Consolidated Annual Report 2020

Consolidated annual report 2020 Consolidated annual report 2020 175,04 billion CZK Balance sheet total grew 15,4 % y-o-y 6 PRESENTATION PART J&T BANKA, a. s. Table of contents Presentation part Corporate governance and data on the issuer Selected financial indicators, 8 Selected financial indicators – consolidated, 8 Information about securities, rights Selected financial indicators – individual, 9 and obligations, 56 Information on securities, 56 Foreword, 10 Rights and obligations of shareholders and certificate holders, 56 Report of the Board of Directors, 12 Definition of Alternative Performance Measures applied, 56 Financial results – the Group, 16 Financial results – the Bank, 17 Company Management, 57 Financial markets, 18 Corporate governance, 57 Information technologies, 19 Information about internal control principles and procedures Human resources, 21 relating to the financial reporting process, 58 Partner of the fine arts, music and sports, 21 Competence of the General Meeting, 58 Outlook for 2021, 23 Remuneration policy, 58 Declaration, 24 Issuer’s dividend policy and significant litigations, 61 Significant contracts, 62 Non-financial information, 25 Bank’s management, 35 Financial part Board of Directors, 36 Supervisory Board, 40 Consolidated Financial Statements, 66 Declaration, 44 Consolidated statement of financial position, 66 Consolidated statement of comprehensive income, 67 Committees of the Bank, 45 Consolidated statement of changes in equity, 70 Organisational chart, 50 Consolidated statement of cash flows, 74 Report of the Supervisory Board, 52 Notes to the consolidated financial statemen, 76 Correspondent banks, 53 Independent auditor’s report to consolidated financial statements, 178 Individual financial statements, 186 Statement of financial position, 186 Statement of comprehensive, income, 187 Statement of changes in equity, 190 Statement of cash flows, 192 Notes to the financial statements, 193 Independent auditor’s report to consolidated financial statements, 274 Report on relations between related parties, 282 7 Selected financial indicators Selected financial indicators – consolidated in millions of CZK 2020 2019 2018 2017 2016 2015 Annual figures Profit before tax 2,002 3,978 2,538 2,617 1,360 2,186 Tax (336) (822) (462) (421) (407) (310) Share of profit of equity-accounted investees 169 (1) — (17) (50) