In these videos, leaders speak about the people and culture within the group, its clients,
products, and services. They also introduce the Bank’s ambitious strategy, talk about the brand, the new banking platform, sustainability,
and the importance of compliance and risk management. Furthermore, the newcomer adaptation program was refreshed with the Bank
Group's values, which were created and approved in 2024. The first value is Closer to People, the second is Act Rationally, the third is
Surpass Yourself, and the fourth is Trust Each Other.
In 2024, the Bank's unique program Financing Solutions Forum continued, aimed at strengthening the functional and generic
competences of credit professionals. During the program, employees also participated in a training segment on personal development,
titled " Who am I becoming in the process? Personal Growth at Work", which encouraged deeper self-awareness, emotional intelligence
development, more effective problem-solving, enhanced collaboration skills, and active pursuit of professional and personal growth goals.
In 2024, we continued the monthly lecture series for employees titled "Good Afternoon, Fellow". During these lectures, we aimed to
discuss various topics that are important to the entire organization. One of the most relevant topics today is artificial intelligence (AI), so
we paid special attention to this area. We invited an AI and ChatGPT expert to give an inspiring and informative lecture titled "Artificial
Intelligence – Everything You Need to Know About AI" for the entire organization. During this time, employees had the opportunity to
familiarize themselves with the fundamentals of AI, its applications in the financial sector, challenges, and ethical issues. The lecture
encouraged deeper reflection on the significance of AI in our daily activities, as well as revealed how we can utilize this technology for
everyday tasks. This initiative was a great opportunity to expand knowledge and promote dialogue on the importance of future
technologies.
The war in Ukraine also remained a relevant topic, so we invited employees to the Chameleon 2024 lecture, during which they were
introduced to updated information about the military actions in Ukraine, Israel, and the Red Sea, and the security situation in the Baltic
region, as Sweden and Finland became NATO members. The lecture reminded employees about the importance of war and the
dissemination of proper information, emphasizing responsible behavior and the importance of verifying sources to avoid the spread of
misinformation.
Employee recruitment
In 2024, to attract highly skilled employees in various fields, including prevention, compliance, risk management, and leadership positions,
we partnered with external recruitment agencies and actively expanded our employee search channels.
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150
To ensure the quality and efficiency of recruitment, recruitment processes were standardized, and recruitment measurement standards
were implemented, enabling objective assessment of candidates' suitability for the requirements and improving the accuracy of
recruitment.
Significant attention was also given to talent market monitoring and analysis. These efforts ensured that the Bank could quickly respond
to changes in the labor market, remain competitive, and attract highly qualified specialists.
These initiatives helped ensure high-quality recruitment of employees and strengthened the Bank's position as an attractive employer in
the market.
Internship opportunities
In 2024, the Bank continued its collaboration with Lithuanian higher education institutions, creating opportunities for students to undertake
various types of internships within the Bank.
In 2024, a total of 12 students undertook mandatory or voluntary internships in various Bank departments. The students had the chance
to gain practical work experience at the Bank and establish professional connections crucial for their future careers. After completing the
internship, the Bank provides opportunities for students to be employed and begin their professional careers.
Employee motivation
For the majority of the Bank's employees, quarterly and/or annual bonuses can be awarded for the achievement of departmental and
personal goals, paid in cash. In 2024, new principles for awarding bonuses were reviewed and implemented, providing quarterly and/or
annual bonuses for performance results, which depend on the employee's personal and departmental results, evaluating not only financial
but also non-financial criteria. The approved goal evaluation scale and bonus brackets define the amount of bonus (quarterly/annual)
based on the achieved goal results. Employees can also be rewarded with one-off bonuses for exceptional results, participation in
significant Bank projects, etc.
Annual variable compensation, awarded in cash and Bank shares, can only be granted to Designated Employees. Designated Employees
are the Bank's and certain Group companies' executives and board members, as well as other Bank employees whose professional
activities have a significant impact on the nature of the Bank's and Group's risks, and who, under the applicable laws of the Republic of
Lithuania and the European Union, as well as the Bank's internal documents, are considered eligible for annual variable compensation.
More information about the compensation of Designated Employees is provided in the Compensation Policy section of this report.
Additional benefits offered within the Group are not based on employee performance and are provided to all employees under the same
conditions. In 2024, as a socially responsible employer, the Bank continued to provide health insurance to all employees. Health
insurance is one of the most relevant additional motivation tools. It allows insured employees to access health-related services more
quickly, such as receiving treatment at chosen healthcare institutions, visiting specialists, undergoing various tests, purchasing medicines,
and using other health improvement services. In 2024, employees were given the option to choose between Health Insurance and a free
limit in the newly introduced MELP additional benefits app used by the Bank. Using this digital tool, employees can purchase various
services related to professional development, wellness, healthy living, and quality leisure activities. However, the majority of Bank
employees continue to use Health Insurance.
Bank employees have the opportunity to contribute to their pension savings by choosing between two products – a pension fund or
investment life insurance, where part of the contribution is paid by the employee and part is provided by the employer. Approximately
26% of employees participate in these programs.
Other additional benefits offered to the Bank employees, which are not based on performance, include:
▪ Telework;
▪ Flexible working hours;
▪ Additional leave days for certain managerial positions and for uninterrupted service;
▪ Additional days off in case of illness or bereavement;
▪ Welcome kits, gifts for employees and their children during major holidays;
▪ One-off payments in the event of the death of an employee's family member, a significant accident, or the diagnosis of a critical
illness, etc.;
▪ Higher compensation for the first two days of employee sickness;
▪ Free flu vaccines and other discounts provided by the bank's partners;
▪ Team-building events;
▪ Opportunities to participate in interbank and other sports tournaments.
REMUNERATION POLICY
The information has been prepared and is provided in accordance with the Description of the Minimum Requirements for Remuneration
Policy of the Board of the Bank of Lithuania, the provisions of Article 450 of Regulation (EU) No. 575/2013 of the European Parliament
and of the Council, the Bank’s Articles of Association, the decisions of the Supervisory Council and the Board, and other legal acts
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151
regulating the requirements for the Remuneration Policy of the Bank, as a financial institution and a stock company whose shares are
admitted to trading in the regulated market.
Information relating to the decision-making process used to determine the Remuneration Policy, including the number of
meetings held by the main body overseeing remuneration during the financial year
In 2024, the Remuneration Policy was reviewed and updated based on the decisions of the Bank’s Remuneration Committee, the Bank’s
Supervisory Council, the Bank’s Management Board, and the recommendations of the Bank’s internal audit. The draft Remuneration
Policy was submitted to the Board of the Bank and the Remuneration Committee for consideration in accordance with internal legislation.
The Remuneration Policy, together with the feedback from the Bank’s Management Board, Remuneration Committee, the Bank’s Chief
Compliance Officer (CCO), has been submitted to the Bank’s Supervisory Council and the Bank’s General Meeting of Shareholders for
approval. The version of the Remuneration Policy approved by the Bank’s General Meeting of Shareholders on 29 March 2024 shall
enter into force from the date of its approval and shall apply when awarding, approving, granting and paying remuneration to Nominated
Employees for their work/performance in 2023 and/or subsequent years. The version of the Remuneration Policy approved on 29 March
2024 shall apply to the approval and granting of deferred portions of the annual variable remuneration to Nominated Employees for their
work/performance in 2022. The version of the Remuneration Policy approved by the Bank’s General Meeting of Shareholders on 30
March 2022 applied when awarding remuneration to Nominated Employees for their work/performance in 2022. The version of the
Remuneration Policy approved by the Bank’s General Meeting of Shareholders on 31 March 2020 applies when awarding, approving
and granting remuneration to Nominated Employees for their work/performance up to 2022.
The version of the Remuneration Policy approved by the Bank’s General Meeting of Shareholders on 29 March 2024 is intended for and
applicable to the Bank and Group companies. The Group companies that are subject to special remuneration requirements under other
laws shall draw up and approve their own remuneration policy that applies jointly with this Remuneration Policy. The approved
Remuneration Policy is published on the website of the Bank.
The Remuneration Policy is in compliance with the operational and risk strategy of the Group as well as its objectives, including those in
relation to the environmental, social and governance (ESG) risk, the values and culture of the organization as well as the long-term
interests of continuing operations aimed at increasing the long-term value of the Bank’s shares of, avoiding conflicts of interest, promoting
sound and efficient risk management as well as reliable and effective management of money laundering and terrorist financing risks, and
lays down the processes and principles followed in paying remuneration. The Remuneration Policy is an integral component of the risk
management framework of the Bank.
The Remuneration Policy of the Bank is gender-neutral, i.e., it is based on the principal of equal pay for equal work or work of equal value
for workers of either gender.
The responsibility for the setting of the principles of the Remuneration Policy and remuneration framework models, the maintenance of
the Remuneration Policy, the supervision of the implementation and the periodic review of the Remuneration Policy at least once per
year shall be with the Supervisory Council of the Bank; the Management Board of the Bank shall be responsible for the implementation
of the Remuneration Policy. The Internal Audit Service of the Bank shall audit the implementation of the Remuneration Policy; the audits
shall be conducted on a regular basis but at least once per year.
External consultants were consulted in the preparation of the draft Remuneration Policy.
The Bank has formed a Remuneration Committee that carries out competent and independent assessments of variable remuneration
policy and practice, and ensures that the remuneration framework takes into account all types of risk, capital and liquidity, and is
compatible with sound and effective risk management as well as with the business strategy, objectives and the long-term interests of
continuing operations of the Bank or the Group company, and provides an opinion on the gender neutrality of the Remuneration Policy.
The composition of the Remuneration Committee, the procedure for its formation, its functions, rights and responsibilities are set out in
the Rules of Procedure of the Bank’s Remuneration Committee approved by the Supervisory Council of the Bank. The composition of
the Remuneration Committee is approved by the Supervisory Council of the Bank, and the list and functions of the committee members
are set out in the section of the Management Report entitled “Committees established in the Bank and their areas of activity”. The
Remuneration Committee held seven (7) meetings in 2024.
Information on the link between remuneration and performance
The remuneration system is a complex of remuneration package elements used by the Group to attract, motivate and retain the best
employees who would help implement the long-term objectives and the business strategy of the Group.
The Bank and Group companies have fixed remuneration and variable remuneration.
Fixed remuneration shall be established, calculated and paid on the terms and conditions and in accordance with the procedure set out
in the Remuneration Policy and internal documents of the Bank. Fixed remuneration represents a sufficiently high proportion of total
remuneration to ensure that employees are not dependent on variable remuneration and that the Bank and Group companies are able
to pursue a flexible remuneration policy, including the possibility of non-payment of variable remuneration. Competence, experience,
qualifications, specific knowledge, external and internal equity, market trends, etc. are all taken into account when determining the
remuneration of a given employee. Additional benefits apply regardless of the individual performance of the employees, without providing
an incentive to take risks, and therefore they are not considered to be a remuneration for the work or functions performed. Additional
benefits are based on predefined criteria, they reflect the professional experience of the employees and are irrevocable for the stated
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152
effective term of the benefits and/or until the employee holds a specific job position with assigned certain additional benefits in accordance
with the internal documents of the Bank and the additional benefits, limits and/or rates set therein.
Variable remuneration is paid to link the individual performance targets of employees to the long-term interests of the Group in order to
ensure sustainable business development and to encourage employees to act in and respectful, honest, transparent and professional
manner, respecting the rights and interests of customers.
The amount of variable remuneration is based on the assessment of the Bank, the Group, individual Group companies, divisions, specific
groups of activities, and the pre-set objectives and results achieved by the employee. The variable remuneration awarded to an employee
may depend on the job position of the employee, the importance of his/her decisions that may have a significant effect on the risk taken
by the Group. When assessing individual employee’s objectives and achievements, not only the personal financial result achieved, but
also non-financial/non-quantitative contributions (e.g., adherence to the Code of Ethics, adherence to the Bank’s values, relations with
clients/colleagues, adherence to the standards, fulfilment of the requirements set out in the internal documents, taking initiative,
leadership, participation in the project activities, performance improvement) are considered. Methods for calculating variable
remuneration are designed to meet the Group’s business strategy, objectives, values, the long-term interests of continuing operations,
and promote sound and effective risk management, help avoid conflicts of interest, ensure compliance with the Code of Ethics and
discourage employees from taking excessive risks that are unacceptable to the Group, also ensure the principles of investor and customer
protection in the provision of services by the Group and not harming the interests of customers.
A variable remuneration fund is formed only after assessing the Bank’s performance, taking into account current and future risks, costs
of the capital employed and liquidity support needs. The variable remuneration fund and its size must not limit the ability of the Group to
strengthen its capital base. Where the persons performing risk management and compliance control functions of the Bank are in doubt
as to the effect on customer behavior and operational risk exposure, they provide input within their respective competences during the
setting-up of variable remuneration budgets, establishing performance criteria and awarding variable remuneration.
The Remuneration Policy seeks to promote responsible business, fair dealing with customers and avoiding conflicts of interest in relations
with customers, so that the monetary/non-monetary rewards do not become an incentive for employees to pursue their own interests,
the interests of the Bank or any other company of the Group to the detriment of customers’ interest.
Key features of the remuneration structure, including information on the criteria used to assess performance, and risk
adjustment, deferral policies and award criteria. The ratio between fixed and variable remuneration.
The Bank and the Group companies, depending on their size, the nature, scale and complexity of their operations and the risks they
take, are subject to fixed remuneration and variable remuneration (remuneration components):
▪ Fixed remuneration for employees consists of (i) official remuneration and other related benefits (e.g., holiday pay, compensation
for unused leave, sick pay, overtime, etc.) and (ii) fringe benefits.
▪ Fixed remuneration for the Supervisory Council members who are not employees consists of (i) official remuneration (ii)
supplement to the official remuneration.
▪ Variable remuneration of employees includes (i) annual variable remuneration, (ii) supplements, (iii) one-time bonuses, (iv) other
benefits that are considered variable remuneration by law (e.g., non-compete payment, severance pay or relevant part thereof,
etc.).
No variable remuneration is granted to members of the Supervisory Council of the Bank.
Detailed information on the components of remuneration at the Bank and Group companies is provided in the Remuneration Policy,
which is published on the Bank’s website.
Variable remuneration may be granted to all employees, while maintaining an appropriate balance between fixed and variable
remuneration components and the possibility of a flexible policy regarding variable remuneration components, i.e., the variable
remuneration awarded shall not exceed 100% of the sum of the fixed remuneration elements earned during the same one (1) calendar
year for which the variable remuneration was awarded in order to promote sound and effective risk management, unless the Bank’s
General Meeting of Shareholders (applicable only to the Bank’s Nominated Employees)/the Bank’s Management Board as the sole
shareholder of the Group companies (applicable to the executives and members of the Management Board of the Group companies,
who are Nominated Employees), in accordance with the statutory requirements, increases the maximum ratio of variable to fixed
remuneration to 200%.
The Group does not offer guaranteed variable remuneration.
The actual ratio between variable and fixed remuneration in the Group is calculated by adding up all components of the variable
remuneration awarded over a certain period and dividing their sum by the amount of the components of fixed remuneration awarded
during the same period.
In accordance with the Bank’s Remuneration Policy, the members of the Bank’s Supervisory Council are paid a fixed remuneration
consisting of an official remuneration and a bonus to the official remuneration. The official remuneration and the bonus to the official
remuneration of the members of the Bank’s Supervisory Council are determined irrespective of the member’s gender, age, nationality,
experience, and are paid on a pro rata basis for the preceding month, quarter, or at such other periodicity as may be determined in the
contract with a member of the Bank’s Supervisory Council.
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153
For the performance of their duties as members of the Bank’s Supervisory Council, members of the Bank’s Supervisory Council shall be
paid an annual official remuneration of EUR 50,000 (before applicable taxes).
The amounts of the supplements to the official remuneration of the members of the Bank’s Supervisory Council were reviewed in 2024
and approved by the Bank’s General Meeting of Shareholders in the Remuneration Policy on 29 March 2024. The annual supplement to
the official remuneration of a member of the Bank’s Supervisory Council for the position of chairperson of the Bank’s Supervisory Council
is EUR 200,000 (before applicable taxes), for the position of chairperson of one committee is EUR 18,000 (before applicable taxes), and
for the position of a member of one committee is EUR 10,000 (before applicable taxes). A member of the Bank’s Supervisory Council
receiving a supplement for the position of chairperson of a committee does not receive a supplement for the position of a member of the
same committee.
The amounts of the official remuneration and supplements to the official remuneration of the members of the Bank’s Supervisory Council
have been fixed for the full term of office of a member of the Bank’s Supervisory Council as from 29 March 2024 at the meeting of the
Bank’s General Meeting of Shareholders approving the Remuneration Policy. In accordance with the Bank’s Remuneration Policy, annual
variable remuneration may only be granted to Nominated Employees, except for members of the Supervisory Council of the Bank.
Nominated Employees are the members of the Supervisory Council of the Bank, managers and members of the Board of the Bank and
part of the Group companies, as well as other employees of the Bank whose professional activities have material impact on the risk
profile of the Bank and the Group, due to which such employees are considered to be recipients of variable annual remuneration for the
purpose of the applicable laws of the Republic of Lithuanian and the European Union and internal documents of the Bank.
Group companies, with due regard to the applicable special regulatory requirements, designate the nominated employees of a specific
Group company. Such nominated employees are not considered to be the Nominated Employees. Group companies that are subject to
special remuneration requirements under other legislation shall determine the principles of variable remuneration applicable to Nominated
Employees of Group companies and shall award and pay variable remuneration to them in accordance with the procedures set out in
the Group company’s internal documents.
Nominated Employees shall be designated in accordance with the criteria set out in the Resolution of the Board of the Bank of Lithuania
on the Approval of the Description of the Minimum Requirements for Remuneration Policy and the qualitative and quantitative criteria set
out in Commission Delegated Regulation (EU) No. 2021/923.
Representatives from independent risk management, compliance, legal, human resources and other departments, as appropriate, are
involved in the designation of Nominated Employees, as well as the Remuneration Committee and other committees of the Council (Risk,
Nomination and/or Audit), within the scope of their responsibilities in relation to remuneration decisions. The list of Nominated Employees
shall be reviewed annually, or more frequently if necessary, e.g., in the event of significant changes in the structure of the Bank/Group,
in accordance with the criteria set out in the legislation, and taking into account any additional criteria that may be applicable (if
appropriate), reflecting the level of risk inherent in the Group’s various activities and the impact of employees on the nature of risk.
The list of Nominated Employees shall be approved by the Management Board of the Bank, subject to the designation report. The Bank’s
Supervisory Council shall be informed of the report on the designation of the Nominated Employees and the list of Nominated Employees.
The Bank’s Supervisory Council approves all exceptions to the designation of Nominated Employees and reviews and monitors their
impact and, if necessary, approves exceptions in the designation of Nominated Employees. In 2024, the Nominated Employees were
awarded an annual variable remuneration for their performance in 2023. It has been determined that the award and payment of the
annual variable remuneration to the Nominated Employees for their performance in 2023 would not restrict the Group’s ability to maintain
an adequate capital base and would not place undue pressure on liquidity ratios. It has also been established that the payment of the
annual variable remuneration should not affect the risk level of the behavior and activities of the Nominated Employees. In 2024, in
awarding the annual variable remuneration to the Nominated Employees in respect of their performance in 2023, the Nominated
Employees were assessed, and no instances were identified where the Nominated Employees acted dishonestly or where their
performance has resulted in a loss to the Bank or a Group company.
In calculating annual variable remuneration to members of the Bank’s Management Board, the Chief Executive Officer, Deputy Chief
Executive Officers, Heads of Divisions, Heads of significant business units of the Bank, except where the individuals referred to herein
are also the Heads of internal control functions (i.e., CRO, CCO, Head of Internal Audit Division), the Bank’s/Group’s performance is
given more weight than the performance of a unit/line of business/individual. For other Nominated Employees, including heads of internal
control functions, the Bank’s/Group’s performance is weighted less heavily than the performance of a unit/line of business/individual or
the Group company’s performance for the purpose of calculating annual variable remuneration.
The variable remuneration of employees performing risk management, compliance and internal audit functions is awarded for the work
performed and the results obtained in connection with the performance of their assigned functions; the performance of the units under
their control is not taken into account. It may be linked, however, to the overall performance of the Bank/Group/Group company or the
performance of certain lines of business unrelated to the business units under their control.
The amount of the annual variable remuneration for Nominated Employees shall be determined taking into account the financial and non-
financial performance, i.e., the results of the assessment of the Bank’s/Group’s objectives, the results of the assessment of the
achievement by the Nominated Employee of the objectives of the Group company/division/certain group of activities/personal objectives,
and the weight assigned to these objectives, the coefficients of the annual variable remuneration approved by the respective body of the
Bank, and possible adjustments to the calculated coefficient, which may also be influenced by the employee’s non-financial/non-
quantitative contribution. The annual variable remuneration is linked to the risk taken by the unit/employee and to the performance of the
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154
Group/Group company and the unit/certain lines of business/employee. The criteria for calculating annual variable remuneration and
target ratios are affected by the job position and responsibility, the effect on operating performance as well as the existing and future
risks. The relative weighting of the performance criteria of each level (group of posts) is established by the respective body of the Bank
that sets the exact proportions/weightings of the targets.
Pursuant to the version of the Remuneration Policy approved by the Bank’s General Meeting of Shareholders on 29 March 2024, the
annual variable remuneration of the Nominated Employees for their performance in 2023 has been awarded and may be awarded in the
future in one of the following ways:
▪ by awarding the full annual variable remuneration in Bank shares, with a deferral period of 5 or 4 years.
▪ by awarding 50% of the annual variable remuneration in cash, to be paid immediately, and 50% of the annual variable
remuneration in Bank shares, with a deferral period of 4 years.
▪ by awarding the full annual variable remuneration in cash, to be paid immediately; this method may be used where the annual
variable remuneration awarded for a given performance year does not exceed EUR 50,000 (gross) and does not represent more
than one third (1/3) of the total annual remuneration of the Nominated Employee to whom the annual variable remuneration is
awarded, and where such option is provided for by law.
The deferral period for the annual variable remuneration shall be determined taking into account the potential risk associated with the
outcome of the annual performance review of the Nominated Employee:
▪ for members of the Bank’s Management Board, the Chief Executive Officer and senior management, the deferral period is five
(5) years from the date of award of the annual variable remuneration to the date of granting the deferred portion.
▪ for other Nominated Employees, including those performing internal control functions (other than those serving as members of
the Bank’s Management Board), the deferral period is four (4) years from the date of award of the annual variable remuneration
to the date of granting the deferred portion, unless 100% of the annual variable remuneration is awarded and paid in cash, if
the amount awarded for a given year of work does not exceed EUR 50,000 (gross) and does not represent more than one third
(1/3) of the total annual remuneration of the Nominated Employee to whom the annual variable remuneration is awarded, and,
where applicable, where the law so provides.
The awarded annual variable remuneration or parts thereof that are deferred shall be confirmed. The approval of the first deferred portion
shall take place one year after the award of the annual variable remuneration by approving the specific deferred portion of the annual
variable remuneration awarded, and the other deferred portions of the annual variable remuneration shall be approved pro rata on an
annual basis, taking into account the length of the deferral period. The deferred portion awarded at the time of approval may be adjusted
downwards (with the right to reduce to zero) by applying ex post adjustments (where applicable), and in compliance with legal
requirements.
For Nominated Employees, the annual variable remuneration is awarded only after an annual performance review and based on the
results of the most recent year’s performance review, i.e., the approval of the deferred portion must be based on the results of the
Nominated Employee’s performance reviews of at least the 3 most recent years. Where the duration of the employment relationship or
the contract with a Nominated Employee is less than 3 years, account is taken of the available performance review data of the employee.
Pursuant to the Remuneration Policy, the Group does not have a pension scheme and agreements for early retirement are not concluded.
The Group does not generally conclude prior agreements about the amount of severance pay and non-compete compensation.
In case of expiry of an employment contract with a Nominated Employee, an agreement on the procedure for the payment of annual
variable remuneration and/or outstanding portions thereof must be made. Any portions of variable remuneration unpaid/not awarded as
at the redundancy date of the Nominated Employee shall be paid/awarded taking into account the employee’s performance during the
period set by the Bank or Group company, his/her period of service during that year, and in such way that the employee is not remunerated
if his/her actions resulted in a loss to the Bank or the Group, except for statutory payments under the law. The award/approval of annual
variable remuneration takes place under the same procedure and at the same time as the award/approval of variable remuneration for
other employees, regardless of the date on which the employee’s employment ends. The same rules shall apply in the event that no
agreement can be reached with the dismissed Nominated Employee as provided for herein.
In 2024, the Remuneration Policy was supplemented with provisions on the amounts and notice periods for benefits and compensation
(hereinafter, the Severance Pay) in connection with the termination of the employment relationship/term of office, which are determined
in accordance with the statutory mandatory amounts and/or notice periods for such payments and the Remuneration Policy. Maximum
Severance Pay for a Nominated Employee is the amount of his/her average salary for a period of twelve (12) months. In exceptional
circumstances, the maximum possible Severance Pay may be increased by the Council to the Nominated Employee’s average salary
for a period of up to eighteen (18) months. In all cases, the Severance Pay to the Nominated Employee shall not exceed the ratio of
variable to fixed remuneration set out in the Remuneration Policy. Severance Pay shall be linked to performance over the performance
period and shall be set so as not to reward failure to fulfil obligations or misconduct and/or underperformance. Severance Pay to members
of the Bank’s Management Board holding other positions in the Bank, to the Bank’s Chief Executive Officer and his/her deputies, and to
the Head of the Internal Audit Division and other key function holders shall be subject to the prior decision/approval of the Council.
Severance Pay is considered to be variable remuneration. The Severance Pay shall be granted in accordance with the method of granting
the annual variable remuneration applicable to the Nominated Employee and applying the same principles of approval, award and
withholding as those applicable to the deferred portion of the annual variable remuneration in accordance with the Remuneration Policy
and other internal documents of the Bank. The amount of severance pay, and the procedure for awarding it, is set out in the internal
documents of the Bank. In accordance with the provisions of the Guidelines on Sound Remuneration Policies of 2 July 2021
CONSOLIDATED MANAGEMENT REPORT FOR 2024
155
(EBA/GL/2021/04; hereinafter, the Guidelines), Severance Pay is considered to be variable remuneration. For the calculation of the ratio
between variable and fixed remuneration, exceptions apply, subject to the provisions of the Guidelines on severance pay/compensation.
In the event of resignation or removal of a member of the Bank’s Supervisory Council, or in any other case where the term of office of a
member of the Bank’s Supervisory Council ends before the expiry of the term of office, no benefits or compensation shall be payable in
connection with the termination of the contract of the member of the Supervisory Council of the Bank. In such a case, the member of the
Bank’s Supervisory Council is paid a portion of his/her remuneration in proportion of his/her time of service as the member or chairperson
of the Bank’s Supervisory Council and/or a member/chairperson of a committee of the Bank for which remuneration has not yet been
paid.
Information on the performance assessment criteria on which the entitlement to shares, options or variable remuneration is
based. The main criteria and reasons for the variable remuneration system and other fringe benefits.
The annual variable remuneration, including the deferred portion thereof, may be awarded, approved, granted and/or paid only provided
the financial position of the Bank/Group is sustainable, upon application of ex ante and ex post adjustments (where applicable) and
without prejudice to the requirements of other laws. The Bank’s assessment of current and potential future risks, including ESG risk,
arising from, or directly related to, the payment of annual variable remuneration is based on the Bank’s assessment of quantitative and
qualitative criteria. Quantitative criteria are the Bank’s capital and liquidity ratios, and qualitative criteria are the Bank’s business continuity
risk management indicators. Annual variable remuneration must be reduced or not paid at all upon motion of the Bank’s
management/supervisory bodies/Remuneration Committee, if the performance of the Bank/Group fails to meet the indicators set out in
the strategy, or where losses are recorded, where the Nominated Employee has acted in bad faith or where his/her actions resulted in a
loss to the Bank or the Group. The annual variable remuneration may be withheld if the Nominated Employee has not completed a full
calendar year.
In accordance with the Remuneration Policy, the deferred portions of the annual variable remuneration shall be made available to the
Nominated Employee in line with the deferral period of the annual variable remuneration applicable to the position of Nominated
Employee:
▪ where a 5-year deferral period applies, 3/5 of the deferred portion shall be granted 3 years after the award of the annual variable
remuneration, 1/5 of the deferred portion shall be granted 4 years after the award of the annual variable remuneration, and the
remaining 1/5 of the deferred portion shall be granted 5 years after the award of the annual variable remuneration.
▪ where a 4-year deferral period applies, 3/4 of the deferred portion shall be granted 3 years after the award of the annual variable
remuneration, and the remaining 1/4 of the deferred portion shall be granted 4 years after the award of the annual variable
remuneration.
The deferred portion may be released to the Nominated Employee under an option agreement (option contract) between the Bank and
the Nominated Employee whereby the Bank grants the Nominated Employee the right to acquire the Bank’s shares free of charge upon
the expiry of the deferment period, or other method established by the Management Board of the Bank may be used. The annual variable
remuneration, or part thereof, granted in Bank shares shall be subject to a one-year restriction period for the right of transfer (retention
period) from the date of granting the shares, during which time the Nominated Employee may not transfer, pledge, otherwise encumber
or otherwise dispose of the shares granted.
The Bank’s shares as a portion of the annual variable remuneration payable to Nominated Employees are awarded in accordance with
the Rules for Awarding Shares approved by the General Meeting of Shareholders of the Bank; they are awarded to ensure the interest
of the Group in increasing employee engagement, promoting long-term employment with the Group and pursuing its long-term strategic
objectives. Employees are prohibited from personally ensuring themselves under insurance strategies or by taking out insurance cover
against a decrease of their variable remuneration in order to mitigate the risk determined through the application of the principles for
calculating their variable remuneration.
GENERAL QUANTITATIVE INFORMATION ON REMUNERATION
Average monthly remuneration of the Bank's and the Group's employees before taxes
Bank
Group
Management personnel
Other employees
Management personnel
Other employees
Average
number of
employees
Average monthly
salary, EUR
Average
number of
employees
Average
monthly salary,
EUR
Average number
of employees
Average monthly
salary, EUR
Average
number of
employees
Average monthly
salary, EUR
2023
72
9,616
746
2,571
93
8,951
825
2,534
2024
81
9,933
914
2,788
114
9,063
1,009
2,562
Information on the remuneration of Nominated Employees of the Bank and the Group in 2024, before tax
As at 31 December 2024, the Group had 34 Nominated Employees, of whom: 30 at the Bank, 4 at SB Lizingas UAB, holding the
Nominated Positions, whose professional activities have a significant impact on the risk profile of the Group, and that have been
determined by the Board of the Bank in accordance with the applicable legislation of the Republic of Lithuania and European Union, and
the internal documents of the Bank.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
156
In view of the changes in the organizational structure of the Bank in 2024 and the identified business lines in the Group context, an
assessment of the Nominated Positions has been carried out and the Group’s list of Nominated Positions has been updated in accordance
with the qualitative and quantitative criteria set out in Directive 2013/36/EU and Commission Delegated Regulation (EU) No. 2021/923.
The tables below provide aggregate quantitative information for the Bank and the Group:
▪ The data for the Nominated Employees are based on the positions identified on 31 December 2024. Remuneration information
for 2024 is presented including employees who were in the position of a Nominated Employee in 2024. For the Nominated
Employees who became members of a management body exercising the management function in 2024, the information for the
relevant period is presented separately, by position, in the relevant columns for both the Business Area and the members of the
management body.
▪ Fixed remuneration includes payments made in the respective year: main salary, payments for leave, payments for sick leave,
income in kind, fringe benefits (e.g., pension insurance and accumulation, health insurance contributions, gratuities/cash
benefits, prizes, funeral allowances, etc.).
▪ Variable remuneration includes payments made in the respective year: bonuses and premiums; cash portion of the annual
variable remuneration awarded (deferred portion of the annual variable remuneration awarded in shares is excluded); deferred
share-based components of annual variable remuneration paid.
▪ Deferred variable remuneration for prior periods – annual variable remuneration data on the recipients who hold and have held
the position of a Nominated Employee and who have been awarded an annual variable remuneration for the relevant previous
periods.
▪ Fixed remuneration of members of the Bank’s management body performing the supervisory function (no variable remuneration
is paid to members of the Bank’s management body performing the supervisory function), and fixed and variable remuneration
for members of the Bank’s and the Group’s management body exercising the management function.
▪ The members of the management body exercising the management function shall be understood as the members of the
Management Board and the Chief Executive Officer of the Bank, the members of the Management Board and the Chief
Executive Officer of SB Lizingas UAB. Information on members of the management body exercising the management function
is presented separately and is not repeated in the Business Area data, unless the Nominated Employee became a member of
the Bank’s Management Board in the current year.
▪ Fixed and variable remuneration of the Bank’s and the Group’s Nominated Employees, broken down by Business Area.
▪ The Nominated Employees performing investment banking functions are responsible for the investment services business
functions, which include the provision of investment services to clients in the areas of corporate finance advisory services,
private equity, capital markets, trading and sales.
▪ The Nominated Employees performing retail banking functions are responsible for corporate and private client transactions and
lending activities.
▪ The Nominated Employees performing asset management functions are responsible for portfolio management, UCITS
management and other forms of asset management.
▪ The Nominated Employees performing the operational functions are responsible for information technology, information security,
human resources, outsourcing of essential or critical operational functions.
▪ The Nominated Employees performing the independent internal control functions are those performing an independent risk
management function, a compliance function or an internal audit function.
▪ Values in the Total column are calculated by adding together information under Members of the management body performing
the supervisory function, Members of the management body performing the management function and under Business areas.
In 2024, no Nominated Employee in the Bank and the Group was paid total remuneration (fixed and variable) in the range of EUR 1
million to EUR 1.5 million
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157
Bank, 2024
Members of the
management body
performing the
supervisory function
Employees bearing significant risks (Nominated
Employees)
Total
Members of the
management body
performing the
management
function
Business areas
Investment
banking
Retail banking
Asset
management
Operational
function
Independent
internal
control
functions
Other
Number of members of the Supervisory Council and the
Management Board, pcs.
7
8
-
-
-
-
-
-
15
Number of recipients acting as Nominated Employees, pcs.
-
-
1
9
-
1
4
5
20
Number of recipients performing senior management functions,
pcs.
-
-
-
-
-
1
1
-
2
FIXED REMUNERATION in 2024, EUR thousand
744
1 409
157
1 109
-
180
598
491
4 688
Number of recipients, pcs.
8
8
2
10
-
2
6
5
41
ANNUAL VARIABLE REMUNERATION FOR 2023, AWARDED
IN 2024, in EUR thousands
-
834
94
594
-
88
105
116
1 831
Number of recipients, pcs.
-
9
3
8
-
2
8
5
35
Non-deferred annual variable remuneration for 2023 awarded in
cash in 2024 (paid in 2024), in EUR thousands
-
-
52
297
-
-
105
90
544
Deferred annual variable remuneration for 2023 awarded in
shares in 2024 (not paid), in EUR thousands
-
834
42
297
-
88
-
26
1 287
Deferred (not paid) annual variable remuneration for 2023
awarded in shares in 2024, number of shares
-
1 246
63
444
-
132
-
39
1 924
Variable remuneration as a percentage of fixed remuneration
(awarded for 2023), %
-
59%
60%
54%
-
49%
18%
24%
39%
Guaranteed variable remuneration in 2024, EUR thousand
-
-
-
-
-
-
-
-
-
Number of recipients, pcs.
-
-
-
-
-
-
-
-
-
Payments related to termination in 2024, in EUR thousands
-
-
-
-
-
-
45
-
-
Number of recipients, pcs.
-
-
-
-
-
-
1
-
-
Of whom: maximum amount per person
-
-
-
-
-
-
-
-
-
Deferred variable remuneration for prior periods
-
1 365
116
585
-
108
137
241
2 552
Deferred annual variable remuneration for 2020 awarded in
shares in 2021 and paid in 2024, in EUR thousands
-
537
44
28
-
32
36
81
758
Deferred annual variable remuneration for 2021 awarded in
shares in 2022 outstanding at 31/12/2024, in EUR thousands
-
450
38
241
-
33
48
69
879
Deferred annual variable remuneration for 2022 awarded in
shares in 2023 outstanding at 31/12/2024, in thousands euro
-
378
34
316
-
43
53
91
915
CONSOLIDATED MANAGEMENT REPORT FOR 2024
158
MAIN INVESTMENTS DURING
THE REPORTING PERIOD
The table below shows the main investments made by the Bank's group during the reporting period, in EUR thousand:
Acquisition of property, plant and equipment, investment property and intangible assets
5,179
Acquisition of debt securities at amortized cost
316,044
Group, 2024
Members of the
management body
performing the
supervisory function
Employees bearing significant risks (Nominated
Employees)
Total
Members of the
management body
performing the
management
function
Areas of business
Investment
banking
Retail banking
Asset
management
Operational
function
Independent
internal control
functions
Other
Number of members of the Supervisory Council and the
Management Board, pcs.
7
12
-
-
-
-
-
-
19
Number of recipients acting as Nominated Employees, pcs.
-
-
1
9
-
1
4
5
20
Number of recipients performing senior management functions,
pcs.
-
-
-
-
-
1
1
-
2
FIXED REMUNERATION in 2024, EUR thousand
744
1 849
157
1 109
-
180
598
491
5 128
Number of beneficiaries, pcs.
8
12
2
10
-
2
6
5
45
ANNUAL VARIABLE REMUNERATION FOR 2023, AWARDED
IN 2024, in EUR thousands
-
1 132
94
594
-
88
105
116
2 129
Number of beneficiaries, pcs.
-
16
3
8
-
2
8
-
-
Non-deferred annual variable remuneration for 2023 awarded in
cash in 2024 (paid in 2024), in EUR thousands
-
162
52
297
-
-
105
90
706
Deferred annual variable remuneration for 2023 awarded in
shares in 2024 (not paid), in EUR thousands
-
970
42
297
-
88
-
26
1 423
Deferred (not paid) annual variable remuneration for 2023
awarded in shares in 2024, number of shares
-
1 450
63
444
-
132
-
39
2 128
Variable remuneration as a percentage of fixed remuneration
(awarded for 2023), %
-
60%
60%
54%
-
49%
18%
24%
41%
Guaranteed variable remuneration in 2024, EUR thousand
-
-
-
-
-
-
-
-
-
Number of beneficiaries, pcs.
-
-
-
-
-
-
-
-
-
Payments related to termination in 2024, in EUR thousands
-
-
-
-
-
-
45
-
-
Number of beneficiaries, pcs.
-
-
-
-
-
-
1
-
-
Of whom: maximum amount per person
-
-
-
-
-
-
-
-
-
Deferred variable remuneration for prior periods
-
1 893
116
835
0
108
137
241
3 330
Deferred annual variable remuneration for 2020 awarded in
shares in 2021 and paid in 2024, in EUR thousands
-
723
44
278
-
32
36
81
1 194
Deferred annual variable remuneration for 2021 awarded in
shares in 2022 outstanding at 31/12/2024, in EUR thousands
-
597
38
241
-
33
48
69
1 026
Deferred annual variable remuneration for 2022 awarded in
shares in 2023 outstanding at 31/12/2024, in thousands euro
-
573
34
316
-
43
53
91
1 110
CONSOLIDATED MANAGEMENT REPORT FOR 2024
159
COMPANIES COMPRISING GROUP
Nature of activities
Registration
date
Company
code
Address
Tel.
e- mail, website
Šiaulių Bankas AB
commercial banking
04/02/1992
112025254
Tilžės str.149
LT-76348 Šiauliai
+370 41 595 607
info@sb.lt,
www.sb.lt
The Bank directly controls the following subsidiaries
SB Lizingas UAB
finance lease, consumer
credits.
14/07/1997
234995490
Laisvės av. 80, LT-
44249 Kaunas
+370 37 407 200
info@sbl.lt,
www.sblizingas.lt
SB Turto Fondas UAB
real estate management
13/08/2002
145855439
Vilniaus str. 167,
LT-76352 Šiauliai
+370 41 525 322
turtofondas@sb.lt,
www.sbip.lt
Life insurance SB
draudimas UAB
life insurance
31/08/2000
110081788
Laisvės pr. 3, LT-
04215 Vilnius
+370 5 236 2723
info@sbdraudimas.lt,
www.sbdraudimas.lt
SB modernizavimo
fondas UAB*
multi-apartment
renovation financing
05/04/2022
306057616
Tilžės str. 149, LT-
76348 Šiauliai
+370 41 595 607
sbfondas@sb.lt
SB Asset Management
UAB
fund management
07/02/2023
306241274
Gynėjų str. 14, LT-
01109 Vilnius
+370 41 595 607
https://info@sbam.lt
SB modernizavimo
fondas 2 UAB*
multi-apartment
renovation financing
21/02/2024
306682354
Tilžės str. 149, LT-
76348 Šiauliai
+370 41 595 607
sbfondas@sb.lt
*Not consolidated under IFRS 10 requirements
CONSOLIDATED MANAGEMENT REPORT FOR 2024
160
OTHER INFORMATION, PUBLISHED
INFORMATION AND MAJOR EVENTS
TRANSACTIONS WITH RELATING PARTIES
Information on these transactions with related parties is provided in note 30 to the Bank's financial statements for the year 2024.
INFORMATION ON SANCTIONS IMPOSED
During 2024, neither Šiaulių Bankas nor the Group companies were subject to any sanctions.
INFORMATION ON RESEARCH AND DEVELOPMENT ACTIVITIES
The Bank is constantly investing and looking for ways to ensure expansion and better operational efficiency.
INFORMATION ABOUT HARMFUL TRANSACTIONS
During the reporting period, no harmful transactions that were not in accordance with the Bank's objectives, normal market conditions,
harming the interests of shareholders or other groups of persons and which had or could have a negative impact on the Bank's activities
or results of operations were concluded. There were also no transactions where the Bank's executives, controlling shareholders or other
related parties would have been in a conflict of interest due to their different duties to the Bank and their private interests and / or duties.
REPORTS ON MATERAIL EVENTS
In accordance with the procedures set by the Charter of the Bank and the legal acts of the Republic of Lithuania reports on material
events are announced in the Central regulated information base and on the Bank ‘s website at:
Homepage › Bank Investors › Reports on Stock Events
Other important events are available on the Bank’s website at:
Homepage › About Us › News
ADDITIONAL INFORMATION
Governance information for 2024 (attached)
Remuneration information for 2024 (attached)
Sustainability information for 2024 (attached)
Chief Executive Officer Vytautas Sinius
2025-03-07
GOVERNANCE INFORMATION FOR 2024
(Additional Information to the Consolidated Management Report for 2024)
Tilžės 149, LT-76348 Šiauliai
Tel. (8 41) 595 607, faks. (8 41) 430 774
Email info@sb.lt
www.sb.lt
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
162
Following Article 24th of the Law on Reporting of Enterprises and Groups of Enterprises of the Republic of Lithuania, the Bank discloses
its compliance with its specific provisions or recommendations.
Clause 1. Reference (s) to the applicable Corporate Governance Code (Codes) and where it is (they are) published and / or a reference
to all publicly available information on corporate governance practices.
The Bank’s shares are traded on a regulated market and are listed on the Nasdaq Baltic Main List. Following Article 12(3) of the Law on
Securities of the Republic of Lithuania and clause 25.4 of the Listing Rules of Nasdaq Vilnius, the Governance Code for the companies
quoted on the Nasdaq Vilnius applies to the Bank, which has been prepared by Nasdaq Vilnius in accordance with the Commission
recommendation 2014/208/ES dated 09 April 2014 approved by the European Commission regarding quality of governance reporting
provided by undertakings. The Bank follows the Corporate Governance Report form approved by the Board of Nasdaq Vilnius AB on 15
January 2019 which is prepared in accordance with the Governance Code for Listed Companies approved by the Board of Nasdaq
Vilnius on 15 January 2019.
Clause 2. In the event of a deviation from, and / or non-compliance with the applicable provisions of corporate governance code (s), the
provisions being deviated from and / or not complied with and the reasons for it.
Following Article 12(3) of the Law on Securities of the Republic of Lithuania and clause 25.4 of the Listing Rules of Nasdaq Vilnius AB,
the Bank discloses its compliance with the Governance Code for the companies quoted on the Nasdaq Vilnius AB, its specific provisions
and recommendations. Where the Bank does not meet some of its provisions or recommendations, it is indicated which specific provisions
or recommendations are not met and explanatory information is provided.
Free Form Summary of the Corporate Governance Report
According to the Articles of Association, the Bank’s bodies are the General Meeting of Shareholders, the Supervisory Council, the
Management Board and the Chief Executive Officer. The Bank’s Supervisory Council is a collegial eight-member supervisory body with
four independent members. The Management Board of the Bank is an eight-member collegiate executive body of the Bank, consisting
of the Chief Executive Officer, Deputy Chief Executive Officers and Heads of Bank Divisions. The Bank has 7 committees. 5 Committees
– Risk, Audit, Nomination, Remuneration, Corporate Affairs – are formed by the decision of the Supervisory Council from the members
of the Supervisory Council, 2 Committees – Loan and Risk Management – by the decision of the Management Board.
The Supervisory Council is elected by the General Meeting of Shareholders for the term of 4 years. The Management Board of the Bank
is also elected by the Supervisory Council for a 4-year term. The Management Board elects and dismisses the Chief Executive Officer
and his/her Deputies, determines the remuneration of the Chief Executive Officer and other conditions of the employment contract.
More information on the Bank’s corporate governance, shareholders’ rights, activities of the Supervisory Council, Management Board
and Committees, members, internal control and risk management systems is provided in the Bank’s consolidated management report
for the year ended 31 December 2024.
Structured table for disclosure
PRINCIPLES/ RECOMMENDATIONS
YES
/NO/NOT
APPLICABLE
I Principle. General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights.
The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance
framework should protect the rights of shareholders.
1.1. All shareholders should be provided with access to the information and/or documents established in the legal acts
on equal terms.
COMMENT
The information required by legislation and the Bank’s documents is publicly available on the Bank’s website in
Lithuanian and English.
All shareholders have the same statutory rights to attend general meetings.
Yes
1.2. It is recommended that the company’s capital should consist only of the shares that grant the same rights to
voting, ownership, dividend and other rights to all of their holders.
COMMENT
The Bank’s authorized capital consists of 662,996,646 ordinary registered shares with a par value of EUR 0.29
each. Each share grants one vote at the general meeting. All shares of the Bank entitle the holders to equal
rights.
Yes
1.3. It is recommended that investors should have access to the information concerning the rights attached to the
shares of the new issue or those issued earlier in advance, i.e. before they purchase shares.
Yes
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
163
COMMENT
The Bank’s website contains the Bank’s Articles of Association which establish the rights granted to the holders
of the Bank’s shares.
When new shares are issued, the rights granted by the shares shall be disclosed in the prospectus and in other
publicly available issue documents.
1.4. Exclusive transactions that are particularly important to the company, such as transfer of all or almost all assets
of the company which in principle would mean the transfer of the company, should be subject to approval of the
general meeting of shareholders.
COMMENT
When approving the Articles of Association of the Bank, the General Meeting of Shareholders transferred the
right to approve the decisions of the Management Board regarding the sale of a significant part of the assets to
the Supervisory Council of the Bank (without prejudice to the requirements of the Law on Companies of the
Republic of Lithuania). It should be noted that in the event of a particularly significant transaction, the Bank’s
bodies, the Management Board or the Supervisory Council, could decide to convene a GMS on this issue,
although such an obligation is not directly enshrined in the Bank’s Articles of Association. For example, at the
Extraordinary General Meeting of Shareholders held on 22 February 2023, the issue of approval of the
implementation of the Master Agreement regarding merger of Invalda INVL AB retail asset management and life
insurance businesses with the Šiaulių Bankas AB Group was put to the vote.
No
1.5. Procedures for convening and conducting a general meeting of shareholders should provide shareholders with
equal opportunities to participate in the general meeting of shareholders and should not prejudice the rights and
interests of shareholders. The chosen venue, date and time of the general meeting of shareholders should not prevent
active participation of shareholders at the general meeting. In the notice of the general meeting of shareholders being
convened, the company should specify the last day on which the proposed draft decisions should be submitted at the
latest.
COMMENT
The General Meetings of Shareholders of the Bank are held in Vilnius/Šiauliai at an address and time announced
in advance. Ordinary shareholders’ meetings are held at the end of March (i.e., within 3 months after the end of
the financial year) extraordinary – when necessary. The notice convening the General Meeting of Shareholders
shall specify that the draft resolutions may be submitted in writing or by e-mail before the time indicated on the
date of the meeting and shall be communicated to the chairperson after he/she has announced the agenda of
the meeting, until the meeting begins to discuss the agenda items.
Yes
1.6. With a view to ensure the right of shareholders living abroad to access the information, it is recommended, where
possible, that documents prepared for the general meeting of shareholders in advance should be announced publicly
not only in Lithuanian language but also in English and/or other foreign languages in advance. It is recommended that
the minutes of the general meeting of shareholders after the signing thereof and/or adopted decisions should be made
available publicly not only in Lithuanian language but also in English and/or other foreign languages. It is recommended
that this information should be placed on the website of the company. Such documents may be published to the extent
that their public disclosure is not detrimental to the company or the company’s commercial secrets are not revealed.
COMMENT
All information and documents of the General Meeting of Shareholders are drafted in Lithuanian and English and
are publicly available on the Bank’s website and through the GlobeNewswire information delivery system
regulated by the Nasdaq Baltic.
Yes
1.7. Shareholders who are entitled to vote should be furnished with the opportunity to vote at the general meeting of
shareholders both in person and in absentia. Shareholders should not be prevented from voting in writing in advance
by completing the general voting ballot.
COMMENT
The Bank’s shareholders have the right to participate in the shareholders’ meeting both in person and through a
representative, by issuing a duly authorized proxy or concluding a transfer of voting rights in accordance with the
procedure established by legal acts. Shareholders are also be provided with the opportunity to vote in writing in
advance by completing the general ballot paper and submitting it to the Bank prior to the meeting.
Yes
1.8. With a view to increasing the shareholders’ opportunities to participate effectively at general meetings of
shareholders, it is recommended that companies should apply modern technologies on a wider scale and thus provide
shareholders with the conditions to participate and vote in general meetings of shareholders via electronic means of
communication. In such cases the security of transmitted information must be ensured and it must be possible to identify
the participating and voting person.
COMMENT
Due to the specific nature of the Bank’s share accounting, where voting is done through intermediaries and the
beneficial owners of part of the shares are not known to the Bank prior to the disclosure at the General Meeting
of Shareholders, the Bank does not itself encourage or initiate the possibility to participate and vote in General
No
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
164
Meetings of Shareholders by electronic means of communication. However, the Bank would be prepared to allow
shareholders to participate in the General Meeting of Shareholders and to vote by electronic means and to provide
voting instructions, if so requested by shareholders holding shares carrying at least 1/10 of the total votes.
1.9. It is recommended that the notice on the draft decisions of the general meeting of shareholders being convened
should specify new candidatures of members of the collegial body, their proposed remuneration and the proposed audit
company if these issues are included into the agenda of the general meeting of shareholders. Where it is proposed to
elect a new member of the collegial body, it is recommended that the information about his/her educational background,
work experience and other managerial positions held (or proposed) should be provided.
COMMENT
The information made public together with the draft resolutions discloses information about the proposed
candidates, as well as data on the candidates’ education, professional experience and other positions held.
Information on the remuneration paid to the members of the Supervisory Council is set out in the Remuneration
Policy, which is approved by the Bank’s General Meeting of Shareholders and published on the Bank’s website.
In 2024, 1 (one) new independent candidate was elected to the Bank's Supervisory Board, together with details
of the candidate's education, work experience and other positions held, submitted to the General Meeting of
Shareholders. The name of the audit company proposed for election to the General Meeting of Shareholders and
the proposed remuneration for audit services are provided in the draft resolution for the relevant item on the
agenda of the meeting.
Yes
1.10. Members of the company’s collegial management body, heads of the administration
1
or other competent persons
related to the company who can provide information related to the agenda of the general meeting of shareholders should
take part in the general meeting of shareholders. Proposed candidates to member of the collegial body should also
participate in the general meeting of shareholders in case the election of new members is included into the agenda of
the general meeting of shareholders.
COMMENT
General Meetings of Shareholders, which are organized and coordinated in advance, are always attended by
persons who can provide information related to the agenda of the meeting.
Proposed candidates shall always attend the General Meeting of Shareholders who elect the members of the
Supervisory Council except in special cases (e.g., if physical attendance at the meeting would not possible due to
the illness, quarantine regime or other important circumstances).
Yes
II Principle. Supervisory Council
2.1 Functions and liability of the supervisory council
The supervisory council f the company should ensure representation of the interests of the company and its shareholders,
accountability of this body to the shareholders and objective monitoring of the company’s operations and its management
bodies as well as constantly provide recommendations to the management bodies of the company.
The supervisory council should ensure the integrity and transparency of the company’s financial accounting and control
system.
2.1.1. Members of the supervisory board should act in good faith, with care and responsibility for the benefit and in the
interests of the company and its shareholders and represent their interests, having regard to the interests of employees
and public welfare.
COMMENT
The members of the Supervisory Council act in accordance with the principles of good governance and perform
their functions taking into account the interests of the Bank and its shareholders, depositors and other interested
third parties. The obligations specified in the recommendation are enshrined in the agreement on the activities of
a member of the Supervisory Council and in the Rules of Procedure of the Supervisory Council.
Yes
2.1.2. Where decisions of the Supervisory Council may affect the interests of the company's shareholders differently,
the Supervisory Council should treat all shareholders impartially. It should ensure that shareholders are properly
informed about the company's strategy, risk management and control and resolution of conflicts of interest.
COMMENT
The Supervisory Council follows the recommendations. Before making decisions, the members of the Supervisory
Council assess their influence on the activities of the Bank and the shareholders of the Bank. The Bank shall
comply with the disclosure requirements of listed companies and shall ensure that the Bank’s shareholders are
properly informed about the Bank’s strategy, operations and risk management and control.
Yes
2.1.3. The supervisory council should be impartial in passing decisions that are significant for the company’s operations
and strategy. Members of the supervisory council should act and pass decisions without an external influence from the
persons who elected them.
COMMENT
Yes
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
165
When making decisions that have a bearing on the Bank’s operations and strategy, the Bank’s Supervisory Council
acts independently and follows the requirements of legal acts. The work and decisions of the members of the
Supervisory Council shall not be influenced by the persons who elected them.
The Rules of Procedure of the Supervisory Council include the provision stating that each member shall be
prepared and able to act objectively, critically and independently and to make informed, objective and independent
decisions.
2.1.4. Members of the supervisory council should clearly voice their objections in case they believe that a decision of the
supervisory board is against the interests of the company. Independent
2
members of the supervisory board should: a)
maintain independence of their analysis and decision-making; b) not seek or accept any unjustified privileges that might
compromise their independence.
KOMENTARAS
The members of the Supervisory Council have the right to express their opinion on all issues on the agenda of the
meeting, which must be duly reflected in the minutes of the meeting in accordance with the Rules of Procedure of
the Supervisory Council. The Rules of Procedure of the Supervisory Council oblige the members of the Supervisory
Council to constructively and critically evaluate the proposals, explanations and information submitted to the
Supervisory Council. Also, in the event of circumstances that could cause a conflict of interest between a member
of the Supervisory Council and the Bank, the member of the Supervisory Council must immediately inform the
Bank and the Supervisory Council in writing about such new circumstances. The obligations specified in the
recommendation are enshrined in the agreement on the activities of a member of the Supervisory Council and in
the Rules of Procedure of the Supervisory Council.
Yes
2.1.5. The supervisory council should oversee that the company’s tax planning strategies are designed and implemented
in accordance with the legal acts in order to avoid faulty practice that is not related to the long-term interests of the
company and its shareholders, which may give rise to reputational, legal or other risks.
COMMENT
The Bank’s Supervisory Council supervises the activities of the Bank’s bodies in the exercise of its responsibilities,
including that all the Bank’s strategies (as well as the tax planning strategy) are developed and implemented in
accordance with legal acts.
Yes
2.1.6. The company should ensure that the supervisory council is provided with sufficient resources (including financial
ones) to discharge their duties, including the right to obtain all the necessary information or to seek independent
professional advice from external legal, accounting or other experts on matters pertaining to the competence of the
supervisory council and its committees.
COMMENT
The Bank ensures the Supervisory Council is provided with the resources necessary for its activities – it technically
services the meetings of the Supervisory Council, ensures the secretarial function and providing all the necessary
information.
The Rules of Procedure of the Supervisory Council also provide for the right of the Supervisory Council to call on
the assistance of other specialists (i.e., consultants, subject matter experts, personal assistants, etc.) (e.g., to
appoint an expert/group of experts to audit and evaluate the financial accounts of the Bank, considering issues
within the competence of the Supervisory Council.
Yes
II Principle. Supervisory Council
2.2 Formation of the Supervisory Council
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective
and fair corporate governance.
2.2.1. The members of the supervisory council elected by the general meeting of shareholders should collectively ensure
the diversity of qualifications, professional experience and competences and seek for gender equality With a view to
maintain a proper balance between the qualifications of the members of the supervisory board, it should be ensured that
members of the supervisory council, as a whole, should have diverse knowledge, opinions and experience to duly
perform their tasks.
COMMENT
Shareholders, in assessing the qualifications and professional experience of the members of the Supervisory
Council, shall vote accordingly at the General Meeting of Shareholders in respect of the proposed candidates to
the Supervisory Council.
Before recommending candidates to the Supervisory Council to the General Meeting of Shareholders, the
Nomination Committee evaluates the candidates for the members of the Supervisory Council in accordance with
the applicable legal regulations and the Bank’s internal legal acts. The evaluation also includes a collective
evaluation of the Supervisory Council as a body. The diversity of the qualifications, professional experience and
competences of the members of the Supervisory Council is ensured by the fact that a member of the Supervisory
Council (nominated or already elected at the shareholders meeting) is allowed to start his/her duties only with the
Yes
2
For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of unrelated parties defined in Article 31(7) and
(8) of the Law on Companies of the Republic of Lithuaniai.
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
166
permission of the supervisory authority. The supervisory authority shall also assess the individual and collective
suitability of the members of the Supervisory Council when issuing authorization.
The composition of the Supervisory Council is in line with the requirements set out in the Bank’s Diversity Policy
adopted in 2022, including the criterion of under-representation of the genders in the Bank’s collegial body.
2.2.2. Members of the supervisory council should be appointed for a specific term, subject to individual re-election for a
new term in office in order to ensure necessary development of professional experience.
COMMENT
The Supervisory Council is elected for four years. The number of terms of office of a person in the Supervisory
Council shall not be limited. The General Meeting of Shareholders may remove the entire Supervisory Council or
its individual members before the end of the term of office and may elect new members until the end of the term of
office of the existing Supervisory Council.
Yes
2.2.3. Chair of the supervisory council should be a person whose current or past positions constituted no obstacle to
carry out impartial activities. A former manager or management board member of the company should not be immediately
appointed as chair of the supervisory council either. Where the company decides to depart from these recommendations,
it should provide information on the measures taken to ensure impartiality of the supervision.
COMMENT
The other (former) duties of the Chair of the Supervisory Council do not prevent him/her from acting impartially as
the Chair of the Supervisory Council. The current Chairman of the Supervisory Council (the independent
Supervisory Council member) does not hold any other positions, either has not been the Chief Executive Officer
or a member of the Management Board of the Bank.
Yes
2.2.4. Each member should devote sufficient time and attention to perform his duties as a member of the supervisory
board. Each member of the supervisory board should undertake to limit his other professional obligations (particularly
the managing positions in other companies) so that they would not interfere with the proper performance of the duties of
a member of the supervisory board. Should a member of the supervisory board attend less than a half of the meetings
of the supervisory board throughout the financial year of the company, the shareholders of the company should be
notified thereof.
COMMENT
The members of the Supervisory Council devote sufficient time and attention to the duties of the member of the
Supervisory Council. In 2024, the Supervisory Council held eight (8) Supervisory Council meetings, of which one
(1) was an extraordinary meeting, and two (2) Supervisory Council decisions were taken by poll (i.e., by written
ballot). 6 (six) regular meetings were attended by all Supervisory Board members and 1 (one) regular meeting was
attended by 6 (six) of the 7 (seven). In 1 (one) extraordinary meeting of the Supervisory Board, convened as a
matter of urgency, 5 (five) out of 7 (seven) members were present.
Yes
2.2.5. When it is proposed to appoint a member of the supervisory board, it should be announced which members of the
supervisory board are deemed to be independent. The supervisory board may decide that, despite the fact that a
particular member meets all the criteria of independence, he/she cannot be considered independent due to special
personal or company-related circumstances.
COMMENT
There are four (4) independent members in the current eight (7)-member Supervisory Council, whose term is until
the ordinary General Meeting of Shareholders in 2028S. The selection of 1 (one) independent member of the
Supervisory Board is ongoing. This information is disclosed in the Bank’s consolidated management reports and
the information published on the website of the Bank. The Supervisory Council has not decided that any of the
current independent members cannot be considered independent.
Yes
2.2.6. The amount of remuneration to members of the supervisory council for their activity and participation in meetings
of the supervisory board should be approved by the general meeting of shareholders.
COMMENT
For their activities and participation in meetings, the members of the Supervisory Council are paid a fixed
remuneration which consists of a salary and a bonus paid for performing additional functions while holding the
position of a member of the Supervisory Council (Chair of the Supervisory Council, Chair of the Committee,
Committee member).
The annual amount of the official remuneration and the percentage of bonuses to the official remuneration paid to
a member of the Supervisory Council for the entire term of office shall be approved by the General Meeting of
Shareholders of the Bank when approving the Remuneration Policy.
Yes
2.2.7. Every year the supervisory board should carry out an assessment of its activities. It should include evaluation of
the structure of the supervisory board, its work organization and ability to act as a group, evaluation of the competence
and work efficiency of each member of the supervisory board, and evaluation whether the supervisory board has
achieved its objectives. The supervisory board should, at least once a year, make public respective information about
its internal structure and working procedures.
COMMENT
Yes
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Each year, the members of the Supervisory Council participate in the overall process of assessing the effectiveness
of the Bank’s internal management system, which includes assessing its structure, organization and ability to act
as a group, as well as assessing whether the Supervisory Council had achieved the set performance targets. The
composition and operating procedures of the Supervisory Council are specified in the Bank’s Articles of Association
and published in the management reports.
III Principle. Management Board
3.1 Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate governance with
due regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the implementation of the company’s strategy approved by the supervisory
board if the latter has been formed at the company. In such cases where the supervisory board is not formed, the
management board is also responsible for the approval of the company’s strategy.
COMMENT
The Bank’s Management Board ensures the implementation of the Bank’s strategy as approved by the Supervisory
Council.
Yes
3.1.2. As a collegial management body of the company, the management board performs the functions assigned to it by
the Law and in the articles of association of the company, and in such cases where the supervisory board is not formed
in the company, it performs inter alia the supervisory functions established in the Law. By performing the functions
assigned to it, the management board should take into account the needs of the company’s shareholders, employees
and other interest groups by respectively striving to achieve sustainable business development.
COMMENT
The Bank has a Supervisory Council, accordingly the Management Council, performs the functions assigned to it
by law and the Bank’s Articles of Association.
The duty to act in good faith, diligently, responsibly and prudently, to make decisions for the benefit of the Bank
and its shareholders and taking into account their legitimate interests is enshrined in the Rules of Procedure of the
Management Board of the Bank.
The duty to act in good faith, diligently, responsibly and prudently, to make decisions for the benefit of the Bank
and its shareholders and taking into account their legitimate interests is enshrined in the Rules of Procedure of the
Management Board of the Bank.
Yes
3.1.3. The management board should ensure compliance with the laws and the internal policy of the company applicable
to the company or a group of companies to which this company belongs. It should also establish the respective risk
management and control measures aimed at ensuring regular and direct liability of managers.
COMMENT
The Board of the Bank ensures compliance with laws and internal policies. As set out in the Bank’s Articles of
Association, the Management Board monitors the implementation of the Bank’s risk management policy,
independent risk management and compliance, effective functioning of the Bank’s internal control system, how
appropriate is governance structure, compliance with set principles, values, and code of conduct. The Management
Board monitors and supervises whether the actions of the Bank’s administration are in accordance with the Bank’s
strategy, policies, business plans, budget implementation and, where appropriate, special external or internal
factors (e.g., non-standard financial sector developments, regulatory changes, supervisory requirements,
substantial deviation from business plans, budget) may revoke decisions made by the Chief Executive Officer of
the Bank.
Yes
3.1.4. Moreover, the management board should ensure that the measures included into the OECD Good Practice
Guidance
3
on Internal Controls, Ethics and Compliance are applied at the company in order to ensure adherence to the
applicable laws, rules and standards.
COMMENT
The Management Board is responsible for enforcing applicable laws, regulations and standards in the areas of
internal control, ethics and compliance, including those included in the OECD Guidelines.
The Bank has various documents in place to ensure internal control, ethics and compliance management
measures, such as: Code of Ethics; Policy for Anti-Corruption and Unacceptable Conduct; Compliance Policy of
the Šiaulių Bankas Group; Financial Crime Prevention and Sanctions Compliance Policy; Standard for Prevention
of Money Laundering and Terrorist Financing; Conflict of Interest Management Policy; Risk Appetite Framework;
Risk Management Strategy, etc.
Yes
3.1.5. On Internal Controls, Ethics and Compliance are applied at the company in order to ensure adherence to the
applicable laws, rules and standards.
COMMENT
Yes
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf
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When appointing the Bank’s Chief Executive Officer, the Management Board of the Bank takes into account the
balance of his/her qualifications, skills, experience and competence, as well as his good reputation. It is also taken
into account whether the supervisory authority has not objected to such appointment.
III Principle. Management Board
3.2 Formation of the management board
3.2.1. The members of the management board elected by the supervisory board or, if the supervisory board is not
formed, by the general meeting of shareholders should collectively ensure the required diversity of qualifications,
professional experience and competences and seek for gender equality. With a view to maintain a proper balance in
terms of the current qualifications possessed by the members of the management board, it should be ensured that the
members of the management board would have, as a whole, diverse knowledge, opinions and experience to duly perform
their tasks.
COMMENT
The qualifications and professional experience of the members of the Management Board are assessed by the
Supervisory Council by voting in favor of the proposed candidates to the Management Board.
Before recommending candidates to the Management Board to the Supervisory Council, the Nomination
Committee evaluates the candidates to the Management Board in accordance with the applicable legal regulations
and the Bank’s internal legal acts. The evaluation also includes a collective evaluation of the Management Board
as a body. The diversity of the qualifications, professional experience and competences of the members of the
Management Board is ensured by the fact that a member of the Management Board (nominated or already elected
by the Supervisory Council) is allowed to start his/her duties only with the permission of the supervisory authority.
When granting authorizations, the supervisory authority assesses the individual and collective suitability of the
members of the Management Board of the Bank.
Yes
3.2.2. Names and surnames of the candidates to become members of the management board, information on their
educational background, qualifications, professional experience, current positions, other important professional
obligations and potential conflicts of interest should be disclosed without violating the requirements of the legal acts
regulating the handling of personal data at the meeting of the supervisory board in which the management board or
individual members of the management board are elected. In the event that the supervisory board is not formed, the
information specified in this paragraph should be submitted to the general meeting of shareholders. The management
board should, on yearly basis, collect data provided in this paragraph on its members and disclose it in the company’s
management report.
COMMENT
Information on candidates to the Management Board of the Bank, including their curriculum vitae and declaration
of interests, shall be submitted to the meeting of the Bank’s Supervisory Council at which the Management Board
or its individual members are elected. Information about the positions held by the members of the Management
Board or their participation in the activities of other companies is constantly collected, stored and presented in the
Bank’s consolidated management report and on the Bank’s website.
Yes
3.2.3. All new members of the management board should be familiarized with their duties and the structure and
operations of the company.
COMMENT
Members of the Management Board are familiarized with their duties, activities, organizational and governance
framework of the Bank, its strategy and operations.
Yes
3.2.4. Members of the management board should be appointed for a specific term, subject to individual re-election for a
new term in office in order to ensure necessary development of professional experience and frequent reapproval of their
status.
COMMENT
According to the Bank’s Articles of Association, the Management Board of the Bank is elected for four years. The
number of terms of office of a person in the Management Board shall not be limited. The Supervisory Council may
remove the entire Management Board or its individual members before the end of the term of office and may elect
new members until the end of the term of office of the existing Management Board.
Yes
3.2.5. Chair of the management board should be a person whose current or past positions constitute no obstacle to carry
out impartial activity. Where the supervisory board is not formed, the former manager of the company should not be
immediately appointed as chair of the management board. When a company decides to depart from these
recommendations, it should furnish information on the measures it has taken to ensure the impartiality of supervision.
COMMENT
The other (current and former) duties of the Chair of the Management Board of the Bank do not prevent him/her
from acting impartially as the Chair of the Management Board. The fact that the Chair of the Management Board
also is the Chief Executive Officer of the Bank ensures the compliance with the requirement set forth in Article
33(2) of the Law on Banks of the Republic of Lithuania.
Yes
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3.2.6. Each member should devote sufficient time and attention to the duties of a board member. If a board member
attended less than half of the board meetings during the financial year of the company, the company's supervisory
council should be informed about it, if the supervisory council is not formed in the company – the general meeting of
shareholders.
COMMENT
Members of the Management Board devote sufficient time and attention to the performance of the duties of a
Management Board member.
The minutes of the company record the participation and voting of the members of the Management Board in
making decisions.
In 2024, 66 meetings of the Management Board were held, all of which were attended by at least five Management
Board members (according to the Rules of Procedure of the Management Board, a meeting may take place and
decisions may be taken when at least 2/3 of the members of the Management Board are present).
Yes
3.2.7. In the event that the management board is elected in the cases established by the Law where the supervisory
council is not formed at the company, and some of its members will be independent
4
, it should be announced which
members of the management board are deemed as independent. The management board may decide that, despite the
fact that a particular member meets all the criteria of independence established by the Law, he/she cannot be considered
independent due to special personal or company-related circumstances.
COMMENT
The Bank has a Supervisory Council.
Not
applicable
3.2.8. The amount of remuneration to members of the management board for their activity and participation in meetings
of the management board should be approved by the general meeting of shareholders.
COMMENT
The Bank has a Supervisory Council, which is responsible for electing and removing members of the Management
Board. All members of the Management Board also hold other positions in the Bank. In accordance with the
Remuneration Policy approved by the General Meeting of Shareholders, the prior approval of the Supervisory
Council is required when determining the remuneration and other terms of the employment contract of the members
of the Management Board holding other positions in the Bank. The Supervisory Council also approves the annual
variable remuneration of the members of the Management Board holding other positions in the Bank.
No
3.2.9. The members of the management board should act in good faith, with care and responsibility for the benefit and
the interests of the company and its shareholders with due regard to other stakeholders. When adopting decisions, they
should not act in their personal interest; they should be subject to no-compete agreements and they should not use the
business information or opportunities related to the company’s operations in violation of the company’s interests.
COMMENT
In accordance with the Rules of Procedure of the Management Board, the Management Board acts in good faith,
with care and responsibly, in accordance with the principles of good governance, and performs its functions in the
interests of the Bank’s shareholders, clients and other interested third parties. A member of the Management Board
shall not have the right to vote and attend the Management Board meeting when dealing with issues related to
his/her activities on the Management Board or his/her responsibility, as well as matters in which the member may
have an interest, or where the lack of objectivity of the member of the Management Board may expose the Bank
to other risks.
Yes
3.2.10. Every year the management board should carry out an assessment of its activities. It should include evaluation
of the structure of the management board, its work organization and ability to act as a group, evaluation of the
competence and work efficiency of each member of the management board, and evaluation whether the management
board has achieved its objectives. The management board should, at least once a year, make public respective
information about its internal structure and working procedures in observance of the legal acts regulating the processing
of personal data.
COMMENT
Each year, the members of the Management Board participate in the overall process of assessing the effectiveness
of the Bank’s internal management system, which includes assessing management structure, organization and
ability to act as a group, as well as assessing whether the Management Board had achieved the set performance
targets. The composition and operating procedures of the Management Board are specified in the Bank’s Articles
of Association and published in the management reports.
Yes
IV Principle. Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure
efficient operation and decision-making of these bodies and promote active cooperation between the company’s
management bodies.
4
For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons defined in Article 33(7) of the Law
on Companies of the Republic of Lithuania.
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4.1. The management board and the supervisory board, if the latter is formed at the company, should act in close
cooperation in order to attain benefit for the company and its shareholders Good corporate governance requires an open
discussion between the management board and the supervisory board. The management board should regularly and,
where necessary, immediately inform the supervisory board about any matters significant for the company that are
related to planning, business development, risk management and control, and compliance with the obligations at the
company. The management board should inform he supervisory board about any derogations in its business
development from the previously formulated plans and objectives by specifying the reasons for this.
COMMENT
The legal acts regulating the activities of the Supervisory Council and the Management Board, the Articles of
Association and the Rules of Procedure of the Bank, shall establish the principles and procedure of cooperation
between the Supervisory Council and the Management Board and ensure that the supervisory and management
bodies function properly for the maximum benefit of the Bank and its shareholders.
All or part of the members of the Management Board are normally invited to attend meetings of the Supervisory
Council. Members of the Management Board are invited to attend meetings of the Supervisory Council depending
on the agenda of the relevant Supervisory Council meeting.
Yes
4.2. It is recommended that meetings of the company’s collegial bodies should be held at the respective intervals,
according to the pre-approved schedule. Each company is free to decide how often meetings of the collegial bodies
should be convened but it is recommended that these meetings should be convened at such intervals that uninterruptable
resolution of essential corporate governance issues would be ensured. Meetings of the company’s collegial bodies
should be convened at least once per quarter.
COMMENT
The Supervisory Council and the Management Board of the Bank act in accordance with the procedures
established in their Rules of Procedure.
Meetings of the Supervisory Council shall be held at least four times a year and at intervals not exceeding four
months. In 2024, the Supervisory Council held eight (8) meetings, and two (2) Supervisory Council decisions were
taken by poll (i.e., by written ballot).
Meetings of the Management Board shall be convened periodically, but at least once a month, in accordance with
the Rules of Procedure of the Management Board. In 2024, 66 meetings of the Management Board were held.
Yes
4.3. Members of a collegial body should be notified of the meeting being convened in advance so that they would have
sufficient time for proper preparation for the issues to be considered at the meeting and a fruitful discussion could be
held and appropriate decisions could be adopted. Along with the notice of the meeting being convened all materials
relevant to the issues on the agenda of the meeting should be submitted to the members of the collegial body. The
agenda of the meeting should not be changed or supplemented during the meeting, unless all members of the collegial
body present at the meeting agree with such change or supplement to the agenda, or certain issues that are important
to the company require immediate resolution.
COMMENT
The Rules of Procedure of the Supervisory Council and the Management Board provide for a requirement that the
notice of the meetings being convened be given in advance.
Meetings of the Supervisory Council are held in accordance with a schedule agreed in advance with the
Supervisory Council. Extraordinary meetings are convened as necessary / questions are submitted to the
Supervisory Council by a survey. The agenda of the meeting is prepared by the secretary of the Supervisory
Council, approved by the chair and submitted to the members of the Supervisory Council in advance not later than
four working days before the meeting, and in case the issue should be solved by way of survey – not later than
two working days. The meeting may take place and the resolutions adopted at it will be considered valid even if
this procedure is not observed if all members of the Supervisory Council agree to it and this is indicated in the
minutes of the meeting.
The Management Board meets according to a pre-agreed meeting schedule, i.e., every week. Extraordinary
meetings are convened as necessary, subject to prior agreement with the Chairman of the Management Board.
The agenda of the meeting is prepared by the Secretary of the Management Board, coordinated with the Chairman
of the Management Board, and made available to all members of the Management Board in advance, at least 2
days before the meeting. Additional urgent items may be included on the agenda of a Management Board meeting
only with the consent of the Chair of the Management Board.
Yes
4.4. In order to coordinate the activities of the company’s collegial bodies and ensure effective decision-making process,
the chairs of the company’s collegial supervision and management bodies should mutually agree on the dates and
agendas of the meetings and close cooperate in resolving other matters related to corporate governance. Meetings of
the company’s supervisory board should be open to members of the management board, particularly in such cases
where issues concerning the removal of the management board members, their responsibility or remuneration are
discussed.
COMMENT
The dates of all meetings of the Supervisory Council and the Management Board cannot be agreed due to the
different frequency of meetings of these bodies. Members of the Management Board are invited to attend meetings
of the Supervisory Council depending on the agenda of the relevant Supervisory Council meeting.
Yes
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V Principle. Nomination, remuneration and audit committees
5.1 Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or, where the
supervisory board is not formed, of the management board which performs the supervisory functions by ensuring that
decisions are based on due consideration and help organize its work in such a way that the decisions it takes would be free
of material conflicts of interest.
Committees should exercise independent judgment and integrity when performing their functions and provide the collegial
body with recommendations concerning the decisions of the collegial body. However, the final decision should be adopted
by the collegial body.
5.1.1. Taking due account of the company-related circumstances and the chosen corporate governance structure, the
supervisory board of the company or, in cases where the supervisory board is not formed, the management board which
performs the supervisory functions, establishes committees. It is recommended that the collegial body should form the
nomination, remuneration and audit committees
5
.
COMMENT
The Bank’s Supervisory Council has formed Audit, Risk, Nomination, Remuneration and Corporate Affairs
Committees which operate in the Bank.
Yes
5.1.2. Companies may decide to set up less than three committees. In such case companies should explain in detail
why they have chosen the alternative approach, and how the chosen approach corresponds with the objectives set for
the three different committees.
COMMENT
See comment of clause 5.1.1.
Not
applicable
5.1.3. In the cases established by the legal acts the functions assigned to the committees formed at companies may be
performed by the collegial body itself. In such case the provisions of this Code pertaining to the committees (particularly
those related to their role, operation and transparency) should apply, where relevant, to the collegial body as a whole.
COMMENT
See comment of clause 5.1.1.
Not
applicable
5.1.4. Committees established by the collegial body should normally be composed of at least three members. Subject
to the requirements of the legal acts, committees could be comprised only of two members as well. Members of each
committee should be selected on the basis of their competences by giving priority to independent members of the
collegial body. The chair of the management board should not serve as the chair of committees.
COMMENT
The Nomination, Remuneration, Risk and Audit Committees are composed of three members each, and the
Corporate Affairs Committee of four members. The Committees are made up of members of the Supervisory Board,
who are appointed to the Committees based on their expertise. The Remuneration, Nomination, Risk and
Corporate Affairs Committees each have two independent Supervisory Board members, the Audit Committee has
all independent members. The Chairpersons of the Remuneration, Nomination, Risk and Audit Committees are
independent members of the Supervisory Board. The Chairman of the Supervisory Board is also the Chairman of
the Nomination and Remuneration Committee.
Yes
5.1.5. The authority of each committee formed should be determined by the collegial body itself. Committees should
perform their duties according to the authority delegated to them and regularly inform the collegial body about their
activities and performance on a regular basis. The authority of each committee defining its role and specifying its rights
and duties should be made public at least once a year (as part of the information disclosed by the company on its
governance structure and practice on an annual basis). In compliance with the legal acts regulating the processing of
personal data, companies should also include in their management reports the statements of the existing committees
on their composition, the number of meetings and attendance over the year as well as the main directions of their
activities and performance.
COMMENT
The recommendation is implemented through the committees of the Supervisory Council formed and operating in
the Bank. The powers (functions, rights and duties) of the committees of the Supervisory Council are determined
by the Supervisory Council by approving the operating regulations of each committee.
The chairs of the committees shall present to the Supervisory Council information on the activities of each
committee between the meetings of the Supervisory Council at the beginning of each meeting of the Supervisory
Council, as well as the management reports of the committees to the Supervisory Council.
The powers of the committees, their composition and other information are published in the Bank’s annual and
semi-annual reports.
Yes
5
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of the Republic
of Lithuania provides that public-interest entities (including but not limited to public limited liability companies whose securities are traded on a regulated
market of the Republic of Lithuania and/or of any other Member State) are under the obligation to set up an audit committee (the legal acts provide for the
exemptions where the functions of the audit committee may be carried out by the collegial body performing the supervisory functions).
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5.1.6. With a view to ensure the independence and impartiality of the committees, the members of the collegial body
who are not members of the committees should normally have a right to participate in the meetings of the committee
only if invited by the committee. A committee may invite or request that certain employees of the company or experts
would participate in the meeting. Chair of each committee should have the possibility to maintain direct communication
with the shareholders. Cases where such practice is to be applied should be specified in the rules regulating the activities
of the committee.
COMMENT
Only Bank employees or other persons (experts) invited by the committee may attend and participate in the
meetings of the committees. The chairs of the committees are enabled to communicate directly with the
shareholders.
Yes
V Principle. Nomination, remuneration and audit committees
5.2 Nomination committee
5.2.1. The key functions of the nomination committee should be the following:
1) to select candidates to fill vacancies in the membership of supervisory and management bodies and the
administration and recommend the collegial body to approve them. The nomination committee should evaluate
the balance of skills, knowledge and experience in the management body, prepare a description of the functions
and capabilities required to assume a particular position and assess the time commitment expected;
2) assess, on a regular basis, the structure, size and composition of the supervisory and management bodies as
well as the skills, knowledge and activity of its members, and provide the collegial body with recommendations
on how the required changes should be sought;
3) devote the attention necessary to ensure succession planning.
COMMENT
The main functions of the Bank’s Nomination Committee are in line with this recommendation.
Yes
6.2.2. When dealing with issues related to members of the collegial body who have employment relationships
with the company and the heads of the administration, the manager of the company should be consulted
by granting him/her the right to submit proposals to the Nomination Committee.
COMMENT
Consultations between the Nomination Committee and the Chief Executive Officer of the Bank take place through
the information and documents required for the decisions of the Nomination Committee which are prepared by the
Secretary of this Committee – the responsible employee of the Bank’s Personnel Department who coordinates all
the issues relating to employment relations with the Chief Executive Officer.
Yes
V Principle. Nomination, remuneration and audit committees
5.3 Remuneration committee
The main functions of the remuneration committee should be the following:
1) submit to the collegial body proposals on the remuneration policy applied to members of the supervisory and
management bodies and the heads of the administration for approval. Such policy should include all forms of
remuneration, including the fixed-rate remuneration, performance-based remuneration, financial incentive
schemes, pension arrangements and termination payments as well as conditions which would allow the
company to recover the amounts or suspend the payments by specifying the circumstances under which it
would be expedient to do so;
2) submit to the collegial body proposals regarding individual remuneration for members of the collegial bodies
and the heads of the administration in order to ensure that they would be consistent with the company’s
remuneration policy and the evaluation of the performance of the persons concerned;
3) review, on a regular basis, the remuneration policy and its implementation.
COMMENT
The main functions of the Bank’s Remuneration Committee are in line with this recommendation.
Yes
V Principle. Nomination, remuneration and audit committees
5.4 Audit committee
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5.4.1. The key functions of the audit committee are defined in the legal acts regulating the activities
6
of the audit
committee.
COMMENT
The key functions of the Bank’s Audit Committee are described in the Regulations of the Audit Committee and
correspond to those specified in legal acts.
Yes
5.4.2. All members of the committee should be provided with detailed information on specific issues of the company’s
accounting system, finances and operations. The heads of the company’s administration should inform the audit
committee about the methods of accounting for significant and unusual transactions where the accounting may be
subject to different approaches.
COMMENT
As provided for in the Regulations of the Audit Committee, the members of the committee must be provided with
detailed information regarding the specifics of the Bank’s accounting, financial and operational activities. The
Bank’s management staff and persons responsible for accounting and compiling of the financial statements are
required to inform the Audit Committee of the methods of accounting for high-value and non-standard transactions,
if the accounting of these transactions can be managed by different methods as well as activities in preferential
trade zones and/or through specialist entities (enterprises, organizations) in order to find out whether such activity
is justified.
Yes
5.4.3. The audit committee should decide whether the participation of the chair of the management board, the manager
of the company, the chief finance officer (or senior employees responsible for finance and accounting), the internal and
external auditors in its meetings is required (and, if required, when). The committee should be entitled, when needed, to
meet the relevant persons without members of the management bodies present.
COMMENT
In accordance with the Regulations of the Audit Committee, other employees of the Bank may be invited to attend
the meetings of the Audit Committee (as observers or specialists), but they do not have the right to vote in decision
making. All those present at a meeting of the Audit Committee shall have access to information on the items on
the agenda for which they are invited. Furthermore, in carrying out its duties, the committee shall be entitled to use
the assistance of third parties for the purpose of conducting special investigations or other tasks and obtaining the
necessary funding from the Bank.
Yes
5.4.4. The audit committee should be informed about the internal auditor’s work program and should be furnished with
internal audit reports or periodic summaries. The audit committee should also be informed about the work program of
external auditors and should receive from the audit firm a report describing all relationships between the independent
audit firm and the company and its group.
COMMENT
The Bank’s Audit Committee, ensuring the effectiveness of the internal audit function, coordinates and periodically
assesses the work of internal audit function and discusses the results of inspections, assesses how the identified
deficiencies are being eliminated and internal audit plans are being implemented, and, if necessary, takes
appropriate actions.
In supervising external auditors or audit firms, the committee shall be aware of the auditors’ work program including
the scope of assignments in the financial statements audit, the materiality level applied, and the process of
identification of significant risks.
Yes
5.4.5. The audit committee should examine whether the company complies with the applicable provisions regulating the
possibility of lodging a complaint or reporting anonymously his/her suspicions of potential violations committed at the
company and should also ensure that there is a procedure in place for proportionate and independent investigation of
such issues and appropriate follow-up actions.
COMMENT
The Audit Committee verifies if the Bank complies with the effective provisions concerning the possibility for
employees to submit complaints or anonymously report suspicions that significant violations are made within the
Bank and aims to ensure that procedures are established for a proportionate and independent investigation of
such issues and for the necessary follow-up. The Audit Committee also may demand information on major events
and non-compliance events, or whether they have been subject to appropriate measures in a timely manner.
Yes
5.4.6. The audit committee should submit to the supervisory board or, where the supervisory board is not formed, to the
management board its activity report at least once in every six months, at the time that annual and half-yearly reports
are approved.
COMMENT
The Bank’s Audit Committee reports to the Supervisory Council once a year, when the financial statements are
submitted for approval to the Bank’s General Meeting of Shareholders.
No
6
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council of 16 April 2014 on specific
requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements of the Republic of Lithuania, and the Rules Regulating the
Activities of Audit Committees approved by the Bank of Lithuania.
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VI Principle. Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and management bodies to
avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to
members of the supervisory and management bodies.
The corporate governance framework should recognize the rights of the stakeholders as established by law and promote
active cooperation between the company and its stakeholders in creating the company's well-being, jobs and financial
stability. In the context of this principle, the term “stakeholders” includes investors, employees, creditors, suppliers,
customers, the local community and others with interests in a particular company.
Any member of the company’s supervisory and management body should avoid a situation where his/her personal
interests are or may be in conflict with the company’s interests. In case such a situation did occur, a member of the
company’s supervisory or management body should, within a reasonable period of time, notify other members of the
same body or the body of the company which elected him/her or the company’s shareholders of such situation of a
conflict of interest, indicate the nature of interests and, where possible, their value.
COMMENT
The recommendation is followed. This is ensured by the provisions of the Rules of Procedure of the Supervisory
Council and the Management Board of the Bank that members of the Supervisory Council and the Management
Board must avoid activities that may give rise to situations of conflict of interest and must disclose to the Bank,
prior to taking up their duties as a member of the supervisory and/or management body, any information that may
give rise to, or that has already given rise to, a conflict of interest, and must keep such information updated. In
accordance with the Bank’s internal regulations, members of the Bank’s Supervisory Council and Management
Board annually submit to the Bank declarations of associated persons and private interests. Meanwhile, if there is
a change in the data contained in the declarations, the declarations are updated and submitted to the Bank
immediately.
It should also be noted that the Bank has adopted the Procedure for the Management of Conflicts of Interest, which
sets out the main measures for the identification, prevention and management of conflicts of interest in the Bank,
as well as the rights, duties and responsibilities of the Bank’s Supervisory Council and Management Body and of
other employees in relation to managing conflicts of interest.
Yes
VII Principle. Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the company should
prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads
of the administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and
its long-term strategy.
7.1. The company should approve and post the remuneration policy on the website of the company; such policy should
be reviewed on a regular basis and be consistent with the company’s long-term strategy.
COMMENT
The Remuneration Policy approved by the General Meeting of Shareholders on 29 March 2024
7
is published on
the website of the Bank. This policy is in line with the long-term strategy of the Bank and is regularly reviewed in
accordance with the procedure and on terms provided for in the legal acts.
Yes
7.2. The remuneration policy should include all forms of remuneration, including the fixed-rate remuneration,
performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as well
as the conditions specifying the cases where the company can recover the disbursed amounts or suspend the payments.
COMMENT
The Remuneration Policy covers all forms of remuneration applied by the Bank.
Yes
7.3. With a view to avoid potential conflicts of interest, the remuneration policy should provide that members of the
collegial bodies which perform the supervisory functions should not receive remuneration based on the company’s
performance.
COMMENT
The applicable Remuneration Policy provides for a fixed remuneration for the members of the Supervisory Council,
independent of the Bank's performance.
Yes
7
This version of the Remuneration Policy, as approved by the Bank’s General Meeting of Shareholders on 29 March 2024,
is effective as of the date of its approval and applies to the full extent, except for the appointment, approval and payment
of remuneration (other than the deferred portion of the annual variable remuneration awarded) to the Designated Employees
in respect of service/performance for the year 2022 and for the payment to the Designated Employees in respect of
service/performance in respect of the years 2021 and 2020 (in such cases, the dates as of 31 March 2020 and 30 March
2022 shall apply. Remuneration Policy as approved by the Bank's General Meeting of Shareholders).
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7.4. The remuneration policy should provide sufficient information on the policy regarding termination payments.
Termination payments should not exceed a fixed amount or a fixed number of annual wages and in general should not
be higher than the non-variable component of remuneration for two years or the equivalent thereof. Termination
payments should not be paid if the contract is terminated due to inadequate performance.
COMMENT
According to the Remuneration Policy, amounts of payments related to employment termination/end of term of
office and notice periods are determined based on the statutory amounts of such payments and/or the duration of
such notice periods established in the laws and the procedure laid down in the Remuneration Policy. The
Remuneration Policy also sets the maximum amount of severance pay available to a nominated employee at the
sum of twelve (12) months of his/her average salary, unless the Supervisory Council decides to grant a higher
amount on a case-by-case basis and subject to the fulfilment of other additional conditions set out in the policy (up
to a maximum amount of the employee’s average monthly salary for a period of eighteen (18) months).
Yes
7.5. In the event that the financial incentive scheme is applied at the company, the remuneration policy should contain
sufficient information about the retention of shares after the award thereof. Where remuneration is based on the award
of shares, shares should not be vested at least for three years after the award thereof. After vesting, members of the
collegial bodies and heads of the administration should retain a certain number of shares until the end of their term in
office, subject to the need to compensate for any costs related to the acquisition of shares.
COMMENT
The Bank has a system of payment of a part of the annual variable remuneration in the Bank’s shares. The
Remuneration Policy and other documents regulating the Bank’s remuneration system provide for the granting of
rights to shares four or five years after the initial appointment (through the Employee Options). The retention of
shares after the grant is not provided for the members of the Management Board and the Chief Executive Officer
and is in no way linked to the end of their term of office.
No
7.6. The company should publish information about the implementation of the remuneration policy on its website, with a
key focus on the remuneration policy in respect of the collegial bodies and managers in the next and, where relevant,
subsequent financial years. It should also contain a review of how the remuneration policy was implemented during the
previous financial year. The information of such nature should not include any details having a commercial value.
Particular attention should be paid on the major changes in the company’s remuneration policy, compared to the previous
financial year.
COMMENT
On 29 March 2024, the Bank’s General Meeting of Shareholders approved the Remuneration Policy, which
complies with the requirements of the Law on Companies of the Republic of Lithuania and other legislation
applicable to the Bank. As of 2021, the Bank publishes information on the implementation of the Remuneration
Policy.
Yes
7.7. It is recommended that the remuneration policy or any major change of the policy should be included on the agenda
of the general meeting of shareholders. The schemes under which members and employees of a collegial body receive
remuneration in shares or share options should be approved by the general meeting of shareholders.
COMMENT
In 2024, the Ordinary General Meeting of Shareholders approved a new version of the Remuneration Policy, and
the Rules for Granting Shares were approved in 2022. These documents govern the annual variable share-based
remuneration scheme through options.
Changes in the Rules for Granting Shares and Remuneration Policy are possible only by the decision of the
General Meeting of Shareholders.
Yes
VIII Principle. Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual
agreements and encourage active cooperation between companies and stakeholders in creating the company value, jobs
and financial sustainability. In the context of this principle the concept “stakeholders” includes investors, employees,
creditors, suppliers, clients, local community and other persons having certain interests in the company concerned.
8.1. The corporate governance framework should ensure that the rights and lawful interests of stakeholders are
protected.
COMMENT
The Bank identifies employees, shareholders, customers, suppliers and partners, regulators, communities and the
public, associates and the media as key stakeholder groups. The rights and legitimate interests of all these groups
are respected, and this is more fully disclosed in the Social Responsibility Report.
Yes
8.2. The corporate governance framework should create conditions for stakeholders to participate in corporate
governance in the manner prescribed by law. Examples of participation by stakeholders in corporate governance include
the participation of employees or their representatives in the adoption of decisions that are important for the company,
consultations with employees or their representatives on corporate governance and other important matters, participation
Yes
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of employees in the company’s authorized capital, involvement of creditors in corporate governance in the cases of the
company’s insolvency, etc.
COMMENT
Depending on the stakeholder group, participation is made possible. This is explained in more detail in the Social
Responsibility Report.
One of the Bank’s exclusive instruments is employee participation in the share capital through the payment of part
of the annual variable remuneration in the Bank’s shares.
8.3. Where stakeholders participate in the corporate governance process, they should have access to relevant
information.
COMMENT
Stakeholders are given access to the necessary information, except where the information is confidential.
Yes
8.4. Stakeholders should be provided with the possibility of reporting confidentially any illegal or unethical practices to
the collegial body performing the supervisory function.
COMMENT
The Bank provides different stakeholder groups with different channels for reporting illegal or unethical practices.
For employees – through the Bank’s internal information system AIS, for shareholders – through investor relations
channels, for customers – through the Remote Call Centre, etc.
Yes
IX Principle. Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues,
including the financial situation, operations and governance of the company.
9.1. In accordance with the company’s procedure on confidential information and commercial secrets and the legal acts
regulating the processing of personal data, the information publicly disclosed by the company should include but not be
limited to the following:
9.1.1. operating and financial results of the company;
COMMENT
Disclosed quarterly in interim and annual financial statements.
Yes
9.1.2. objectives and non-financial information of the company;
COMMENT
Disclosed in interim and annual financial statements.
Yes
9.1.3. persons holding a stake in the company or controlling it directly and/or indirectly and/or together with related
persons as well as the structure of the group of companies and their relationships by specifying the final beneficiary.
COMMENT
It is disclosed on the Bank’s website and in its interim and annual statements. The acquisition or disposal of a
stake is also publicly announced when the person or group of persons who have acquired or lost the stake inform
the Bank thereof in accordance with the established procedure.
Yes
9.1.4. members of the company’s supervisory and management bodies who are deemed independent, the manager of
the company, the shares or votes held by them at the company, participation in corporate governance of other
companies, their competence and remuneration;
COMMENT
It is disclosed on the Bank’s website and in its interim and annual statements.
Yes
9.1.5. reports of the existing committees on their composition, number of meetings and attendance of members during
the last year as well as the main directions and results of their activities;
COMMENT
Information on the composition and activities of the Committees is disclosed in an management report. The number
of committee meetings and attendance by the members shall not be disclosed.
No
9.1.6. potential key risk factors, the company’s risk management and supervision policy;
COMMENT
Information on the Bank’s risk management and supervision is disclosed in the annual financial statements.
Yes
9.1.7. the company’s transactions with related parties;
COMMENT
Yes
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It is disclosed on the Bank’s website in accordance with the criteria established by legal acts and internal
documents of the Bank.
9.1.8. main issues related to employees and other stakeholders (for instance, human resource policy, participation of
employees in corporate governance, award of the company’s shares or share options as incentives, relationships with
creditors, suppliers, local community, etc.);
COMMENT
It is disclosed on the Bank’s website in accordance with the criteria established by legal acts and internal
documents of the Bank.
Yes
9.1.9. structure and strategy of corporate governance;
COMMENT
It is disclosed on the Bank’s website and in its interim and annual statements.
Yes
9.1.10. initiatives and measures of social responsibility policy and anti-corruption fight, significant current or planned
investment projects. This list is deemed minimum and companies are encouraged not to restrict themselves to the
disclosure of information included into this list. This principle of the Code does not exempt companies from their obligation
to disclose information as provided for in the applicable legal acts;
COMMENT
Information on environmental, social and governance (ESG) aspects and the management of these risks is
disclosed in the Social Responsibility Report.
Information on significant investment projects planned and implemented within the scope of the Bank’s activities
is published as essential information of the issuer through the regulated information publication system
administered by Nasdaq.
Yes
9.2. When disclosing the information specified in paragraph 9.1.1 of recommendation 9.1, it is recommended that the
company which is a parent company in respect of other companies should disclose information about the consolidated
results of the whole group of companies.
COMMENT
The Bank discloses consolidated results for the Group as a whole through consolidated interim and annual
statements and consolidated management report.
Yes
9.3. When disclosing the information specified in paragraph 9.1.4 of recommendation 9.1, it is recommended that the
information on the professional experience and qualifications of members of the company’s supervisory and
management bodies and the manager of the company as well as potential conflicts of interest which could affect their
decisions should be provided. It is further recommended that the remuneration or other income of members of the
company’s supervisory and management bodies and the manager of the company should be disclosed, as provided for
in greater detail in Principle 7.
COMMENT
Information on the professional experience, qualifications and potential conflicts of interest of the Bank’s
Supervisory Council, Management Board and Chief Executive Officer that could affect their decisions is disclosed.
The Consolidated Management Report and the Consolidated Financial Statements disclose information on the
total personnel costs, the salaries paid to key executives of the Bank during the year; the Remuneration Report
provides detailed information on the remuneration received by each member of the collegial body.
Yes
9.4. Information should be disclosed in such manner that no shareholders or investors are discriminated in terms of the
method of receipt and scope of information. Information should be disclosed to all parties concerned at the same time.
COMMENT
Information is provided to shareholders and investors to the same extent and simultaneously in the Lithuanian and
English languages and is publicly available on the Bank’s website.
Yes
X Principle. Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.
10.1. With a view to obtain an objective opinion on the company’s financial condition and financial results, the company’s
annual financial statements and the financial information provided in its management report should be audited by an
independent audit firm:
COMMENT
The Bank’s consolidated financial statements are audited, and the financial information presented in the
management report is audited by an independent firm of auditors in accordance with the International Standards
on Auditing as adopted by the EU.
Yes
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10.2. It is recommended that the audit firm would be proposed to the general meeting of shareholders by the supervisory
board or, if the supervisory board is not formed at the company, by the management board of the company.
COMMENT
The candidate audit firms are selected by the Audit Committee and proposed to the General Meeting of
Shareholders by the Supervisory Council.
Yes
10.3. In the event that the audit firm has received remuneration from the company for the non-audit services provided,
the company should disclose this publicly. This information should also be available to the supervisory board or, if the
supervisory board is not formed at the company, by the management board of the company when considering which
audit firm should be proposed to the general meeting of shareholders.
COMMENT
The fee information for the audit firm for non-audit services (if any) would be disclosed publicly in the Bank’s
consolidated management reports. The Supervisory Council and the Management Board have this information at
their disposal.
Yes
Clause 3. Information on risk scope and risk management - describes risk management related to financial reporting, risk mitigation
measures and the internal control system in place.
More details are provided in the Financial Risk Management disclosure in notes to the financial statements for the year 2024 and on the
internal control system in the Consolidated Management Report 2024.
Clause 4. Information on significant direct or indirect holdings.
As of 31 December 2024, the following shareholdings have been declared in accordance with the procedure established in the Law on
Securities of the Republic of Lithuania and the disclosure rules of the Bank of Lithuania:
▪ Acquisition of a shareholding by Algirdas Butkus together with his controlled companies - UAB prekybos namais "Aiva" and UAB
"Mintaka" - notified on 22 March 2024. The holding amounted to 5,02% at the date of notification and to 5,06% of the Bank's
shares as of 31 December 2024.
▪ The dilution of the European Bank for Reconstruction and Development's (EBRD) holding of 10.00% on 4 June 2024, notified
on 31 December 2024. EBRD held a 7.25% stake.
▪ Tesonet Global UAB - acquisition of a stake notified on 7 June 2024. As at 31 December 2024, 5.32% of the Bank's shares.
▪ AB Invalda INVL's shareholding above 15%, notified on 19 December 2023. As at 31 December 2024, the stake held by Invalda
INVL AB together with its subsidiary UAB INVL Asset Management amounted to 19.93% of the Bank's shares.
▪ The 5,71 % stake held by Willgrow UAB (formerly UAB ME investicija), notified on 29 December 2021, amounted to 8,97 % as
at 31 December 2024.
Clause 5. Information on related party transactions as provided for in Article 372 of the Law on Companies (identifying the parties to the
transaction (legal form, name, code, register of the legal entity, register where the data concerning this entity are collected and stored;
natural person's name, address for correspondence) and transaction value).
In 2024, the Bank published on its website three notices regarding significant transactions with parties related with the Bank:
NOTIFICATION 06/03/2024
Transaction concluded with SB Lizingas UAB, a subsidiary of Šiaulių Bankas AB.
Registration No. 234995490, address: Karaliaus Mindaugo pr. 35, Kaunas.
Transaction information:
Credit limit EUR 290 000 000 (maturity until 30.03.2025, interest rate until 30.03.2024 4,35 %, from 30.03.2024 until 30.03.2025 5,35
%).
Credit limit EUR 7 000 000 (maturity until 30.09.2024, interest rate 5,80 %).
The credit transactions with a related party of AB Šiaulių Bankas were concluded in the ordinary course of business of AB Šiaulių
Bankas under normal market conditions. AB Šiaulių Bankas considers that the loan transactions and the terms and conditions of the
credit transactions are fair and reasonable in relation to AB Šiaulių Bankas and its shareholders, who are not parties to the credit
transactions.
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Clause 6. Information on and description of shareholders having special control rights.
There are no shareholders with special control rights in the Bank.
Clause 7. Details of any existing restrictions on voting rights, such as restrictions on the exercise of voting rights by a certain percentage
or number of persons, the time limits by which voting rights may be exercised or the systems by which ownership of the securities is
separated from the shareholder.
As of 31 December 2024, the Bank was not aware of any restrictions on the voting rights attached to the Bank’s shares, the time limits
for exercising the voting rights, or any voting rights conferred by these shares separated from the shareholder under any systems.
Clause 8. Information on the rules governing the election and replacement of the members of the Board as well as amendments to the
Charter of the Company.
According to the Bank’s Articles of Association, the members of the Management Board are elected, removed and supervised by the
Bank’s Supervisory Council. The selection of the members of the Management Board is carried out in accordance with the Regulations
on the Selection of Management Board Members, and the evaluation of the candidates to the Management Board is carried out in
accordance with the Policy for the Assessment of Managers. In accordance with Policy for the Assessment of Managers, the Nomination
Committee evaluates the candidate and recommends that the appointing/electing person/body make a final decision on the respective
position in the Bank. A member of the Management Board must also obtain the permission of the supervisory authority before taking up
his/her duties at the Bank.
The Bank’s Articles of Association are amended by the General Meeting of Shareholders of the Bank. Decisions on the amendment of
the Articles of Association are adopted by a majority of votes, which may not be less than 2/3 of all votes granted by the shares of the
shareholders participating in the meeting.
Clause 9. Information on the powers of board members.
The Management Board of the Bank is a collegial management body of the Bank consisting of eight (8) members. The term of office of
the Management Board is four years and the number of terms is not limited. If individual members of the Management Board are elected,
they are elected until the end of the term of office of the existing Management Board. The Management Board acts in accordance with
its Rules of Procedure.
The Bank’s Management Board shall consider and approve:
• the Bank's management report;
• the governance structure of the Bank and positions of employees;
• regulations of the branches, representative offices and other separate subdivisions of the Bank;
• the Bank’s lending procedure in accordance with the Lending Policy approved by the Bank’s Supervisory Council;
• the procedure for issuing guarantees, sureties and assuming other obligations;
• the procedure for writing off loans and other debt obligations;
• regulations of the Loan Committee and Risk Management Committee of the Bank;
• a description of the procedure for participation and voting at the Meeting by electronic means;
• the Rules of Procedure of the Management Board.
The Management Board also elects/appoints and removes the Chief Executive Officer of the Bank and his/her deputies, determines the
remuneration of the Chief Executive Officer, other terms and conditions of his/her employment contract, approves his/her job description,
promotes him/her and imposes sanctions, determines which information is considered a trade secret and confidential information of the
Bank.
The Management Board shall adopt:
• decisions on the Bank becoming the promoter and/or participant of other legal entities;
• decisions on opening branches, representative offices and other separate subdivisions of the Bank and on terminating their
activities;
• decisions on the investment, transfer or lease of fixed assets with the book value exceeding 1/20 of the Bank’s authorized capital
(calculated separately for each type of transaction);
• decisions on the pledge and mortgage of fixed assets with the book value exceeding 1/20 of the Bank’s authorized capital (the
total amount of transactions is calculated);
• decisions on the issue of guarantees or sureties to secure obligations of other entities in the amount exceeding 1/20 of the
Bank’s authorized capital;
• decisions on the acquisition of fixed assets for a price exceeding 1/20 of the Bank’s authorized capital;
• decisions to issue non-convertible bonds;
• decisions on other matters that are considered or decided by the Management Board under the laws and Articles of Association
of the Bank.
The Management Board shall set forth:
• the terms and conditions of issue of the Bank’s shares;
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• the procedure for issuing the Bank’s bonds. When the General Meeting decides on the issue of convertible bonds, the
Management Board shall have the right to determine additional terms and conditions of their issue and approve the subscription
agreements which the Chief Executive Officer or a person authorized by him/her is entitled to sign;
• the recruitment procedure and cases in which employees are hired by the Bank with the approval of the Management Board.
The Management Board shall execute resolutions passed by the General Meeting of Shareholders and the Supervisory Council.
The Management Board shall analyze and evaluate the materials submitted by the Chief Executive Officer of the Bank concerning:
• the strategic business plan of the Bank and information on its implementation;
• organization of the Bank’s activities;
• the Bank’s financial position;
• results of economic activity, revenue and expenditure estimates, inventory and other records of changes in assets.
The Management Board analyzes and evaluates the draft Rules for Granting Shares and submits it to the Supervisory Council and the
General Meeting of Shareholders along with the feedback and proposals. The Management Board, furthermore, analyzes and assesses
the set of annual financial statements of the Bank and profit/loss distribution project, and submits them to the Supervisory Council and
the General Meeting of Shareholders together with the management report of the Bank, and handles other matters related to the business
of the Bank if they do not fall within the competence of other bodies of the Bank under the laws or Articles of Association of the Bank.
The Management Board is responsible for convening and organizing the General Meetings of Shareholders in a timely manner.
Clause 10. Information on the competence of the general meeting of shareholders, rights of shareholders and their implementation, if
not provided by law.
The competence of the General Meeting of Shareholders, the rights of shareholders and exercise thereof do not differ from those provided
by law.
Clause 11. Information on the composition of the management, supervisory bodies and their committees, areas of their and company
head’s activity.
The Supervisory Council is a collegial body supervising the activities of the Bank. The Supervisory Council is chaired by the
Chairperson. The Bank’s Supervisory Council, consisting of seven (7) members, is elected by the General Meeting of Shareholders for
a period of four years. The members of the Supervisory Council are proposed to the General Meeting by the initiators of the General
Meeting or shareholders holding 1/20 of the Bank’s shares.
Candidates are proposed before or during the meeting. Each candidate to the Supervisory Council shall inform the General Meeting of
his/her duties and responsibilities, as well as his/her other activities related to the Bank and other legal entities related to the Bank.
In the election of the members of the Supervisory Council, each shareholder shall have the number of votes attributable to the shares
he/she holds multiplied by the number of members of the Supervisory Council being elected. These votes are distributed at the
shareholder’s discretion, for one or more candidates. The candidates who receive most votes shall be elected.
Four (4) independent members were elected to the Supervisory Council for this term. The Articles of Association of the Bank provide that
the number of terms of office of a member of the Supervisory Council shall not be limited.
Functions of the Supervisory Council:
• considers and approves the Bank’s business strategy, analyzes and assesses information on the implementation of the Bank’s
business strategy, provides this information to the Ordinary General Meeting of Shareholders;
• elects members of the Management Board and removes them from office, submits proposals to the Management Board
regarding the candidacy of the Chairperson of the Management Board. Setting the remuneration and other terms and conditions
of employment contracts of the members of the Management Board who hold other positions in the Bank, the Chief Executive
Officer and his/her deputies requires prior approval of the Supervisory Council. If the Bank is operating at a loss, the Supervisory
Council must consider whether the members of the Management Board are suitable for the position;
• elects members of the Audit, Risk, Nomination and Remuneration Committees, and form and elect the members of the other
Board Committees;
• supervises activities of the Management Board and the Chief Executive Officer of the Bank;
• supervises the implementation of business plans of the Bank, analyzes the Bank’s revenue and expenses, own investments
and capital adequacy issues;
• considers and approves the Rules of Procedure of the Supervisory Council of the Bank;
• approves business plans and annual budget of the Bank;
• approves any type of policies related to the Bank’s activities including the risk management policy;
• approves the description of procedures and conditions for the valuation of transactions with related parties that are entered into
on an arm’s length basis and in the ordinary course of business, as defined in the Law on Companies;
• ensures that the Bank has an efficient internal control system in place;
• submits to the General Meeting of Shareholders feedback and proposals on the draft Rules for Granting Shares;
• makes proposals and comments to the General Meeting of Shareholders on the draft set of annual financial statements of the
Bank, profit/loss distribution project and report of the Bank, and the activities of the Management Board and Chief Executive
Officer;
• makes proposals to the Management Board and Chief Executive Officer to revoke their decisions that contradict the laws and
other legal acts, the Articles of Association of the Bank or decisions of the General Meeting of Shareholders;
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
181
• submits to the General Meeting of Shareholders and the Management Board comments and proposals regarding the draft
remuneration policy of public limited liability companies whose shares are admitted to trading on a regulated market and the
draft remuneration report;
• approves the lending policy and sets forth the procedure for lending that is subject to the approval of the Supervisory Council;
• makes proposals to the Management Board and Chief Executive Officer to revoke their decisions that contradict the laws and
other legal acts, Articles of Association of the Bank or decisions of the General Meeting of Shareholders;
• draws up the list of transactions and decisions of the management bodies of the Bank, the conclusion/adoption or execution of
which requires the approval of the Supervisory Council;
• passes decisions that fall within the competence of the Supervisory Council under the procedures approved by the Supervisory
Council, which the Supervisory Council is required to adopt in accordance with the laws, Articles of Association of the Bank and
decisions of the General Meeting of Shareholders;
• considers and decides on other matters that must be considered or decided on by the Supervisory Council under the laws,
Articles of Association of the Bank and decisions of the General Meeting of Shareholders.
Management Board of the Bank – see Clause 9.
Chief Executive Officer (CEO) is a single-person management body of the Bank who organizes day-to-day activities of the Bank and
performs other actions necessary to perform his/her functions, implement the decisions of the Bank’s bodies and ensure the Bank’s
activities.
Functions of the CEO of the Bank:
• to organize day-to-day activities of the Bank;
• to hire and dismiss employees of the Bank, conclude and terminate employment contracts concluded with them, provide
incentives to them and impose sanctions on them. The CEO is entitled to authorize another Bank employee to perform actions
listed herein;
• to represent the Bank in dealings with other persons, in a court and arbitral tribunal without a separate authorization;
• to issue and revoke authorization to represent the Bank and powers of procurations;
• to issue orders;
• to perform other actions necessary to perform his/her functions, implement decisions of the Bank’s bodies and ensure the Bank’s
activities.
Chief Executive Officer is responsible for:
• organizing the Bank’s activities and achieving its goals;
• drawing up a set of financial statements and management report of the Bank;
• drafting the Remuneration Policy, the Remuneration Report and the Rules for Granting Shares;
• concluding an agreement with the audit firm;
• submitting information and documents to the General Meeting of Shareholders, the Supervisory Council and the Management
Board in the cases provided for in the laws or at the request of the respective bodies;
• submitting documents and data of the Bank to the manager of the Register of Legal Entities;
• submitting documents to the Bank of Lithuania and Lithuanian Central Securities Depository;
• publishing information required by laws and other regulations in sources specified in the Articles of Association of the Bank;
• submitting information to the shareholders;
• drafting a description of the procedure for participation and voting at the Meeting by electronic means;
• drafting a description of procedures and conditions for the valuation of arm’s length transactions with related parties in the
ordinary course of business;
• fulfilling other duties provided for in laws and regulations, Articles of Association of the Bank and job description of the Chief
Executive Officer of the Bank.
The Chief Executive Officer of the Bank shall act on behalf of the Bank and shall have the right to conclude transactions unilaterally,
except as otherwise provided for in the Articles of Association of the Bank or decisions of the Bank’s bodies.
More information about the composition of management bodies and committees is provided in the summary to this report and the
consolidated management report for 2024, section Bank Management.
Clause 12. For the selection of the company's chief executive officer, members of the management and supervisory bodies, a description
of the company's diversity policy in relation to gender, other aspects such as age, disability, education, professional experience, the
objectives of the policy, the manner in which it has been implemented and the results of its implementation during the reporting period.
If the diversity policy is not applied, the reasons for not applying it shall be explained. For companies with boards of directors and/or
supervisory boards, the section of the management report devoted to information on corporate governance shall also include statistical
information on gender representation on the company's management and supervisory bodies (percentages of representation by gender),
the measures already taken or to be taken by the company to ensure that the under-represented gender in the company's management
and supervisory bodies is not less than 33 %. (the proportion of gender representation in the company's management, board of directors,
supervisory board and the reasons for failing to achieve this proportion.
The Bank has a Diversity Policy approved by the Supervisory Council on 5 May 2022, which is publicly available on the Bank’s website.
Diversity in the Bank is understood in a broad sense, not only in terms of the diversity of the management bodies, but also across the
organization and the Bank’s Group. Diversity is a situation in which the characteristics of employees and members of management
bodies, including their age, gender, education, and professional experience, differ in such a way as to ensure a diversity of views within
the Bank’s Group and, as appropriate, the management / supervisory bodies. The geographical origin criterion is not mandatory as the
Bank does not operate internationally but is seen as an advantage by the Bank. The following Diversity Policy principles and objectives
GOVERNANCE INFORMATION FOR 2024
(ADDITIONAL INFORMATION TO THE CONSOLIDATED MANAGEMENT REPORT FOR 2024)
182
were identified: (i) Fostering the diversity culture; (ii) Increasing the diversity of the management body; (iii) Equality; (iv) Achieving gender
balance; (v) Increase of the number of the under-represented gender in management bodies; and (vi) Zero-tolerance to discrimination.
At least 25 per cent of the members of the Bank’s collegial bodies must be women (under-represented gender), with a target of 30 per
cent as of 2028 (it should be noted that the current term of office of the Bank’s governing bodies is 2020–2024).
The selection of members of the Bank's supervisory and management bodies is governed by the provisions on the selection of members
of the Management Board/Supervisory Board approved by the Bank's Supervisory Board. Before the selection is announced, the need
for the required competences, experience, knowledge and skills shall be assessed and the Nomination Committee shall prepare a
description of the functions and skills in this respect.
In 2024, the gender representation in the governing bodies of the Bank was as follows:
Bank body
Women (%)
Men (%)
Women (number)
Men (number)
Management Board
37,5
62,5
3
5
Supervisory Council
28,6
71,4
2
5
Chief Executive Officer
(Member of the
Management Board)
-
100
-
1
Total
33,3
66,7
5
10
As the overall representation of women (under-represented gender) in the Bank's governing bodies is 33.3%, Šiaulių Bankas meets the
legal minimum threshold of 33%. In the future, the Bank will continue to apply transparent and equality-based selection processes in
order to maintain its diversity policy and promote gender balance at the highest levels of management.
Clause 13. Information on all the agreements between the shareholders (their substance, terms).
The Bank does not have any information about any mutual agreements between the shareholders related to the Bank’s shares effective
as of 31 December 2024.
REMUNERATION INFORMATION FOR 2024
(Additional Information to the Consolidated Management Report for 2024)
Tilžės 149, LT-76348 Šiauliai
Tel. (8 41) 595 607, faks. (8 41) 430 774
Email info@sb.lt
www.sb.lt
184
The Bank's information on remuneration has been prepared and approved in accordance with the procedure stipulated in the Republic
of Lithuania Law on Companies and complies with the requirements set out in Article 25 of the Republic of Lithuania Law on Accountability
of Enterprises and Enterprise Groups.
Upon approval by the Bank's General Meeting of Shareholders of the 2024 consolidated financial statements of the Bank and the Bank
Group, this information will be publicly disclosed for a period of 10 years on the Bank’s official website at www.sb.lt.
This section, dedicated to information on remuneration (reporting period from 2024-01-01 to 2024-12-31), provides details regarding the
remuneration of each member of the Bank's management (the Chief Executive Officer, the Management Board) and supervisory bodies
(Supervisory Council). The members of the management and supervisory bodies have been identified on the basis of their position in
the Bank as at 31 December 2024, and disclosures are also made regarding those members who commenced/ceased their roles during
the course of 2024 (if any).
As of 29 March 2024, the General Meeting of Shareholders of the Bank did not express disagreement/other remarks regarding the 2023
Remuneration Report, which, as an attachment to the Bank's consolidated management report, is publicly disclosed on the Bank's
website in the document titled “2023 Annual Report of AB Šiaulių Bankas and the Bank Group.” Indications were received solely from
certain shareholders – institutional investors – on the basis of undisclosed information concerning the performance metrics of board
members, which would allow understanding the relationship between the allocated variable remuneration and the achieved results,
objectives, and their weighting, as well as the respective lower and upper limits for the payment of variable remuneration and the
methodology for its calculation.
The allocation of remuneration to members of the Bank's management Board and supervisory bodies is governed by the Remuneration
Policy, approved by the Bank's General Meeting of Shareholders and publicly disclosed on the Bank’s website. On 29 March 2024, the
General Meeting of Shareholders approved a revised version of the Remuneration Policy, which is fully applicable when assigning,
confirming, granting, and paying remuneration for the year 2023. For work/activities in 2022, the allocation of remuneration follows the
version of the Remuneration Policy approved on 30 March 2022. According to this policy, the annual deferred portion of the variable
remuneration for members of the Bank's management Board is confirmed and granted in accordance with the 2022-approved version of
the Remuneration Policy.
The allocation, confirmation, granting, and payment of remuneration to the members of the Bank's management Board for work/activities
in 2021 and 2020 are guided by the edition of the Remuneration Policy approved on 31 March 2020.
The model of the Group's remuneration framework is consistent and aligned with the Group's business and risk strategy, objectives,
including those related to environmental, social, and governance (hereinafter the ESG) risks, values, corporate culture, risk culture, and
long-term sustainability interests, aiming to increase the long-term value of the Bank's shares, avoid conflicts of interest, promote reliable
and effective risk management, as well as robust management of money laundering and terrorist financing risks, and defines the
processes and principles governing the payment of remuneration. Remuneration is determined taking into account the employee's
knowledge, experience, qualifications, responsibility, operational efficiency, and work quality, as well as the position held, applicable
remuneration ranges for the position, and similar factors. A uniform remuneration system is applied, ensuring non-discrimination of
employees based on gender, age, nationality, race, social status, religion, etc. The successful implementation of the Remuneration Policy
provides the Bank with opportunities to attract, motivate, and retain the best employees who contribute to the achievement of the Group's
long-term goals and the strategic implementation of the business. The Bank monitors gender pay gaps and takes action to reduce them
when necessary.
According to the Remuneration Policy, fixed remuneration is paid to the members of the Bank’s Supervisory Council, while members of
the Bank’s Management Board receive both fixed and variable remuneration. The variable remuneration fund is established only after
evaluating the Bank's performance, taking into account existing and future risks, the use of capital, and the need for liquidity support. The
methods for calculating variable remuneration are developed to align with the Bank Group's business strategy, objectives, values, long-
term sustainable business interests, promote reliable and effective risk management, avoid conflicts of interest, ensure compliance with
the code of ethics, and prevent incentivizing excessive risk-taking by remuneration recipients.
In accordance with the Bank's Remuneration Policy, the annual variable remuneration for members of the Bank’s Management Board is
granted only after the annual performance assessment, based on the results of the last year's performance evaluation. In confirming the
deferred portion, consideration is given to the results of evaluating the member's performance over at least the last 3 years. When the
duration of employment or the Contract with the Employee is less than 3 years, decisions are based on the available performance
evaluation results. The size of variable remuneration is based on the overall assessment of employee, department, and predetermined
goals and achieved results of the bank and the Group. The allocated variable remuneration may also depend on the employee's position
and the significance of decision-making, which can have a significant impact on the risk assumed by the Group. When assessing
individual employee objectives and achievements, not only the achieved personal financial result is evaluated, but also the non-
financial/qualitative contribution (e.g., compliance with the Code of Ethics, adherence to the Bank’s values, relationships with
clients/colleagues, adherence to standards, fulfilment of requirements set out in internal documents, initiative, leadership, participation in
project activities, process improvement).
As stipulated in the Bank's Remuneration Policy, annual variable remuneration for members of the Bank’s Management Board is paid in
both cash and Bank shares. This section discloses information on the annual variable remuneration allocated in 2024 based on the
results of operations in 2023. Following the decision of 29 March 2024, approving the Remuneration Policy applicable to the allocation
of annual variable remuneration for the year 2023, the provision of the portion of remuneration payable in Bank shares to members of
the Bank's management body is deferred for a period of 5 (five) years from the date of allocation of the annual variable remuneration.
185
The deferred portion is approved in increments of five times, meaning that each year, 1/5 of the allocated shares must be approved. 3/5
of the deferred portion is granted 3 years after the allocation of the annual variable remuneration, 1/5 of the deferred portion is granted 4
years after the allocation of the annual variable remuneration, and the remaining 1/5 of the deferred portion is granted 5 years after the
allocation of the annual variable remuneration. A retention period applies to the granted portions.
This deferred portion can be granted through an option agreement (option contract) entered into between the Bank and the employee,
granting the employee the right to acquire Bank shares at no cost upon the expiration of the deferral period or by any other method
determined by the Bank’s Management Board.
The annual variable remuneration may be allocated to a member of the management body, maintaining an appropriate balance between
the variable and fixed components of remuneration, and allowing for flexible policies related to variable remuneration components;
specifically, the variable remuneration allocated for 1 calendar year cannot exceed 100% of the total amount of fixed remuneration
elements received during the same 1 calendar year for which the variable remuneration is allocated (i.e., the ratio of variable to fixed
remuneration cannot exceed 100%), aiming to promote reliable and effective risk management.
REMUNERATION OF MEMBERS OF THE SUPERVISORY BODY
In accordance with the Bank’s Remuneration Policy, members of the Supervisory Council are paid fixed remuneration, consisting of the
base salary and additional allowances. Remuneration for members of the Supervisory Council is determined irrespective of the member's
gender, age, nationality, and experience, and is paid on a pro rata basis for the preceding month, quarter or at such other intervals as
may be specified in the member's contract of service as a member of the Supervisory Council of the Bank. The amounts of position salary
and supplements for the entire term of office of a member of the Supervisory Council are determined by the Bank's general shareholders'
meeting when approving the Bank's Remuneration Policy.
Information about the remuneration of the members of the Bank's Supervisory Council for the year 2024 (current or having resigned in
2024), excluding taxes:
Full name
Positions on the Bank's Supervisory Council and Committees
1
Remuneration paid by the
Bank in 2024, EUR
2
Valdas Vitkauskas
Independent Member of the Supervisory Council, Chairperson of the Supervisory
Council, Chairperson of the Remuneration and Nomination Committee, Member of the
Audit, Risk, and Corporate Affairs Committees
323,621
Gintaras Kateiva
Member of the Supervisory Council, Member of the Remuneration Committee
59,395
Darius Šulnis
Member of the Supervisory Council, Chairperson of the Corporate Affairs Committee,
Member of the Nomination and Risk Committees
83,645
Ramunė Vilija Zabulienė
3
Independent member of the Supervisory Council, Chairperson of the Audit Committee,
Member of the Remuneration and Risk Committees
18,750
Miha Košak
4
Independent Member of the Supervisory Council, Chairperson of the Risk Committee,
Member of the Nomination Committee
16,936
Susan Gail Buyske
Independent member of the Supervisory Council, Chairperson of the Risk Committee,
Member of the Audit Committee
74,855
Mindaugas Raila
Member of the Supervisory Council, Member of the Corporate Affairs Committee
59,395
Tomas Okmanas
Independent Member of the Supervisory Council, Member of the Remuneration
Committee
66,976
Monika Nachyła
5
Independent member of the Supervisory Council. Chairperson of the Audit Committee,
Member of the Nomination Committee
40,083
1
The Corporate Affairs Committee was established on 2024-01-01.
2
Members of the Supervisory Council have been paid a fixed remuneration for their activities in accordance with the Remuneration Policy.
3
Ramunė Zabulienė served in the Bank's Supervisory Council until 2024-03-28.
4
Miha Košak served in the Bank's Supervisory Council until 2024-03-28.
5
Monika Nachyła began serving in the Bank's Supervisory Council from 2024-06-26.
186
Below is the information on the changes in the remuneration of the members of the Bank's Supervisory Council for the period 2019-2024:
Full name
Positions on the Bank's Supervisory
Council and Committees
Changes in remuneration, %
1
In 2020
compared to
2019
In 2021
compared to
2020
In 2022
compared to
2021
In 2023
compared to
2022
In 2024
compared to
2023
Valdas Vitkauskas
2
Independent Member of the Supervisory
Council, Chairperson of the Supervisory
Council,
Chairperson of the Remuneration Committee
Chairperson of the Nomination Committee,
Member of Audit Committee,
Member of Risk Committee
-
-
-
253%
3
-5%
Gintaras Kateiva
Member of the Supervisory Council, Member of
the Remuneration Committee
-3%
-7%
0%
0%
3%
Darius Šulnis
Member of the Supervisory Council, Member of
the Nomination Committee
Chairperson of the Corporate Affairs Committee
2%
1%
-5%
-7%
45%
4
Ramunė Vilija Zabulienė
5
Independent member of the Supervisory
Council, Chairperson of the Audit Committee,
Member of Audit Committee,
Member of Risk Committee
4%
-4%
0%
0%
-76%
6
Miha Košak
Independent Member of the Supervisory
Council, Chairperson of the Risk Committee,
Member of the Nomination Committee
14%
4%
0%
0%
-76%
7
Susan Gail Buyske
8
Independent member of the Supervisory
Council, Chairperson of the Risk Committee,
Member of the Audit Committee
-
87%
5%
7%
15%
9
Mindaugas Raila
10
Member of the Supervisory Council, Member of
the Corporate Affairs Committee
-
-
-
-
24%
11
Tomas Okmanas
12
Independent Member of the Supervisory
Council, Member of the Remuneration
Committee
-
-
-
-
47%
13
Monika Nachyła
14
Independent member of the Supervisory
Council. Chairperson of the Audit Committee,
Member of the Nomination Committee
-
-
-
-
-
1
Up until 2020-03-31, the Supervisory Council members were paid bonuses for their activities. From 2020-04-01, the fixed remuneration specified in the Remuneration Policy
is paid. The changes in remuneration have been calculated by adding up the remuneration paid in the relevant year and comparing it with the corresponding previous year. The
calculations use remuneration data without deducting taxes.
2
Valdas Vitkauskas was elected as an independent member of the Bank's Supervisory Council in 2020, therefore remuneration changes for the period 2019-2022 are not
provided. 3 Increase due to the remuneration paid to the Bank for the period from 2022-06-01 to 2022-12-31 for the full year 2023 and after becoming Chairperson of the Bank's
Supervisory Council.
4
In 2024, the increase in remuneration due to the payment of an annual increment on top of the remuneration after becoming a Chairperson of the Bank's Corporate Affairs
Committee as of 2024-01-01.
5
Ramunė Zabulienė served in the Bank's Supervisory Council until 2024-03-28. The calculations include additional remuneration paid for participation in committee meetings
of AB Šiaulių bankas in the period 2019 – 2020 Q1. 6 Decrease due to the remuneration paid by the Bank for the year 2023 compared to the remuneration paid for the partial
year 2024.
7
Miha Košak served in the Bank's Supervisory Council until 2024-03-28. 7 Decrease due to the remuneration paid by the Bank for the year 2023 compared to the remuneration
paid for the partial year 2024.
8
Susan Gail Buyske was elected as an independent member of the Bank's Supervisory Council in 2020, therefore no changes in remuneration for 2020 are presented. 4
Increase in 2024 in remuneration due to the payment of an annual increment on top of the remuneration after becoming a Chairperson of the Bank's Risk Committee from 2024-
03-29.
10
Mindaugas Raila was elected as a member of the Bank's Supervisory Council in 2023, therefore remuneration changes for the period 2020-2023 are not provided. 11 In 2024,
the increase in remuneration due to the payment of an annual increment on top of the remuneration after becoming a member of the Bank's Corporate Affairs Committee as of
2024-03-29.
12
Tomas Okmanas was elected as an independent member of the Bank's Supervisory Council in 2023, therefore remuneration changes for the period 2020-2023 are not
provided. 13 In 2024, the increase in remuneration due to the payment of an annual increment on top of the remuneration after becoming a member of the Bank's Remuneration
Committee as of 2024-03-29.
14
Monika Nachyła joined the Supervisory Council on 2024-06-26, therefore, no changes in remuneration for the period 2020-2024 are provided.
REMUNERATION OF MEMBERS
OF THE MANAGEMENT BODY
All members of the Bank‘s Management Board are also Bank employees, holding either the position of the Chief Executive Officer or
Deputy Chief Executive Officer and/or Heads of Divisions. As Bank employees, they are subject to the fixed and variable remuneration
specified in the Bank's Remuneration Policy, is determined and appointed by the Supervisory Council of the Bank.
When allocating the annual variable remuneration to members of the Bank‘s Management Board, the Head of Administration, deputy
Heads of Administration, and department heads – excluding those who also perform internal control functions such as Chief Risk Officer
(CRO) and Chief Compliance Officer (CCO) – the Group's performance results carry greater weight than divisional or individual
performance results. When allocating the annual variable remuneration to the CRO and CCO, the Group's performance results carry less
weight compared to divisional/individual performance results or the operating results of the Group company.
187
Information on the remuneration of the Bank‘s Management Board for the year 2024, excluding taxes:
1
Fixed remuneration (excluding income in kind and additional benefits) is calculated including the base salary paid in 2024, leave pay, and sick leave payments.
2
Income in kind and additional benefits include pension insurance, contributions to third-pillar pension funds, health insurance contributions, cash bonuses, death benefits, and
other payments made under the Bank’s internal regulations.
3
Information on the ratio of fixed to variable remuneration is provided only for 2023, as the annual variable remuneration for 2024 activities has not yet been allocated.
4
Algimantas Gaulia took up his duties as a member of the Bank‘s Management Board on 2021-07-30, therefore the deferred annual variable remuneration paid in 2024 for 2020
is not disclosed.
5
Agnė Duksienė took up the duties as a member of the Bank‘s Management Board on 2023-05-08, therefore the deferred annual variable remuneration paid in 2024 for 2020
is not disclosed.
6
Tomas Varenbergas took up the duties as Member of the Bank‘s Management Board on 2024-06-04, therefore, the annual variable remuneration awarded and the deferred
annual variable remuneration paid in 2023 for the performance in 2020, and the ratio of variable to fixed remuneration is not provided.
7
Laura Križinauskienė took up the duties as member of the Bank‘s Management Board on 2024-06-07, therefore, the annual variable remuneration awarded for 2023
performance and the deferred annual variable remuneration paid in 2024 for the performance in 2020, and the ratio of variable to fixed remuneration is not provided.
Information on the portion of the annual variable remuneration for members of the Bank‘s Management Board for 2023 and performance
criteria:
Full name
Roles at the Bank
Weight of
Group
objectives,
%
Weight of
Management
objectives, %
Weight of
Department
objectives, %
Limits of the variable
remuneration portion
based on achieved
objective results
Overall achievement
result of objectives
(Group, Management,
Department)
Vytautas Sinius
Chairperson of the Management Board
and Chief Executive Officer
60%
40%
-
51 – 125%
93.7%
Donatas Savickas
Deputy Chairperson of the
Management Board, Deputy Chief
Executive Officer – Head of Division
50%
20%
30%
51 – 125%
91.7%
Daiva Šorienė
Member of the Management Board,
Deputy Chief Executive Officer – Head
of Division
50%
20%
30%
51 – 125%
89.1%
Mindaugas Rudys
Member of the Management Board,
Head of Division
50%
20%
30%
51 – 125%
88.8%
Algimantas Gaulia
Member of the Management Board,
Head of Division, CRO
30%
10%
60%
51 – 125%
88.2%
Agnė Duksienė
Member of the Management Board,
Head of Division, CCO
30%
10%
60%
51 – 125%
104.5%
Tomas Varenbergas
1
Member of the Management Board,
Head of Division
-
-
-
-
-
Laura Križinauskienė
2
Member of the Management Board,
Head of Division
-
-
-
-
-
1
Tomas Varenbergas began serving as a member of the Bank‘s Management Board on 2024-06-04, therefore, information on performance criteria for 2023 is not provided.
2
Laura Križinauskienė began serving as a member of the Bank‘s Management Board on 2024-06-07, therefore, information on performance criteria for 2023 is not provided.
No remuneration was paid to the members of the Bank‘s Management Board by the Bank's Group companies for 2024.
Reclaims of variable remuneration for the year 2024 were not applicable to the Bank's Management Board members.
Full name
Roles at the Bank
Fixed remuneration for 2024
Annual variable remuneration allocated in
2024 for 2023
Other
variable
remuneration
paid in 2024
Deferred annual variable
remuneration paid in
2024, granted in the form
of options for activities in
2020 (equity-based)
Ratio of variable
to fixed
remuneration
for the year
2023
3
, %
Fixed
remuneration
(excluding
income in kind
and additional
benefits), EUR
1
Income in kind
and other
additional
benefits, EUR
2
Total allocated
variable
remuneration,
EUR
Portion paid
in cash,
EUR
Deferred
portion in
shares,
allocation units
Paid in cash,
EUR
Share
value, EUR
Number of
shares
Vytautas Sinius
Chairperson of the
Management Board and
Chief Executive Officer
362,163
20,000
309,260
-
462,272
-
155,236
229,979
84%
Donatas
Savickas
Deputy Chairperson of
the Management Board,
Deputy Chief Executive
Officer – Head of
Division
150,064
10,222
113,300
-
169,357
-
66,321
98,254
78%
Daiva Šorienė
Member of the
Management Board,
Deputy Chief Executive
Officer – Head of
Division
166,411
11,548
131,840
-
197,070
-
77,253
114,449
79%
Mindaugas
Rudys
Member of the
Management Board,
Head of Division
159,914
11,944
121,540
-
181,674
-
66,321
98,254
76%
Algimantas
Gaulia
4
Member of the
Management Board,
Head of Division, CRO
172,940
10,694
89,700
-
134,081
-
-
-
62%
Agnė Duksienė
5
Member of the
Management Board,
Head of Division, CCO
147,222
8,333
68,180
-
101,913
-
-
-
47%
Tomas
Varenbergas
6
Member of the
Management Board,
Head of Division
90,884
7,157
-
-
-
-
-
Laura
Križinauskienė
7
Member of the
Management Board,
Head of Division
84,175
14,251
-
-
-
-
-
-
-
188
Below is information about the shares granted to the members of the Bank‘s Management Board in 2024, rights granted through stock
option agreements, transaction prices, and dates:
1
Date of grant and confirmation of the option rights 2024-04-05. Option transactions grant the right to receive, upon exercise of the option transaction, shares in the Bank for no
consideration (with the recipient paying applicable taxes based on the share price on the date of exercise of the option), subject to taxation in accordance with the provisions of
the law in force at the time of grant.
2
Average share price – 0.6690 EUR (determination period from 2023-09-11 to 2024-03-08 (exclusive)).
3
The payment of a portion of remuneration to members of the Bank‘s Management Board in Bank shares is deferred for a 5-year period from the date of allocation of the annual
variable remuneration, with the assigned deferred portion being confirmed annually over five years, i.e., 1/5 of the allocated shares must be confirmed each year. 3/5 of the
deferred portion is granted 3 years after the allocation of the annual variable remuneration, 1/5 of the deferred portion is granted 4 years after the allocation of the annual
variable remuneration, and the remaining 1/5 of the deferred portion is granted 5 years after the allocation of the annual variable remuneration.
4
Algimantas Gaulia began serving as a member of the Bank‘s Management Board on 2021-07-30, hence information is provided regarding the granted stock option rights for
2021 and subsequent years.
5
Agnė Duksienė assumed the duties of a Board member on 2023-05-08, therefore, the information is provided regarding granted option rights to shares for 2023 and subsequent
years.
6
Tomas Varenbergas assumed the duties of a member of the Bank‘s Management Board on 2024-06-04, therefore, no information on share option rights granted is provided.
7
Laura Križinauskienė assumed the duties of a member of the Bank‘s Management Board on 2024-06-07, therefore, no information on share option rights granted is provided.
No amendments were made to option agreements with the members of the Bank‘s Management Board.
Below is information about the remuneration changes for the Bank‘s Management Board members for the year 2024 in their roles for the
period 2019-2023:
Full name
Roles at the Bank
Changes in remuneration, %
1
In 2019 compared
to 2018
In 2020 compared
to 2019
In 2021 compared
to 2020
In 2022 compared
to 2021
In 2023 compared
to 2022
7
Vytautas Sinius
Chairperson of the Management Board and
Chief Executive Officer
2.7%
-7.8%
2.9%
2.6%
16%
Donatas Savickas
Deputy Chairperson of the Management
Board, Deputy Chief Executive Officer –
Head of Division
4.4%
-6.7%
1.9%
9.6%
6%
Daiva Šorienė
Member of the Management Board, Deputy
Chief Executive Officer – Head of Division
1.8%
-8.8%
3.0%
10.7%
7%
Mindaugas Rudys
2
Member of the Management Board, Head of
Division
-
-
5.6%
14.7%
6%
Algimantas Gaulia
3
Member of the Management Board, Head of
Division, CRO
-
-
-
22.7%
14%
Agnė Duksienė
4
Member of the Management Board, Head of
Division, CCO
-
-
-
-
-
Tomas Varenbergas
5
Member of the Management Board, Head of
Division
-
-
-
-
-
Laura Križinauskienė
6
Member of the Management Board, Head of
Division
-
-
-
-
-
1
Remuneration changes calculated by summing the fixed remuneration (salary, vacation pay, disability benefits, in-kind benefits, additional perks) and variable remuneration
(bonuses and annual variable remuneration in cash and shares assigned for specific years, excluding paid deferred portions of annual variable remuneration (in cash and
shares) paid in respect of the preceding year) for the relevant year, and by comparing them with the corresponding prior year. The calculations use remuneration data without
deducting taxes. For 2023, no change in remuneration is presented as the annual variable remuneration for 2023 performance has not yet been awarded.
2
Mindaugas Rudys commenced the duties as a member of the Bank‘s Management Board on 2020-03-31, therefore, remuneration changes until 2020 are not disclosed.
3
Algimantas Gaulia commenced the duties as a member of the Bank‘s Management Board on 2021-07-30, therefore, remuneration changes until 2021 are not disclosed.
4
Agnė Duksienė commenced the duties as a member of the Bank‘s Management Board on 2023-05-08, therefore, remuneration changes until 2023 are not disclosed.
5
Tomas Varenbergas commenced the duties as a member of the Bank‘s Management Board on 2024-06-04, therefore, remuneration changes are not disclosed.
6
Laura Križinauskienė commenced the duties as a member of the Bank‘s Management Board on 2024-06-07, therefore, remuneration changes are not disclosed.
7
Increases due to the fixed remuneration review implemented in 2023 for current roles within the Bank.
Full name
Roles at the Bank
In 2024, shares
were granted as
an annual
variable
remuneration
for 2020, unit
2
Option transactions
1
The deferred
portion of the
annual variable
remuneration
allocated in 2024
for 2023, granted
in shares via
options, units.
3
First deferred 1/5
th
of
the annual variable
remuneration for 2022,
granted in shares
under options,
approved in 2024, pcs.
(option implementation
date – 2028-04-07)
Second deferred 1/3
rd
of the annual variable
remuneration for 2021,
granted in shares
under options,
approved in 2024, pcs.
(option implementation
date – 2025-04-11)
Third deferred 1/3
rd
of
the annual variable
remuneration for 2020,
granted in shares
under options,
approved in 2024, pcs.
(option implementation
date – 2024-04-12)
Vytautas Sinius
Chairperson of the
Management Board and Chief
Executive Officer
229,979
462,272
39,707
57,109
76,659
Donatas
Savickas
Deputy Chairperson of the
Management Board, Deputy
Chief Executive Officer – Head
of Division
98,254
169,357
17,094
24,399
32,752
Daiva Šorienė
Member of the Management
Board, Deputy Chief Executive
Officer – Head of Division
114,449
197,070
20,655
28,421
38,149
Mindaugas
Rudys
Member of the Management
Board, Head of Division
98,254
181,674
18,162
24,399
32,752
Algimantas
Gaulia
4
Member of the Management
Board, Head of Division, CRO
-
134,081
15,543
18,712
-
Agnė Duksienė
5
Member of the Management
Board, Head of Division, CCO
-
101,913
-
-
-
Tomas
Varenbergas
6
Member of the Management
Board, Head of Division
-
-
-
-
-
Laura
Križinauskienė
7
Member of the Management
Board, Head of Division
-
-
-
-
-
189
CHANGES IN THE BANK’S RESULTS
AND AVERAGE REMUNERATION AMOUNT
Below is the information about the Bank's results and the average monthly remuneration of Bank employees who are not members of
the Bank's management and supervisory bodies, for the period 2020-2024:
Net profit, in thousands EUR
Average monthly remuneration, EUR (before taxes)
2024
78,787
3,248
2023
75,375
3,013
2022
67,449
2,642
2021
56,005
2,251
2020
43,095
2,080
SUSTAINABILITY INFORMATION FOR 2024
(Additional Information to the Consolidated Management Report for 2024)
Tilžės 149, LT-76348 Šiauliai
No. (8 41) 595 607, faks. (8 41) 430 774
E-mail info@sb.lt
www.sb.lt
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
191
ŠIAULIŲ BANKAS AB GROUP
SUSTAINABILITY INFORMATION 2024
TABLE OF CONTENT
BACKGROUND INFORMATION .................................................................................................................................. 192
Basis for drawing up .................................................................................................................................................. 192
Disclosure of information relating to special circumstances ..................................................................................... 192
Governance ............................................................................................................................................................... 194
Strategy ..................................................................................................................................................................... 199
Materiality assessment .............................................................................................................................................. 203
ENVIRONMENTAL INFORMATION .............................................................................................................................. 214
Disclosure of information under Article 8 of Regulation 2020/852 (Taxonomy Regulation) ...................................... 214
Climate change ......................................................................................................................................................... 232
SOCIAL INFORMATION ............................................................................................................................................... 243
Own workforce .......................................................................................................................................................... 243
Consumers and end-users ........................................................................................................................................ 252
GOVERNANCE INFORMATION ................................................................................................................................... 256
ADDITIONAL INFORMATION ....................................................................................................................................... 261
Annex 1. List of disclosure requirements .................................................................................................................. 261
Annex 2. List of datapoints in cross-cutting and topical standards that derive from other EU legislation ................ 263
Annex 3. Disclosure of information of SB Asset management UAB under Article 8 of Regulation 2020/852
(Taxonomy Regulation) ............................................................................................................................................. 267
Annex 4. Disclosure of information of SB Draudimas UAB under Article 8 of Regulation 2020/852 (Taxonomy
Regulation) ................................................................................................................................................................ 271
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
192
BACKGROUND INFORMATION
BASIS FOR DRAWING UP
BP-1
This sustainability information of Šiaulių Bankas AB Group is prepared on a consolidated basis together with the financial statements
of the Bank and the Group (hereinafter referred to as the Financial Statements). The information is prepared in accordance with the
requirements of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards
(ESRS). The same reporting period is used as the Financial Statements to ensure consistency and comparability of data from 1
January 2024 to 31 December 2024. The scope of consolidation of the sustainability information is the same as that of the financial
statements. The information covers all aspects of the Group’s operations and the related value chain.
Šiaulių Bankas AB is hereinafter referred to as the Bank, and Šiaulių Bankas AB Group, comprising the Bank and its subsidiaries, is
referred to as the Group.
Subsidiaries: SB Asset Management UAB, Life insurance company SB Draudimas UAB, SB Lizingas UAB, SB Turto Fondas UAB,
SB Modernizavimo Fondas UAB, SB Modernizavimo Fondas 2 UAB.
Coverage of the value chain
The sustainability information section discloses information about the upstream and downstream parts of the Group’s value chain.
The focus is on:
- Analysis of the impact of key suppliers and assessment of their sustainability.
- Analysis of the Group’s financing portfolio, including assessment of sustainability risks and opportunities for the clients and
projects financed.
These aspects ensure a comprehensive assessment of the environmental, social and governance (ESG) impacts of the Group.
Confidential information clauses
The Group does not exercise the option to withhold certain information regarding intellectual property, know-how or results of
innovation as set out in paragraph 7.7 of ESRS 1. Full disclosure of sustainability actions and results is provided to ensure
transparency and compliance with EU regulatory requirements.
Future operational developments and negotiating information
The Group also does not benefit from the exemption from disclosure of information on future business developments or ongoing
negotiations as referred to in Articles 19a(3) and 29a(3) of Directive 2013/34/EC.
DISCLOSURE OF INFORMATION RELATING TO SPECIAL CIRCUMSTANCES
BP-2
Time horizons
The Group follows the definitions of short-term, medium-term and long-term periods set out in Section 6.4 of ESRS 1: the short-term
horizon is less than 1 year, the medium-term horizon is between 1 and 5 years, and the long-term horizon is more than 5 years.
These time horizons have been chosen to ensure clear and consistent compliance with the European regulatory requirements for
sustainability reporting and are aligned with the periods set out in the Group’s risk management strategy in the area of ESG risk
management.
The impact of climate and environmental risks on standard financial and non-financial risks depends on the time period being
assessed, and the Group has therefore used these time horizons for its analysis of the significance of climate and environmental
risks and for the Double Materiality Assessment.
The 2024 update of the ESG strategy, which is an integral part of the Group’s strategy, also took into account the results of the 2024
Double Materiality Assessment and the identified material topics. The results are expected to contribute to the formulation of new
sustainability targets, which will be measured and monitored over these time horizons.
Value chain estimates
The majority of the Group’s greenhouse gas (GHG) emissions come from financing activities. To this end, in early 2023, the Bank
joined the Partnership for Carbon Accounting Financials (PCAF) initiative, which helps financial institutions to calculate and disclose
GHG emissions from financing and investment activities (scope 3, category 15 of the Greenhouse Gas Protocol). The PCAF was
chosen because it is a recognised and widely used methodology that is appropriate for the Bank’s loan and securities portfolio data.
In early 2025, Group companies (Life insurance company SB Draudimas UAB, SB Asset Management UAB) submitted an application
to join this partnership.
In calculating GHG emissions from financing and investing activities, the Group uses:
• GHG emissions data provided by corporate clients or available in the public domain;
• publicly available GHG emissions data from issuers or data projected by third parties;
• emissions data provided by the manufacturers of the leased vehicles;
• financial and other client data (e.g., type of buildings financed, energy efficiency class, floor area, value) collected by the
Group;
• emissions factors available in the PCAF database.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
193
The reliability of the data is assessed by the PCAF data quality score (1 being the highest, 5 being the lowest). In investment activities,
not all issuers have access to information for the calculation of the Group’s GHG emissions, and in financing activities, not all clients
or transactions have access to information. Therefore, a volume indicator is provided to indicate what proportion of the asset value
was based on available information. Details of the data used, and the quality scores, are provided in the statement under “GHG
emissions from financing activities of the Bank” and “GHG emissions from investing activities of the Bank and Group companies”.
Group’s sustainability position
The Group complies with legal requirements, supervisory guidance (ECB, EBA, LBA) and best practice in the area of sustainability
and expects this from its clients and partners. The disclosure of sustainability indicators aims to use data of the highest possible
quality wherever possible. For example, to calculate as accurately as possible the volume of emissions to be financed, efforts are
being made to collect as much data as possible directly from clients, through an improved ESG questionnaire for business clients,
the promotion of a publicly available GHG emissions calculator, and the collection of additional information, such as the energy
performance class of buildings. In addition, continuous efforts are being made to improve data collection and quality control processes
and to strengthen cooperation with local and international initiatives.
As the Group’s clients will be required to disclose sustainability information under the EU Corporate Sustainability Reporting Directive
(CSRD), those not subject to the CSRD may also start to disclose sustainability information under the voluntary disclosure standards,
which is likely to lead to more accurate data.
The quantitative indicators disclosed in the report have not been verified by an external institution that is not an assurance provider,
unless otherwise stated for individual indicators.
Reporting of errors in previous reporting periods
Last year’s Corporate Social Responsibility Report of Šiaulių Bankas incorrectly disclosed the date of joining the Science Based
Target initiative (SBTi). The 2023 sustainability statement was dated at the end of 2023, but formal approval was received in January
2024.
Disclosures under other legislation
Disclosures made under other legislation or generally accepted sustainability reporting resolutions are not provided.
Incorporating information by reference
Disclosure
ESRS reference
Page No.
Members of the Management Board and the Supervisory Council of the Bank
ESRS 2.GOV-1_08
ESRS 2.GOV-1_09
141
Disclosure of revenue amount
ESRS 2.SBM-1_06
6
Disclosure of net revenue used to calculate GHG emission intensity
E1-6_33
6
Disclosure of actual number of employees
S1-6_17
145, 243
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
194
GOVERNANCE
The role of the administrative, management and supervisory bodies
GOV-1 (+G1.GOV-1), GOV-2
The Management Board is a collegiate management body of the Bank that ensures the proper conduct of the Bank’s business. The
members of the Management Board are elected, dismissed and supervised by the Supervisory Council of the Bank. The Management
Board currently consists of eight (8) members (the Bank’s Articles of Association provide for a 7-member Management Board). The
term of office of the Management Board is four years. There is no limit to the number of terms of office. If individual members of the
Management Board are elected, they are elected until the end of the term of office of the existing Management Board.
The Supervisory Council is the collegiate body supervising the Bank’s activities. The members of the Supervisory Council are
elected and dismissed by the General Meeting of Shareholders. The Supervisory Council is currently composed of seven (7)
members, four (4) of whom are independent. The Supervisory Council is chaired by the Chairperson. The term of office of the
Supervisory Council is four years. There is no limit to the number of terms of office. If individual members of the Supervisory Council
are elected, they hold office until the end of the term of office of the current Supervisory Council.
Composition of the Management Board
Number of members of the Management Board
8
Breakdown by gender (%)
38%
Composition of the Supervisory Council
Number of members of the Supervisory Council
7
Average ratio of female to male members of the Supervisory Council (%) (calculated as average ratio of female to male members)
29%
Percentage of independent Supervisory Council members (%)
57%
Information as at 31 December 2024
Members of the Bank’s Management Board and Supervisory Council are listed in the Annual Report (page 141).
Competences of the top management bodies of the Group and the Management Board in relation to sustainability
The knowledge and experience of the members of the Bank’s Management Board and Supervisory Council are assessed on an
individual and collective basis, taking into account the requirements of the legislation applicable to the Bank and the Bank’s internal
regulations. The assessment takes into account the educational background, further training, experience, specific knowledge and
skills required.
The knowledge and experience of the members of the Bank’s governing bodies are assessed on an individual and collective basis
in the following areas:
• key areas of governance of the Bank,
• strategy and decision-making,
• legal and regulatory environment,
• the Bank’s main areas of activity and the risks arising from them (including risk management, compliance and audit),
• relevant sectoral and/or financial areas of expertise, including financial and capital markets, solvency and models,
• environmental, social and governance risks and their drivers,
• financial accounting and reporting,
• information technology and information security (including ICT and security risk management),
• and other areas specified in the legal requirements applicable to the Bank.
The assessment of the collective suitability of the Bank’s collegiate body includes an assessment of knowledge, skills and experience
in the area of ESG, which are necessary to ensure the sound and effective management of the risks to which the Bank is, or may be,
exposed. A sufficient collective understanding of ESG risks among the members of the Bank’s Management Board is essential for
effective risk management, and a sufficient understanding of ESG risks among the members of the Bank’s Supervisory Council is
essential for effective oversight.
Governing bodies are also held to the highest standards and requirements of business ethics – they are responsible for shaping
business ethics in the organisation, which requires appropriate knowledge that is also assessed as part of individual and collective
assessment. Both the members of the Management Boards within the Group and the Supervisory Council are subject to the
requirements of the Code of Ethics, and the members of the Management Boards within the Group are also required to undergo
mandatory training on the Code of Ethics once a year.
We aim to ensure that the Group’s governing bodies and their members have access to a wide range of sources of expert knowledge
so that they can continuously update and expand their knowledge in the field of sustainability. During the reporting period, members
of the Bank’s Management Board had meetings with the experts who carried out the Double Materiality Assessment and was briefed
on the processes involved in the assessment and subsequently presented with the final results. As the main decision-making body
on sustainability issues, the Management Board is provided with relevant information before any decisions are taken, to ensure that
decisions are well founded and informed.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
195
In 2024, a Risk and Compliance Culture Survey was also carried out for all Bank employees, which assessed 6 focus areas through
surveys with the assistance of external consultants:
• Responsibility – taking risks, with clear consequences for violating values;
• Incentive – balance of rewards and incentives, bonus/malus principle;
• Leadership – leading by example, communicating the Bank’s vision;
• Talent management – education, personal development;
• Communication – understanding risks, escalation principles, information flow through the organisation;
• Organisational governance – clarity of roles and responsibilities within the organisation.
The survey was carried out in three phases: a survey, interviews and group work. Top-level managers participated in interviews and
group work. This survey helped to assess the risk and compliance culture of the Bank. Taking into account the results of the survey
and the identified areas for improvement, a target state of risk culture will be defined and a detailed action plan will be drawn up to
achieve this state. The planned actions include strengthening the competences of managers in relevant areas.
The Bank’s ESG impact management structure
Bank’s Supervisory Council:
• At the level of the Bank’s Supervisory Council, the Chairperson of the Supervisory Council is responsible for the area of
ESG;
• Approves the Group’s strategy, including the ESG strategy, which is an integral part of the Group’s strategy;
• Approves the Bank’s Risk Management Strategy and Risk Appetite Statement (together with ESG key risk indicators).
Bank’s Management Board:
• At the level of the Bank’s Management Board, direct oversight of ESG risk management is the responsibility of a member
of the Management Board, who is also the Bank’s Chief Risk Officer (CRO) holding the position of the Head of the Bank’s
Risk Management Division, and who has the ability to raise issues directly with the Management Board, the Risk
Committee, and the Supervisory Council as necessary.
• The Bank’s Management Board approves the ESG risk impact assessment for the Bank’s operations, as well as the
Climate and environmental risk materiality assessment and the Business environment scan (once a year).
• The Bank’s Management Board is the top-level governance body responsible for aligning and integrating the ESG strategy
into the Group’s strategy and submitting it to the Bank’s Supervisory Council for approval, as well as for the annual review
of the implementation of the ESG strategy and the formulation of the strategic objectives of ESG within the context of the
Group’s strategy.
Corporate Affairs
Committee
Risk Management
Committee
Sustainable Action
Group
Other committees
and commissions
General Meeting of
Shareholders
Chief Executiv e
Off icer (CEO)
Chief Risk Off icer
(CRO)
Audit Committee
Risk Committee
Nomination
Committee
Subordination
Accountability
Possibility of escalation
Remuneration
Committee
Loan Committee
Chief Risk Officer
(CRO)
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
196
Risk Committee:
• Oversees ESG risk management in the Bank (quarterly);
• Conducts periodic monitoring of ESG risk indicators and overall ESG risk management (quarterly).
• Considers, on a proposal from the Bank’s Management Board, changes to the ESG key risk indicators approved by the
Supervisory Council;
• Conducts a deep dive into detailed ESG analyses as required.
Audit Committee
• Oversees the process of ensuring the integrity of the Bank’s and Group’s annual reports, including sustainability
information.
Nomination Committee
• Monitors and assesses whether the Bank’s governing bodies and key function holders have the core competencies
required, including ESG risk management competencies.
Risk Management Committee:
• The Chief Risk Officer (CRO) chairs the Bank’s Risk Management Committee;
• Oversees ESG risk management in the Bank (monthly);
• Conducts periodic monitoring of ESG risk indicators and overall ESG risk management (monthly).
Sustainable Action Group:
• The Sustainable Action Group is chaired by the Sustainability Officer;
• The Sustainable Action Group is composed of a total of 13 members from 7 different divisions (Chief Risk Officer, Director
of the Risk Department, Director of the Credit Risk Management and Control Department, Director of the Product
Development Department, Director of the Compliance Department, Director of the Personnel Department, the
Sustainability Officer and other managers and specialists participate in the activities);
• The Sustainable Action Group is an advisory body on ESG risks and on the development of the ESG strategy, and
conducts quarterly oversight of the implementation of the ESG strategy.
Other structural units, committees and functions:
• Banking Product Committee – responsible for the development of banking products, including green products, as well as
products focused on improving energy efficiency and promoting a sustainable business model, and ESG risks are among
the risks assessed in product development.
• Loan Committee – decides whether to grant loans to clients. The ESG risk class is also taken into account when
considering lending.
• Retail Banking and Corporate Banking Divisions – provide financing proposals to clients, also focused on improving
energy efficiency and promoting a sustainable business model. Assesses the level of ESG risk of clients (first line of
defence).
• Investment services – when investing, effort is made to avoid the negative impact of ESG risks on the price and liquidity of
securities in the long term, and therefore compliance with the ESG criteria is assessed.
• Non-Financial Risks Department coordinates ESG risk management and control processes within the Group (second line
of defence), prepares internal legal acts to manage the risk, and oversees their implementation.
• Compliance Department – performs an internal control function of the ESG risk management system for compliance with
legal acts (the second line of defence), and also performs compliance inspections.
• Internal Audit – the third line of defence, carrying out independent ESG audits on a risk basis, assessing the effectiveness
of the ESG risk management control framework, making recommendations to strengthen the effectiveness of the ESG risk
management control framework, and monitoring the implementation of the recommendations. Provides materials to the
Bank’s Audit Committee on issues identified during audits, recommendations made and their implementation. Advises on
ESG risk management issues as needed.
Part of the activities of the Group companies (Life insurance company SB Draudimas UAB, SB Asset Management UAB, SB Lizingas
UAB) are integrated into the Bank’s activities, therefore the above-mentioned Bank’s committees and commissions deal with the ESG
risk management issues of the subsidiaries. However, the subsidiaries have committees dedicated solely to their activities:
Investment Committee:
• In the context of the activities of Life insurance company SB Draudimas UAB, it takes investment decisions on the
management of the assets in the Investment Baskets taking into account the results of the ESG analysis (daily
monitoring, ad-hoc decision-making).
• In the context of the activities of SB Asset Management UAB, it takes investment decisions on the management of the
assets in the Funds taking into account the results of the ESG analysis (daily monitoring, ad-hoc decision-making).
Risk Management Committee:
• In the context of the activities of Life insurance company SB Draudimas UAB, it manages and monitors risks (including
ESG risk) on a quarterly basis.
The Bank also has a Labour Council, made up of 11 staff members elected by secret ballot and holding various positions in the
Bank. The activities of the Council are governed by its rules of procedure. It actively cooperates with the Bank’s Human Resources,
Asset Management and Administration and other departments, providing proposals that, among other things, reflect the ESG topics
of interest to employees, in order to find the best solutions for the well-being of employees. The Group companies Life insurance
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
197
company SB Draudimas UAB and SB Asset Management UAB also have Labour Councils, which operate on a similar basis to the
Labour Council of the Bank.
For more on the governing bodies and their composition, see page 141 of the Annual Report.
Overview of the management of sustainability issues during the reporting period
Group conducts an annual self-assessment. During this process, it analyses the types of risks that may arise from banking activities
and have a significant impact on the Group. The main risks faced by the Group are:
• credit risk,
• market risk,
• liquidity risk,
• concentration risk,
• operational risk,
• ICT risk,
• model risk,
• compliance risk,
• ESG risk,
• banking book interest rate risk,
• insurance risk.
In 2024, the Group carried out a Double Materiality Assessment (DMA). It included an assessment of the risks and opportunities that
could financially affect the Group’s operations (financial materiality) and an assessment of the Group’s positive and negative impacts
on the environment or society (impact materiality). It is planned to review the results of the Double Materiality Assessment at least
once a year, and in case of significant changes, the Double Materiality Assessment would be substantially updated. The Double
Materiality Assessment is approved by the Bank’s Management Board or other delegated management bodies.
In 2024, the Bank also significantly updated its Climate and environmental risk materiality assessment, the results of which were
used in the Double Materiality Assessment (ESG risk assessment is described in more detail on page 207 of this section).
Risk management and internal controls over sustainability reporting
GOV-5
The Group’s annual consolidated financial statements and the management report are reviewed by the Bank’s Chief Executive Officer
and approved by the Bank’s Management Board.
The Group analyses, assesses, assumes and manages the risks or groups of risks it faces in its operations. The Risk Management
Strategy approved by the Bank’s Supervisory Council and the procedures for managing the different types of risks based on it help
to ensure the integrity of the risk management process within the Group. The risk appetite framework aims to define the risks and
their management principles in the Group’s activities. As the various risks faced by the Group are interconnected, their management
is centralised and the Bank has a Risk Management Committee for this purpose. One of the main objectives of the Bank’s Risk
Management Committee is to organise and coordinate the risk management system and oversee public disclosure of information
related to ESG risk and its management. The Group reviews its risk management procedures and systems on a regular basis, at
least once a year, taking into account market developments, new products and emerging best practices.
Oversight of ESG risk management, including oversight of public disclosure issues related to ESG risk and its management, is also
carried out by the Risk Committee. Details of the functions of this Committee are disclosed on page 196.
Integration of sustainability-related performance in incentive schemes
GOV-3 (+ E1.GOV-3)
The Group’s remuneration system is currently not directly linked to the achievement of sustainability objectives (including the
reduction of greenhouse gas (GHG) emissions). However, ESG objectives can be measured in terms of the achievement of the
overall objectives of the organisation or assigned to specific posts with direct responsibility for this area. Currently, performance
measurement is not directly based on specific sustainability-related targets or their impact, nor are ESG performance indicators
considered as benchmarks for performance measurement or integrated into remuneration policies. However, the Group regularly
reviews its remuneration system and its publicly disclosed Remuneration Policy and would, therefore, consider future improvements
to better integrate sustainability objectives into its incentive and remuneration framework.
Statement on due diligence
GOV-4
The Group does not currently have a comprehensive due diligence process in place – suppliers are subject to a supplier-specific due
diligence process. Nevertheless, there are a number of different processes in place that take a number of steps relevant to this topic.
Last year, the Group carried out a Double Materiality Assessment, which revealed significant impacts, risks and opportunities in the
environmental, social and governance areas. In this assessment, stakeholders were involved, and their feedback was taken into
account in the assessment of the topics relevant to Group. As part of future improvements to sustainability management processes,
the possibility of extending the due diligence process is also being considered.
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198
KEY ELEMENTS OF DUE DILIGENCE
SECTIONS OF THE SUSTAINABILITY STATEMENT
PAGE No.
Integrating due diligence into governance, strategy and
business model
ESRS 2.GOV-2, ESRS 2.GOV-3,
ESRS 2.SBM-3
194, 197, 203
Involvement of affected stakeholders in all key stages of
due diligence (stakeholder involvement in policy
implementation – access to rights and mechanisms
outlined in policies)
ESRS 2.GOV-2, ESRS 2.SBM-2, ESRS 2.IRO-1, ESRS 2.MDR-P
(E1-2, S1-1, S1-2, S4-1, S4-2, G1-1, G1-2)
194, 201, 203, 209,
236, 244, 245, 252,
254, 256, 259
Identification and assessment of negative impacts
ESRS 2.IRO-1, ESRS 2.SBM-3
203, 209
Taking action to address negative impacts
ESRS 2.MDR-A (E1-3, S1-4, S4-4)
236, 244, 252
Monitoring and communicating the effectiveness of
these efforts (indicators and targets)
ESRS 2.MDR-M, ESRS 2.MDR-T (E1-4, E1-5, E1-6, S1-5, S1-6,
S1-7, S1-10, S1-13, S1-14, S1-16, S1-17, S4-5)
236, 238, 239, 243,
244, 245, 247, 249,
250, 252
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199
STRATEGY
Strategy, business model and value chain
SBM-1
The Bank’s priority areas of activity are:
• Retail banking,
• Corporate banking,
• Investment services.
Important groups of services offered:
Šiaulių Bankas AB:
• Daily banking,
• Financing,
• Savings and investment products.
SB Lizingas UAB:
• Financing.
As part of its services, the Bank and SB Lizingas UAB also offers its clients a choice of green and energy efficiency products: green
mortgage loans, leasing of electric and hybrid cars, and financing of projects that promote business sustainability, such as loans for
the purchase and/or installation of solar and wind power plants.
SB Asset Management UAB:
• Pension and investment funds.
All second- and third-pillar pension funds managed by the management company integrate sustainability risk management into the
investment process. These products invest in activities that promote environmental and/or social factors. Approaches to managing
sustainability risks and integrating these risks into investment decisions include: ESG integration, engagement, negative screening
(prohibited investments).
Life insurance company SB Draudimas UAB:
• Life insurance products.
For investment-linked life insurance clients, Life insurance company SB Draudimas UAB also offers the INVL Global Sustainable
Equity investment basket, which seeks to invest the majority of assets in sustainable products.
For more detailed information on green products and products aimed at improving energy efficiency, see the Environmental section
(page 236).
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200
Disclosure of the value chain
Group’s commitment to sustainability is integral to Group’s overall strategy, business model and value chain. As part of the Double
Materiality Assessment, we have carried out a detailed value chain identification and assessment and developed our own value chain
map. It covers the Group’s entire value chain, while resources and dependencies cover the value chain and key resources used for
the Bank’s direct activities (hereinafter, “own activities”).
The Bank and other Group companies holds a central position in the financial services value chain. The Group acts as an intermediary
between capital providers (e.g. shareholders and other banks) and end users – customers. The Bank depends on various suppliers
and regulatory authorities, which shape its operating environment, technological capabilities and security assurance.
The upstream and downstream parts of the Group’s value chain consists of:
• External suppliers (e.g., IT services),
• Systems and data maintenance providers (data protection),
• Office rental,
• ATM servicing,
• Security service providers (including cash transportation),
• Shareholder deposits,
• Services of other banks (e.g., correspondent banks),
• Supervisory authorities,
• Clients.
Upstream indicate the most important resources necessary for the successful development and use of our Group’s operations and
business model. The upstreams used are selected and used taking into account the business model, and different departments are
responsible for their collection, use and preservation (e.g. HR, Supply Department, etc.).
The downstream indicate the Group’s Products and Services ( a detailed description of them is provided in the section “Strategy,
Business Model and Value Chain”, page 199. The specified value chain includes the Bank’s direct activities (hereinafter referred to
as its own activities).
Key upstream (resources):
• Human resources (own workforce)
• Natural/physical resources:
o Water,
o Land,
o Energy (green energy for own operations),
o Financial assets,
o Rented premises,
• Cars purchased.
• Technological resources:
o Internal IT solutions,
o Databases.
• Data (and data protection).
Downstream:
• Products and services
Disclosure of revenue amount
Details of the Group’s income are disclosed in the financial disclosures section of this statement (page 6).
Strategic orientations
In 2024, the Group presented an updated strategy for 2024-2029, which sets the goal for the Bank to become a leader in the
Lithuanian banking sector by 2029. The Bank aims to provide the best customer experience, to be the first choice in the minds of
clients, to outperform the market growth rates in terms of number of clients and loan portfolio, and to generate high double-digit
returns for investors.
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201
The ESG strategy is an integral part of the Group’s strategy and initiatives will continue to be implemented in relation to the key
strategic directions in the area of ESG:
• Environment: Reducing environmental impact
• Social: Developing access to services and engaged employees
• Governance: Responsible operations, transparency and reliable services
Interests and views of stakeholders
SBM-2 (+S1.SBM-2, S4.SBM-2)
We continuously strive to integrate interests and views of stakeholders into our strategy and business model. This process is an
essential part of Group’s business, ensuring that Group’s solutions meet the expectations and needs of all stakeholders.
During the development of the strategy, the Group analyses factors and trends in the external environment, involving a large part of
the Bank’s community. The impact and significance of the different trends are analysed from the point of view of the following four
stakeholders:
• Clients,
• Employees,
• The public,
• Investors.
We regularly organise meetings, surveys and discussions with a wide range of stakeholder groups, including clients, employees,
suppliers, investors and communities. We collect and analyse data on stakeholders’ expectations and needs to better understand
their priorities. The data and insights obtained are integrated into Group’s strategic plans and business model. This includes setting
strategic objectives that meet stakeholders’ expectations and needs, improving business processes and ensuring responsible and
transparent operations.
Stakeholder interests and opinions were also analysed in the Double Materiality Assessment. The interests, views and rights of
employees along the value chain and of affected communities likely to be significantly impacted by the Group, including respect for
their human rights, have also been taken into account in this process. However, the interests of clients and society/community were
considered together. This approach has been chosen because of the broad nature of the Bank’s and the Group’s activities and the
ongoing impact – it is assumed that the direct decisions of clients can affect society and vice versa (for example, through real estate
investments, both direct clients and society at large are affected).
Stakeholder map (DMA flow chart)
New core banking platform
New opportunities for growth, increased efficiency
and a better customer experience
Customer centricity
The organisational structure has been reorganised
to prioritise customer needs and accelerate growth
Compliance
Commitment to compliance by delivering an
exceptional customer experience
Commitment to Phygital
Connecting the physical and digital worlds to
create leading customer experience
Rebranding
Aiming to create a strong link between our brand
and our clients
ESG
Focusing on specific projects that make a
difference and have a lasting impact
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202
Engaging with stakeholders
Stakeholder engagement is a key aspect of Group’s business, which helps to ensure that Group’s decisions and actions meet the
expectations and needs of all stakeholders. By engaging with our stakeholders, we can better understand market trends and identify
potential risks and opportunities. This promotes transparency and trust that are essential for long-term business success. In addition,
active stakeholder engagement helps develop sustainable and responsible business solutions that contribute to social and economic
well-being.
The Management Board and the Supervisory Council are kept informed of the results of the stakeholder engagement through the
internal governance system. Information is provided through reports by committees (Risk Management Committee, Risk Committee)
and by responsible staff with escalation rights.
In the table below, we disclose our key stakeholders and how we engage with them in our day-to-day activities. Stakeholder
engagement was also ensured in the context of the Double Materiality Assessment. This step is described in the description of the
DMA process in this statement (page 212).
Stakeholders
How engagement is organised
Purpose of engagement (topic)
How stakeholder views
are taken into account
Own workforce
Annual performance review
interview
Bank’s internal website (Intranet)
Internal surveys
Events for employees
Opportunities to make and
implement proposals
Labour Council
Possibility to notify the Compliance
Officer
Ensuring adequate working
conditions (adequate pay, work-life
balance, health and safety).
Equal opportunities, non-
discrimination.
The insights/results from surveys
and suggestions through various
internal channels are used to make
relevant decisions, such as the
design of new training and
engagement programmes.
Investors (existing and potential
shareholders)
Presentation of performance
results to investors
Shareholder meetings
Regular reports
Website
Developing a sustainable and
financially stable business.
Taken into account in the
formulation of the Group’s main
strategic directions.
Supervisory authorities (European
Central Bank, Bank of Lithuania,
Single Resolution Board)
Regular reports
Participation in meetings
Legal compliance and conformity.
The Group’s main strategic
directions are shaped by ensuring
compliance with supervisory
requirements and expectations and
implementing recommendations.
Clients
Client service quality surveys
Communication on social networks
Website
Events for clients
Access to quality information about
services.
Accessible services.
The relationship with clients to
secure sustainable revenues from
the services we provide to them is
a key driver of the Group’s
business model. The results of
customer service quality surveys
have implications for actions to
improve customer experience.
Partners
Regular reports
Website
Up-to-date and transparent
information on the Group’s
activities.
Partners’ impact and action on
ESG topics.
The Group strives to meet its
partners’ expectations regarding
ESG standards and expects the
same from its partners.
The public
Public communication
Website
Events
Meetings
Up-to-date and transparent
information on the Group’s
activities.
Information on the impact
generated by the Group on ESG
topics.
The Group strives to meet the
public’s expectations regarding
ESG standards.
Monitoring of public opinion and
trends; results are used to inform
relevant decisions.
Clients
STAKEHOLDERS
STAKEH OLD ER S ALON G TH E VALU E CH AI N
Partners
Media/public
Inv estors
(existing and
potential
shareholders)
Supervisory
authorities
(European Central
Bank, Bank of
Lithuania)
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203
MATERIALITY ASSESSMENT
SBM-3 (+ E1.SBM-3, S1.SBM-3, S4.SBM-3, IRO-1 (+E1.IRO-1, G1.IRO-1), IRO-2
Results of the Double Materiality Assessment
Following a comprehensive Double Materiality Assessment, the following key material topics (as well as sub-topics and sub-sub-
topics) were identified:
• ESRS E1: Climate change (climate change mitigation (O+ P), adapting to climate change (P), energy (O+ P)).
• ESRS S1: Own workforce (working conditions (fair pay, social dialogue, freedom of association, collective bargaining,
health and safety), equal treatment and equal opportunities for all (gender equality and equal pay for work of equal value,
training and skills development), other work-related rights (privacy)). (O).
• ESRS S4: Consumers and end-users (information-related impacts on consumers and/or end-users (privacy, access to
(quality) information) (O), social inclusion of consumers and/or end-users (non-discrimination, access to products and
services, responsible marketing) (A+ P).
• ESRS G1: Business ethics (corporate culture, corruption and bribery) (A).
A – own activities covering the Group’s activities
P – portfolio (includes both Bank (BP) and Group (GP) portfolios)
BP – the Bank’s portfolio, comprising the loan and investment portfolios of Šiaulių Bankas AB
GP – the Group’s portfolio comprising the investment and loan portfolios of the subsidiaries Life insurance company SB Draudimas
UAB and SB Asset Management UAB and SB Lizingas UAB
The matrix shows the ranking of the material topics based on the results of the Double Materiality Assessment. Detailed descriptions
of the results and the impacts, risks and opportunities identified are presented below.
Materiality Matrix
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204
Material impacts, risks and opportunities and their interaction with strategy and business model
ESRS
Topic
Assessment
of impact
materiality
Assessment
of financial
materiality
Impacts (I), risks (R) and opportunities (O)
Where do
IROs occur?
Time horizon
(short-,
medium
-,
long-term)
Impact on business,
value chain, strategy or
decision-making
Action taken or planned
E1
Climate
change
(mitigation
and energy)
Critical
(climate
change
mitigation)
Material
(energy)
Material
I (OA): The negative impacts arise from greenhouse gas
emissions, both from the Group’s own activities and from
the value chain.
I (GP/BP): The most significant negative impacts relate to
greenhouse gas emissions resulting from the Group’s
financing and investment services (GP). However, the
most significant negative impact relates to the Bank’s loan
portfolio.
R (BP): Regulatory requirements and policy mechanisms
are expected to affect primarily sectors such as real estate,
construction, manufacturing, transport, with transition risks
having the greatest impact in the medium to long term.
R (BP): SMEs dominating the portfolio of Šiaulių Bankas
(BP) may face greater challenges in adapting to new
requirements due to their limited resources and knowledge
compared to the ability of larger corporations to adapt to
change. As a result, the transformation of SMEs towards a
more sustainable business model may be slower.
R (GP): Managing sustainability and climate change risks
is key to complying with legislation, representing the
interests of clients and remaining competitive in the
market. Existing and new legislation, such as the European
Securities and Markets Authority’s (ESMA) regulation on
fund names, may require a swift change of strategy. Failure
to take this into account risks a reclassification of the fund,
which could lead to dissatisfaction among investors who
chose these funds based on their original classification.
Analysing and implementing these changes takes time and
resources.
R (GP): Issuers of securities need to take steps to manage
climate change risks to attract finance and maintain
security prices. Sectors such as energy face greater risks.
If companies fail to meet these expectations, they may find
it difficult to attract investment and their securities may lose
value, which would in turn jeopardise the stability of the
Group’s portfolio.
O (BP): Negative impacts from loans can be significantly
reduced if mitigating measures, such as loans focused on
energy efficiency improvements or other loans that
promote business sustainability, are used.
O (BP): By investing in companies and projects that focus
on reducing environmental impacts and adopting
sustainable practices (e.g., loans focused on energy
efficiency improvements, green bonds, ESG-related
funds), we can attract external capital, generate financial
returns at a comparatively lower risk (in terms of ESG or
climate change), maintain or increase our attractiveness to
clients and investors, and make a positive contribution to
tackling environmental issues.
Own
activities,
upstream
in the
value
chain,
Bank’s
portfolio
All time
horizons
Loans: regulatory
requirements and policy
mechanisms will primarily
affect sectors such as real
estate, construction,
manufacturing and
transport, probably more in
the medium to long term.
All of this may have an
impact on client insolvency
– credit risk, as well as on
the Bank’s reputational risk
and, consequently, on
strategic risk (the Bank
may receive negative
credit risk ratings or even
face lawsuits, which may
require a review of its
business model).
Investment portfolio: if
issuers fail to address
climate change risks and
manage climate-related
risks inadequately or
insufficiently, they could
lose investments and the
value of their securities,
which puts portfolio
stability at risk. These
circumstances may affect
the public’s (including
investors, clients)
perception of companies
(issuers).
By joining the SBTi, the Bank
has committed itself to
setting targets and measures
to achieve climate neutrality
by 2050. It is expected that
targets and measures will be
set by the end of 2025.
Continuous improvement of
the sustainability or ESG risk
framework (including climate
and environmental risks), as
detailed in the ESG risk
management section.
Financing solutions offered
by the Group companies,
focused on improving energy
efficiency and promoting a
sustainable business model.
Educating employees and
clients on the importance of
sustainability and climate
and environmental risks to
help them better prepare for
and adapt to change.
Climate
change
(adaptation)
Important
Important
I (BP): Part of the loan portfolio is related to negative
impacts. While the overall impact is not significant, certain
sectors can make a significant contribution. For example,
the agricultural or construction sector can have negative
impacts on soil and/or resources, such as water supplies
and/or water quality, biodiversity, habitat loss, etc.
I (GP): The investment products offered invest in a wide
range of sectors, so that certain sectors (e.g., energy, real
estate, transport) can have a significant impact on the
value of investments.
R (BP): Potential impacts include additional investment,
increased costs or reduced income due to new regulatory
requirements, losses and business disruption caused by
extreme weather events, additional insurance costs or
reduced property values in flood-prone areas. In addition,
disruptions in customer supply chains can have a
significant impact on sectors such as manufacturing and
retail.
Bank’s
portfolio
All time
horizons
In areas affected by
flooding, property values
can be significantly
reduced. This can have a
lasting impact on the
Bank’s financial position
and credit risk.
Adverse policy changes,
such as stricter
environmental
requirements, can lead to
additional investments or
costs. This can increase
overall operating costs and
reduce profitability.
Continuous improvement of
the sustainability or ESG risk
framework (including climate
and environmental risks), as
detailed in the ESG risk
management section.
Diversifying investments to
reduce the risks associated
with specific sectors such as
energy. This will help protect
your portfolio against
potential losses.
S1
Own
workforce
(working
conditions:
fair pay, and
equal
treatment
and equal
opportunitie
s for all:
gender
equality and
equal pay
for work of
equal value)
Material
Important
I (OA): Solid implementation of regulatory changes and
monitoring measures have had a positive impact on
reducing the pay gap and raising average wages relative to
the market. Despite these efforts, current wage levels are
below the market median.
I (OA): The existing pay gap has a negative impact by
creating wage disparities among workers. This can lead to
feelings of unfairness, weakened motivation and possible
dissatisfaction in the workforce.
R (OA): Companies with high pay gaps can find it difficult
to retain and attract top talent, as good performers can
leave for higher pay. In addition, closing the pay gap can
be costly and require significant financial and
administrative resources.
Own
activities
All time
horizons
Impacts may include
increased staff turnover,
loss of competencies,
unattractiveness of the
Bank/Group as an
employer, loss of talent,
increased financial
resources due to staff
turnover or a reduction in
the wage gap.
The following strategic
initiative – Renewal of the
Performance Evaluation and
Remuneration Policy – is
planned to address the risks
identified, with projects and
activities planned to
implement the initiative:
reviewing the performance
evaluation process and
introducing calibration of
results;
introducing a competency
model;
reviewing the remuneration
system: reviewing and
updating the systems in
place for the management of
the official remuneration and
variable remuneration;
analysis of the use of long-
term financial instruments in
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205
the remuneration system,
choice of instruments.
S1
Own
workforce
(working
conditions:
social
dialogue,
freedom of
association,
collective
bargaining)
Material
Important
I (OA): The positive impact stems from the Group
companies’ commitment to active social dialogue and
employee representation through the Staff Committee. This
approach encourages open communication, effectively
addresses employees’ concerns and fosters a collaborative
and inclusive working environment.
Own
activities
All time
horizons
Ignoring feedback from
employees leads to
employee dissatisfaction
and reduced employee
engagement.
We have active Labour
Councils in all Group
companies, with which we
maintain regular dialogue.
S1
Own
workforce
(working
conditions:
health and
safety)
Material
Important
I (OA): Negative impacts arising from potential physical
and cyber attacks, blackmailing of bank employees can
cause physical harm, psychological stress and create a
hostile working environment for employees.
R (OA): Inadequate working conditions can have an impact
on human resources, making it difficult to retain and attract
staff.
Own
activities
All time
horizons
The potential negative
impact on workers’ mental
and physical health,
compounded by heavy
workloads that can reduce
their efficiency, motivation
or lead to higher staff
turnover. Staff turnover
can require financial and
administrative resources
and affect the quality of
customer service.
Actions taken:
Reviewing and updating
instructions and procedures;
Attention to the proper
familiarisation of staff with
internal documents;
Focus on more efficient
processes and prioritisation
of tasks;
Ensuring the provision of
safe and ergonomic
workstations;
Organising health checks;
Carrying out occupational
risk assessments of
workstations;
Additional focus on civil
protection; etc.
S1
Own
workforce
(equal
treatment
and equal
opportunitie
s for all:
training and
skills
developmen
t)
Material
Important
I (OA): Solid training and development programmes for all
staff have a positive impact, not only by developing and
strengthening the skills relevant to their job functions, but
also by fostering a culture of continuous improvement.
R (OA): Potential risks – lack of competences without
sufficient resources for training, which could affect other
critical areas.
Own
activities
All time
horizons
Lack of skills development
can lead to staff turnover,
reduced motivation and
failure to attract talent. At
the same time, there is a
growing need to improve
the competences of
managers and to increase
the focus on leadership
development.
The e-training platform is
used to manage mandatory
training for all Group
employees and to organise
training for certain groups
more efficiently.
Training performance is
monitored. Knowledge
checks are carried out and
proper communication is
ensured.
S1
Own
workforce
(other work-
related
rights:
privacy)
Material
Important
I (OA): Potential negative impacts arise from possible
breaches or unauthorised use of employee data.
Own
activities
All time
horizons
Financial impact (fines);
reputational impact
(warning, reprimand,
instruction).
Mitigation measures are in
place, mainly through
implementation of the GDPR
requirements. All employees
receive training on the
GDPR.
Procedures are regularly
reviewed and updated, while
maintaining compliance with
the law and other regulatory
instruments.
Informing staff about the
Bank’s processing of their
personal data.
S4
Consumers
and end-
users
(information
-related
impacts on
consumers
and/or end-
uses
(privacy,
access to
(quality)
information)
Critical
Important
I (OA): The negative impact stems from the highly sensitive
nature of financial information and the associated potential
privacy breaches. The financial sector handles a huge
amount of personal and financial data, making it a prime
target for cyber-attacks and identity theft.
I (OA): Positive impact is achieved through effective
communication (providing accurate, non-excessive
information in the right way and at the right time).
R (OA): Both potential data breaches and privacy breaches
carry significant risks, including fines and reputational
damage. In addition, the elimination and mitigation of these
breaches may disrupt the normal operations of the
organisation and create additional costs.
Own
activities
All time
horizons
Financial impact (fines);
reputational impact
(warning, reprimand,
instruction) or through the
relationship with clients
(the Bank incurs additional
costs to compensate the
client for losses incurred
by the client).
The plan is to reach a Net
Promoter Score (NPS) of
83% by 2025.
Actions taken:
GDPR requirements
implemented.
In 2024, implementation of
the project “DORA
Implementation”.
Related mandatory training
for all staff introduced within
the Group.
Procedures are regularly
reviewed and updated, while
maintaining compliance with
the law and other regulatory
instruments.
S4
Consumers
and end-
users
(social
inclusion of
consumers
and/or end-
users (non-
discriminatio
n, access to
products
and
services,
responsible
marketing)
Critical
Material
I (OA): The positive impact is achieved through a variety of
channels of communication with consumers, including an
extensive network of physical banking outlets. Additional
improvements are being introduced, aligned with the
overall business strategy to become the best bank in the
country by providing the best customer experience in terms
of services and products.
R/O (OA): Without maintaining a wide network of physical
outlets, access to financial services would be restricted,
resulting in a loss of income opportunities. In addition,
competitors offering more inclusive products and services
may attract these segregated segments and thus reduce
the Bank’s market share.
R/O (BP): Risks arise from additional investment in SME
education on ESG topics to make their businesses more
resilient and protect their creditworthiness. This is
particularly difficult given the limited resources and lack of
Own
activities,
Bank’s
portfolio
All time
horizons
A network of physical
outlets or a limited supply
of digital services could
have an impact on the
business and the strategy
regarding accessibility of
services (a network of
physical outlets is relevant
for clients, a limited supply
of digital services would
limit the attraction of new
segments).
In 2024, the customer
experience of becoming a
client of the Bank/Group
through the digital channel
was improved.
We are continuously taking
steps to increase our clients’
knowledge on financial fraud
and financial literacy.
Following the acquisition of
SB Asset Management UAB
and the expansion of the
Group’s range of services,
the focus is on quality and
accessibility of services.
Processes are in place to
assess risks and ensure
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206
experience of the organisation compared to other players
in the sector. Furthermore, SBTi objectives and reputation
are closely linked to the sustainability of the portfolio, so
the Bank’s reputation is affected by the progress of its
clients. However, educating clients and promoting
sustainability can strengthen business relationships,
provide financial opportunities and lead to stronger and
more resilient business relationships.
compliance with legislation
(non-discrimination, equal
opportunities, responsible
marketing).
G1
Business
ethics
(corporate
culture,
corruption
and bribery)
Material
Material
I (OA): Potential negative impacts could arise from poor
management practices leading to incidents of bribery,
corruption – such a failure to meet ethical standards could
seriously damage the Group companies’ culture and
reputation from the point of view of its clients, investors
and the public.
I (OA): Negative impacts arise from the potential for
corruption, which remains significant even with
comprehensive prevention and mitigation measures and
continuous monitoring, as a corruption incident can
undermine trust in the organisation, lead to legal
consequences and reputational damage.
R (OA): Risks arising from improper management
practices (e.g., bribery, corruption, non-compliance with
ethics and requirements) can lead to penalties for business
partners such as suppliers, financial consequences (e.g.,
insolvency) and the Group’s reputation.
R (BP): Risks arising from inappropriate management
practices (e.g., bribery, corruption, non-compliance with
ethics and requirements) may lead to penalties for clients,
adversely affect clients’ credit risk (creditworthiness), affect
the return on investment portfolios, and further damage the
Bank’s reputation.
Own
activities,
value
chain,
Bank’s
portfolio
All time
horizons
Impact on the Group’s
reputation (due to
inappropriate client
activities), potential impact
on client and investor
choices, negative
employer image.
Financial impact, i.e., client
links to incidents of bribery
and corruption may have a
negative impact on the
client’s creditworthiness,
the client may be fined,
which in turn may lead to a
change in the Bank’s cost
of borrowing in the market.
Direction for 2025 –
improving risk and
compliance culture. A survey
on areas of potential
corruption is planned to be
carried out as part of the
compliance programme.
In 2024, a Risk and
Compliance Culture Survey
was carried out to assess the
current situation in the Bank
and to develop an action
plan to improve the risk and
compliance culture.
Periodic training on zero
tolerance for corruption is
provided.
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207
Management of ESG risks (including climate and environmental risks)
Key impacts, risks and opportunities
The Group is continuously focusing on improving the ESG risk management framework. In 2024, the Group focused on the following
areas:
• the Group’s ESG risk management framework was improved through an update of the Bank’s Climate and environmental
risk materiality assessment, a comprehensive Business environment scan in relation to climate and environmental risks,
an update of the Risk Appetite Statement and an update of the ESG Risk Indicator Framework.
• Double Materiality Assessment was carried out.
• the Group’s consolidated GHG emissions were calculated, both from operational activities and for the loan and investment
portfolios.
• the requirements of supervisory authorities and legislation were implemented.
• the Bank underwent internal ESG audit and ESG improvements were made based on the recommendations received.
• the development of the Transition Plan was started and will continue in 2025.
The ESG risk management system includes:
Components of the ESG risk
management system:
Processes within the Bank:
Risk identification
Identification of ESG risks (Double Materiality Assessment);
Climate and environmental risk materiality assessment;
Business environment scan.
The Risk Management Strategy
defines the Group’s policy for
identifying, assessing and
managing risks.
The risk appetite statement
defines the level of risk that the
Group is willing to take in order to
achieve its business objectives.
Risk assessment
Risk assessment process (Risk Map);
GHG emissions from financing and investment activities;
Stress testing and evaluation of results as part of the Internal Capital
Adequacy Assessment Process (ICAAP);
Green asset indicator
Risk management
Managing ESG risk as a distinct type of risk;
Integrating ESG risk management into the management of other financial
and non-financial risks.
Risk monitoring and reporting
Internal reporting (see page 195 of the statement for details on the
functions of the governing bodies);
External reporting (public disclosure).
Identifying ESG risk
The Group understands ESG risk as the risk of any adverse financial impact on the Group arising from the existing or future impact
of ESG factors on counterparties (clients, suppliers, etc.), on the Group’s assets, or on the Group’s activities. ESG risk includes:
• Environmental risks, consisting of climate and environmental risks (other environmental risks) related to biodiversity,
pollution, waste and water management, land use, etc. Climate and environmental risks consist of two main factors:
Physical risk is the risk of any adverse financial impact on the Group arising from the current or future impact of changing climatic
events on counterparties, on the Group’s assets, or on the Group’s activities.
Transition risk is the risk of any adverse financial impact on the Group arising from the current or future transition to a more
environmentally sustainable economy (including adaptation to a lower carbon economy) affecting counterparties, the Group’s assets,
or the Group’s activities.
• Social risks relate to the Group’s employees, their health and well-being, differences in remuneration, impact on society,
the quality of services, etc.
• Governance risks relate to the Group’s risk management culture, regulatory compliance, legal risk, gender diversity, etc.
In 2024, the Bank continued to improve its ESG risk management framework by significantly updating its Climate and environmental
risk materiality assessment, which has been linked to the Double Materiality Assessment, as well as by conducting a comprehensive
Business environment scan, updating the Risk Appetite Statement accordingly, and reviewing and updating the ESG risk indicators.
The climate and environmental risks and the assessment of their impacts are a regular process in the Bank, which is assessed at
each review of the Group’s strategy and Risk Management Framework. The Group’s new strategy (2024-2029) identifies the
strengthening of ESG standards as one of the key strategic directions.
The Group’s risk appetite documents (see page 208 for more details on Risk Appetite) and the Risk Map identify ESG risk (together
with climate and environmental risks) as a separate risk category, but their impact is assessed and managed through the standard
risks – credit, market, liquidity, operational and reputational.
The ESG risk culture is an integral part of the Group’s risk culture, and in the future the Group will continue to focus on the
development of its ESG risk management framework, the implementation of new supervisory and legislative requirements.
ESG risk measurement, monitoring and management
Credit risk
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208
Since 2006, the Bank’s business lending has been guided by one of the best practices in the international financial sector – EBRD
Environmental and Social Risk Management Manual. The identification, assessment and management of environmental and social
risks are considered as part of credit risk. Based on this Manual, ECB documents, the Bank's internal documents and procedures,
and complementary methodologies, environmental and social risk management is carried out in a few main phases:
• The Bank does not provide New Lending for Non-Financed Activities. Non-financed activities are determined in
accordance with the EBRD Environmental and Social Risk Management Manual (Corporate, SME and Micro Lending,
Annex 1: Environmental and Social Exclusion List) and other regulations governing particularly high ESG risks.
• The Bank identifies whether the project is likely to cause significant future adverse environmental and/or social impacts
that cannot be readily identified or assessed at the time of examination. In such a case, an environmental and social
impact assessment is carried out. The types of projects falling into this category are identified in accordance with this
EBRD List: Corporate, SME and Micro Lending, Annex 2: Category A Projects.
• The Bank determines the client’s ESG risk class based on an assessment of the client’s economic activity (economic
activity code) and the measures taken by the client to mitigate ESG risk by assessing the answers provided in the ESG
questionnaire and the client’s supporting documentation. The ESG questionnaire consists of qualitative and quantitative
questions. The ESG questionnaire covers all three elements: environmental, social and governance risks.
• The Bank also collects GHG emissions data from its clients along with their annual financial statements.
Client ESG risk assessment is used in the credit risk assessment (rating) process for corporate clients and in the client risk monitoring
process. This risk assessment influences clients’ credit risk assessment and pricing. The social and business client management
elements are integrated into the rating system of corporate clients.
Internal documents ensure adequate risk management and internal controls ensure the implementation of the principles.
Market risk
Market risk has been identified as insignificant in the Bank due to the narrow range of the Bank’s investment products, but ESG risk
assessment is included in the Bank’s product management procedures. The Bank assesses ESG risk in the investment decision-
making process – when the Bank invests in a portfolio held to generate cash flows, it assesses the compliance of corporate debt
securities with ESG criteria. First, the compliance of debt securities with the ESG eligibility criteria is assessed (i.e., they must meet
the definition of a green bond, a sustainable bond, or a similar condition). If this condition is not met, the issuer’s own ESG rating is
assessed.
SB Asset Management UAB, the company that was acquired at the end of 2023, also performs ESG risk assessment – each new or
existing investment is assessed against the ASV eligibility criteria.
Operational and reputational risks
The ESG risk is included in operational and reputational risk management. The Operational Risk Event Logging System provides the
possibility to classify operational and reputational risk events related to environmental (physical and transition risk factors), social and
governance risk factors as ESG risk.
Operational risk events and reputational risk events related to ESG risk are included in the reporting to the Bank’s relevant governing
bodies. The Bank’s Emergency Plan also identifies risk factors resulting from physical risk factors.
Liquidity risk
ESG risks are included in liquidity risk management to a limited extent due to the currently identified relatively low impact of ESG risk
factors on the Bank’s liquidity risk. The Bank periodically assesses the impact of ESG risk factors on the Bank’s liquidity.
Stress testing
The Bank includes climate and environmental risk elements, i.e., exposures with a high/medium-high risk rating from the Climate and
environmental risk materiality assessment, and the risk factors with the highest likelihood of occurrence and the highest potential
impact, in the internal stress testing. The testing assesses the occurrence of climate risks under different scenarios, which are based
on expert assumptions. The results of the stress tests are further used in the Bank’s Internal Capital Adequacy Assessment Process
(ICAAP) to ensure future capital adequacy.
The Bank plans to further develop and refine the climate and environmental risk scenarios for the stress tests and to compile the data
needed for the tests, taking into account the information that is continuously accumulated on the main climate change risk drivers
and their impact on the Bank’s exposure to climate change risk.
Risk appetite
The Group periodically updates its Risk Management Strategy and Risk Appetite documents. The Risk Appetite Statement includes
the following ESG risk indicators and their limits: the share of non-financed sectors, the share of high ESG risk in the loan portfolio
and the staff turnover. To improve the Group’s ESG risk assessment, other ESG risk indicators (which were previously monitored)
were reviewed in 2024 and limits were set for some of them, for example, the taxonomy-aligned mortgage loan volume indicator was
started to be monitored, and limits were set for other indicators in the social and governance areas. Other indicators in the
environmental area continue to be monitored, such as the amount of fuel used in the Bank’s official vehicles, the amount of taxonomy-
eligible assets, the fulfilment of commitments to external investors, and the Bank’s securities exposures that meet the ESG eligibility
criteria.
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209
Changes to the key ESG risk indicators of the Bank are considered by the Risk Committee and approved by the Supervisory Council,
on the recommendation of the Bank’s Management Board. Periodic monitoring of ESG risk indicators and overall ESG risk
management is carried out by the Risk Management Committee (reporting on a monthly basis) that reports periodically (quarterly) to
the Risk Committee.
Opportunities
The Bank reports green asset ratios as provided for in Regulation (EU) 2020/852 of the European Parliament and of the Council
(hereinafter, the “Taxonomy Regulation”), and any successor legislation thereto. Exposures to taxonomy-eligible economic activities
are determined based on the Regulation, taking into account the Bank’s products and information received from companies. The
main performance indicator related to the taxonomy is the Green Asset Ratio (GAR), which measures the proportion of assets that
meet the criteria of the taxonomy. Such assets are defined as assets that meet the criteria of the taxonomy, i.e., assets that contribute
significantly to at least one of the six environmental objectives set out in the Taxonomy Regulation.
For the financial year 2024, the Bank provides information on the share of taxonomy-eligible and taxonomy-aligned assets in the
Bank’s total assets (see page 214). Taxonomy-aligned assets are taxonomy-eligible assets that are subject to the environmental
objectives of the taxonomy and meet the criteria of the Taxonomy Regulation. These assets are assessed based on the taxonomy
reports of the companies in the portfolio of loans and/or debt securities. The taxonomy reports disclosed by the Bank are based solely
on information provided by the companies.
Description of the process to identify and assess material impacts, risks and opportunities
IRO-1 (+E1.IRO-1, G1.IRO-1)
The materiality assessment process followed the double materiality principle set out in the EU Corporate Sustainability Reporting
Directive. The materiality assessment process was carried out by external experts with the participation of Šiaulių Bankas Group,
based on the European Sustainability Reporting Standards (ESRS) and the EFRAG Materiality Assessment Implementation
Guidance (version of May 2024).
The assessment covered impact materiality and financial materiality. In an impact assessment, a topic is considered to be material if
it has significant actual or potential impact on people or the environment.
In a financial materiality assessment, a topic is considered material if it has or may have a financial impact on the company, i.e., it
creates financial risks or opportunities.
In the financial sector, a large part of the sustainability impacts and risks and opportunities arise in the client segment or investment
portfolio. The Double Materiality Assessment has therefore been divided into two phases:
1. the assessment of the materiality of the upstream operations in the value chain and the materiality of the Šiaulių
Bankas Group’s direct activities. The aim is to assess the impacts and risks arising from the direct activities of Šiaulių
Bankas and its employees (Phase 1, also known as “DMA of the Bank’s operations”).
2. The Bank’s portfolio performance assessment. The aim is to assess the impacts and risks arising from the activities in
which Šiaulių Bankas Group invests (Phase 2, also known as “Portfolio DMA”).
This method of identifying material topics is applied to financial institutions. The distinction between direct activities and the portfolio
in the identification of topics is mandatory, as these two activities differ significantly in their impact and scope:
• Šiaulių Bankas Group is a national institution and operates in Lithuania. Its direct activities are divided into several areas,
but all of them fall within the financial services area. This area involves specific impacts, risks and opportunities.
• Meanwhile, the Bank’s investments cover a wide range of sectors with very different impacts and operational specificities.
Although Šiaulių Bankas Group invests in Lithuanian companies, mainly in the small and medium-sized enterprises
segment, the range of investments covers very different activities: real estate, manufacturing, transportation, agriculture.
These activities have the potential to give rise to wide-ranging impacts, risks and opportunities.
Important. The descriptions below indicate the differences in the process of double materiality assessment by indicating the phase
(1 – direct activities of Šiaulių Bankas Group or 2 – Portfolio activities). In the absence of such a reference, the process is similar for
both stages of the assessment (e.g., stakeholder engagement and setting the materiality threshold).
The Double Materiality Assessment was carried out in three steps:
1. Understanding context and scope. The scope of the assessment was defined and agreed taking into account the Group’s
core business, value chain partners and stakeholders.
a. Scope of the assessment: developing value chain and stakeholder maps.
b. Time horizons applied. As the Group’s materiality assessment has to be carried out in the short, medium and long term,
the following time horizons have been defined:
i. Short-term: 1 year (reporting period)
ii. Medium: 1-5 years
iii. Long-term: more than 5 years.
c. In Stage 2 (Portfolio DMA), the following information was added to the value chain and stakeholder information:
i. Overview of securities and other financial instruments held by the main investment portfolios of Šiaulių
Bankas Group (Šiaulių Bankas AB, SB Asset Management and Life insurance company SB Draudimas). The
focus was on the types of such investments (bonds, shares, etc.) and their geographical location.
ii. Product types and volumes by client group. This breakdown is based on the United Nations Environment
Programme Finance Initiative (UNEP FI) tool. The client groups assessed separately were consumers (natural
persons) and institutional clients (private businesses), according to their sectoral distribution.
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d. Identifying the value chain and stakeholders. Based on the identified value chain and stakeholders, data collection and
the identification of a list of potentially material sustainability topics continued.
2. Compiling a list of potentially material sustainability topics. The purpose of this step was to pre-assess which of the
sustainability topics listed in Annex A of ESRS 1 are not relevant to the Group and may not be included in the further
assessment in step 3. Furthermore, topics that are potentially material from a financial perspective were also analysed at
this stage.
a. The pre-assessment in Phase 1 (DMA of the Bank’s operations) was carried out using an initial assessment template
developed by external experts to determine whether a particular topic is likely to be material to the Bank. All of the
Group’s activities were assessed here, without distinguishing specific geographies or business relationships, but
bearing in mind that most of the Group’s operations are carried out in Lithuania.
b. In Phase 2 (Portfolio DMA), given that the Group’s portfolios include companies from different sectors, all sustainability
topics were retained as potentially material. In terms of industry-specific topics, the UNEP FI tool has a number of
topics with specific impacts on the financial sector that were included in the Phase 2 (Portfolio DMA) assessment, but
scored low and did not make it to the final list of material topics.
c. Value chain perspective. The ESRS does not require detailed information on each actor in the value chain, but
essential value chain information must be included. The assessment of material impacts, risks and opportunities (IROs)
should focus on relationships that are likely to involve material IROs, e.g., relationships with:
i. “hot spots” have been identified, i.e. activities or locations that may have the greatest actual and potential
impacts, or
ii. Relationships with actors whose products or services have a significant impact on the Group’s business model
have been identified.
3. Materiality assessment. This step sought to determine the impact and financial materiality of the potentially material topics
selected in step 2 and to identify actual and potential sustainability impacts, risks and opportunities (IROs).
Impact materiality assessment.
The assessment of the impact materiality has been carried out taking into account the severity and likelihood of actual and potential
impacts along the value chain.
• Severity of impact. The severity of impact was assessed based on three parameters:
1. the scale, to determine how serious or beneficial a negative or positive impact on people or the environment is;
2. the extent, to determine how widespread a positive or negative impact is;
3. irreversibility, to determine whether and to what extent negative impacts can be remedied. In the case of positive
impacts, reversibility is not addressed.
• Likelihood. The likelihood of occurrence of impacts has been assessed in the short, medium and long term (as described
on page 209 of the statement). In the case of actual or potential human rights impacts, likelihood was not taken into account.
In this case, materiality is determined by the severity of the impact.
• Impact materiality categories. Actual and potential impacts were divided into four categories based on the sum of the
severity and likelihood scores:
1. Informative
2. Important
3. Material
4. Critical
Where there are multiple potential or actual impacts, the negative impact was prioritized, with a more conservative assessment being
chosen if the magnitude or likelihood is not obvious.
Specifics of the impact materiality assessment in Phase 2 (Portfolio DMA).
The impact materiality assessment in this phase was carried out according to the UNEP FI methodology. The UNEP FI platform is
designed to calculate the portfolio impact of financial institutions. The tool combines individual portfolio data and international official
sources measuring the impact of different sectors on 11 ESG topics (broken down into 22 sub-topics and additional sub-sub-topics),
depending on geography, time horizon, scale of investment and other variables. The UNEP FI tool is used by banks and financial
institutions worldwide. The methodology of the UNEP FI tool is described in more detail on the website and in the user guides for
the tool.
The following modules of the UNEP FI tool were used in the analysis: Context Module, Consumer Banking/Identification Module and
Institutional Banking/Identification Module.
The official UNEP FI-ESRS Conversion Tool and additional explanatory documents were used to link the results of the impact
assessment to the ESRS topics and sub-topics. Some adjustments have been made to the UNEP FI methodology to take into account
the specificities of the Group, such as the use of additional proxy indicators after the experts assessed that the indicators provided
by the UNEP FI were not directly relevant for the assessment of certain ESRS topics/sub-topics; and indicators adapted to the
geography of the Bank’s investments, for example, data on the social topics have been updated with the latest national statistics.
Methods and sources for assessing the materiality of impacts: Environmental impacts
Methods applied:
• Portfolio impact and geographic context: The Group’s environmental impact was mainly portfolio-related, so due
consideration was given to the portfolio and the composition of the Group’s client base. In addition, the geographical location
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of the Group’s operations has been taken into account and location-specific data have been updated based on the latest
available information.
• Impact in own operations: In the Group’s own operations, the environmental impact was mainly related to the use of
resources or services required to operate (e.g., energy consumption, water, use of office space). The assessment therefore
focused on impacts related to the use of Group resources.
• Weighted method: The severity parameters were assessed taking into account the size of the Group’s loan portfolio in
different sectors and the environmental impact related to that sector. This was done with a view to limiting the potential
environmental impact from a small part of the loan portfolio.
• Probability: In assessing the probability in own operations, the Group’s own policies and impact management measures
on environmental issues were taken into account. If no policies or measures are in place, the probability has not been
assessed (the impact is considered real). For Phase 2 (Portfolio DMA), the probability was considered as a current state,
as no projected changes in the composition of the portfolio were taken into account.
Sources used: The severity and likelihood parameters were estimated based on a range of information and sources, including:
• Šiaulių Bankas Group’s sustainability statements, ESG strategy and existing policies (focus on: Šiaulių Bankas’ Climate and
environmental risk materiality assessment and Business environment scan; policies of Life insurance company SB
Draudimas UAB and SB Asset Management UAB for responsible investment and integration of sustainability risks).
• Annual reports and topics relevant to suppliers, where applicable.
• Disclosures from Lithuanian utility companies and other service providers (e.g., energy, water).
• Environmental impact studies and reviews by financial institutions and international organisations.
• Official sources used by the UNEP FI tool.
Methods and sources for assessing the materiality of impacts: Social impacts
Methods applied:
• Conservative approach: Due to the Group’s close relationship with consumers and the public, the severity parameters
were assessed using a conservative approach, i.e., taking into account potential non-compliance or the greatest potential
impact. If certain sub-sub-topics could involve both negative and positive impacts (e.g., working time/work-life balance),
depending on the sub-group of the stakeholder, only negative impacts were assessed. For Stage 2 (Portfolio DMA), both
positive and negative impacts were assessed in parallel and the higher of the two was chosen as the final impact materiality
score.
• Hotspot in the impact area: The pre-assessment in Phase 1 (DMA of the Bank’s operations) identified the area of high
impact for a specific sub-topic with scores being based on the potential impacts associated with the area of high impact.
• Likelihood of value chain impacts: The assessment of the likelihood of potential impacts took into account the company’s
policies and mitigation measures in place to reduce the impact on workers along the value chain. For Phase 2 (Portfolio
DMA), the probability was considered as a current state, as no projected changes in the composition of the portfolio were
taken into account. In addition, for the purposes of assessing the portfolio impact on workers, all workers are considered to
be value chain workers and own workforce was not assessed.
Sources used: the severity and likelihood parameters for Phase 1 (DMA of the Bank’s operations) were estimated based on a
range of information and sources, including:
• Šiaulių Bankas Group’s sustainability statements, ESG strategy and existing policies (taking into account the ESG Risk
Assessment Procedure for Clients, Šiaulių Bankas AB internal procedure Limits on Investments in Securities Portfolio,
policies of Life insurance company SB Draudimas UAB and SB Asset Management UAB for responsible investment and
integration of sustainability risks).
• Annual reports and topics relevant to suppliers, where applicable.
• Industry rankings and materiality maps (e.g., SASB, MSCI).
• Studies and reviews by international organisations on the social and human rights impacts of the financial industry.
• Disclosures from industry stakeholders on social and human rights impacts, including:
o Standards specific to the financial sector relating to employee welfare, stress levels and working conditions.
o Legal requirements on privacy and cybersecurity for financial institutions.
o Responsible marketing requirements for financial institutions.
• Official sources used by the UNEP FI tool.
In addition to the sources mentioned above, the experts used the following sources for the analysis in Phase 2 (Portfolio DMA):
• Information on the Group’s credit risks by client group and, in the case of legal entities, by sector;
• Information on the Group’s investment portfolios, including the types of financial instruments and the geographical location
of investments.
Methods and sources for assessing the materiality of impacts: Impacts on governance
Methods applied:
• Sector-specific high-impact areas. The Group’s business and governance model is heavily dependent on its internal
management structure; as well as on financial regulation at both local and European level. Therefore, the governance model
and the control system (e.g., Group management system, relations with subsidiaries, sectoral policies, etc.) were assessed.
• National laws and business environment. Although the Group’s operations and loan portfolio are primarily domestic, the
Group is subject to extensive international legal regulation. Supervisory authorities, in particular the European Central Bank,
which is the supervisory authority of Šiaulių Bankas, have ambitious expectations for ESG.
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• Group’s commitments. The Group’s current status has been assessed based on the policies presented, national
commitments and publicly available information on the future plans of the European Central Bank and the European Banking
Authority.
Sources used: the likelihood parameters were estimated based on a range of information and sources, including:
• Šiaulių Bankas Group’s sustainability statements and ESG strategy.
• Existing policies (including Remuneration Policy, Diversity Policy, Policy on the Prevention of Corruption and Unacceptable
Conduct, Corporate Governance Policy, Code of Ethics), processes and management structure, including the Articles of
Association of Šiaulių Bankas Group, the Privacy Policy of Šiaulių Bankas Group companies in Lithuania, the ESG Risk
Assessment Procedure for Clients, etc.
• Particular attention was paid to the processes and the organisational model of the subsidiaries, taking into account the major
organisational changes after the merger of Šiaulių Bankas AB and Invalda INVL in 2023.
• In addition, the assessment is based on previous and current stakeholder engagement and questionnaires.
Financial impact materiality assessment.
The assessment of financial materiality has been carried out taking into account the magnitude of financial impacts and the likelihood
of risks and opportunities for direct activities and the value chain in the short, medium and long term. Qualitative assessment
thresholds were applied, assigning appropriate numerical values to them, but not related to financial or other quantitative thresholds.
Sustainability-related risks and opportunities were assessed from two perspectives:
• Risks or opportunities for business relationships and
• Risks or opportunities for resources.
The assessment of financial materiality also took into account Šiaulių Bankas’ existing Climate and environmental risk materiality
assessment and Business environment scan.
Categories of financial materiality
The following categories of financial materiality have been identified:
• No risks/opportunities,
• Informative,
• Material,
• Important,
• Critical.
The following data were used to assess financial materiality:
• Typical sectoral risk information according to SASB:
o The analysis in Phase 1 (DMA of the Bank’s operations) used SASB information on key ESG risk areas for the
commercial banking, consumer finance, asset management and custody and insurance sectors. Where the topics were
related to portfolio activities, the relevant information was also used in the scope of the financial materiality assessment
in Phase 2 (Portfolio DMA).
• The Phase 2 (Portfolio DMA) analysis took into account SASB information on key ESG risk areas for the Group’s loan
portfolio.
• Typical sectoral dependencies on ecosystem services according to ENCORE (Exploring Natural Capital Opportunities,
Risks and Exposure).
• Information on financially material topics among others in the financial industry.
In addition to sector-specific information, the assessment of financial materiality also took into account entity-specific information:
• the results of the impact materiality assessment.
• the results of existing risk assessments, in particular Šiaulių Bankas’ Climate and environmental risk materiality assessment
and Business environment scan.
• views of internal and external stakeholders.
Stakeholder engagement
The ESRS identifies two types of stakeholders that are relevant for the Double Materiality Assessment: affected stakeholders and
users of sustainability statements. Some stakeholders may belong to hypothetical groups.
A stakeholder engagement plan has been developed:
1. Following the pre-assessment step, stakeholder engagement is planned with a view to obtaining missing information on the
impact of the Group and its value chain or the risks/opportunities relevant to it;
2. Following the impact materiality assessment, stakeholder engagement is planned with a view to confirming or refuting the
hypotheses.
Stakeholder perspectives were collected in two ways:
1. Analysis of documentation and available sources – this step involved analysing documents that indicate actions and
commitments for specific stakeholders, e.g., sustainability statements, supplier policies, survey results. This method was
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chosen to understand their views and expectations at Group level or in cases where individual responses were not available
or relevant.
2. Direct engagement – this step involved direct interviews and focus groups with stakeholder groups. This method was
chosen when there was a need for a more detailed opinion and when there was insufficient good quality publicly available
data. This method of engagement also provides a broader view than questionnaires.
Different stakeholder engagement methods were used depending on:
• whether the relationship with the stakeholder is associated with a high impact area or a major dependency. This has been
assessed in the pre-assessment and the main assessment.
• the quality of information on the views of the stakeholder group.
The following stakeholders (and their method of engagement) were included in the Double Materiality Assessment:
• investors (interviews and analysis),
• regulators (analysis),
• employees and their representatives (interviews and analysis),
• business partners (analysis),
• clients (retail and corporate) (interviews),
• nature (analysis),
• media (analysis).
Identification of material topics
The following ranges were agreed for the identification of material topics:
• If an impact or financial assessment identifies a topic as falling within the critical range, it is considered to be material to
the Group.
• Include other topics that are recognised as relevant to the Group’s business strategy.
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214
ENVIRONMENTAL INFORMATION
DISCLOSURE OF INFORMATION UNDER ARTICLE 8 OF REGULATION 2020/852
(TAXONOMY REGULATION)
Definitions
Green Asset Ratio (GAR) – The proportion of assets used to finance or invested in taxonomy-aligned economic activities relative to
the total GAR assets.
Taxonomy-eligible economic activity – Economic activity described in the delegated acts adopted under the EU Taxonomy
Regulation, regardless of whether the economic activity meets any or all of the technical screening criteria set out in those delegated
acts.
Taxonomy-aligned enabling activity – Economic activity that directly enables other activities to make a substantial contribution to
one or more environmental objectives. An economic activity is considered to make a substantial contribution to one or more
environmental objectives when it directly enables other activities to make a substantial contribution to one or more environmental
objectives, provided that such economic activity: a) does not lead to the lock-in of assets that undermine long-term environmental
goals, considering the economic lifetime of those assets; and b) has a substantial positive environmental impact based on lifecycle
considerations.
Companies subject to the Non-Financial Reporting Directive (NFRD) – The Non-Financial Reporting Directive (2014/95/EU)
requires large public-interest entities with more than 500 employees (listed companies, banks, and insurance companies) to disclose
certain non-financial information.
Turnover – Key performance indicators (KPIs) for taxonomy-relevant activities based on turnover. Turnover includes revenue
recognized under International Accounting Standard (IAS) 1.
Capital Expenditures (CapEx) – Key performance indicators (KPIs) for taxonomy-relevant activities based on capital expenditures.
Capital expenditures cover costs accounted for under: property, plant, and equipment (IAS 16), intangible assets (IAS 38), investment
property (IAS 40), agriculture (IAS 41), and leases (IFRS 16).
Data Scope, Availability, and Quality
Bank’s Green Assets mainly consist of household loans used to finance real estate with energy efficiency class. In order to assess
whether these loans are aligned with Taxonomy criteria, information is collected from the Bank’s clients and third parties (State
Enterprise Centre of Registers). By financing green and other similar projects (projects that are oriented to energy efficiency) the
Bank is aiming to increase the supply of financial services that promote sustainability.
Another portion of the Bank’s Green Assets consisted of Own Portfolio investments in corporate debt securities (both held-to-maturity
and available-for-sale). For the collection of Taxonomy KPIs on debt securities issuers, we relied on publicly available non-financial
reports of the issuers and from third-party databases.
Although the Bank does not include the Trading Book portfolio among additional Taxonomy KPI disclosures due to compliance with
Article 94(1) of Regulation (EU) No 575/2013 (CRR), a comprehensive review of the portfolio composition was conducted internally.
It was determined that the companies in which the Bank invested are not subject to Non-Investment Activities Disclosure (NIAD) and
do not disclose Taxonomy KPIs.
The Taxonomy disclosures of the Bank’s subsidiaries, UAB “SB Asset Management” and Life Insurance UAB “SB Draudimas,” are
presented in Annexes 3 and 4 of this report. In assessing the Taxonomy KPI indicators of all investment issuers, data was collected
from publicly available non-financial reports of the issuers and from third-party databases. For investments in collective investment
undertakings, the look-through method was applied when calculating Taxonomy disclosures.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
215
0. Summary of KPIs
Total
environmentally
sustainable
assets (Revenue
based)
KPI (****)
KPI (*****)
%
coverage
(over
total
assets)
(***)
% of assets excluded
from the numerator of
the GAR (article 7(2)
and (3) and Section
1.1.2 of Annex V)
% of assets excluded
from the denominator
of the GAR (article 7(1)
and section 1.1.4 of
Annex V)
Main KPI
Green asset ratio
(GAR) stock
56.69
1.58%
1.53%
76.06%
41.3%
23.9%
Total
environmentally
sustainable
assets (Revenue
based)
KPI
KPI
%
coverage
(over
total
assets)
% of assets excluded
from the numerator of
the GAR (Article 7(2)
and (3) and Section
1.1.2 of Annex V)
% of assets excluded
from the denominator
of the GAR (Article 7(1)
and Section 1.2.4 of
Annex V)
Additional
KPIs
GAR (flow)
14.86
7.02%
7.02%
0.31%
41.3%
23.9%
Trading book (*)
-
-
-
Financial
guarantees
-
-
-
Assets under
management
94.93
7.08%
11.87%
Fees and
commissions
income (**)
-
-
-
(*) For credit institutions that do not meet the conditions of Article 94(1) of the CRR or the conditions set out in Article 325a(1) of the CRR.
(**) Fees and commissions income from services other than lending and AuM. Institutions shall disclose forward-looking information for these KPIs,
including information in terms of targets, together with relevant explanations on the methodology applied.
(***) % of assets covered by the KPI over banks’ total assets.
(****) Based on the Turnover KPI of the counterparty.
(*****) Based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used.
Note 1: Across the reporting templates: cells shaded in black should not be reported.
Note 2: Fees and Commissions (sheet 6) and Trading Book (sheet 7) KPIs shall only apply starting 2026. SMEs’ inclusion in these KPI will only
apply subject to a positive result of an impact assessment.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
216
1. Assets for the calculation of GAR. Turnover based
Milion EUR
2024-12-31
Total
gross
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
1639.44
908.00
53.21
6.60
3.48
914.59
56.69
Financial corporations
174.01
1.03
0.22
0.92
0.11
1.95
0.33
Credit institutions
8.98
Loans and advances
4.46
Debt securities, including UoP
2.43
Equity instruments
2.09
Other financial corporations
165.03
1.03
0.22
0.92
0.11
1.95
0.33
of which investment firms
165.03
Loans and advances
152.71
Debt securities, including UoP
11.88
1.03
0.22
0.92
0.11
1.95
0.33
Equity instruments
0.44
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
13.67
7.29
3.37
5.67
3.37
12.96
6.74
NFCs subject to NFRD disclosure
obligations
13.67
7.29
3.37
5.67
3.37
12.96
6.74
Loans and advances
Debt securities, including UoP
13.32
7.29
3.37
5.67
3.37
12.96
6.74
Equity instruments
0.35
Households
1413.79
899.68
49.62
899.68
49.62
of which loans collateralised by
residential immovable property
886.38
886.38
49.62
886.38
49.62
of which building renovation loans
81.09
10.31
10.31
of which motor vehicle loans
45.10
2.99
2.99
Local governments financing
37.97
Collateral obtained by taking
possession: residential and commercial
immovable properties
Other local government financing
37.97
Other assets excluded from the
numerator for GAR calculation
(covered in the denominator)
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
Non-financial corporations
1842.75
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
1837.47
Loans and advances
1826.43
of which loans collateralised by
residential immovable property
239.08
of which building renovation
loans
125.69
Debt securities
11.04
Equity instruments
Non-EU country counterparties not
subject to NFRD disclosure
obligations
5.28
Loans and advances
0.50
Debt securities
4.78
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other assets (e.g. Goodwill,
commodities etc.)
109.90
Total GAR assets
3592.09
908.00
53.21
6.60
3.48
914.59
56.69
Other assets not covered for GAR
calculation
1130.47
Sovereigns
723.68
Central banks exposure
387.68
Trading book
19.11
Total assets
4722.56
908.00
53.21
6.60
3.48
914.59
56.69
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Financial guarantees
50.75
Assets under management
1,313.82
91.94
91.94
3.00
3.00
94.93
94.93
of which debt securities
177.18
5.30
5.30
0.00
0.00
5.30
5.30
of which equity instruments
1,136.64
86.64
86.64
2.99
2.99
89.64
89.64
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
217
1. Assets for the calculation of GAR. Turnover based (continue)
Million EUR
2023-12-31
Total
gross
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt
securities and equity instruments
not HfT eligible for GAR calculation
1506.34
756.84
37.59
1.31
756.84
38.90
Financial corporations
151.30
Credit institutions
10.42
Loans and advances
6.13
Debt securities, including UoP
2.27
Equity instruments
2.02
Other financial corporations
140.88
of which investment firms
140.88
Loans and advances
109.04
Debt securities, including UoP
31.38
Equity instruments
0.46
of which management
companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance
undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
50.49
4.29
1.31
5.60
NFCs subject to NFRD
disclosure obligations
1.31
5.60
Loans and advances
Debt securities, including UoP
1.31
5.60
Equity instruments
Households
1240.40
756.84
33.30
756.84
33.30
of which loans collateralised by
residential immovable property
757.52
754.33
33.30
754.33
33.30
of which building renovation
loans
88.21
0.89
0.89
of which motor vehicle loans
36.46
1.62
1.62
Local governments financing
64.15
Collateral obtained by taking
possession: residential and
commercial immovable properties
Other local government financing
64.15
Other assets excluded from the
numerator for GAR calculation
(covered in the denominator)
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
Non-financial corporations
SMEs and NFCs (other than
SMEs) not subject to NFRD
disclosure obligations
Loans and advances
of which loans collateralised
by residential immovable
property
of which building renovation
loans
Debt securities
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other assets (e.g. Goodwill,
commodities etc.)
Total GAR assets
3155.78
756.84
37.59
1.31
756.84
38.90
Other assets not covered for GAR
calculation
Sovereigns
Central banks exposure
Trading book
Total assets
3155.78
756.84
37.59
1.31
756.84
38.90
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Financial guarantees
21.26
Assets under management
of which debt securities
of which equity instruments
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
218
1. Assets for the calculation of GAR. CapEx based
Million EUR
2024-12-31
Total
gross
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt
securities and equity instruments
not HfT eligible for GAR
calculation
1639.44
901.40
49.72
9.83
5.18
911.23
54.90
Financial corporations
174.01
0.10
0.10
1.18
0.51
1.28
0.61
Credit institutions
8.98
Loans and advances
4.46
Debt securities, including
UoP
2.43
Equity instruments
2.09
Other financial corporations
165.03
0.10
0.10
1.18
0.51
1.28
0.61
of which investment firms
165.03
Loans and advances
152.71
Debt securities, including UoP
11.88
0.10
0.10
1.18
0.51
1.28
0.61
Equity instruments
0.44
of which management
companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance
undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
13.67
1.62
8.65
4.67
10.27
4.67
NFCs subject to NFRD
disclosure obligations
13.67
1.62
8.65
4.67
10.27
4.67
Loans and advances
Debt securities, including UoP
13.32
1.62
8.65
4.67
10.27
4.67
Equity instruments
0.35
Households
1413.79
899.68
49.62
899.68
49.62
of which loans collateralised by
residential immovable property
886.38
886.38
49.62
886.38
49.62
of which building renovation
loans
81.09
10.31
10.31
of which motor vehicle loans
45.1
2.99
2.99
Local governments financing
37.97
Collateral obtained by taking
possession: residential and
commercial immovable properties
Other local government financing
37.97
Other assets excluded from the
numerator for GAR calculation
(covered in the denominator)
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
1952.65
Non-financial corporations
1842.75
SMEs and NFCs (other than
SMEs) not subject to NFRD
disclosure obligations
1837.47
Loans and advances
1826.43
of which loans collateralised
by residential immovable
property
239.08
of which building renovation
loans
125.69
Debt securities
11.04
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
5.28
Loans and advances
0.5
Debt securities
4.78
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other assets (e.g. Goodwill,
commodities etc.)
109.9
Total GAR assets
3592.09
901.40
49.72
9.83
5.18
911.23
54.90
Other assets not covered for GAR
calculation
1130.47
Sovereigns
723.68
Central banks exposure
387.68
Trading book
19.11
Total assets
4722.56
901.40
49.72
9.83
5.18
911.23
54.90
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Financial guarantees
50.75
Assets under management
1313.82
150.73
150.73
8.38
8.38
159.11
159.11
of which debt securities
177.18
14.03
14.03
0.03
0.03
14.06
14.06
of which equity instruments
1136.64
136.70
136.70
8.35
8.35
145.05
145.05
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
219
1. Assets for the calculation of GAR. CapEx based (continue)
Million EUR
2023-12-31
Total
gross
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which environmentally sustainable
(Taxonomy aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt
securities and equity instruments
not HfT eligible for GAR calculation
1506.34
756.84
19.77
2.54
756.84
22.31
Financial corporations
151.30
Credit institutions
10.42
Loans and advances
6.13
Debt securities, including
UoP
2.27
Equity instruments
2.02
Other financial corporations
140.88
of which investment firms
140.88
Loans and advances
109.04
Debt securities, including UoP
31.38
Equity instruments
0.46
of which management
companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance
undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
50.49
10.03
2.54
12.57
NFCs subject to NFRD
disclosure obligations
50.49
1.28
2.54
12.57
Loans and advances
Debt securities, including UoP
50.21
1.28
2.54
12.57
Equity instruments
0.28
Households
1240.40
756.84
9.74
756.84
9.74
of which loans collateralised by
residential immovable property
757.52
754.33
9.74
754.33
9.74
of which building renovation
loans
88.21
0.89
0.89
of which motor vehicle loans
36.46
1.62
1.62
Local governments financing
64.15
Collateral obtained by taking
possession: residential and
commercial immovable properties
Other local government financing
64.15
Other assets excluded from the
numerator for GAR calculation
(covered in the denominator)
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
1649.44
Non-financial corporations
SMEs and NFCs (other than
SMEs) not subject to NFRD
disclosure obligations
Loans and advances
of which loans collateralised
by residential immovable
property
of which building renovation
loans
Debt securities
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other assets (e.g. Goodwill,
commodities etc.)
Total GAR assets
1506.34
756.84
19.77
2.54
756.84
22.31
Other assets not covered for GAR
calculation
Sovereigns
Central banks exposure
Trading book
Total assets
1506.34
756.84
19.77
2.54
756.84
22.31
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Financial guarantees
21.26
Assets under management
of which debt securities
of which equity instruments
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
220
2. GAR sector information. Turnover based
2024-12-31
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
35.00 - Electricity, gas,
steam and air
conditioning supply
9.39
1.41
9.39
1.41
9.39
2.81
16.00 - Manufacture of
wood and of products
of wood and cork,
except furniture
2.01
0.32
2.01
0.32
2.01
0.64
30.00 - Manufacture of
other transport
equipment
4.05
0.02
4.05
0.02
4.05
0.04
70.22 - Business and
other management
consultancy activities
2.03
1.62
2.03
1.62
2.03
3.24
2023-12-31
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
19.20 - Manufacture of
refined petroleum
products
3.00
0.01
3.00
0.00
3.00
0.01
23.11 - Manufacture of
flat glass
2.01
0.34
2.01
0.34
2.01
0.68
29.10 - Manufacture of
motor vehicles
13.07
0.46
13.07
0.00
13.07
0.46
32.50 - Manufacture of
medical and dental
instruments and
supplies
1.01
0.00
1.01
0.00
1.01
0.00
35.11 - Production of
electricity
9.76
2.12
9.76
0.80
9.76
2.92
35.22 - Distribution of
gaseous fuels through
mains
3.58
1.17
3.58
0.00
3.58
1.17
61.10 - Wired
telecommunications
activities
5.26
0.01
5.26
0.00
5.26
0.01
61.20 - Wireless
telecommunications
activities
8.08
0.19
8.08
0.17
8.08
0.36
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
221
2. GAR sector information. CapEx based
2024-12-31
Breakdown by
sector -
NACE 4 digits
level (code and
label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Mln.
EUR
Of which
environmentally
sustainable (CCM)
Mln.
EUR
Of which
environmentally
sustainable (CCM)
Mln.
EUR
Of which
environmentally
sustainable (CCM)
Mln.
EUR
Of which
environmentally
sustainable (CCM)
Mln.
EUR
Of which
environmentally
sustainable (CCM)
Mln.
EUR
Of which
environmentally
sustainable (CCM)
35.00 - Electricity,
gas, steam and air
conditioning
supply
9.39
9.39
2.39
9.39
2.39
16.00 -
Manufacture of
wood and of
products of wood
and cork, except
furniture
2.01
2.01
0.42
2.01
0.42
30.00 -
Manufacture of
other transport
equipment
4.05
4.05
0.22
4.05
0.22
70.22 - Business
and other
management
consultancy
activities
2.03
2.03
1.64
2.03
1.64
2023-12-31
Breakdown by
sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
Mln.
EUR
Of which
environmentally
sustainable
(CCM)
19.20 -
Manufacture of
refined petroleum
products
3.00
0.63
3.00
0.00
3.00
0.63
23.11 -
Manufacture of flat
glass
2.01
0.71
2.01
0.71
2.01
1.42
29.10 -
Manufacture of
motor vehicles
13.07
1.50
13.07
0.00
13.07
1.50
32.50 -
Manufacture of
medical and dental
instruments and
supplies
1.01
0.21
1.01
0.00
1.01
0.21
35.11 - Production
of electricity
9.76
4.44
9.76
1.76
9.76
6.20
35.22 - Distribution
of gaseous fuels
through mains
3.58
2.46
3.58
0.04
3.58
2.50
61.10 - Wired
telecommunication
s activities
8.08
0.09
8.08
0.03
8.08
0.12
61.20 - Wireless
telecommunication
s activities
0.00
0.00
0.00
0.00
0.00
0.00
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
222
3. GAR KPI stock. Turnover based
% (compared to total covered assets in the
denominator)
2024-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total assets covered
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
25.28%
1.48%
0.18%
0.10%
25.46%
1.58%
34.72%
Financial corporations
0.03%
0.01%
0.03%
0.00%
0.05%
0.01%
3.68%
Credit institutions
0.19%
Loans and advances
0.09%
Debt securities, including UoP
0.05%
Equity instruments
0.04%
Other financial corporations
0.03%
0.01%
0.03%
0.00%
0.05%
0.01%
3.49%
of which investment firms
3.49%
Loans and advances
3.23%
Debt securities, including UoP
0.03%
0.01%
0.03%
0.00%
0.05%
0.01%
0.25%
Equity instruments
0.01%
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
0.20%
0.09%
0.16%
0.09%
0.36%
0.19%
0.29%
NFCs subject to NFRD disclosure
obligations
0.20%
0.09%
0.16%
0.09%
0.36%
0.19%
0.29%
Loans and advances
Debt securities, including UoP
0.20%
0.09%
0.16%
0.09%
0.36%
0.19%
0.28%
Equity instruments
0.01%
Households
25.05%
1.38%
25.05%
1.38%
29.94%
of which loans collateralised by
residential immovable property
24.68%
1.38%
24.68%
1.38%
18.77%
of which building renovation loans
0.29%
0.29%
1.72%
of which motor vehicle loans
0.08%
0.08%
0.95%
Local governments financing
0.80%
Collateral obtained by taking possession:
residential and commercial immovable
properties
Other local government financing
0.80%
Total GAR assets
25.28%
1.48%
0.18%
0.10%
25.46%
1.58%
76.06%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
223
3. GAR KPI stock. Turnover based (continue)
% (compared to total covered assets in the
denominator)
2023-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total assets covered
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
23.98%
1.19%
0.04%
23.98%
1.23%
47.73%
Financial corporations
4.79%
Credit institutions
0.33%
Loans and advances
0.19%
Debt securities, including UoP
0.07%
Equity instruments
0.06%
Other financial corporations
4.46%
of which investment firms
4.46%
Loans and advances
3.46%
Debt securities, including UoP
0.99%
Equity instruments
0.01%
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
0.14%
0.04%
0.18%
1.60%
NFCs subject to NFRD disclosure
obligations
0.04%
0.18%
Loans and advances
Debt securities, including UoP
0.04%
0.18%
Equity instruments
Households
23.98%
1.06%
23.98%
1.06%
39.31%
of which loans collateralised by
residential immovable property
23.90%
1.06%
23.90%
1.06%
24.0%
of which building renovation loans
0.03%
0.03%
2.80%
of which motor vehicle loans
0.05%
0.05%
1.16%
Local governments financing
2.03%
Collateral obtained by taking possession:
residential and commercial immovable
properties
Other local government financing
2.03%
Total GAR assets
23.98%
1.19%
0.04%
23.98%
1.23%
100.00%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
224
3. GAR KPI stock. CapEx based
% (compared to total covered assets in the
denominator)
2024-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total assets covered
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
25.09%
1.38%
0.27%
0.14%
25.37%
1.53%
34.72%
Financial corporations
0.00%
0.00%
0.03%
0.01%
0.04%
0.02%
3.68%
Credit institutions
0.19%
Loans and advances
0.09%
Debt securities, including UoP
0.05%
Equity instruments
0.04%
Other financial corporations
0.00%
0.00%
0.03%
0.01%
0.04%
0.02%
3.49%
of which investment firms
3.49%
Loans and advances
3.23%
Debt securities, including UoP
0.00%
0.00%
0.03%
0.01%
0.04%
0.02%
0.25%
Equity instruments
0.01%
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
0.05%
0.24%
0.13%
0.29%
0.13%
0.29%
NFCs subject to NFRD disclosure
obligations
0.05%
0.24%
0.13%
0.29%
0.13%
0.29%
Loans and advances
Debt securities, including UoP
0.05%
0.24%
0.13%
0.29%
0.13%
0.28%
Equity instruments
0.01%
Households
25.05%
1.38%
25.05%
1.38%
29.94%
of which loans collateralised by
residential immovable property
24.68%
1.38%
24.68%
1.38%
18.77%
of which building renovation loans
0.29%
0.29%
1.72%
of which motor vehicle loans
0.08%
0.08%
0.95%
Local governments financing
0.80%
Collateral obtained by taking possession:
residential and commercial immovable
properties
Other local government financing
0.80%
Total GAR assets
25.09%
1.38%
0.27%
0.14%
25.37%
1.53%
76.06%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
225
3. GAR KPI stock. CapEx based (continue)
% (compared to total covered assets in the
denominator)
2023-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total assets covered
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
50.24%
1.31%
0.17%
50.24%
1.48%
100.00%
Financial corporations
10.04%
Credit institutions
0.69%
Loans and advances
0.41%
Debt securities, including UoP
0.15%
Equity instruments
0.13%
Other financial corporations
9.35%
of which investment firms
9.35%
Loans and advances
7.24%
Debt securities, including UoP
2.08%
Equity instruments
0.03%
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
0.67%
0.17%
0.83%
3.35%
NFCs subject to NFRD disclosure
obligations
0.08%
0.17%
0.83%
3.35%
Loans and advances
Debt securities, including UoP
0.08%
0.17%
0.83%
3.33%
Equity instruments
0.02%
Households
50.24%
0.65%
50.24%
0.65%
82.35%
of which loans collateralised by
residential immovable property
50.08%
0.65%
50.08%
0.65%
50.29%
of which building renovation loans
0.06%
0.06%
5.86%
of which motor vehicle loans
0.11%
0.11%
2.42%
Local governments financing
4.26%
Collateral obtained by taking possession:
residential and commercial immovable
properties
Other local government financing
4.26%
Total GAR assets
50.24%
1.31%
0.17%
50.24%
1.48%
100.00%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
226
4. GAR KPI flow. Turnover based
% (compared to total covered assets in the
denominator)
2024-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total assets covered
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
100.0%
7.0%
100.0%
7.0%
5.9%
Financial corporations
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
NFCs subject to NFRD disclosure
obligations
Loans and advances
Debt securities, including UoP
Equity instruments
Households
100.0%
7.0%
100.0%
7.0%
5.9%
of which loans collateralised by
residential immovable property
98.8%
7.0%
98.8%
7.0%
5.8%
of which building renovation loans
0.5%
0.5%
0.0%
of which motor vehicle loans
0.7%
0.7%
0.0%
Local governments financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
Other local government financing
Total GAR assets
100.0%
7.0%
100.0%
7.0%
5.9%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
227
4. GAR KPI flow. CapEx based
% (compared to total covered assets in the
denominator)
2024-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total assets covered
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
100.0%
7.0%
100.0%
7.0%
5.9%
Financial corporations
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial corporations
NFCs subject to NFRD disclosure
obligations
Loans and advances
Debt securities, including UoP
Equity instruments
Households
100.0%
7.0%
100.0%
7.0%
5.9%
of which loans collateralised by
residential immovable property
98.8%
7.0%
98.8%
7.0%
5.8%
of which building renovation loans
0.5%
0.5%
0.0%
of which motor vehicle loans
0.7%
0.7%
0.0%
Local governments financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
Other local government financing
Total GAR assets
100.0%
7.0%
100.0%
7.0%
5.9%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
228
5. KPI off-balance sheet exposures. Turnover based
% (compared to total eligible off-
balance sheet assets)
2024-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)*
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)*
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)*
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Financial guarantees (FinGuar KPI)
Assets under management (AuM KPI)
6.9%
6.9%
0.2%
0.2%
7.1%
7.1%
5. KPI off-balance sheet exposures. CapEx based
% (compared to total eligible off-
balance sheet assets)
2024-12-31
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)*
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)*
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)*
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Of which
specialized
lending
Of which
transitional
Of which
enabling
Financial guarantees (FinGuar KPI)
Assets under management (AuM KPI)
11.2%
11.2%
0.6%
0.6%
11.9%
11.9%
*For Assets under management the look-through method was applied to our investments in investment funds. However, due to data limitations, it was not possible to
assess what part of Taxonomy Eligible assets were related to climate change mitigation or adaptation. For the case of Taxonomy Aligned if was possible to assess. In the
reporting we chose to disclose the conservative amount of Taxonomy Eligible assets related to climate change mitigation and adaptation.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
229
1. Nuclear energy related activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process
heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil
gaseous fuels.
YES
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation
facilities using fossil gaseous fuels.
YES
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool
using fossil gaseous fuels.
YES
2. Taxonomy-aligned economic activities (denominator) 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2.81
5%
1.41
2%
1.41
40%
2.39
4%
0.00
0%
2.39
46%
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the denominator of the
applicable KPI
53.87
95%
51.80
97%
2.08
60%
52.51
96%
49.72
100%
2.79
54%
8
Total applicable KPI
56.69
100%
53.21
100%
3.48
100%
54.90
100%
49.72
100%
5.18
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
230
3. Taxonomy-aligned economic activities (numerator) 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2.81
5%
1.41
2%
1.41
40%
2.39
4%
0.00
0%
2.39
46%
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the numerator of the
applicable KPI
53.87
95%
51.80
97%
2.08
60%
52.51
96%
49.72
100%
2.79
54%
8
Total amount and proportion of taxonomy-
aligned economic activities in the numerator
of the applicable KPI
56.69
100%
53.21
100%
3.48
100%
54.90
100%
49.72
100%
5.18
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
231
4. Taxonomy-eligible but not taxonomy-aligned economic activities 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
2
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
3
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
4
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
3.17
0%
1.58
0%
1.58
19%
2.85
0%
0.00
0%
2.85
29%
5
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
6
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
7
Amount and proportion of other taxonomy-
eligible but not taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
911.43
100%
906.41
100%
6.60
81%
908.38
100%
901.40
100%
6.98
71%
8
Total amount and proportion of taxonomy
eligible but not taxonomy-aligned economic
activities in the denominator of the
applicable KPI
914.59
100%
908.00
100%
8.18
100%
911.23
100%
901.40
100%
9.83
100%
5. Taxonomy non-eligible economic activities 2024-12-31
Row
Economic activities
Turnover
Capex
Mln. EUR
%
Mln. EUR
%
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred
to in rows 1 to 6 above in the denominator of the applicable KPI
2 677.50
100%
2 680.86
100%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the
denominator of the applicable KPI
2 677.50
100%
2 680.86
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
232
CLIMATE CHANGE
E1-1 (+ S1.SBM-3)
This part of the statement provides detailed information on the impact of Šiaulių Bankas AB Group on climate change and its efforts
to contribute to climate change mitigation and adaptation. As one of the main players in the financial sector in Lithuania, we
understand the importance of our responsibility to contribute to addressing the environmental and climate change challenges. We
aim to reduce the environmental impact of our own and our partners’ direct activities and to promote positive change with our clients
and sustainable organisations. We do this by taking a range of actions to prevent, mitigate or remedy the negative impacts of climate
change, and to manage the risks and opportunities associated with climate change.
To this end, in January 2024, we became signatories to the Science Based Targets Initiative (SBTi). Joining SBTi has been approved
by the Management Board of the Bank. In 2025, we are committed to setting near-term targets and measures to reduce greenhouse
gas emissions, aligned with the target achievement trajectory set for 2050, and submitting them for alignment with the SBTi standard.
By joining this initiative, we are also committing to achieving the Net Zero target by 2050.
The Science Based Targets Initiative provides businesses and financial institutions with clear guidance on how to reduce greenhouse
gas (GHG) emissions, helping them to avoid the most damaging impacts of climate change and ensure future business growth
opportunities. Targets are considered science-based if they are in line with what the latest climate science deems necessary to
achieve the Paris Agreement’s objectives of limiting global warming to 1.5°C compared to pre-industrial levels.
Transition plan
The Group committed to tackling climate change and is determined to align its business strategy and operations with the transition
to a sustainable economy. Although we do not currently have an official transition plan, as mentioned earlier, the Bank has joined the
Science Based Targets initiative and will set near-term targets this year, which will be approved by the SBTi. The preparation of the
transition plan is included in the Group’s list of strategic initiatives for 2025.
The Bank’s ability to successfully implement its transition plan in the future will depend not only on the Bank’s own actions, but also
on the impact of external factors, particularly in the medium to long term. For example, important external factors include:
• Implementation of the European Green Deal
• The successful implementation of the European Sustainable Growth Strategy and the related regulatory changes in our
economy would have a direct impact on the Bank’s plans.
• Transformation of sectors
• The successful transformation of different business sectors to more sustainable business models will determine the Bank’s
ability to deliver on its future plans.
• Green finance
• Another important factor in achieving the transition objectives and actions will be the Bank’s ability to raise additional
capital and access affordable finance.
With all these components in mind, we will strive to align Group’s strategy and business model to meet the Paris Agreement targets
to limit global warming to 1.5°C and the European climate legislation (Regulation (EU) 2021/1119) and to achieve climate neutrality
by 2050. Recognising the importance of a comprehensive transition plan, we are determined to develop and implement a plan that
meets Group’s sustainability objectives and regulatory requirements. We plan to make all sustainability-related targets (including the
transition plan) publicly available in the Bank’s/Group’s Sustainability Statement for 2025.
The Group does not currently have a specific transition plan, so there is no direct impact on its own workforce in terms of transition
or job losses resulting from the implementation of such a plan.
CLIMATE RISK AND RESILIENCE ANALYSIS
E1.SBM-3
Resilience analysis
Although we have carried out a detailed analysis of the physical and transitional risks associated with climate change, as well as a
stress test incorporating climate and environmental risk factors and assessing the impact of these risks in the context of internal
capital adequacy, a comprehensive resilience analysis is not yet complete. This analysis, which will assess the ability to adapt the
Group’s strategy and business model to climate change in the short, medium and long term, will be conducted in the future.
Climate and environmental impact assessment
The Climate and environmental risk materiality assessment looks at the impact of physical and transition risks on the Bank’s activities,
in terms of both financial and non-financial risks. The Climate and environmental risk materiality assessment and the Business
environment scan are carried out at least once a year and approved by the Management Board of the Bank.
Use of Climate and environmental risk materiality assessment and the Business environment scan from a climate and environmental
risk assessment perspective:
• part of the Group’s Self-Assessment (risk assessment) process (once a year);
• the results and findings of the Climate and environmental risk materiality assessment and the Business environment scan
feed into the review of the Bank’s strategy (which also integrates ESG topics);
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
233
• they can also be used in the review of the Group’s Risk Management Strategy and Risk Appetite Statement;
• in other internal processes, such as determining the level of client ESG risk, stress testing, determining ESG risk
indicators, etc.
the Climate and environmental risk materiality assessment carried out in the reporting year included a detailed assessment of the
impact of physical and transition risks on the following risks: credit, market, liquidity, operational and reputational, compliance
and strategic (business model) risks, as well as the main sectors and portfolios financed by the Bank. The assessment identified
the main risk drivers, risk transmission channels, assessed the impact of risks over different time horizons (short-, medium and long-
term), and determined the final level of risk after assessing the Bank’s risk management measures to mitigate these risks.
The Climate and environmental risk materiality assessment allows the Bank to get a holistic view and to direct its risk management
strategy accordingly.
The impact of climate and environmental risks on the Bank’s standard financial and non-financial risks may vary from period to period.
The Bank assesses the significance of climate and environmental risks by focusing on the following time periods:
Period
YEARS
Short-term
<1
Medium
1-5
Long-term
5-30
Climate and environmental risk drivers and potential impacts are assessed through the following perspectives (risk drivers):
• Climate change policy and regulatory change. Carbon taxation and the ability of companies to adapt to a changing
business environment can have an impact on highly polluting sectors.
• Technological changes that help to reduce carbon emissions can replace existing technologies that eventually become
uncompetitive and obsolete (stranded assets) and could affect the price of the products produced.
• Market developments. Changing investor and customer expectations towards more sustainable business solutions can
create reputational risks for companies that delay action to change their business model and reduce their attractiveness to
investors and customers.
The Bank’s materiality assessment looks at the impact of climate and environmental risk drivers on standard financial and non-
financial risks:
• Credit risk. There may be financial impacts on the Bank’s clients (e.g., increased operating costs, reduced profitability,
reduced turnover, stranded assets, etc.) that may affect the client’s solvency or the value of collateral. In the event of a
physical risk, there is also a potential financial impact on the Bank’s clients due to the impact of physical events on the
client’s assets, disruption of operations, which may affect the client’s solvency or the value of the collateral.
• Market risk. It may manifest itself through interest rate risk and issuer credit risk, which would have an impact on the Bank
itself and its performance. Whereas in the case of physical risk, the impact depends on the potential exposure to physical
risk in the country of the issuer, but given the relatively limited securities exposure, the impact on the Bank of both physical
risk and transition risk is considered to be relatively limited.
• Liquidity risk. May affect the Bank’s liquidity buffer (assets) and the Bank’s financial results, for example, regulatory
changes related to GHGs may impact cash flows and the use of the liquidity buffer due to the revaluation of assets. In the
case of physical risk, the impact on the Bank may occur through the Bank’s clients (for example, physical damage to a
client’s real estate may result in disruption to the client’s business and/or cause solvency problems).
• Operational and reputational risks. Changes in client and investor preferences, inappropriate Bank services/products,
cooperation with suppliers with high switching risk – manifested mainly through reputational risk. Meanwhile, physical risks
may manifest themselves through physical damage to the Bank’s immovable property, to the Bank’s employees, disruption
of the Bank’s services, and physical damage to third parties providing critical outsourcing services to the Bank, as a result
of extreme weather events. Disruption of the Bank’s services to its clients may result in reputational risk.
• Compliance risk is mainly related to physical events and their consequences, which can disrupt the Bank’s operations and
ability to meet its obligations in a timely manner (e.g., delays in reporting to the Bank’s supervisors).
• Strategic (business model) risk. Implementation of the Bank’s ESG (including climate and environmental) standards to
maintain its attractiveness to investors. In terms of both transition and physical risks, the main impact on strategic
(business model) risk relates to the Bank’s clients – the occurrence of risk drivers may have an impact on client insolvency
(credit risk), as well as on the Bank’s reputational risk and, consequently, on strategic risk (the Bank may receive negative
credit risk ratings or even face lawsuits, which may require a review of its business model).
Following the identification of potential transition and physical risk drivers, their transmission channels, and the assessment of the
measures taken by the Bank to mitigate these risks, the impact and materiality of these risks in the context of the Bank’s operations
are further assessed. Although climate and environmental risks and their impact were assessed in the context of the Bank’s various
financial and non-financial risks, material impacts were observed for the following risk categories: credit risk, reputational risk and
strategic (business model) risk:
Climate and
environmental
risk category
Risk
category
Impact
Time horizon
Material
risks
Transition risks
Credit risk
The impact is considered to be negligible in this period due to the short time
horizon and the likelihood of the risk drivers occurring. In addition, the Bank has
Short-term
No
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
234
various risk management tools in place which are deemed sufficient to manage
the risks arising in the short term.
The main impact in the medium and long term comes from the potential impact of
transition risk on the Bank’s clients, which arises from changing investor and client
preferences, as well as from the changing regulatory environment, which creates
the need to transform the business model for the Bank’s clients. Impacts on the
activities of the Bank’s clients may affect their credit risk and the Bank’s financial
performance.
Medium
Yes
Long-term
Yes
Reputational
risk
The impact is considered to be negligible in this period due to the short time
horizon and the likelihood of the risk drivers occurring, and the Bank has limited
investments to highly polluting sectors.
Short-term
No
The impact of transition risk on the Bank’s reputational risk has a tendency to
increase in the medium to long term, depending on the measures taken by the
Bank’s clients to manage this risk, their ability to adapt to changes and the Bank’s
own ability to adequately manage the climate and environmental risks.
Medium
Yes
Long-term
Yes
Strategic
(business
model) risk
The impact is considered to be negligible in this period due to the short time
horizon and the likelihood of the risk drivers occurring, and the Bank’s actions
(strategic direction) are in line with current investor expectations.
Short-term
No
The impact is significant in the medium to long term due to the increasing focus on
climate and environmental risk, both from the Bank’s supervisors and due to the
needs of investors and the Bank’s clients.
Medium
Yes
Long-term
Yes
Physical risks
Credit risk
The impact is considered to be negligible in this period due to relatively short time
horizon and the likelihood of the risk drivers occurring. In addition, the Bank has
various risk management tools in place, which are currently considered sufficient
to manage the risks in the short term.
Short-term
No
The impact of physical risks on the Bank’s clients tends to be more pronounced in
the longer term.
Medium
Yes
Long-term
Yes
Reputational
risk
The impact is considered to be negligible in this period due to the short time
horizon and the likelihood of the risk drivers occurring. In addition, the Bank has
various risk management tools in place, which are currently considered sufficient
to manage the risks in the short term.
Short-term
No
In the medium to long term, the impact of physical risk on the Bank’s reputational
risk has a tendency to increase due to the degree of uncertainty and potential
impact of physical events on the Bank’s clients and on the Bank’s own ability to
adequately manage the climate and environmental risks.
Medium
Yes
Long-term
Yes
Strategic
(business
model) risk
The impact is considered to be negligible in this period due to the short time
horizon and the likelihood of the risk drivers occurring. In addition, the Bank has
various risk management tools in place, which are currently considered sufficient
to manage the risks in the short term.
Short-term
No
The impact is significant in the medium to long term due to the increasing focus on
climate and environmental risk, both from the Bank’s supervisors and due to the
needs of investors. Also due to the degree of uncertainty and potential impact of
physical events on the Bank’s clients and on the Bank’s own ability to adequately
manage the climate and environmental risks.
Medium
Yes
Long-term
Yes
Overall assessment
The impact in the short term is considered to be insignificant due to the relatively
short time horizon, the likelihood of occurrence of the risk drivers and the
measures taken by the Bank to manage these risks.
In the medium to long term, the level of risk tends to increase mainly due to
increasing regulatory requirements for both the Bank and its clients and the
additional need for resources to meet new requirements, as well as the changing
expectations and priorities of investors and clients focused on more sustainable
solutions. The impacts on strategic and business risks in the longer term reflects
the need to focus on climate and environmental risk management and the
continuous improvement of the risk management framework.
Short-term
No
Medium
Yes
Long-term
Yes
The process, responsibilities and frequency of assessing the materiality of climate and environmental risks are described in the
Bank’s internal procedures: Environmental, Social and Governance (ESG) Risk Management Procedure.
Transition risks
The materiality of transition risk drivers to credit risk is assessed both qualitatively by analysing the legal environment, best practices
and international methodologies applied in the financial sector (e.g., the recommendations of the Task Force on Climate-Related
Financial Disclosures, the reports of the European Banking Authority, the Fit for 55 toolkit and information on the related legislation).
The materiality assessment also uses internal information, such as GHG emissions from financing activities, and takes into account
the Bank’s existing methodology (e.g., sectors with high ESG risk) and the Bank’s climate and environmental risk management
measures. The impacts of transition risks are assessed for the largest sectors (real estate, construction, manufacturing, trade and
transport, agriculture) and segments (retail clients and corporate clients) financed by the Bank over different time horizons: short-
term (<1 year), medium (1-5 years) and long-term (5-30 years).
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
235
Following the update of the Climate and environmental risk materiality assessment in 2024 and taking into account the potential
impacts of transition risks on individual sectors, the Bank has also updated the ESG Risk Assessment for Corporate Clients
(methodology and process). The share of the Bank’s corporate loan portfolio in sectors with high ESG risk (with a focus on transition
risk) is relatively low (page 235). According to the methodology currently used, the Bank has identified the following sectors of
economic activity where corporate clients may have the highest transition risk: agriculture, forestry and fishing, mining and quarrying;
manufacturing; electricity, gas, steam and air conditioning supply; water supply, sewage treatment, waste management and
remediation; and construction, transport and real estate affairs. The Bank operates in Lithuania and therefore the exposures
presented in the table are limited to loans to business clients with operations in Lithuania.
Sector
High ESG-risk bank loans to
corporate clients, EUR
million*
Portfolio share of high ESG-risk
loans, % (of total high ESG-risk
loans to corporate clients)
Portfolio share of high ESG-
risk loans, % (of total sector
loans to corporate clients)
Agriculture, forestry and fishing
34.57
1.9%
33.9%
Mining and quarrying
9.03
0.5%
96.7%
Manufacturing
111.46
6.1%
42.1%
Electricity, gas, steam and air conditioning
supply
89.96
4.9%
100.0%
Water supply, sewerage, waste management
and remediation activities
6.82
0.4%
41.2%
Construction
87.53
4.8%
52.8%
Transportation and storage
47.82
2.6%
47.1%
Real estate activities
366.42
20.0%
77.9%
Other sectors
1,075.61
58.8%
0.00%
Total:
1,829.21
100.00%
-
* Net book value of the transaction as at 31/12/2024
Physical risks
In 2024, the Bank supplemented its earlier materiality assessment of physical risks with a more detailed and comprehensive
materiality assessment of physical risks. The following physical risk categories and their impact on credit risk were assessed:
• Extreme weather events;
• Chronic weather events;
• Environmental physical risks – water scarcity, loss of biodiversity, impacts on soils (including soil degradation and erosion),
destruction of habitats, dwindling resources, pollution.
Methodology
The Bank uses a variety of publicly available studies, tools and sources to assess the impact of physical risks. For example, the
Study on Climate Change Risks by the Middle of the 21st Century (by the Hydrometeorological Service) and the Study of Soil
Degradation and Erosion, Coastal Erosion and Solifluction in Lithuania (by Assoc. Prof. Dr. Jonas Volungevičius, Prof. Dr. Darijus
Veteikis and Dr. Laurynas Jukna), ThinkHazard!, Aqueduct tools. The analysis of environmental physical risks is based on policies
and strategic plans of the European Union and Lithuania, as well as legislation and other sources. However, due to the lack of tools
and sources, the analysis of environmental physical risks is of a more qualitative nature. Climate risk analysis (extreme and chronic
weather events), on the other hand, is based on qualitative and quantitative approaches.
Scope of the assessment
The materiality assessment uses the Bank’s internal information, such as information on collateral (pledged real estate – registered
address of the property, value of collateral). This internal information is then combined with physical risk maps (e.g., a flood map) to
determine the proportion of the Bank’s collateral that is exposed to future flood risk. The Bank’s climate and environmental risk
management measures (e.g., monitoring of insurance conditions) are also taken into account when determining the final (residual)
risk level. Flood risk is the most relevant physical climate risk identified. It affects a wide range of sectors in which real estate is
used as collateral.
Climate risk impacts are assessed for the largest sectors (real estate affairs, manufacturing and trade), segments (retail clients and
corporate clients) and products (mortgage loans, consumer loans, other loans) financed by the Bank.
The impacts of individual environmental risks are also assessed for other sectors financed by the Bank. Other environmental risks
assessed include water scarcity, land use change, resource scarcity, biodiversity loss, destruction of habitats and pollution risks due
to their environmental impacts in sectors such as agriculture, energy, manufacturing and construction. Land use change risks are
relevant to the agriculture and construction sectors because of their potential impact on land and its characteristics. The water supply
and waste recycling sectors, as well as the mining and quarrying sector, are exposed to resource scarcity and pollution risks. The
impact assessment is carried out over different time horizons: short-term (<1 year), medium (1-5 years) and long-term (5-30 years).
Where possible, the Bank uses climate projections (Representative Concentration Pathways, or RCPs; Shared Socioeconomic
Pathways, or SSPs) to better assess the impacts of climate change in the long term, or other available scenarios based on the source
of information (e.g., realistic, optimistic and pessimistic scenarios). In other cases, qualitative expert judgement is used to determine
how physical risk events may affect individual sectors or segments financed by the Bank, based on the sources mentioned above.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
236
POLICIES
E1-2
The Bank/Group does not currently have a specific policy in place to manage the material impacts, risks and opportunities associated
with climate change mitigation and adaptation. The plan is to develop such a policy in the future once climate targets have been set.
However, there is an internal Environmental, Social and Governance (ESG) Risk Management Procedure that provides an
effective framework for the management of these risks and contributes to the development of an ESG risk culture within the Bank.
This procedure helps to achieve the objectives set out in the Group’s and the ESG strategy.
The Bank’s Supervisory Council oversees the design, development and implementation of ESG risk culture, and the Bank’s
Management Board approves internal documents related to ESG strategy and risk management. The Non-Financial Risk Department
(NFRD) is responsible for the design and effective functioning of the ESG risk management framework at Group level.
Information on the management of ESG risks in the Group is provided to the Bank’s governing bodies – the Management Board, the
Risk Management Committee and the Risk Committee – in accordance with the reporting frequency set out for such information in
the Register of Information Provided to the Governing Bodies.
This procedure is mandatory to all employees of the Group. It is available in the Group’s internal information systems. Regular
mandatory training sessions (once a year) are organised to familiarise all Group employees with the topic of ESG and the importance
of ESG risk management in the context of other financial and non-financial risk management.
The investment products of SB Asset Management UAB and Life insurance company SB Draudimas UAB follow the Responsible
Investment and Sustainability Risk Integration Policy, which includes the impact of climate change in the investment process.
ACTIONS AND OBJECTIVES
E1-3, E1-4
There are currently no specific objectives for climate change mitigation and adaptation. However, in the future, the adoption of near-
term targets under the Science Based Targets Initiative (SBTi) will lead to clearly defined objectives. This will allow us to better
manage climate-related impacts, risks and opportunities, and ensure that our activities are in line with sustainability objectives and
regulatory requirements. The Bank plans to set targets and measures to reduce greenhouse gas emissions and align them with the
SBTi initiative standard by the end of 2025 and share the information in next year’s statement.
• Nevertheless, the Bank takes various actions that contribute to reducing GHG emissions and help maintain its attractiveness
to investors. For example, information is collected on the GHG emissions of the companies (clients) and the efforts of
companies (clients) to reduce GHG emissions and adapt to new expectations are monitored. For this purpose, tools such
as the ESG questionnaire for clients and financials statement detailing forms, which also collect information on the GHG
emissions of clients, are used. This helps to manage climate change risks and potentially avoid or reduce the negative
impacts of the Bank’s portfolio. New regulatory requirements are also continuously monitored and prepared for. ESG risk
management and climate and environmental impact assessment are disclosed in detail on page 207.
The investment products of Life insurance company SB Draudimas UAB and SB Asset Management UAB, for which information is
disclosed in accordance with Articles 8 and 9 of the SFDR, have quantitative indicators, such as the portfolio’s weighted GHG
emissions intensity and the share of investments in investee companies involved in violations of the UN Global Compact principles
or the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (MNEs), which
help assess how environmental and social factors are implemented in the investment process.
Green products and products focused on improving energy efficiency
Green products and products focused on improving energy efficiency aim to increase the supply of financial services that promote
sustainability. The green product categories are: green mortgage loans, special terms for leasing electric and hybrid vehicles, and
projects to improve business sustainability.
In 2024, the Bank granted green mortgage loans worth EUR 14.7 million.
Šiaulių Bankas AB contributes to the development of renewable energy projects in the country – in 2024, it financed the acquisition
and installation of solar and wind power plants for almost EUR 55 million. The largest wind power projects financed by the Bank are
in the Akmenė FEZ and Jurbarkas district.
Loans on more favourable terms are available for electric and hybrid vehicles, which contribute to a more sustainable
environment. The purpose of financing such cars is to make more environmentally friendly vehicles more affordable and to encourage
buyers to seriously consider purchasing them. The main advantage offered to clients is more attractive interest rates.
We are the main financing partner for multi-apartment building modernisation projects in the country. Over the period 2011-2023, the
Bank has financed multi-apartment building renovation projects worth EUR 1 billion.
In 2025, the Bank will continue to focus on financing other projects that improve business sustainability, such as:
• Renewable energy,
• Energy efficiency improvement projects,
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
237
• Waste management projects,
• Emission reduction projects,
• Sustainable forestry projects,
• Water and wastewater management projects.
Climate change adaptation is a significant topic in the Bank’s portfolio, and we are taking the following related actions:
• periodic assessment of the impact of climate and environmental risks on the sectors and portfolios financed by the
Bank (Climate and environmental risk materiality assessment).
• improvements to the credit risk management. The credit decision-making system ensures that clients with higher ESG
risk are properly rated and that the approved financing structure allows for a reduction in the level of ESG risk.
• The collateral valuation process includes climate and environmental risk factors such as the energy performance of the
property and physical risk assessment. Assessing these factors allows for improved credit risk management and
contributes to promoting a societal shift towards more sustainable financial decisions.
Energy consumption in own activities
In its operations, the Group aims to reduce fuel consumption and atmospheric pollution, with the following ongoing initiatives:
• Using an electronic car booking system. This allows planning business trips in groups and travelling in as few cars as
possible.
• 16% of the fleet is made up of plug-in vehicles (13% in 2023) and 9% of electric vehicles (7.5% in 2023).
• The Bank’s employees are encouraged to use public transport (e.g., train, bus) for business trips within Lithuania.
New projects implemented in the Group:
• The procedure for purchasing mobile phones has been updated to include refurbished phones. New phones are bought
and returned to the same suppliers, who refurbish and prepare them for future use.
• In 2024, the Sign on Tab pilot project was launched to replace a physical signature on a paper document with a digital
signature on a tablet. Signed documents are sent to the client’s personal e-mail address. This saves the environment by
reducing the amount of paper printed during client consultations.
• Digital health records. Moving paper health records to electronic format eliminates the need for a paper booklet.
• Access pilot project. Bank branches are accessed using a telephone, so we no longer rely on plastic access cards.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
238
ENERGY CONSUMPTION AND ENERGY MIX
E1-5
Group
Bank
Energy consumption and its energy mix
2023
2024
2023
2024
Total fossil energy consumption (MWh)
1,117.56
1,173.44
1,045.52
1,078.90
Share of fossil sources in total energy consumption (%)
42.56
39.48
40.94
37.49
Consumption from nuclear sources (MWh)
0
0
0
0
Share of consumption from nuclear sources in total energy consumption
(%)
0
0
0
0
(A) Fuel consumption for renewable sources, including biomass (also
comprising industrial and municipal waste of biologic origin, biogas,
renewable hydrogen, etc.) (MWh)
0
0
0
0
(B) Consumption of purchased or acquired electricity, heat, steam, and
cooling from renewable sources (MWh)
1,508.48
1,799.06
1,508.48
1,799.06
(C) The consumption of self-generated non-fuel renewable energy
(MWh)
0
0
0
0
Total renewable energy consumption (MWh) (calculated as the sum of
lines A to C)
1,508.48
1,799.06
1,508.48
1,799.06
Share of renewable sources in total energy consumption (%)
57.44
60.52
59.06
62.51
Total energy consumption (MWh)
2,626.03
2,972.51
2,554.00
2,877.96
Methodology and additional information:
• Energy consumption is disclosed at Group level.
• Gas demand in 2024 increased due to slightly colder winter weather than in 2023.
• Conventional energy consumption was lower in 2023, as a higher proportion of landlords who rent out their premises
started to buy green electricity in 2024. Conventional energy consumption by the Bank and the Group companies was
185.44094 MWh in 2023 and 190.91505 MWh in 2024. Green electricity (market-based) consumption was 1,508.481
MWh in 2023 and 1,799.062 MWh in 2024.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
239
EMISSIONS
E1-6
Bank and Portfolio clients’ emissions are measured from 2023. The GHG emission quantities and measurement methodology are
presented below.
Emissions from direct activities
Group
Bank
2023
2024
Change (%)
2023
2024
Change (%)
Scope 1 GHG emissions
Total Scope 1 GHG emissions (tCO2eq)
405.31
311.69
-23.10%
332.35
255.40
-23.15%
Percentage of Scope 1 GHG emissions regulated
under the ETS (%)
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions
(tCO2eq)
714.26
817.78
+14.49
695.01
795.83
+14.51
Gross market-based Scope 2 GHG emissions
(tCO2eq)
272.56
294.00
+7.86
243.02
264.17
+8,70
Significant scope 3 GHG emissions
Total Gross indirect (Scope 3) GHG emissions
(tCO2eq)
446,411.75
579,140.00
+29.73
428,035.51
433,919.00
+1.37
1 Purchased goods and services
17.45
12.70
-27.23%
17.07
12.50
-26.77%
[Optional sub-category: Cloud computing and data
centre services]
2 Capital goods
Not estimated
3 Fuel and energy-related (not included in Scope1
or Scope 2)
Not estimated
4 Upstream transportation and distribution
Not estimated
5 Waste generated in operations
1.54
1.68
+9.38%
1.44
1.55
+6.86%
6 Business travelling
70.07
109.06
+55.64%
66.00
104.07
+57.69%
7 Employee commuting
-
361.17
-
-
343.48
-
8 Upstream leased assets
Not estimated
9 Downstream transportation
Not estimated
10 Processing of sold products
Not estimated
11 Use of sold products
Not estimated
12 End-of-life treatment of sold products
Not estimated
13 Downstream leased assets
0
0
0%
0
0
0%
14 Franchises
Not estimated
15 Investments (the Bank, Life insurance company
SB Draudimas, SB Asset Management)
446,325.40
578,652.20
+29.65
427,951.00
433,455.50
+1.28
Total GHG emissions
Total GHG emissions (location-based) (tCO2eq)
447,531.00
580,269.00
+29.66
429,062.87
434,970.00
+1.38
Total GHG emissions (market-based) (tCO2eq)
447,089.63
579,745.00
+29.67
428,610.88
434,439.00
+1.36
Methodology and additional information:
• Scope 1 covers: gas (own premises) (conversion factor – MWh), data gathered from external company’s Ignitis UAB self-
service website (for the Bank). Fuel burned by the Group companies’ own vehicles (petrol and diesel) (conversion factor –
l, data gathered from external companies’ FLEET UNION UAB (for Šiaulių bankas AB) and Circle K Lietuva UAB (for Šiaulių
bankas AB, SB lizingas UAB, SB Asset Management UAB and Life insurance company SB Draudimas UAB) self-service
websites and accounts (for SB Asset Management UAB)), diesel refuelling in generators (conversion factor – l, data gathered
from external company’s Fima UAB (for Šiaulių bankas AB)), replenishing refrigerants (conversion factor – t, data gathered
from external companies’ Inservis UAB ir SOL Baltics OU Lietuvos filialas (for Šiaulių bankas AB)).
• Scope 2 covers: gas (rented premises) (conversion factor – MWh, data gathered from accounts (Šiaulių bankas AB)),
conventional and green energy consumption (conversion factor – kWh, data gathered from accounts (Šiaulių bankas AB,
SB lizingas UAB, SB Asset Management UAB and Life insurance company SB Draudimas UAB)), thermal energy
consumption (conversion factor – MWh, data gathered from accounts (Šiaulių bankas AB, SB lizingas UAB, SB Asset
Management UAB and Life insurance company SB Draudimas UAB).
• Scope 3 covers:
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
240
o Category 1: paper products for operations (conversion factor – t, data gathered from external companies’ Sanitex UAB
(Šiaulių bankas AB, Life insurance company SB Draudimas UAB) and Charlot UAB (for SB lizingas UAB)), cash
collection services (conversion factor – from km to l), distance traveled gathered from external company Brink‘s
Lithuania UAB (for Šiaulių bankas AB), water use and preparation (conversion factor – kWh/m3, data gathered from
bills to Šiaulių bankas AB, SB lizingas UAB, SB Asset Management UAB and Life insurance company SB Draudimas
UAB).
o Category 5: waste water (conversion factor – kWh/m3, data gathered from bills to Šiaulių bankas AB, SB lizingas UAB,
SB Asset Management UAB and Life insurance company SB Draudimas UAB);
o Category 6: taxi services (conversion factor – from km to l, distance traveled gathered from external companies’ Bolt
Operations OÜ and Prime leasing UAB self-service websites (for Šiaulių bankas AB), bills (SB Asset Management
UAB) and foreign receipts (Life insurance company SB Draudimas UAB)), flights (flight application: Carbon Footprint
Calculator), data about flight routes gathered from bills (Šiaulių bankas AB, SB Asset Management UAB and Life
insurance company SB Draudimas UAB)), fuel (petrol and diesel) used in rental/lease cars (conversion factor – l, data
gathered from accounting (Šiaulių bankas AB, Life insurance company SB Draudimas UAB);
o Category 7: employee commuting (conversion factor – km, data that were extrapolated for all employees, gathered
using survey (Šiaulių bankas AB, SB lizingas UAB, SB Asset Management UAB and Life insurance company SB
Draudimas UAB));
o Category 13: electricity (premises rented to third parties) (conversion factor – kWh, gathered from the bills (for Šiaulių
bankas AB));
o Category 15: investments (detailed information – GHG emissions from financing and investment activities page 240).
• Certain categories in Scope 3 have not been assessed because they were not considered or were considered but a
decision was taken not to calculate emissions due to:
• the lack of accurate data;
o the unreliability of the data;
o the insignificance of the amounts obtained.
• GHG emissions (t CO
2
) are calculated by multiplying the energy consumption by the emission factor, per type of
fuel/energy/activity, as appropriate:
Emissions
Energy type
= Energy consumption x Emission factor
For the energy type
• The above formula is used to calculate a large part of the CO
2
emissions in terms of units of measurement. A different way
of calculating CO
2
emissions was used for flights (Scope 3, category 6): using a flight application (Carbon Footprint
Calculator) publicly available online.
• For the calculations, market-based and location-based (this method was used for electricity only) methods were chosen
for the whole Group.
• The emission factors (GHG emission factors) used are derived from several sources and are chosen to be relevant to the
area under consideration.
GHG intensity per net revenue
Group
Bank
GHG intensity per net revenue
2023
2024
Change (%)
2023
2024
Change (%)
Total GHG emissions (location-based) per net
revenue (tCO2eq/mEUR)
1,700.28
1,698.34
-0.11%
1,811.78
1,490.62
-17.73%
Total GHG emissions (market-based) per net revenue
(tCO2eq/mEUR)
1,698.60
1,696.80
-0.11%
1,809.87
1,488.81
-17.74%
Consistency of the net revenue used to calculate the GHG intensity with the Financial statement: page 6.
GHG emissions from financing and investment activities
2023***
2024
Assets,
mEUR
GHG (Scopes
1 and 2),
tonnes per
year*
GHG intensity
(t CO2 / mEUR
assets)**
Coverage
Data quality
score
Assets,
mEUR
GHG (Scopes
1 and 2),
tonnes per
year*
GHG intensity
(t CO2 / mEUR
assets)**
Coverage
Data quality
score
Bank, GHG emissions from financing activities
Business loans
916.3
211,363
239.6
96.3%
4.0
1,151.3
207,705
180.4
100%
4.0
Loans for the purchase of
commercial real estate
422.0
19,882
50.9
92.5%
3.3
458.0
24,582
55.9
96.0%
3,9
Renovation of buildings
261.6
1,749
14.9
44.9%
4.4
286.5
1,999
39.7
17.6%
4,0
Leasing
286.5
74,652
260.6
100%
4.0
316.9
75,841
239.3
100%
4.2
Mortgage loans
779.5
17,199
22.5
97.9%
3.2
915.8
18,556
21.7
93.3%
3.5
Bank, GHG emissions from investment activities
Government securities
714.0
88,543
124.5
99.6%
1.0
714.4
100,574
140.8
100%
1.0
Securities of private companies
117.8
14,460
144.3
85.1%
2.7
57.0
4,051
91.2
77.9%
2.2
Equity securities
2.8
103
36.8
100%
3.4
95.5
147
1.8
85.1%
2.1
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
241
Bank, total:
3,500.5
427,951
131.5
93.0%
3.0
3,995.4
433,456
118.7
91.4%
3.2
Life insurance company SB Draudimas UAB, GHG emissions from investment activities
Government securities
27.5
2,185
79.5
100%
1.0
28.0
4,772
170.3
100%
1.0
Securities of private companies
28.5
1,160
42.4
95.8%
3.0
20.2
3,970
196.1
100%
2.2
Equity securities
0.6
11
17.6
100%
2.7
0.7
143
213.4
100%
2,0
Collective investment undertakings
127.1
4,728
37.7
98.6%
1.6
166.3
21,715
136.3
95.8%
2.0
Life insurance company SB
Draudimas UAB, total:
183.7
8,083
44.7
98.4%
1.8
215.3
30,599
147.0
96.7%
1.9
SB Asset Management UAB, GHG emissions from investment activities
Government securities
97.9
1,464
15.0
99.8%
1.0
120.7
21,621
179.2
100%
1.0
Securities of private companies
130.6
2,152
17.9
92.2%
2.9
176.3
32,511
210.2
87.7%
2.4
Equity securities
45.3
1,970
43.5
100%
2.5
52.4
25,511
487.0
100.0%
2.5
Collective investment undertakings
868.2
4,704
6.5
83.2%
1.4
1,084.5
41,256
45.6
83.4%
1.9
SB Asset Management UAB,
total:
1,142.0
10,289
10.4
86.3%
1.6
1,433.9
120,899
98.2
85.9%
1.9
Group, total:
4,826.3
446,235
101.0
91.6%
2.7
5,565.9
578,652
115.2
90.2%
2.9
*When consolidating Group’s GHG emissions, an adjustment was made in order to avoid double counting because Life insurance company SB
draudimas UAB invests in investment funds managed by SB Asset Management UAB; also, in 2024, the Bank had investments in subsidiaries - Life
Insurance SB Draudimas UAB and SB Asset Management UAB.
**For GHG intensity applied part of the assets for which it was possible to calculate the financed emissions.
***The financed emissions of Life Insurance Life insurance company SB draudimas UAB (acquired part of INVL Life UAB assets) and SB Asset
Management UAB financed emissions are calculated only from 1 December 2023 (1 month), taking into account merge of the business.
Methodology and additional information:
GHG calculations from the Group’s financing and investment activities are made in accordance with the PCAF standard for individual
asset classes and subject to the availability of data to the Group.
The Group, when calculating GHG emissions from financing and investment activities, currently considers only clients' Scope 1 and
Scope 2 GHG emissions, while Scope 3 GHG emissions are not assessed due to potential inaccuracies at this level (for example,
when a client does not account for all relevant Scope 3 categories). In the future, as the Group enhances its disclosures, it plans to
assess the possibility of disclosing GHG emissions from financing and investment activities, including clients' Scope 3 GHG
emissions.
Financing activities
Business loans. This category includes loans to corporate clients without a specific lending purpose or other loans that do not fall
under any other PCAF category. GHG emissions from business loans were calculated for all sectors using GHG emissions data
provided by the Bank’s business clients, in the absence of direct data – GHG emissions were calculated using the clients’ most recent
financial data (sales revenue, equity, liabilities) and the PCAF emission factors updated in 2023 that didn’t change in 2024. The GHG
emissions data provided directly by clients represent a small part of the total portfolio of business loans for which emissions were
calculated, and the remainder was therefore calculated based on the emission factors proposed by PCAF.
Although the volume of business loans portfolio has increased, GHG emissions for this category has decreased due to the dynamics
in the portfolio – the portfolio grew in relatively less polluting sectors, and decreased in less polluting sectors, as well as due to more
accurate data provided by clients compared to what was provided to the Bank and used for calculations for 2023. These reasons
caused that the total GHG emissions of this portfolio has decreased.
Loans for the purchase of commercial real estate and mortgage loans. GHG emission calculations for loans for the purchase of
commercial real estate and mortgage loans were carried out using the emission factors provided by PCAF and taking into account
the type of buildings financed and mortgaged, the energy performance class, the gross floor area and the value of the property - this
information is periodically received from the State Enterprise Centre of Registers. Actual data on the energy consumption of buildings
were not available to the Bank.
Motor vehicle leasing. GHG emissions from leasing/hire purchase transactions have been calculated using the GHG emissions
data provided by the leased car manufacturers or, in their absence, using publicly available GHG emission factors (provided by the
UK Department for Environment, Food and Rural Affairs (Defra)) by car and fuel type. The estimated distances travelled by cars per
year were also used, taking into account the type of car and the statistics on average distances travelled. GHG emissions were
extrapolated for some of the leased assets where suitable data could not be found. It should be noted that the assumptions used in
the GHG emissions calculations will be subject to future adjustments by the Bank.
Renovation/modernisation of buildings. As a financing partner, the Bank participates in a state programme to modernise multi-
apartment and municipal buildings to improve their energy efficiency and reduce energy consumption. The GHG emission calculations
for these loans were carried out using information on the value of the renovation projects, the emission factors provided by PCAF for
the construction sector, and assumptions on the duration of works.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
242
GHG emissions recalculation for 2023. It is noted that the Bank's loan to the subsidiary SB lizingas UAB, whose main activity is
providing consumer loans to individuals, was assessed as a business loan in the last year's Šiaulių bankas Social responsibility report
and GHG emissions were calculated based on the financial data of this subsidiary and the relevant PCAF emission factors for the
sector. The PCAF methodology currently does not provide an opportunity to assess such loans (consumer loans) provided by SB
lizingas UAB to individuals, therefore, GHG emissions should not be calculated when consolidating data at the Group level. If the
opportunity arises to assess this portfolio (loans provided by SB lizingas UAB) according to PCAF, GHG emissions from this portfolio
could be assessed in the future.
Investment activities
Government debt securities. In line with the PCAF methodology, the Group’s calculations used country GHG emissions data from
the European Commission’s EDGAR database. The EDGAR database was chosen because it offers up-to-date data, whereas in
previous years the Bank’s GHG emissions were based on emissions reported by countries under the United Nations Climate Change
Convention (UNFCCC). Publicly available GDP values (adjusted for purchasing power parity) were also used for the calculations.
Debt securities and equity securities of private companies. The GHG emissions calculations for these portfolios were based on
actual GHG data provided by clients (issuers), assessing their disclosures in published reports, as well as on third-party data on
client-generated GHG emissions (Bloomberg, CDP). In the absence of direct data, the GHG emissions of clients were calculated
based on financial data (sales revenues) and PCAF emission factors for the sector from which GHG emissions can be estimated.
Financial data of clients (Enterprise Value Including Cash - EVIC, equity, liabilities) were also used to calculate the share of GHG
emissions financed by the Bank.
Collective investment undertakings. GHG emissions are calculated using the look-through method for collective investment
undertakings, such as mutual funds, exchange-traded funds, private equity funds and others. When using the look-through method
for investment undertakings, GHG emissions are calculated using the same methodology for government, corporate debt and equity
securities, as outlined in the previous paragraphs. Due to fragmented and limited data, GHG emissions were not estimated for
investments in private equity funds.
Anticipated financial effects from material physical and transition risks and potential climate-related opportunities
E1-9
In accordance with Appendix C of ESRS 1 (List of phased-in disclosure requirements), the Bank exercises the option to omit the
information required by this disclosure requirement in the first year of preparation of its sustainability statement.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
243
SOCIAL INFORMATION
OWN WORKFORCE
Employees are undoubtedly the cornerstone of the Group’s success. Their input and active participation are crucial in shaping the
overall culture and environment within the Group. The Group has set ourselves the ambitious goal of becoming one of the TOP 3
employers in the financial sector. In the long term, for us, this means being the best place for professional development in the financial
sector and creating a strong organisational culture based on mature leadership and values. Therefore, the aim is to create a
supportive and inclusive environment that promotes the well-being of all employees.
This section discloses information about the Group’s policies relating to own workforce, training and skills development, remuneration,
health and safety and other relevant topics. Here, we also provide data on training programmes, staff development, remuneration
structure and health and safety measures taken to ensure the well-being and safety of workers at work.
OUR EMPLOYEES
S1-6, S1-7
Types of employees and non-employee workers classified as own workforce:
1. employees on fixed-term and open-ended employment contracts (the employment contract is between the company
(employer) and the employee).
2. non-employee workers – The Group employs 8 persons who may be classified as non-employees, i.e. persons who have
concluded contracts with the company for the provision of labour ("self-employed persons"), or persons provided by
companies primarily engaged in employment activities (NACE code N78). 8 persons (2 women and 6 men) have service
contracts with the relevant companies of the Group for which they provide services: 1 person from Life insurance
company SB Draudimas UAB and SB Asset Management UAB, 7 persons from Šiaulių bankas AB.
Total number of employees and breakdown by gender
Gender
Number of employees
Male
271
Female
968
Total
1,239
Data are presented at Group level. The number of employees is consistent with the financial statements (page 144).
The number of employees includes all employees of the Group. The total number includes active employees and those who are
absent from the activities of the Group’s companies (employees on maternity/paternity leave).
The Group fosters long-term working relationships with its employees. As at 31 December 2024, 25.7% of Šiaulių Bankas employees
had been employed for 10 years or more.
Number of employees by gender and type of contract
Male
Female
Number of permanent employees
246
904
Number of temporary employees
4
17
Number of full-time employees
245
907
Number of part-time employees
5
14
Number of employees who left the undertaking during the reporting period: 154
Rate of employee turnover in the reporting period: 14.37 per cent
The data presented by gender and turnover include the following Group companies: Šiaulių Bankas AB, Life insurance company SB
Draudimas UAB, SB Asset Management UAB. Currently, data from other Group companies is not centrally managed and therefore
is not provided.
There are 8 persons in the Group who could be classified as non-employee workers, i.e., persons contracted by the undertaking to
provide labour (“self-employed people”) or people provided by undertakings primarily engaged in “employment activities” (NACE
Code N78). 8 persons have service contracts with the respective Group companies for which they perform services: 1 person with
Life insurance company SB Draudimas UAB and SB Asset Management UAB, 7 persons with Šiaulių Bankas AB.
A description of the methodologies and assumptions used to compile the data:
• The information is based on the calculation formulae and methodologies specified in the ESRS.
• Figures are based on number of employees.
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244
• All numerical information is provided for the end of the year, i.e., based on the information at 31 December 2024.
• The rate of employee turnover is calculated according to the following formula: (number of redundancies / average number
of employees) x 100%.
• In some EU Member States, individuals can legally register as being of a third, often neutral, gender, but this is not legally
established in the Republic of Lithuania, so the “other” category as set out in the ESRS is not applicable.
• The data were collected from the human resources data management system tool used by the Personnel Department’s
administration team.
• “Number of part-time employees” refers to employees whose employment contract provides for less than 40 hours during
the entire working week.
POLICIES, ACTIONS AND TARGETS
S1-1, S1-4, S1-5
The Bank Group has adopted internal documents to manage material impacts on its workforce, as well as the associated risks and
opportunities, by ensuring an inclusive, respectful and productive working environment.
The main documents are the Diversity Policy approved by the Bank’s Supervisory Council, the Code of Ethics approved by the
Bank’s Management Board, the Rules for the Implementation of the Equal Opportunities Policy approved by the Bank’s Chief
Executive Officer, as well as other internal procedures of the Bank (e.g., the Remuneration Policy and the Rules for Determining the
Official Remuneration, as described in the Remuneration section). They are based on and reflect the fundamental principles and
requirements set out in international instruments such as the UN Declaration of Human Rights, as well as the relevant legislation of
the European Union and the Republic of Lithuania. Although there is no separate document dedicated to human rights, the core
principles are embedded in the above-mentioned documents. The Diversity Policy was developed to address the Human Rights
aspect of diversity and inclusion in order to further address the importance of the topics for employees and society. Other Human
Rights principles, such as the Business Responsibility to Respect Human Rights, Non-Discrimination or Freedom of Association, are
addressed in general employment law, which also applies to Group companies.
The Group’s operations do not identify risks related to forced labour, compulsory labour or child labour, and as such, there are no
provisions in the substantive documents to address these topics. In its activities, the Group is guided by the principles of the Global
Compact and the laws of the Republic of Lithuania, which prohibit child or forced labour.
The Group has targets related to its own workforce, but it is plans to review them in 2025 and provide related information in the
upcoming report. The specific actions are listed under the individual sub-topics below.
DIVERSITY POLICY
The purpose of the Policy. The Policy aims to foster a Group culture where gender equality and diversity are intrinsic parts of the
organisation and where differences are harnessed actively to deliver business benefits. The Policy is taken into account in the
assessment of the management – in the selection and recruitment of members of the governing bodies and in succession planning.
Main content of the Policy. The Policy lists key principles: fostering a culture of diversity, increasing the diversity of members of the
governing bodies, achieving equality, gender balance, increasing the proportion of under-represented gender in the governing bodies
and zero tolerance of discrimination.
Scope of the Policy. The Policy applies to all employees and members of the governing bodies of the Bank and Group companies.
Responsibility for implementing the Policy. The Bank’s progress in the area of diversity and compliance with this document is the
responsibility of the Bank’s Management Board, except for the meeting of the criterion of under-represented gender in the Bank’s
governing bodies set out in this Policy, which is the responsibility of the Supervisory Council. The Bank’s Internal Audit Division
regularly reviews the implementation of the Policy within the scope of the diversity of the Bank’s governing bodies, within the
timeframes set out in its action plans.
References to third-party standards. The following standards have been used in the development of this document: resolutions of the
Board of the Bank of Lithuania, European Banking Authority (EBA) and European Securities and Markets Authority (ESMA)
guidelines, the Code of Corporate Governance for NASDAQ Vilnius listed companies.
Assessing stakeholder interests. This Policy ensures that the interests of all stakeholders are taken into account in the pursuit of
gender equality and diversity.
Accessibility of the Policy. The Policy is a publicly available document accessible to employees and stakeholders on the Bank’s
website.
Reports of misconduct and breaches of the law. All employees and members of governing bodies have the right to file an anonymous
report with their company’s Compliance Officer or the Chairperson of the Bank’s Nomination Committee requesting an investigation
of violations that relate to the application and implementation of this Policy. To comply with the Law on the Protection of Whistleblowers
of the Republic of Lithuania, the Group has a channel on the Bank’s external website, sb.lt, where both employees and external
FINANCIAL STATEMENTS AND ANNUAL REPORT
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245
parties can contact the Bank to report irregularities. Any form of persecution, harassment or hostile behaviour against a person who
has reported any non-compliance with the Policy is prohibited and not tolerated.
The Policy sets a target of 25% as the minimum criterion for under- represented gender on the Bank’s Supervisory Council and
Management Board, which will have to be at least 30% from 2028, the start of the new term of the Bank’s Supervisory Council and
Management Board. The Personnel Department is responsible for achieving this target.
The overall diversity targets set out in the Policy are being met and diversity balance is being achieved through strengthened human
resource management across the Group:
• during the selection and recruitment process,
• during the performance review,
• in establishing a succession pool for managers and key function holders and candidates for membership of the governing
body.
Additional actions taken by the Group and its individual companies to manage negative impacts or risks that are covered under the
individual own workforce sub-topics, for example, updates to the Performance Review and Remuneration Policy that will address
equal pay risk management are covered in the remuneration sub-topic.
The Bank, in accordance with the Code of Ethics and the Rules for the Implementation and Supervision of Equal Opportunities (Non-
Discrimination) Policy, the Labour Code of the Republic of Lithuania, the Law on Equal Opportunities of the Republic of Lithuania,
the Law on Equal Opportunities for Women and Men of the Republic of Lithuania, as well as other normative legal acts establishing
equality of persons and the prohibition of restricting the rights of human beings on the basis of discriminatory grounds, does not
tolerate inequalities, manifestations of violence, psychological or similar pressures, or any form of discrimination at work.
Reports of misconduct and breaches of the law. The Code of Ethics and the Prevention of Corruption and Unacceptable Conduct
Policy regulate what acts may be considered as unacceptable cases of corruption. All new employees of the Group are made aware
of these documents. These documents apply to and must be complied with not only by employees of the Bank but also by employees
of Group companies.
The Group has no specific policy commitments in relation to the people from particularly vulnerable groups classified as own
workforce, as the Group has not identified vulnerable groups in its workforce.
The Bank has internal Rules for the Implementation of the Equal Opportunities Policy based on the Labour Code of the Republic
of Lithuania, the Law on Equal Opportunities of the Republic of Lithuania, the Law on Equal Opportunities for Women and Men of the
Republic of Lithuania, as well as other normative legal acts establishing equality of persons and the prohibition of restricting the rights
of human beings on discriminatory grounds. They provide that the Bank respects the principle of equal opportunities and the
prohibition to restrict the rights of employees or to grant them privileges on various discriminatory grounds, both in the recruitment
process and during the duration and termination of the employment relationship. This document provides for the following
discriminatory grounds: gender, race, nationality, citizenship, language, origin, social status, religion, beliefs or opinions, age, sexual
orientation, disability, ethnic origin, medical condition, intent to have a child(ren), adoptive child(ren), foster child(ren), or ward(s),
marital and family status, membership of political parties, trade unions and associations, circumstances unrelated to the worker’s
professional qualities, freedom of association, freedom of collective bargaining and the right to take collective action, or any other
grounds. The Bank’s Personnel Department is responsible for monitoring compliance with this Policy. The Bank also has a channel
for notifications and a timeframe and process for dealing with them. The Policy also provides for the right of employees to apply to
the Office of the Equal Opportunities Ombudsperson in accordance with the procedure set out in the Law on Equal Opportunities of
the Republic of Lithuania.
The Rules of Procedure are an internal document drawn up in accordance with the Labour Code of the Republic of Lithuania and
related legislation. These Rules define the general working procedures and principles of conduct of the employees of these Group
companies - Šiaulių Bankas AB, SB Asset Management UAB, Life insurance company SB Draudimas UAB - in order to improve the
working environment, the organisational culture within the Group and the quality of the services provided by the Group. Key topics
covered in the document:
• Ethics and equal opportunities requirements,
• Security requirements and data protection,
• Working time and rest periods,
• Remuneration arrangements and incentives,
• Violation of work duties,
• Compensation for damages,
• Terms of employment contract, etc.
The supervision and control of the document is carried out by the Personnel Department. Employees are made aware of the rules
through internal channels, and new employees are made aware of the rules before they start their job functions.
SB Lizingas UAB has its own Rules of Procedure, an updated version of which has been drafted taking into account the provisions
of the Bank Group’s Rules of Procedure and entered into force on 1 January 2024.
ENGAGEMENT
S1-2, S1-3, S1-8, S1-17
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It is important for the Group to engage with employees and their representatives on a wide range of significant issues, especially on
topics that already affect them or may affect them. Therefore the aim is to ensure that employees have the opportunity to actively
participate and express their views when designing our employee engagement process. It also takes into account the views of
employees in our decision-making processes to ensure that their voices are heard and valued.
One of the ways of engagement is the Group-wide (except for SB Lizingas UAB) Pulse Surveys, an instant feedback measurement
tool that allows assessing employees’ job satisfaction and their well-being within the team on a regular (monthly) basis. This tool
helps to monitor whether employees are getting enough communication from both the organisation and the manager, how employees
feel and to take prompt action on the results.
These surveys allow employees to provide direct feedback and the organisation to respond more quickly without having to wait for
the results of the annual survey. Each survey has one fixed and consistent question, with changes in responses monitored on a
monthly basis. 1-2 questions are variable, depending on the topical issues at the time. Employees can also make comments and
observations on each question.
The Annual Employee Engagement Survey is also an essential tool for improving organisational performance. It aims to identify
employee sentiment and organisational strengths, as well as areas for improvement in order to create a more efficient and friendly
working environment.
This survey is carried out annually (the fifth survey was carried out in 2024). It consists of two parts:
• Organisational perspective: four key elements are assessed – culture of engagement, strategic coherence, motivation and
relationships, and implementation of changes.
• Employee perspective: the level of engagement is analysed: engaged, moderately engaged and disengaged employees.
90% of employees took part in the survey in 2024. The survey showed that employees value meaningful work, variety of
responsibilities and attention to customers. Leaders trust their teams, encourage autonomy and creativity. A flexible working
environment is a strength of the organisation. Areas for improvement: clearer objectives and priorities, workload balance, greater
focus on employee well-being, cooperation and more coherent career management processes.
Action plans:
• Clear objectives: Ensure clear responsibilities and quarterly review of objectives. The assignment of strategic objectives
through the heads of divisions will ensure clear communication throughout the organisation. For the planning of the annual
work volumes, training with external partners will be carried out to set long-term objectives and indicators.
• Strengthening cooperation between teams: Regular semi-annual meetings between divisions and departments across
the organisation will allow for the alignment of key performance indicators (KPIs) and projects across departments.
Quarterly discussions involving all employees to discuss the priorities and objectives of the divisions concerned. A
shadowing programme will also be implemented to strengthen awareness of the Bank’s functions.
• Career management at the organisation level:
o A 360-degree feedback system will be in place by the first quarter of 2025 and individual and team-based curricula
will be developed during the rest of 2025.
• The “Followers” programme will be launched by the second quarter of 2025 to identify talent and create action plans for
them.
o The standards of conduct based on the new values of the Bank will be integrated into the performance review from
the first quarter of 2025.
o Internal career guidelines, principles and processes will be presented by the end of the first quarter of 2025.
The Head of Personnel Department is the top manager in the organisation responsible for ensuring that managers have the right
information and that tools are in place to keep employees engaged. He is also responsible for the engagement survey process,
evaluation and implementation of the engagement plan. The direct functions of conducting the engagement survey are delegated to
the relevant units of the Personnel Department.
The results of the engagement survey are compiled in a centralised system and analysed at the level of the organisation, departments
and teams. The information gathered helps to identify strengths and areas for improvement, as well as to develop action plans to
strengthen engagement. The information from the engagement survey is used for decision-making in a number of ways: managers
receive structured analysis with recommendations to support data-driven decision-making, the results of the survey are integrated
into the organisation’s strategic plans and performance improvement initiatives, and there are regular meetings with heads of
departments to ensure that feedback is properly integrated into operational decisions.
After the survey, immediate supervisors organise a debriefing with their teams to present key insights and discuss possible actions
to improve the situation. Open communication is also encouraged, allowing employees to understand how their views influence
organisational decisions, and managers are encouraged to provide feedback and involve employees in decision-making.
The engagement and effectiveness of own workforce are measured through an annual employee engagement survey based on its
results. Effectiveness is measured in terms of employee feedback, positive or negative, on relevant engagement factors.
Collective bargaining coverage and social dialogue
The Group does not have collective agreements, but it has an active Labour Councils in all Group companies, with which dialogue is
maintained as necessary on relevant issues and/or changes concerning employees. Labour Councils hold meetings once a month.
The Group does not have agreements with its employees regarding their representation on the European Works Council, the
European Company (SE) Works Council or the European cooperative society (SCE) Works Council.
Processes to remediate negative impacts and channels for own workers to raise concerns
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247
The Group has processes in place to remedy or cooperate in remedying negative impacts on individuals in its own workforce to which
it is exposed. There are also channels that own workforce can use to raise concerns and have them addressed. Employees can
report suspected or actual breaches by submitting anonymous reports on the internal website. Reports are received by the Chief
Compliance Officer and the Director of the Compliance Department. For a description of the process of analysing reports, see the
section on Governance (page 258). Employees can report violations of anti-violence and anti-harassment regulations to the
Personnel Department via an internal e-mail. Upon receipt of the report, the responsible person in the Personnel Department registers
it in a non-public register and informs the Compliance Department. Within 2 business days, the Personnel Department informs the
employee of the receipt of the report and initiates an internal investigation to gather all possible information on the reported violation.
An investigation team is set up to assess the possible violation and all the information gathered, and to decide what further action
needs to be taken to address the violation. Some of these channels and mechanisms are described in detail in the individual policies
– information is provided in both this Social information section and the Governance section (page 258).
The Bank also has Rules for the Prevention of Violence and Harassment, which set out the procedures for reporting and handling
reports of violence and harassment. In accordance with these rules, all employees who observe or experience violence or harassment
at work have the right and are encouraged to report it to the Personnel Department by e-mail.
All persons working for the Group or otherwise involved in the Group who become aware of various breaches of law, including
discrimination, violence and harassment, are encouraged to report them to the Bank’s Compliance Officer and/or the Director of the
Bank’s Compliance Department using an independent reporting channel. Upon starting work at the Bank, employees are introduced
to internal legal acts, which contain information on when and where to contact for violations. All reports are carefully examined and
investigated (see page 258 (the Governance section) for more information on reporting channels).
The remediation of negative impacts on the own workforce is assessed in the annual employee engagement survey based on its
results. The assessment includes survey questions that describe the measures to remedy the negative impacts and the results of
these questions that allow an assessment of how workers perceive the measures to remedy the negative impacts on the own
workforce.
Incidents, complaints and severe human rights impacts
Incidents, complaints and severe human rights impacts
Number of reports (during the reporting period)
Reports of incidents of discrimination, including harassment
0
Reports made through the Bank’s internal and external notification channels
0
Reports filed to the National Contact Points for OECD Multinational Enterprises
0
No fines or penalties have been received or compensation paid in respect of the incidents and complaints disclosed above.
There were also no major human rights incidents involving the company’s workforce during the reporting period.
TRAINING AND SKILLS DEVELOPMENT
S1-13
To become the best place for professional growth, the Group pays particular attention to training and skills development for its
employees. Significant attention and resources are devoted to the development and implementation of a long-term staff development
framework. This not only strengthens employees’ competences but also increases their job satisfaction and loyalty to the organisation,
helping to ensure that they are well equipped to meet the challenges they face and contribute to the success of the organisation.
All employees are required to attend training at some point in their career. This training may be general, covering ethics and anti-
corruption topics, or specialised, tailored to the employee’s role and function. This ensures that every employee acquires the
necessary knowledge and skills for their professional activity.
For example, there is a strong focus on training for all employees on the General Data Protection Regulation (GDPR). The “Data
Quality and Governance” training introduces employees to the importance of data quality, the requirements for data quality, the risks
arising from data quality gaps, and the steps to be taken when data errors are identified. Employees are also informed about the
Bank’s processing of their personal data (a separate information document); the document is sent to the employee upon
commencement of his/her employment. All procedures relating to employees’ personal data are regularly reviewed and updated to
maintain compliance with the laws and other regulations.
During the reporting period, the following actions were taken to improve the staff development process:
• An e-training platform was introduced. It allows for efficient management of the training that is compulsory for all Group
employees and for more effective organisation of the training for certain groups.
• Knowledge tests are carried out, and a course is considered to have been passed when at least 80% of answers to
knowledge test questions are correct.
• Adequate communication about mandatory training is ensured. All employees receive automatic reminders from the e-
training system about the training they need to complete and when it is due. Managers are provided with information on
the completion of mandatory training for that unit at periodic meetings and/or by e-mail. Notifications of training-related
news are made available in the AIS to all employees.
• Training performance is monitored. The training courses listed are delivered to employees through an internal training
platform; the information on training performance indicators is provided as at 31 December 2024.
FINANCIAL STATEMENTS AND ANNUAL REPORT
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248
Training course
Frequency
Group companies covered by the
training
Employees who have
received training (%)
Data quality and governance | ŠB
Once a year
SB, SBD, SBAM
95%
Inside information
Once a year
SB, SBD, SBAM, SBL
95%
ESG training
Once a year
SB, SBD, SBAM, SBL
92%
Conflicts of interest
Once a year
SB, SBD, SBAM, SBL
96%
Customer service standard: the road to success
Non-recurring
SB
95%
On ethics, gifts and the Bank Group’s approach to
corruption
Once a year
Group-wide
97%
Training on personal data protection. Module 1
Once a year
SB, SBD, SBAM, SBL
94%
Training on personal data protection. Module 2
Once a year
SB, SBD, SBAM, SBL
94%
Fire safety
Once a year
Group-wide
96%
Training: How to evacuate safely in an emergency?
Once a year
SB, SBD
94%
Training in operational risk management
Once a year
SB, SBD, SBAM, SBL
94%
Implementation of sanctions
Once a year
SB, SBD, SBAM, SBL
87%
Digital security
Once a year
SB, SBD, SBAM, SBL
92%
Data quality and governance | SBAM and SBD
Once a year
SBAM and SBD
94%
Communication with clients on AML/CTF
Non-recurring
SB
98%
Mobbing at work: how to spot it?
Non-recurring
SB, SBD, SBAM
98%
Processes and operational efficiency
Non-recurring
SB, SBL
97%
Training on anti-money laundering and counter-
terrorist financing
Once a year
SB, SBD, SBAM, SBL
95%
Know Your Client and identification
Semi-annually
For employees who work with clients
85%
Strengthening leadership of managers is achieved through systematic long-term programmes, an executive club, and external
training or conferences.
To develop the competences of growing team, projects have been planned for 2025-2026:
• introducing the successor programme,
• implementing the talent programme,
• developing an annual training plan,
• ensuring a mentoring programme,
• introducing the career map,
• ensuring a diversity of training resources.
The performance reviews take place from the end of February until mid-March, so there is no possibility to provide information for
2024. The plan is to disclose in next year’s statement the percentage of employees who participated in regular performance and
career development reviews.
Key decisions on training and skills development are taken by the Head of Personnel (strategic and special decisions are taken jointly
with the CEO), and actions on the topic are implemented by the Organisational Development Team.
Training and competency development is the responsibility of the Personnel Department, directly under the responsibility of the Head
of Personnel, who assigns specific tasks to the Organisational Development Team.
Average number of training hours per employee: 23 academic hours/employee.
This indicator was not tracked by gender; in the future, consideration will be given to the technical and legal possibilities of collecting
this information.
A description of the methodologies and assumptions used to compile the data:
• The LMS365 (ZENSAI) training management system is used to calculate the “% of employees who have received training”,
which allows monitoring employee participation and training progress. The system provides accurate data on the number of
individuals assigned to training, completion rates and test results.
• An employee is considered to have completed the training if the LMS365 (ZENSAI) system records a completion status
(“Completed”), which is determined according to the requirements of the training programme. If an employee starts training
but does not complete it, he/she is not included in the number of participants because he/she did not actually follow the
training to completion.
• The indicator “% of employees who have received training” is calculated according to the following formula: Employees who
have received training (%) = Number of employees who have completed the training / Number of all employees to whom
the training has been assigned x 100.
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249
• The owner of the training, i.e., the owner of the area, decides which employees of the Group companies are to receive the
training, based on the material produced and the applicable national laws and regulations.
REMUNERATION
S1-10, S1-16
Ensuring that employees are paid a fair wage is a key issue across the Group, as it directly contributes to low employee turnover and
high job satisfaction. A fair wage not only helps retain existing employees but also attracts new talent who value fair and competitive
pay. In addition, by ensuring a fair wage, the Group strengthens its reputation and contributes to its strategic goal of becoming one
of the best employers in the market.
Remuneration for employees of Group companies is determined based on the principles of external competitiveness and internal
equity, the remuneration range set for the level of the position, the employee’s professional experience, abilities, specific knowledge,
skills and competences, and the availability of the remuneration budget.
Group companies have updated their remuneration policies (publicly available) to reflect and manage pay-related risks. Remuneration
policies of Šiaulių Bankas AB, Life insurance company SB Draudimas UAB, SB Asset Management UAB were updated in 2024.
The Group also has a performance review process, organised according to internal rules and an internal performance review process.
Performance reviews cover all employees of the Group companies, in accordance with the principles of performance review described
in the internal regulations. The result of the performance review may have an impact on the variable remuneration and the annual
remuneration review process.
The Remuneration Policy sets out the requirements for Group companies to comply with in determining and paying remuneration,
premiums, bonuses and other payments awarded to employees for their performance, and other benefits, thereby ensuring that
payroll costs are managed effectively and creating incentives for employees to contribute to the responsible implementation of the
mission, vision, values, long-term objectives and strategy of the Group. The Remuneration Policy is reviewed at least once a year.
The Policy is gender-neutral, i.e., it is based on the principal of equal pay for equal work or work of equal value for workers of either
gender. The Remuneration Policy also declares that employees shall be subject to a uniform remuneration system, without
discrimination on the grounds of gender, age, nationality, race, social status, religion, etc. Remuneration is established with due
regard to the knowledge, experience, qualifications, responsibilities, performance and quality of work, job position of the employee,
the remuneration range applicable to the job position level, etc. The Policy has been prepared in accordance with the Law on
Companies of the Republic of Lithuania, Resolution of the Board of the Bank of Lithuania On the Approval of the Description of the
Minimum Requirements for Remuneration Policy drawn up in accordance with Guidelines on Sound Remuneration Policies of 2 July
2021 (EBA/GL/2021/04) and other laws setting out the requirements for the Remuneration Policy of the Bank as a financial institution
and a public limited liability company whose shares are admitted to trading on a regulated market.
The following actions are planned to implement the update of the Performance Review and Remuneration Policy:
• reviewing the performance review process and introducing calibration of results;
• introducing a competency model;
• reviewing the remuneration system: reviewing and updating the systems in place for the management of the official
remuneration and variable remuneration;
• analysis of the use of long-term financial instruments in the remuneration system, choice of instruments.
The change and impact generated by these actions will be disclosed in next year’s statement, as they will only be launched this year.
The gender pay gap is another important topic as it reflects inequalities in the labour market. The Group aims to ensure fair and equal
pay for all employees, regardless of their gender, thus contributing to a fairer and more equal working environment.
The Rules for Determining the Official Remuneration govern the principles for setting/reviewing the official remuneration of the
Bank’s employees, the classification of job positions into grades, and the setting of minimum and maximum ranges of remuneration.
The purpose of these Rules is to achieve internal fairness of remuneration for the staff at the same grade and to manage payroll
costs efficiently, to provide motivating and equitable remuneration that encourages employees to participate in the achievement of
the Bank’s objectives and to ensure that the remuneration is competitive in relation to the national labour market.
These Rules set out measures to ensure fair and non-discriminatory remuneration:
• the average gender pay gap is analysed and assessed;
• we analyse which gender is dominant at a given job level in terms of the higher remuneration received;
• when significant differences emerge and there are no objective reasons to justify them, action is taken to reduce the gap.
The pay of female employees in managerial positions is 34% lower than that of male employees in managerial positions. Other male
employees are paid 21% more than other female employees. The data were taken from the table below.
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250
Group
Managerial employees
Other employees
Average number of employees
Average monthly salary, EUR
Average number of employees
Average monthly salary, EUR
Total
Women
Men
Total
Women
Men
Total
Women
Men
Total
Women
Men
114
57
57
9063
7760
10366
1009
814
195
2562
2463
2969
The data were taken from the calculation of the average monthly salary of employees over a 12-month period. Figures are presented
for the Group.
The ratio between the total annual remuneration of the highest paid individual and the median total annual remuneration of all
employees (excluding the highest paid individual) is 16.5. This ratio is calculated by taking the average annual remuneration of the
highest paid employee and dividing it by the median annual remuneration of all other employees.
Description of the methodologies and assumptions used in collecting data:
• The average number of employees is calculated using the chronological average formula (this requires 13 (thirteen) months of
data);
• The average number of employees does not include employees on maternity leave or parental leave (maternity/paternity leave) and
employees working in Latvia and Estonia.
• Data is provided for Šiaulių bankas AB, Life insurance company SB Draudimas UAB, SB Asset Management UAB. Information of
the other Group companies is not provided, except for SB lizingas, because these companies are not centralized personnel
management and accounting functions.
HEALTH AND SAFETY
S1-14
The Procedure for Internal Control of Occupational Safety and Health Compliance, which applies to the Group as a whole,
governs the procedure for internal control of occupational safety and health. The purpose of the Procedure is to ensure preventive
measures aimed at preserving workers’ performance, health and life at work, which are applied or planned at all stages of the Group
company’s activities, in order to protect workers from occupational risks or to reduce them as far as possible.
The Bank has an Occupational Safety and Health Commission which regularly proposes and initiates initiatives related to
occupational safety and health. In 2025, a new commission will be elected, which will operate in the following Group companies
Šiaulių bankas AB, Life insurance company SB Draudimas UAB, SB Asset Management UAB and SB lizingas UAB.
The following actions are taken to create a safe working environment:
• review and update instructions and procedures (Procedure for Internal Control of Occupational Safety and Health
Compliance, Rules on Medical Checks for Employees).
• take care to ensure that employees are properly familiarised with internal documents (occupational safety
reminders: what to do in the heat, what to do in slippery conditions, the importance of staying hydrated. Lectures are also
organised on topics such as exercise in the workplace, ergonomic workstations, etc. All this information is made available
through the internal administrative information system and/or internal communication channels).
• ensure the provision of safe and ergonomic workstations.
• organise health checks for all employees, usually every 2 years, but if the medical practitioner specifies a different
interval (e.g., after one year), the frequency specified by the medical practitioner will be followed).
• carry out occupational risk assessments of workstations (assessments are carried out annually, at different sites –
depending on which units have been upgraded, which units/facilities are being added).
• pay extra attention to civil protection (employees are made aware of the Emergency Plan and what to do in such a
situation. Responsible staff have been trained to ensure a smooth evacuation during an emergency).
• maintain a regular dialogue with our employees (the Good Afternoon, Teammates programmes, which focus on health
promotion, current affairs, maintaining the psychological resilience of employees, etc.).
• provide physical protection measures (all customer service units and centres are equipped with panic buttons that
trigger the arrival of a security team).
The Group focuses on more efficient processes and task prioritisation in order to reduce the stress experienced by employees at
work, contribute to their health and safety and create a better working environment. Although the number of employees has steadily
increased in recent years, workload remains a major issue, especially in functions where processes are not streamlined or automated.
The available tools do not match the needs, which means that efficiency and productivity are not ensured. The functions performed
therefore require manual labour and additional resources to keep the Group running.
Metrics
• Group employees covered by compulsory health insurance (%) – 100 per cent
• Number of fatalities as a result of work-related injuries and work-related ill health – 0
• Number of recordable work-related accidents – 0
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• Percentage of recordable work-related accidents – 0 per cent
• Number of cases of recordable work-related ill health (subject to legal restrictions on the collection of data) – 0
• Number of days lost to work-related injuries and fatalities from work-related accidents, work-related ill health and fatalities
from ill health – 0 working days
Description of the methodologies and assumptions used in collecting data:
• All employees of the Group who have a valid employment contract automatically receive mandatory health insurance, the
obligation is in accordance with the national labor law of the Republic of Lithuania.
• Mandatorily insured employees are disclosed by assessing the number of employees (headcount).
• Accidents at work, Accidents on the way to/from work in the Group are investigated in accordance with the procedure
established by the "Regulations on the Investigation and Accounting of Accidents at Work" approved by the Government of
the Republic of Lithuania.
• Accident at work - an event at work, including a traffic accident, while performing work functions or being at the workplace,
due to which an employee suffers damage to health and loses his/her ability to work for at least one day or due to which an
employee dies, investigated in accordance with the established procedure and recognized as an accident at work.
• Occupational disease – an acute or chronic health disorder of an employee caused by one or more harmful and (or)
dangerous factors of the working environment, recognized as an occupational disease in accordance with the established
procedure.
• Data of the following Group companies are provided: Šiaulių bankas AB, Life insurance company SB Draudimas UAB, SB
Asset Management UAB, SB Lizingas UAB, SB Turto Fondas UAB.
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CONSUMERS AND END-USERS
In this section, we outline the Group’s commitments and actions related to sustainability principles that have material impacts on our
consumers and end-users. We strive to ensure that our operations and value chain are transparent and accountable, taking into
account the impact we have through our services and business relationships. Our aim is to manage the risks and opportunities
associated with our activities in order to avoid, mitigate or remedy adverse impacts on consumers and end-users. We therefore
constantly monitor and assess our actions to ensure the highest responsibility standards.
We aim to provide convenient, affordable and accessible services on a national scale, regardless of where our clients live or their
digital skills. Access to services is one of the key principles of banking service delivery and development, which ensures the
achievement of poverty reduction and economic wealth creation. Accessibility means that a wide range of the country’s population
and businesses have access to services and products in a way that is available to them – by visiting a physical bank branch and/or
by choosing to receive services through digital means.
We are committed to providing top-quality services to both retail and corporate clients. We strive to be a Bank that not only meets but
exceeds its clients’ expectations by providing personalised and integrated financial services. Our goal is to ensure that every client,
regardless of their financial situation or the size of their business, receives personalised attention and solutions tailored to their
specific needs.
In line with these objectives, we have renewed the Group’s strategic direction, focusing on clients:
• we have introduced customer-centric processes;
• a new digitalisation and technology platform that will help ensure compliance with existing standards and enable future
services to evolve faster and adapt to changing market needs.
Types of consumers and end-users
When we define consumers and end-users, we refer to our clients who benefit directly from our Group’s products and services.
Clients have direct contact with our Group, and carry out various transactions such as opening accounts, taking out loans, using
investment products or other services of the Group. Our clients are personal account holders, companies with corporate accounts,
or individuals with personal loans or investment products. Accurate and accessible information on products or services is essential
for these clients.
Our main objective is to ensure that our direct beneficiaries receive top-quality services, so we strive to create exceptional value and
meet their diverse needs by providing accurate and accessible information relating to products or services. We are consistently
improving our communication channels and the way we present information.
No specific client groups are identified as being more vulnerable to particular risks or impacts. However, the Bank assesses its clients
based on different risk groups (for Money Laundering and Terrorist Financing (ML/TF) and Sanctions) from low to very high. The
client risk assessment consists of client risk, geographic risk or product risk attributes, which decide which client risk group a consumer
belongs to, in accordance with the Know-Your-Client and Appropriateness Assessment Procedure and the Annexes to the
Procedure. Fraud risk groups are not differentiated, and assessment is carried out for all consumer groups in the same way, in
accordance with the Fraud Prevention and Investigation Procedure and the Annexes to the Procedure.
Essentially the same assessments are carried out by Life insurance company SB Draudimas UAB and SB Asset Management UAB
but separate Know-Your-Client and appropriateness assessment procedures, approved at company level, are followed.
POLICIES, ACTIONS AND TARGETS
S4-1, S4-4, S4-5
The company does not currently have a single policy that identifies, assesses, manages and/or remedies its significant impacts on
consumers and/or end-users and addresses all material risks or opportunities related to them. However, there are certain internal
documents that cover specific topics relating to clients, their relationships and their rights and obligations.
For example, the principles set out in the Code of Ethics, which is described in detail in the Governance section (page 256), also
apply to our clients. It incorporates fundamental human rights standards that oblige equal treatment of all, including clients, regardless
of their nationality, race, social status, religion, age or other discriminatory grounds. We are committed to fostering relationships with
our clients based on mutual respect and tolerance.
The Privacy Policy is also relevant, as it sets out all the rights of data subjects under the GDPR.
One of the main indicators that is monitored is the NPS – the Net Promoter Score. It comes from the Customer Experience
Surveys (see the next section on this topic, i.e., Engagement). This indicator shows the satisfaction and loyalty of retail and corporate
clients, i.e., the extent to which clients would be willing to recommend the services or products offered by the Group. The target for
the NPS is among the Bank Group’s main objectives, i.e., to reach 83% by 2025. In 2024, the Bank Group’s overall NPS was 81%.
The Group has not set any other objectives at this time. To measure the Bank Group’s objective, the NPS is derived from a one-off
telephone survey of retail and corporate (if any) clients of the following companies: Šiaulių Bankas AB, Life insurance company SB
Draudimas UAB, SB Asset Management UAB and SB Lizingas UAB.
Privacy Policy
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The purpose of the Policy. The Policy contains all information related to the processing of personal data, the purpose and legal basis
for the Group’s processing of clients’ personal data, information retention periods, data security, the rights of the individual with regard
to the processing of his/her personal data and other information.
Content of the Policy. This document lists the categories of personal data processed and the list of external data. The Policy also sets
out the rights of the person whose data are processed in accordance with this document, such as the right to access the data being
processed, request the rectification of data or restrict the processing of data, withdraw the consent to the processing of data, e.g., for
direct marketing.
Scope of the Policy. The Policy applies to all current, prospective and/or former clients of the Group or persons related to them.
Responsibility for implementing the Policy. The Bank’s Management Board is the highest level in the company responsible for
implementing the Policy.
References to third-party standards. GDPR and other data protection legislation.
Assessing stakeholder interests. This Policy has been developed taking into account the interests of stakeholders. Each time
documents are revised the aim is to ensure that the Policy meets the expectations and requirements of all stakeholders.
Accessibility of the Policy. The Policy is publicly available to all stakeholders on the Bank’s website.
Reports of misconduct and breaches of the law. Data subjects can exercise their rights, such as the right to access the data being
processed, rectify inaccurate or incomplete personal data, delete personal data that are excessive or unlawfully processed (right to
be forgotten), object to the processing of personal data concerning the data subjects by the companies where the processing is
carried out on the basis of legitimate interest, file a complaint with the State Data Protection Inspectorate, as set out in the Policy, by
visiting the nearest customer service unit, by sending a request by registered mail to the address of the registered office, by e-mail
(contact details are indicated in the document) or by sending a request through the Internet Bank. The document describes the
process and deadlines for handling requests.
There is also a special privacy notice for clients of Group companies, which is made public. It explains in detail the legal basis for
marketing and sales, how personal data are processed and all other relevant issues.
Information on the possibility to file a complaint is publicly available on the Bank’s website.
Clients may file complaints through the channels set out in the Governance section (page 258). The complaints are dealt with by the
Customer Experience Management Department. Depending on the content of the complaint, the responsible staff or other relevant
persons are contacted to address as soon as possible the deficiencies in the processes or products complained about by clients.
This process helps to improve the services and products provided to clients. Employees also have the opportunity to submit customer
experience improvement initiatives through the internal “Idea Bank”. The Customer Experience Management Department submits an
annual report to the Bank of Lithuania indicating the actions taken and planned by the Bank to address performance deficiencies and
risk management based on complaints. The responsible units are sent the logs of the previous year’s complaints and asked to indicate
what has been done and what is planned to be done to reduce the number of such complaints or disputes, taking into account the
content of the complaints or disputes. A complaints indicator is produced each month and forwarded to the Operational Risk Division
(ORD), so no separate operational risk events are recorded for complaints received.
However, complaints related to critical ICT (information and communication technology) incidents, product or service errors are
recorded in the OR Event Register and forwarded to the ORD for management, which, in accordance with the Operational Risk
Management Procedure and the Operational Risk Event Management Procedure, controls the elimination of the recorded OR
events, analyses and systematises the recorded events, and proposes preventive measures. The Operational Risk Management
Procedure applies to the Group as a whole, but Group companies have prepared and approved their own internal regulations
governing OR management in the respective Group company, which must be consistent with the Bank’s Operational Risk
Management Procedure. The Bank’s Operational Risk Event Management Procedure sets out the basic principles of OR event
management, which guide the recording of OR events and the administration of recorded OR events – analysis and assessment,
remediation, loss recovery, control and other actions, and the events themselves may involve both employees and clients. Once an
event has been registered, the main objective is to eliminate or remedy the negative impact on the client. The owner of an OR event
is responsible for taking action to remedy the OR event and/or implementing preventive measures to reduce the number of such
events, monitoring the effectiveness of those measures and assessing material opportunities.
Other internal documents:
• Šiaulių Bankas AB Procedure for Monitoring Monetary Transactions of Clients (the purpose of this procedure is to
manage the ML/TF risk in the most optimal manner to the extent required by the laws on the prevention of money
laundering and terrorist financing (AML/CTF)).
• Šiaulių Bankas AB Fraud Prevention and Investigation Procedure (fraud prevention in the Bank is carried out in
accordance with this procedure. The Bank uses advanced fraud prevention tools such as the ThreatMetrix system. This
process is described in the ThreatMetrix Fraud Prevention Rules. The purpose of this tool is to reduce the losses that the
Bank’s clients suffer due to fraud).
• Life insurance company SB Draudimas UAB Money Laundering and Terrorist Financing Risk Management
Procedure (the purpose of this procedure is to manage the ML/TF risk in the most optimal manner to the extent required
by the AML/CTF legislation).
• Life insurance company SB Draudimas UAB Procedure for the Supervision and Management of Insurance
Products (this procedure establishes effective processes and procedures to ensure that adequate consideration is given
to, inter alia, the objectives, interests and characteristics of clients, including any sustainability-related objectives, in the
development and approval of the company’s products, and throughout their lifecycle).
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• Life insurance company SB Draudimas UAB Conflicts of Interest Management Procedure (this procedure
establishes effective processes and procedures to prevent conflicts of interest, to identify and manage potential conflicts of
interest in order to avoid any adverse impact on the interests of clients (policyholders, insured persons, beneficiaries), and,
in the event of a conflict of interest, to ensure that the company acts in a manner that is in the best interests of its clients
(policyholders, insured persons, beneficiaries)).
• SB Asset Management UAB Procedure for the Monitoring of Client Transactions and Business Relationships
(establishes key criteria for identifying transactions that may give rise to money laundering and terrorist financing risk and
sanctions risk).
• SB Asset Management UAB Procedure for the Prevention of Money Laundering and Terrorist Financing (the
purpose of this procedure is to manage the ML/TF risk in the most optimal manner to the extent required by the AML/CTF
legislation).
• SB Asset Management UAB Requirements for Incentive Arrangements and Procedure for Avoiding Conflicts of
Interest (these procedures set out the arrangements relating to incentives received and provided by the company and
define how potential conflicts of interest can be avoided or, if they arise, how to mitigate their negative impact on clients’
interests).
• SB Asset Management UAB Investment Decision Execution Policy (this document provides that the provision of
services to clients must always be in the best interests of the client and/or the collective investment undertaking and must
be carried out in a fair, equitable and professional manner).
We are constantly striving to ensure high quality and security of services for our consumers and end-users. When we develop new
products or change existing ones, we always assess their risks and compliance with existing legislation. This compulsory procedure
is carried out by the legal division.
In 2024, the following client-focused actions were implemented:
• In 2024, the DORA Implementation project was launched to strengthen the resilience of digital operations to cyber
threats and major disruptions.
• Training for all employees on the General Data Protection Regulation (GDPR). All Group employees have received
training on the GDPR to ensure they understand and comply with data protection requirements.
• Training on data quality and governance. All employees received training on the importance of data quality and
governance to ensure that client data are accurate and reliable.
• New functionality in the Internet Bank. In 2024, new functionality was introduced in the Internet Bank to help keep
clients’ contact details up to date. This ensures that the Bank always has up-to-date information about its clients.
• Regular review and updating of procedures. The Bank regularly reviews and updates its procedures relating to clients’
personal data in order to maintain compliance with the law and other regulatory requirements.
• Informing clients about the processing of personal data. The Bank informs its clients about the processing of their
personal data through a publicly available Privacy Policy, which is available on the Bank’s website. Clients can also get a
printed copy of the document free of charge. Clients are informed when changes occur.
• Improving the customer experience in digital channels. In 2024, the customer experience of becoming a client of the
Bank through the digital channel was improved. The Bank has dedicated human resources to monitor the process and
provide support to help clients successfully complete the registration process.
• Following the acquisition of SB Asset Management UAB and the expansion of the Group’s range of services, the focus is
on quality and accessibility of services.
• Client education on financial fraud and financial literacy. The Bank has consistently taken steps to educate its clients
on financial fraud and financial literacy in order to raise their awareness and protect them from potential threats.
These actions help to ensure that the Bank effectively manages risks and seizes material opportunities relating to consumers and
end-users, as well as ensures high quality and security of services.
ENGAGEMENT
S4-2, S4-3
We engage with our clients in different ways and at different stages, depending on the purpose of the engagement.
To ensure an improved customer experience, accessibility of service channels and impeccable customer service:
• We conduct surveys to measure customer experience:
• the mystery shopper survey assesses the quality of customer service in the branches of Šiaulių Bankas AB, SB Lizingas
UAB and the Remote Call Centre. The quarterly survey assesses the current situation and identifies areas for
improvement. The survey data are used as a basis for the annual training of customer service managers in the Bank.
• Customer experience surveys are carried out with the help of external research companies. The survey is followed by
an evaluation of the results, comments and insights received from clients. Clients’ comments can be used to identify
strengths and weaknesses in products, service and processes. Where areas for improvement are identified, they are
discussed and communicated to the responsible units in an agreed format. Solutions are sought to improve the customer
experience.
• In 2024, the automated customer surveys (Synopticom) via e-mail were complemented by a new module on customer
experience with the Internet Bank. The survey on the Bank Account product has also been extended to include corporate
clients. These surveys also measure NPS and other indicators and assess the various touch points related to a given
product, service and/or process. This allows us to continuously monitor the customer experience, track changes in
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performance and responding more quickly to challenges encountered or expectations expressed by clients. Clients also
leave comments in these surveys, which allow us to pinpoint areas for improvement.
• We communicate with our clients through a variety of channels to provide them with relevant and accurate information:
o websites of Group companies;
o communication through social channels;
o direct communication.
• We organise events for our clients (main events in 2024):
• Lithuanian Investment Index, 19/02/2024 During the remote session, Vaidotas Rūkas, Head of SB Asset Management
UAB, talked about the Lithuanian Investment Index (172 views).
• Macroeconomic outlook for Lithuania. When are we going to switch up a gear? 09/05/2024 Indrė Genytė-Pikčienė, Chief
Economist of Šiaulių Bankas AB, reviewed macroeconomic trends (2.6 thousand views).
• Indrė Genytė-Pikčienė, Chief Economist of Šiaulių Bankas AB, presented the outlook for the Lithuanian and global
economy, 09/10/2024 (770 views).
• The importance of saving for the future and what you need to know about the changes to the PIT relief, 16/10/2024: Dr.
Dalia Kolmatsui, Head of Retail Client Services at Šiaulių Bankas AB, had a discussion with Mr. Tomas Bučys, Head of the
Employer Loyalty Programme Team (1 thousand views).
• In 2024, Šiaulių Bankas AB also periodically presented its results to investors (once a quarter), and on 01/10/2024
changes to the dividend policy were presented.
In addition, we also carry out the aforementioned client risk assessments when necessary and in the event of a suspension of a
payment transaction by a client, we inform the client about the situation through different channels in accordance with the internal
procedures and processes set out therein. The quality and efficiency of the processes are regularly assessed by the AML Compliance
Department to ensure compliance with the legal requirements and the continued effectiveness of the work in the Financial Crime
Prevention Department.
Communication channels
All clients have access to the communication channels described in the Governance section (page 258), which are relevant not only
to the own workforce but also more. As well as the mechanisms mentioned earlier in this section.
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GOVERNANCE INFORMATION
This part of the statement focuses on business ethics and organisational culture, including anti-corruption, anti-bribery, whistleblower
protection and supplier relationship management. Responsible practices and transparency cover a wide range of aspects: ethical
behaviour of employees, risk assessment and management, and sustainable business practices. The Group is committed to
becoming an organisation that operates responsibly and ethically at all levels, contributing to long-term value creation and responsible
business practices.
The Group undertakes various actions and initiatives to achieve these objectives. Particular emphasis is placed on responsible risk
management, including comprehensive identification, assessment and management of risks. Anti-money laundering measures are
implemented to ensure legal compliance and transparency.
The Group integrates whistleblowing mechanisms that allow employees and stakeholders to report potential breaches in a secure
and confidential manner. Project risk assessment ensures that all projects are carried out in a responsible manner, taking into account
potential risks. The restructuring of the loan portfolio ensures sustainability and compliance with responsible lending principles.
Training on responsible and ethical practices is provided to ensure that all employees adhere to the highest ethical standards.
By establishing principles of conduct with employees, clients, business partners, regulatory and governmental authorities and other
stakeholders, the Group aims to build strong, long-term relationships, ensure a transparent business environment, and promote high
ethical standards and a culture of integrity. This approach helps us to better understand operational risks, comply with legal
requirements and internal rules, and better meet the expectations of our employees, shareholders, business partners and clients.
POLICIES
G1-1
The Group has adopted two main policies on this topic: The Code of Ethics (hereinafter referred to as the Code) and Policy on the
Prevention of Corruption and Unacceptable Conduct, which apply to Šiaulių Bankas AB and its subsidiaries, i.e., all employees
of the Bank and the Group companies.
These two policies and any amendments thereto are approved by the Bank’s Supervisory Council.
Code of Ethics
The purpose of the policy. The Group strives to ensure the highest standards of business ethics and responsible conduct through
policies that help to prevent, mitigate and remedy actual and potential negative impacts, manage risks and seize opportunities. This
policy covers key sustainability issues related to the Group’s activities.
Main content of the policy. The policy outlines key principles such as responsibility, professionalism, customer centricity, protection of
personal data and confidential information, zero tolerance of corruption and bribery, transparent provision and acceptance of gifts,
entertainment or services, fair competition, avoidance of conflicts of interest, equality and non-discrimination, open and transparent
communication, and reporting of improper conduct and breaches of legislation. The purpose of this document is to ensure that all
employees of the Group adhere to the highest ethical standards, including anti-corruption, anti-bribery, whistleblower protection and
supplier relationship management.
Scope of the policy. The policy applies to all areas of the Group’s operations, including upstream and downstream value chain, and
to all geographical areas in which the Group operates. It also includes all stakeholders, including employees, clients, suppliers and
communities – business partners and other stakeholders can report any actual or potential breaches of the law and/or the Code
through a publicly accessible communication channel.
Responsibility for implementing the policy. The Bank’s Management board is the highest level in the Group responsible for
implementing the policy. The Compliance Department conducts a review of the Code of Ethics once a year, and the Code and its
amendments are approved by the Bank’s Supervisory Council. The responsible employees of the Bank’s Compliance Department
(in Group companies, the employee(s) in charge of compliance) test knowledge of individual areas and summarise the results as part
of the monitoring of compliance with the Code. The Bank’s Internal Audit Division assesses the results of compliance with the Code
and makes recommendations to the Bank and Group companies.
References to third-party standards. The principles of transparency enshrined in the Code are in line with the standards of the United
Nations Convention against Corruption.
Assessing stakeholder interests. This policy has been developed taking into account the interests of stakeholders. Each time the
Code is revised, the aim is to ensure that the policy meets the expectations and requirements of all stakeholders.
Accessibility of the policy. The Group ensures that the policy is easily accessible to all stakeholders who may be affected and those
who contribute to its implementation. The policy is publicly available and accessible to all stakeholders. Employees must familiarise
themselves with the Code through the Bank’s Administrative Information System (AIS) or in any other manner specified in the internal
documents of the Bank and the Group companies. Managers of the Group companies are responsible for ensuring that their
subordinates are familiar with the Code, and compliance with the Code is discussed during performance reviews.
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Reports of misconduct and breaches of the law. Employees can report breaches to their immediate supervisor, senior manager of
the unit or the Chief Compliance Officer (in Group companies, the employee in charge of compliance) or use the other means of
reporting listed below.
Policy on the Prevention of Corruption and Unacceptable Conduct
The purpose of the Policy. Through this policy, the Group aims to ensure the highest standards of transparency and responsible
conduct to prevent, mitigate and remedy corruption and unacceptable conduct, manage risks and seize opportunities. This policy
aims to establish a uniform management system that is consistent with good practices to ensure fair and equitable treatment of
clients, objective and impartial decision-making, an environment that is not conducive to corruption and unacceptable conduct, to
increase confidence in the Group’s business and to promote responsible business conduct.
Main content of the Policy. The Policy outlines key principles such as fair and transparent procurement and zero tolerance for
corruption. These principles are essential to ensure that the Group’s activities are conducted in a responsible and transparent manner.
The principle of zero tolerance for corruption applies to all relations, both public and private, including relations with foreign public
officials. Fair and transparent procurement provisions ensure that all procurement is carried out in a transparent and fair manner in
accordance with established procedures and requirements.
Scope of the Policy. The policy is applied to the entire Group. Although the Policy does not directly apply to partners, beneficiaries
and suppliers, they are expected to comply with similar provisions. If they are found to be in breach of these provisions, the Group
must promptly assess the criticality of the breach, the potential negative impact on the Groups interests and values and decide on
further cooperation.
Responsibility for implementing the Policy. The Bank’s Management Board is responsible for the implementation of this Policy,
including the approval of measures to prevent corruption and to identify, assess, effectively manage and mitigate or prevent
unacceptable conduct and the oversight of their application. It is the responsibility of the Compliance Department or the unit/employee
in charge of anti-corruption to regularly analyse the risks of corruption and unacceptable behaviour and internal controls and report
to the Bank’s Management Board and managers of the Group companies indicating what organisational or technical measures have
been or should be taken to address the identified weaknesses.
References to third-party standards. The Policy is based on international and national legislation to ensure responsible practices and
the prevention of corruption.
Assessing stakeholder interests. This policy has been developed taking into account the interests of stakeholders. Each time the
policy is revised, the aim is to ensure that the policy meets the expectations and requirements of all stakeholders.
Accessibility of the Policy. This Policy is a publicly available document and is binding on all employees of the Group. It is the
responsibility of every employee to comply with the Policy on a daily basis, to ensure proper communication and to model appropriate
behaviour.
Reporting misconduct and breaches. If a breach of the Policy is identified, immediate disciplinary action is taken, including, but not
limited to, suspension from duties or functions, removal from post, dismissal or termination of contract. If a breach of the Policy is
found to constitute a criminal offence, it is reported to the competent authorities.
Related actions. The Policy provides that the Compliance Department analyses the corruption and/or misconduct risks, the internal
control measures and their effectiveness. The Compliance Department plans to carry out this analysis in the Bank in 2025.
In addition to these fundamental governance policies, the Group also has a number of internal policies and procedures that
govern relevant areas and set out certain responsibilities and standards of conduct for employees:
• Compliance Policy of Šiaulių Bankas Group (governs the principles of compliance risk management, the standards for
the organisation of the process and ensures that the Group's activities comply with the requirements of regulatory
legislation and standards of conduct).
• Procedure for Investigation of Particularly Significant Operational Risk Events (designed to ensure the transparent
and efficient operation of the Bank and the effective implementation and administration of the preventive and control
measures envisaged).
• Šiaulių bankas Group Conflict of Interest Avoidance and Management Policy (is applied to the entire Group,
establishes measures for identifying, preventing and managing conflicts of interest, as well as the rights, duties and
responsibilities of the Group's Collegiate Bodies and employees).
• Conflicts of Interest Management Procedure (establishes measures for the identification, prevention and management
of conflicts of interest, as well as the rights and duties and responsibilities of the Bank’s collegial bodies and the Bank’s
employees).
• Policy for the Assessment of Managers (establishes principles and processes for assessing the suitability of managers
for their duties).
• Procedure for Ensuring Confidentiality and Disclosing Inside Information (regulates the procedure for delayed
disclosure and disclosure of Inside Information at the disposal of Šiaulių Bankas AB to the Bank of Lithuania and the
general public, ensuring confidentiality of the aforementioned information, actions and liability of employees of the Group
companies and the respective persons discharging managerial responsibilities and persons closely associated with them
in relation to (non-)disclosure, (non-)use of Inside Information and maintaining its confidentiality).
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PREVENTION OF CORRUPTION AND BRIBERY
G1-3, G1-4
Reports of misconduct and breaches and the processes for analysing them
Although the reporting channels vary across the Group, the mechanisms and guiding principles for ensuring whistleblower protection
are the same. Any observed or suspected non-compliance with the Policy may be reported confidentially or anonymously by
employees to the Group company through an internal confidential channel for whistleblowers. The Bank’s clients, partners and other
stakeholders can report any actual or potential breaches of the Policy through a publicly accessible channel on the Bank’s website.
The channel for reporting to the Chief Compliance Officer and the Director of Compliance Department is designed to report any
criminal offences, administrative offences or potentially illegal acts by employees of the Bank Group (including managers), such as
theft of property of the Group, its clients, partners, employees, fraud, abuse of office, conflicts of interest, discrimination, suspected
breach of the provisions of the Code of Ethics or non-compliance with the requirements of the legislation governing the Group’s
activities, etc. The Bank’s Chief Compliance Officer and the Director of Compliance Department are responsible for administering
this channel.
The channel for reporting to the Chairperson of the Bank’s Nomination Committee allows for confidential (and, if desired, anonymous)
reporting of any breach or suspected breach by an individual member of a Bank body or a small group of members that may be
prejudicial to the interests of the Bank. All reports are confidential and, if the whistleblower so wishes, anonymous. All new Šiaulių
bankas AB, Life insurance company SB Draudimas UAB, SB Asset Management UAB and SB Lizingas UAB companies employees
are made aware of these reporting channels in their induction training.
The Group implements the Law on the Protection of Whistleblowers of the Republic of Lithuania. The mechanisms for the protection
of whistleblowers set out in the Law are approved in the Group’s internal documents and procedures.
The Head of Compliance and the Compliance Officer are the officers who receive whistleblowing reports addressed to SB Asset
Management UAB and Life insurance company SB Draudimas UAB, both internally and through externally accessible channels
(which are shared within the Group).
The procedure and process of investigation of reports received through the reporting channel is regulated by the internal document
of Šiaulių Bankas Procedure for Investigation of Particularly Significant Operational Risk Events, which ensures that incidents are
dealt with promptly, independently and objectively. The independence of the employees carrying out the investigation is also ensured
by internal documents – the Compliance Policy and the Compliance Procedure, which provide for this. These documents apply to
the entire Group. The results of investigations are regularly presented to the Bank’s Management Board and particularly significant
cases of non-compliance or increased risk are escalated to the Risk Committee or the Supervisory Council.
The results of investigations carried out at SB Asset Management UAB, Life insurance company SB Draudimas UAB and SB Lizingas
UAB are presented to the Management Boards of these companies, with prior information to the Chief Compliance Officer of the
Group. These companies have established processes and procedures that set out which departments and functions are informed as
appropriate within their internal structures.
Positions with the highest risk of corruption and bribery
There are no specifically identified roles within the Group that pose the greatest risk of corruption and bribery. Compliance with the
requirements set out in the above policies is mandatory for every employee, and the head of each unit ensures that the established
standards of conduct are met within his/her unit. However, we recognise that certain functions and activities may be more susceptible
to these risks. Particular attention is therefore paid to those in management, procurement and supply chain management, financial
management, project management, legal, compliance and other positions, the nature of which may increase these risks. Employees
in these areas are encouraged to adhere to the highest ethical standards and to ensure that the Group’s activities are carried out in
a responsible and transparent manner.
Training
In early 2024, mandatory online training was made available to all Group employees (including heads of units), which included
information on the Code of Ethics, the Policy on the Prevention of Unacceptable Conduct and Corruption and the Procedure for
Accepting and Giving Gifts. The training is followed by a knowledge test. Employees must attend training and take the test – if they
fail to do so, regular reminders are sent by e-mail. The training is repeated every year.
In addition, Šiaulių Bankas AB, Life insurance company SB Draudimas UAB and SB Asset Management UAB have been running an
Induction Programme for New Employees since 2023, which introduces the Group and its operations. One of the videos is on
Compliance Assurance, presenting information on personal data protection, anti-money laundering, ethics, etc.
In addition, Life insurance company SB Draudimas UAB also runs a separate programme for new employees, during which business
ethics topics and their implementation principles and current issues in the company are presented. Training is organised on an as-
needed basis, i.e., when a group of around 10 new employees is formed.
SB Lizingas UAB does not have an induction programme for new employees, but mandatory training for all employees (including
training on anti-corruption) is available on the internal portal of Šiaulių Bankas AB.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
259
Incidents of corruption or bribery
As part of our commitment to transparency and ethical business practices, we provide the following information on incidents of
corruption or bribery during the reporting period. No such incidents were identified in the 2024 period.
In order to uphold the highest standards of integrity and transparency, we will continue to improve our anti-corruption measures and
ensure strict compliance with all relevant regulations. In 2025, we intend to carry out an analysis of corruption and/or misconduct
risks, internal controls and their effectiveness.
MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS
G1-2
The Group places great emphasis on environmental requirements, social responsibility, occupational safety and health, business
ethics and governance. While continuously improving our operations and raising our standards above those set in the regulatory
environment, we expect suppliers and sub-suppliers with whom we work in the area of procurement to meet similar commitments
and standards.
The Group’s approach to relationships with suppliers is based on the expectations set out in the Policy on the Prevention of Corruption
and Unacceptable Conduct, which requires suppliers to comply with the ESG requirements. In the event of non-compliance, the
situation is assessed and the right to terminate cooperation is reserved. In order to maintain responsible and transparent relationships
with its suppliers, the Group actively monitors and evaluates its suppliers to ensure that they comply with ethical standards and legal
requirements. This proactive approach helps to mitigate risks and ensure that the operations of the Group companies remain
sustainable and responsible.
The Supplier Code of Conduct approved by the Management Board of the Bank reflects the Group’s commitment to strengthening
sustainable cooperation with suppliers. The document sets out the minimum commitments and standards of business conduct and
ethics that the Group expects from its suppliers. approved by the Management Board of the Bank reflects the Group’s commitment
to strengthening sustainable cooperation with suppliers. The document sets out the minimum commitments and standards of business
conduct and ethics that the Group expects from its suppliers.
Supplier Code of Conduct
The purpose of the policy. The Supplier Code of Conduct of Šiaulių Bankas and Group companies aims to ensure that suppliers
adhere to the highest environmental, social responsibility, occupational safety and health, business ethics and corporate governance
standards.
Main content of the policy. The Code sets out minimum standards of conduct and ethics for suppliers, including environmental
requirements, protection of human rights, promotion of workforce diversity, anti-discrimination, anti-harassment and anti-violence,
and responsible business principles.
Scope of the policy. The policy applies to all suppliers and sub-suppliers with whom Group companies cooperate in procurement.
Responsibility for implementing the policy. The implementation of the policy is the responsibility of suppliers, who must ensure that
their activities comply with the requirements set out in the Code. The Group monitors and assesses the activities of suppliers.
References to third-party standards. The Code is based on the principles of the UN Universal Declaration of Human Rights and the
UN Global Compact, as well as EU and national environmental legislation.
Assessing stakeholder interests. The Group assesses suppliers’ commitments and actions to ensure that they meet stakeholders’
expectations for responsible and sustainable operations.
Accessibility of the policy. The Code is publicly available on the Bank’s website.
Reports of misconduct and breaches of the law. Suppliers are obliged to report cases of non-compliance with the principles of the
Code or potential risks. Stakeholders can also report observed breaches through the reporting channel on the Bank’s website.
Supplier due diligence process
The Group currently carries out a supplier due diligence process to identify, assess and manage potential or actual negative impacts
on society and the environment arising from the activities of its major suppliers. This process involves analysing the information
provided by suppliers and taking additional steps to ensure a responsible supply chain.
Due diligence process:
1. Questionnaire. Major suppliers are asked to complete a due diligence questionnaire, which is used to assess the supplier’s
impacts and the measures in place to mitigate ESG risks. The ESG questionnaire consists of qualitative and quantitative
questions. The ESG questionnaire covers all three elements: environmental, social and governance risks.
2. Analysis of the answers. The potential impacts are assessed in the light of the information provided by suppliers. The
questionnaire is aligned with the key provisions of the Group’s Supplier Code of Conduct and Ethics, which is in line with
the company’s strategic objectives and values.
3. Requesting additional documents. If the answers to the questionnaire are not sufficient to assess the risk, additional
documents or evidence may be requested.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
260
The Group regularly reviews the effectiveness of supplier risk management and carries out additional checks in the event of significant
changes. While the process is currently focused on the largest suppliers, in the longer term the Group plans to review the scope of
the screening and refine the process where possible to ensure comprehensive impact management.
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
261
ADDITIONAL INFORMATION
ANNEX 1. LIST OF DISCLOSURE REQUIREMENTS
IRO-2
ESRS reference
Disclosure requirement
Page number in
the statement
ESRS 2
General disclosures
BP-1
General basis for preparation of sustainability statements
192
BP-2
Disclosures in relation to specific circumstances
192
GOV-1
The role of the administrative, management and supervisory bodies
194
GOV-2
Information provided to and sustainability matters addressed by the undertaking’s administrative, management and
supervisory bodies
194
GOV-3
Integration of sustainability-related performance in incentive schemes
197
GOV-4
Statement on due diligence
197
GOV-5
Risk management and internal controls over sustainability reporting
197
SBM-1
Strategy, business model and value chain
199
SBM-2
Interests and views of stakeholders
201
SBM-3
Material impacts, risks and opportunities and their interaction with strategy and business model
203
IRO-1
Description of the processes to identify and assess material impacts, risks and opportunities
203, 209
IRO-2
Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
203, 265
E1 Climate change
E1.GOV-3
Integration of sustainability-related performance in incentive schemes
197
E1-1
Transition plan for climate change mitigation
232
E1.SBM-3
Material impacts, risks and opportunities and their interaction with strategy and business model
203, 232
E1.IRO-1
Description of the processes to identify and assess material climate-related impacts, risks and opportunities
203, 209
E1-2
Policies related to climate change mitigation and adaptation
236
E1-3
Actions and resources in relation to climate change policies
236
E1-4
Targets related to climate change mitigation and adaptation
236
E1-5
Energy consumption and mix
238
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
239
E1-7
GHG removals and GHG mitigation projects financed through carbon credits
Not material
E1-8
Internal carbon pricing
Not material
E1-9
Anticipated financial effects from material physical and transition risks and potential climate-related opportunities
242
E2 Pollution
Not material
E3 Water and marine resources
Not material
E4 Biodiversity and ecosystems
Not material
E5 Resource use and circular economy
Not material
S1 Own workforce
S1.SBM-2
Interests and views of stakeholders
201
S1.SBM-3
Material impacts, risks and opportunities and their interaction with strategy and business model
203, 232
S1-1
Policies related to own workforce
244
S1-2
Processes for engaging with own workers and workers’ representatives about impacts
245
S1-3
Processes to remediate negative impacts and channels for own workers to raise concerns
245
S1-4
Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material
opportunities related to own workforce, and effectiveness of those actions
244
S1-5
Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and
opportunities
244
S1-6
Characteristics of the undertaking’s employees
243
S1-7
Characteristics of non-employee workers in the undertaking’s own workforce
243
S1-8
Collective bargaining coverage and social dialogue
245
S1-9
Diversity metrics
Not material
S1-10
Adequate wages
249
S1-11
Social protection
Not material
S1-12
Persons with disabilities
Not material
S1-13
Training and skills development metrics
247
S1-14
Health and safety metrics
250
S1-15
Work-life balance metrics
Not material
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
262
S1-16
Compensation metrics (pay gap and total compensation)
249
S1-17
Incidents, complaints and severe human rights impacts
245
S2 Workers in the value chain
Not material
S3 Affected communities
Not material
S4 Consumers and end
-users
S4.SBM-2
Interests and views of stakeholders
201
S4.SBM-3
Material impacts, risks and opportunities and their interaction with strategy and business model
203
S4-1
Policies related to consumers and end-users
252
S4-2
Processes for engaging with consumers and end-users about impacts
254
S4-3
Processes to remediate negative impacts and channels for consumers and end-users to raise concerns
254
S4-4
Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing
material opportunities related to consumers and end-users, and effectiveness of those actions
252
S4-5
Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and
opportunities
252
G1 Business conduct
G1.GOV-1
The role of the administrative, supervisory and management bodies
194
G1.IRO-1
Description of the processes to identify and assess material impacts, risks and opportunities
203, 209
G1-1
Corporate culture and business conduct policies
256
G1-2
Management of relationships with suppliers
259
G1-3
Prevention and detection of corruption and bribery
258
G1-4
Confirmed incidents of corruption or bribery
258
G1-5
Political influence and lobbying activities
Not material
G1-6
Payment practices
Not material
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
263
ANNEX 2. LIST OF DATAPOINTS IN CROSS-CUTTING AND TOPICAL
STANDARDS THAT DERIVE FROM OTHER EU LEGISLATION
This appendix is an integral part of the ESRS 2. The table below illustrates the datapoints in ESRS 2 and topical ESRS that derive
from other EU legislation and which pages of this statement contain related information.
Disclosure requirement and
related datapoint
ESRS
reference
SFDR reference
Pillar 3 reference
Benchmark Regulation
reference
EU Climate
Law reference
Disclosed in
the statement
(page No.)
ESRS 2 GOV-1
Board’s gender diversity
paragraph
21 (d)
Indicator number
13 of Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
194
ESRS 2 GOV-1
Percentage of board
members who are
independent
paragraph
21 (e)
Delegated Regulation (EU)
2020/1816, Annex II
194
ESRS 2 GOV-4
Statement on due diligence
paragraph
30
Indicator number
10 of Table #3 of
Annex 1
197
ESRS 2 SBM-1
Involvement in activities
related to fossil fuel activities
paragraph
40 (d) i
paragraph 40 (d) i
Article 449a Regulation (EU)
No 575/2013
Commission Implementing
Regulation (EU) 2022/2453
Table 1: Qualitative
information on Environmental
risk and Table 2: Qualitative
information on Social risk
Delegated Regulation (EU)
2020/1816, Annex II
Not material
ESRS 2 SBM-1
Involvement in activities
related to chemical production
paragraph
40 (d)
ii
Indicator number
9 of Table #2 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Not material
ESRS 2 SBM-1
Involvement in activities
related to controversial
weapons
paragraph
40 (d) iii
Indicator number
14 of Table #1 of
Annex 1
Article 12(1) Delegated
Regulation (EU) 2020/1818;
Delegated Regulation (EU)
2020/1816, Annex II
Not material
ESRS 2 SBM-1
Involvement in activities
related to cultivation and
production of tobacco
paragraph
40 (d) iv
Article 12(1) Delegated
Regulation (EU) 2020/1818;
Delegated Regulation (EU)
2020/1816, Annex II
Not material
ESRS E1-1
Transition plan to reach
climate neutrality by 2050
paragraph
14
Article 2(1)
Regulation (EU)
2021/1119
232
ESRS E1-1
Undertakings excluded from
Paris-aligned
Benchmarks
paragraph
16 (g)
Article 449a
Regulation (EU) No
575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book. Indicators of
potential climate Change
transition risk: Credit quality
of exposures by sector,
emissions and residual
maturity
Article 12(1)(d) to (g) and Article
12(2) of Delegated Regulation
(EU) 2020/1818
232
ESRS E1-4
GHG emission reduction
targets
paragraph
34
Indicator number
4 of Table #2 of
Annex 1
Article 449a
Regulation (EU) No
575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 3:
Banking book. Indicators of
potential climate Change
transition risk: Alignment
metrics
Article 6 Delegated Regulation
(EU) 2020/1818
236
ESRS E1-5
Energy consumption from
fossil sources disaggregated
by sources (only high climate
impact sectors)
paragraph
38
Indicator number
5 Table #1 and
Indicator number
5 Table #2 of
Annex 1
Not material
E1-5 Energy consumption
and mix
paragraph
37
Indicator number
5 of Table #1 of
Annex 1
238
ESRS E1-5
Energy intensity associated
with activities in high climate
impact sectors
paragraphs
40 to 43
Indicator number
6 of Table #1 of
Annex 1
Not material
ESRS E1-6
Gross Scope 1, 2, 3 and Total
GHG emissions
paragraph
44
Indicators number
1 and 2 Table #1
of Annex 1
Article 449a; Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book. Indicators of
potential climate Change
transition risk: Credit quality
of exposures by sector,
Articles 5(1), 6 and 8(1)
Delegated Regulation (EU)
2020/1818
239
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
264
emissions and residual
maturity
ESRS E1-6
Gross GHG emissions
intensity
paragraphs
53 to 55
Indicator number
3 of Table #1 of
Annex 1
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 3:
Banking book. Indicators of
potential climate Change
transition risk: Alignment
metrics
Article 8(1) Delegated
Regulation (EU) 2020/1818
240
ESRS E1-7
GHG removals and carbon
credits
paragraph
56
Article 2(1)
Regulation (EU)
2021/1119
Not material
ESRS E1-9
Exposure of the benchmark
portfolio to climate-related
physical risks
paragraph
66
Delegated Regulation (EU)
2020/1818, Annex II; Delegated
Regulation (EU) 2020/1816,
Annex II
Transition
period of 3
years
ESRS E1-9
Disaggregation of monetary
amounts by acute and chronic
physical risk
ESRS E1-9
Location of significant assets
at material physical risk
paragraph
66 (a)
paragraph
66 (c)
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Articles 46
and 47; Template 5: Banking
book. Indicators of potential
climate change physical risk:
Exposures subject to physical
risk
Transition
period of 3
years
E1-9 Breakdown of the
carrying value of its real
estate assets by
energy-efficiency classes
paragraph
67 (c)
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Article 34;
Template 2: Banking book.
Indicators of potential climate
Change transition risk: Loans
collateralised by immovable
property - Energy efficiency of
the collateral
Transition
period of 3
years
ESRS E1-9
Degree of exposure of the
portfolio to climate-related
opportunities
paragraph
69
Delegated Regulation (EU)
2020/1818, Annex II
Transition
period of 1 year
ESRS E2-4
Amount of each pollutant
listed in Annex II of the E-
PRTR Regulation (European
Pollutant Release and
Transfer Register) emitted to
air, water and soil,
paragraph
28
Indicator number
8 Table #1 of
Annex 1 Indicator
number 2 Table #2
of Annex 1
Indicator number
1 Table #2 of
Annex 1 Indicator
number 3 Table #2
of Annex 1
Not material
ESRS E3-1
Water and marine resources
paragraph
9
Indicator number
7 of Table #2 of
Annex 1
Not material
ESRS E3-1
Dedicated policy
paragraph
13
Indicator number
8 of Table #2 of
Annex 1
Not material
ESRS E3-1
Sustainable oceans and seas
paragraph
14
Indicator number
12 of Table #2 of
Annex 1
Not material
ESRS E3-4
Total water recycled and
reused
paragraph
28 (c)
Indicator number
6.2 of Table #2 of
Annex 1
Not material
ESRS E3-4
Total water consumption in
m3 per net revenue on own
operations
paragraph
29
Indicator number
6.1 of Table #2 of
Annex 1
Not material
ESRS 2 IRO 1 - E4
paragraph
16 (a) i
Indicator number
7 of Table #1 of
Annex 1
Not material
ESRS 2 IRO 1 - E4
paragraph
16 (b)
Indicator number
10 of Table #2 of
Annex 1
Not material
ESRS 2 IRO 1 - E4
paragraph
16 (c)
Indicator number
14 of Table #2 of
Annex 1
Not material
ESRS E4-2
Sustainable land / agriculture
practices or policies
paragraph
24 (b)
Indicator number
11 of Table #2 of
Annex 1
Not material
ESRS E4-2
Sustainable oceans / seas
practices or policies
paragraph
24 (c)
Indicator number
12 of Table #2 of
Annex 1
Not material
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
265
ESRS E4-2
Policies to address
deforestation
paragraph
24 (d)
Indicator number
15 of Table #2 of
Annex 1
Not material
ESRS E5-5
Non-recycled waste
paragraph
37 (d)
Indicator number
13 of Table #2 of
Annex 1
Not material
ESRS E5-5
Hazardous waste and
radioactive waste
paragraph
39
Indicator number
9 of Table #1 of
Annex 1
Not material
ESRS 2- SBM3 - S1
Risk of incidents of forced
labour
paragraph
14 (f)
Indicator number
13 Table #3 of
Annex I
244
ESRS 2- SBM3 - S1
Risk of incidents of child
labour
paragraph
14 (g)
Indicator number
12 Table #3 of
Annex I
244
ESRS S1-1
Human rights policy
commitments
paragraph
20
Indicator number
9 Table #3 and
Indicator number
11 Table #1 of
Annex I
244
ESRS S1-1
Due diligence policies on
issues
addressed by the
fundamental International
Labour Organisation
Conventions 1 to 8
paragraph
21
Delegated Regulation (EU)
2020/1816, Annex II
244
ESRS S1-1
Processes and measures for
preventing trafficking in
human beings
paragraph
22
Indicator number
11 Table #3 of
Annex I
244
ESRS S1-1
Workplace accident
prevention policy or
management system
paragraph
23
Indicator number
1 Table #3 of
Annex I
257
ESRS S1-3
Grievance/complaints
handling mechanisms
paragraph
32 (c)
Indicator number
5 Table #3 of
Annex I
247
ESRS S1-14
Number of fatalities and
number and rate of work-
related accidents
paragraph
88 (b) and
(c)
Indicator number
2 Table #3 of
Annex I
Delegated Regulation (EU)
2020/1816, Annex II
250
ESRS S1-14
Number of days lost to
injuries, accidents, fatalities or
illness
paragraph
88 (e)
Indicator number
3 Table #3 of
Annex I
250
ESRS S1-16
Unadjusted gender pay gap
paragraph
97 (a)
Indicator number
12 Table #1 of
Annex I
Delegated Regulation (EU)
2020/1816, Annex II
249
ESRS S1-16
Excessive CEO pay ratio
paragraph
97 (b)
Indicator number
8 Table #3 of
Annex I
187
ESRS S1-17
Incidents of discrimination
paragraph
103 (a)
Indicator number
7 Table #3 of
Annex I
247
S1-17 Non-respect of UNGPs
on Business and Human
Rights and OECD
paragraph
104 (a)
Indicator number
10 Table #1 and
Indicator number
14 Table #3 of
Annex I
Delegated Regulation (EU)
2020/1816, Annex II; Delegated
Regulation (EU) 2020/1818 Art
12 (1)
247
ESRS 2- SBM3 - S2
Significant risk of child labour
or forced labour in the value
chain
paragraph
11 (b)
Indicators number
12 and n. 13 Table
#3 of Annex I
Not material
ESRS S2-1
Human rights policy
commitments
paragraph
17
Indicator number
9 Table #3 and
Indicator number
11 Table #1 of
Annex I
Not material
S2-1 Policies related to value
chain workers
paragraph
18
Indicator number
11 and n. 4 Table
#3 of Annex 1
Not material
S2-1 Non-respect of UNGPs
on Business and Human
Rights and OECD
paragraph
19
Indicator number
10 of Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II; Delegated
Regulation (EU) 2020/1818 Art
12 (1)
Not material
ESRS S2-1
Due diligence policies on
issues addressed by the
fundamental International
Labor Organisation
Conventions 1 to 8,
paragraph
19
Delegated Regulation (EU)
2020/1816, Annex II
Not material
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
266
ESRS S2-4
Human rights issues and
incidents connected to its
upstream and downstream
value chain
paragraph
36
Indicator number
14 of Table #3 of
Annex 1
Not material
ESRS S3-1
Human rights policy
commitments
paragraph
16
Indicator number
9 Table #3 of
Annex 1 and
Indicator number
11 Table #1 of
Annex 1
Not material
ESRS S3-1
non-respect of UNGPs on
Business and Human Rights,
ILO principles or and OECD
guidelines
paragraph
17
Indicator number
10 of Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II; Delegated
Regulation (EU) 2020/1818 Art
12 (1)
Not material
ESRS S3-4
Human rights issues and
incidents
paragraph
36
Indicator number
14 of Table #3 of
Annex 1
Not material
S4-1 Policies related to
consumers and end-users
paragraph
16
Indicator number
9 Table #3 and
Indicator number
11 Table #1 of
Annex I
252
ESRS S4-1
Non-respect of UNGPs on
Business and Human Rights
and OECD
paragraph
17
Indicator number
10 of Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II; Delegated
Regulation (EU) 2020/1818 Art
12 (1)
247
ESRS S4-4
Human rights issues and
incidents
paragraph
35
Indicator number
14 of Table #3 of
Annex 1
247
ESRS G1-1
United Nations Convention
against Corruption
paragraph
10 (b)
Indicator number
15 of Table #3 of
Annex 1
258
ESRS G1-1
Protection of whistleblowers
paragraph
10 (d)
Indicator number
6 of Table #3 of
Annex 1
258
ESRS G1-4
Fines for violation of anti-
corruption and anti-bribery
laws
paragraph
24 (a)
Indicator number
17 of Table #3 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
259
ESRS G1-4
Standards of anti-corruption
and anti-bribery
paragraph
24 (b)
Indicator number
16 of Table #3 of
Annex 1
258
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
267
ANNEX 3. DISCLOSURE OF INFORMATION OF SB ASSET MANAGEMENT UAB
UNDER ARTICLE 8 OF REGULATION 2020/852 (TAXONOMY REGULATION)
1
The weighted average value of all the investments that are directed at funding, or
are associated with taxonomy-aligned economic activities relative to the value of
total assets covered by the KPI, with following weights for investments in
undertakings per below:
The weighted average value of all the investments that are directed
at funding, or are associated with taxonomy-aligned economic
activities, with following weights for investments in undertakings
per below:
Turnover-based, %
7.1%
Turnover-based, EURm
94.9
CapEx—based, %
11.9%
CapEx-based, EURm
159.1
2
The percentage of assets covered by the KPI relative to total investments (total AuM).
Excluding investments in sovereign entities:
The monetary value of assets covered by the KPI. Excluding
investments in sovereign entities:
Coverage ratio, %
91.8%
Coverage, EURm
1340.2
Additional, complementary disclosures: breakdown of denominator of the KPI
3
The percentage of derivatives relative to total assets covered by the KPI.
The value in monetary amounts of derivatives:
Share, %
-0.02%
Amount, EURm
-0.3
4*
The proportion of exposures to EU financial and non-financial undertakings not
subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by
the KPI:
Value of exposures to EU financial and non-financial undertakings
not subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings, %
3.2%
For non-financial undertakings, EURm
43.4
For financial undertakings, %
0.8%
For financial undertakings, EURm
11.0
5*
The proportion of exposures to financial and non-financial undertakings from non-
EU countries not subject to Articles 19a and 29a of Directive 2013/34/EU over total
assets covered by the KPI:
Value of exposures to financial and non-financial undertakings from
non-EU countries not subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings, %
1.2%
For non-financial undertakings, EURm
15.7
For financial undertakings, %
0.0%
For financial undertakings EURm
0.0
6*
The proportion of exposures to financial and non-financial undertakings subject to
Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings
subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings, %
6.9%
For non-financial undertakings, EURm
91.9
For financial undertakings, %
7.7%
For financial undertakings, EURm
103.9
7
The proportion of exposures to other counterparties over total assets covered by
the KPI:
Value of exposures to other counterparties:
Share, %
-
Amount, EURm
-
8
The value of all the investments that are funding economic activities that are not
taxonomy-eligible relative to the value of total assets covered by the KPI:
Value of all the investments that are funding economic activities that
are not taxonomy-eligible:
Turnover-based, %
71.4%
Turnover-based, EURm
956.3
CapEx—based, %
65.5%
CapEx-based, EURm
878.2
9
The value of all the investments that are funding taxonomy-eligible economic
activities, but not taxonomy-aligned relative to the value of total assets covered by
the KPI:
Value of all the investments that are funding Taxonomy- eligible
economic activities, but not taxonomy- aligned:
Turnover-based, %
28.6%
Turnover-based, EURm
383.9
CapEx—based, %
34.5%
CapEx-based, EURm
462.0
Additional, complementary disclosures: breakdown of numerator of the KPI
10*
The proportion of Taxonomy-aligned exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over total
assets covered by the KPI:
Value of Taxonomy-aligned exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Turnover-based, %
0.6%
Turnover-based, EURm
8.6
Capital expenditures-based, %
1.9%
Capital expenditures-based, EURm
25.0
For financial undertakings:
For financial undertakings:
Turnover-based, %
0.0%
Turnover-based, EURm
0.0
Capital expenditures-based, %
0.0%
Capital expenditures-based, EURm
0.0
11
The proportion of taxonomy-aligned exposures to other counterparties in over total
assets covered by the KPI:
Value of taxonomy-aligned exposures to other counterparties:
Turnover-based, %
-
Turnover-based, EURm
-
Capital expenditures-based, %
-
Capital expenditures-based, EURm
-
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities –:
12
Climate change mitigation
Of which
Turnover, %
6.9%
Transitional activities, turnover-based, %
-
Enabling activities, turnover-based, %
-
CapEx, %
11.2%
Transitional activities, CapEx-based, %
-
Enabling activities, CapEx-based, %
-
13
Climate change adaptation
Of which
Turnover, %
0.2%
Transitional activities, turnover-based, %
-
Enabling activities, turnover-based, %
-
CapEx, %
0.6%
Transitional activities, CapEx-based, %
-
Enabling activities, CapEx-based, %
-
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
268
*The look-through method was applied to our investments in investment funds. However, due to data limitations, it was not possible to assess whether the undertakings
were subject to Articles 19a and 29a of Directive 2013/34/EU. Consequently, in the marked indicators, investments in investment funds are not included in the KPI
calculations. Only direct investments in undertakings, where we were able to assess compliance, are considered.
1. Nuclear energy related activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process
heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil
gaseous fuels.
YES
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation
facilities using fossil gaseous fuels.
YES
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool
using fossil gaseous fuels.
YES
2. Taxonomy-aligned economic activities (denominator) 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6.87
7%
6.76
7%
0.10
3%
21.38
13%
21.24
14%
0.14
2%
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the denominator of the
applicable KPI
88.07
93%
85.17
93%
2.89
97%
137.73
87%
129.49
86%
8.24
98%
8
Total applicable KPI
94.93
100%
91.94
100%
3.00
100%
159.11
100%
150.73
100%
8.38
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
269
3. Taxonomy-aligned economic activities (numerator) 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6.87
7%
6.76
7%
0.10
3%
21.38
13%
21.24
14%
0.14
2%
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the numerator of the
applicable KPI
88.07
93%
85.17
93%
2.89
97%
137.73
87%
129.49
86%
8.24
98%
8
Total amount and proportion of taxonomy-
aligned economic activities in the numerator
of the applicable KPI
94.93
100%
91.94
100%
3.00
100%
159.11
100%
150.73
100%
8.38
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
270
4. Taxonomy-eligible but not taxonomy-aligned economic activities* 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
2
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
3
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
4
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
9.52
2%
25.56
6%
5
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
6
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
7
Amount and proportion of other taxonomy-
eligible but not taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
374.38
98%
436.43
94%
8
Total amount and proportion of taxonomy
eligible but not taxonomy-aligned economic
activities in the denominator of the
applicable KPI
383.90
100%
461.99
100%
*For Assets under management the look-through method was applied to our investments in investment funds. However, due to data limitations, it was not possible to
assess what part of Taxonomy Eligible assets were raleted to climate change mitigation or adaptation. For the case of Taxonomy Aligned if was possible to assess.
5. Taxonomy non-eligible economic activities 2024-12-31
Row
Economic activities
Turnover
Capex
Mln. EUR
%
Mln. EUR
%
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred
to in rows 1 to 6 above in the denominator of the applicable KPI
956.27
100.0%
878.19
100.0%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the
denominator of the applicable KPI
956.27
100.0%
878.19
100.0%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
271
ANNEX 4. DISCLOSURE OF INFORMATION OF LIFE INSURANCE COMPANY SB
DRAUDIMAS UAB UNDER ARTICLE 8 OF REGULATION 2020/852 (TAXONOMY
REGULATION)
1
The weighted average value of all the investments that are directed at funding, or
are associated with taxonomy-aligned economic activities relative to the value of
total assets covered by the KPI, with following weights for investments in
undertakings per below:
The weighted average value of all the investments that are
directed at funding, or are associated with taxonomy-aligned
economic activities, with following weights for investments in
undertakings per below:
Turnover-based, %
8.9%
Turnover-based, EURm
17.3
CapEx—based, %
18.4%
CapEx-based, EURm
35.6
2
The percentage of assets covered by the KPI relative to total investments (total AuM).
Excluding investments in sovereign entities:
The monetary value of assets covered by the KPI. Excluding
investments in sovereign entities:
Coverage ratio, %
87.4%
Coverage, EURm
193.9
Additional, complementary disclosures: breakdown of denominator of the KPI
3
The percentage of derivatives relative to total assets covered by the KPI.
The value in monetary amounts of derivatives:
Share, %
0.0%
Amount, EURm
-0.1
4*
The proportion of exposures to EU financial and non-financial undertakings not
subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by
the KPI:
Value of exposures to EU financial and non-financial undertakings
not subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings, %
1.6%
For non-financial undertakings, EURm
3.2
For financial undertakings, %
0.8%
For financial undertakings, EURm
1.6
5*
The proportion of exposures to financial and non-financial undertakings from non-
EU countries not subject to Articles 19a and 29a of Directive 2013/34/EU over total
assets covered by the KPI:
Value of exposures to financial and non-financial undertakings
from non-EU countries not subject to Articles 19a and 29a of
Directive 2013/34/EU:
For non-financial undertakings, %
0.6%
For non-financial undertakings, EURm
1.1
For financial undertakings, %
0.2%
For financial undertakings EURm
0.4
6*
The proportion of exposures to financial and non-financial undertakings subject to
Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings
subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings, %
5.5%
For non-financial undertakings, EURm
10.7
For financial undertakings, %
2.1%
For financial undertakings, EURm
4.0
7
The proportion of exposures to other counterparties over total assets covered by the
KPI:
Value of exposures to other counterparties:
Share, %
-
Amount, EURm
-
8
The proportion of the insurance or reinsurance undertaking’s investments other than
investments held in respect of life insurance contracts where the investment risk is borne
by the policy holders, that are directed at funding, or are associated with, Taxonomy-
aligned economic activities.
Value of insurance or reinsurance undertaking’s investments other
than investments held in respect of life insurance contracts where the
investment risk is borne by the policy holders:
Share, %
6.7%
Amount, EURm
44.1
9
The value of all the investments that are funding economic activities that are not
taxonomy-eligible relative to the value of total assets covered by the KPI:
Value of all the investments that are funding economic activities that
are not taxonomy-eligible:
Turnover-based, %
68.8%
Turnover-based, EURm
133.3
CapEx—based, %
58.4%
CapEx-based, EURm
113.3
10
The value of all the investments that are funding taxonomy-eligible economic
activities, but not taxonomy-aligned relative to the value of total assets covered by
the KPI:
Value of all the investments that are funding Taxonomy- eligible
economic activities, but not taxonomy- aligned:
Turnover-based, %
31.2%
Turnover-based, EURm
60.6
CapEx—based, %
41.6%
CapEx-based, EURm
80.6
Additional, complementary disclosures: breakdown of numerator of the KPI
11*
The proportion of Taxonomy-aligned exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over total
assets covered by the KPI:
Value of Taxonomy-aligned exposures to financial and non-
financial undertakings subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Turnover-based, %
0.6%
Turnover-based, EURm
1.1
CapEx—based, %
1.6%
CapEx-based, EURm
3.2
For financial undertakings:
For financial undertakings:
Turnover-based, %
0.0%
Turnover-based, EURm
0.0
CapEx—based, %
0.0%
CapEx-based, EURm
0.0
12
The proportion of the insurance or reinsurance undertaking’s investments other than
investments held in respect of life insurance contracts where the investment risk is borne
by the policy holders, that are directed at funding, or are associated with, Taxonomy-
aligned over total assets covered by the KPI:
Value of insurance or reinsurance undertaking’s investments other
than investments held in respect of life insurance contracts where the
investment risk is borne by the policy holders, that are directed at
funding, or are associated with, Taxonomy-aligned:
Turnover-based, %
1.5%
Turnover-based, EURm
3.0
CapEx—based, %
3.4%
CapEx-based, EURm
6.6
13
The proportion of taxonomy-aligned exposures to other counterparties in over total
assets covered by the KPI:
Value of taxonomy-aligned exposures to other counterparties:
Turnover-based, %
-
Turnover-based, EURm
-
Capital expenditures-based, %
-
Capital expenditures-based, EURm
-
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities:
14
Climate change mitigation
Of which
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
272
Turnover, %
7.8%
Transitional activities, turnover-based, %
-
Enabling activities, turnover-based, %
-
CapEx, %
16.9%
Transitional activities, CapEx-based, %
-
Enabling activities, CapEx-based, %
-
15
Climate change adaptation
Of which
Turnover, %
1.1%
Transitional activities, turnover-based, %
-
Enabling activities, turnover-based, %
-
CapEx, %
1.5%
Transitional activities, CapEx-based, %
-
Enabling activities, CapEx-based, %
-
*The look-through method was applied to our investments in investment funds. However, due to data limitations, it was not possible to assess whether the undertakings
were subject to Articles 19a and 29a of Directive 2013/34/EU. Consequently, in the marked indicators, investments in investment funds are not included in the KPI
calculations. Only direct investments in undertakings, where we were able to assess compliance, are considered
1. Nuclear energy related activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process
heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil
gaseous fuels.
YES
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation
facilities using fossil gaseous fuels.
YES
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool
using fossil gaseous fuels.
YES
2. Taxonomy-aligned economic activities (denominator) 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
0.87
5%
0.87
6%
0.00
0%
2.63
7%
2.63
8%
0.00
0%
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the denominator of the
applicable KPI
16.42
95%
14.33
94%
2.09
100%
33.00
93%
30.13
92%
2.87
100%
8
Total applicable KPI
17.29
100%
15.20
100%
2.09
100%
35.63
100%
32.75
100%
2.87
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
273
3. Taxonomy-aligned economic activities (numerator) 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
0.87
5%
0.87
6%
0.00
0%
2.63
7%
2.63
8%
0.00
0%
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the numerator of the
applicable KPI
16.42
95%
14.33
94%
2.09
100%
33.00
93%
30.13
92%
2.87
100%
8
Total amount and proportion of taxonomy-
aligned economic activities in the numerator
of the applicable KPI
17.29
100%
15.20
100%
2.09
100%
35.63
100%
32.75
100%
2.87
100%
FINANCIAL STATEMENTS AND ANNUAL REPORT
(All amounts are in thousands of euros unless otherwise stated)
274
4. Taxonomy-eligible but not taxonomy-aligned economic activities* 2024-12-31
Row
Economic activities
Turnover
Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
Mln.
EUR
%
1
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
2
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
3
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
4
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
1.25
2%
3.25
4%
5
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
6
Amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
7
Amount and proportion of other taxonomy-
eligible but not taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
59.32
98%
77.35
96%
8
Total amount and proportion of taxonomy
eligible but not taxonomy-aligned economic
activities in the denominator of the
applicable KPI
60.57
100%
80.59
100%
*For Assets under management the look-through method was applied to our investments in investment funds. However, due to data limitations, it was not possible to
assess what part of Taxonomy Eligible assets were related to climate change mitigation or adaptation. For the case of Taxonomy Aligned if was possible to assess.
5. Taxonomy non-eligible economic activities 2024-12-31
Row
Economic activities
Turnover
Capex
Mln. EUR
%
Mln. EUR
%
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is
taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated
Regulation 2021/2139 in the denominator of the applicable KPI
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred
to in rows 1 to 6 above in the denominator of the applicable KPI
133.31
100.0%
113.28
100.0%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the
denominator of the applicable KPI
133.31
100.0%
113.28
100.0%
275
CONFIRMATION FROM THE RESPONSIBLE
PERSONS
We, Chief Executive Officer of Šiaulių bankas AB Vytautas Sinius and Chief Financial Officer Donatas Savickas,
confirm hereby that the provided consolidated financial statements of Šiaulių bankas AB for 2024 are compiled
in compliance with applicable accounting standards, correspond to the reality and correctly reveal the assets,
liabilities, financial status, activity result and cash flows of Šiaulių bankas AB and its Group of Companies,
moreover, we confirm that the review of the business development and activities, the status of the Bank and the
Group, alongside with the description of the key risks and indeterminacies incurred, are correctly revealed in
the consolidated management report.
Chief Executive Officer Vytautas Sinius
Chief Financial Officer Donatas Savickas
4
th
March 2025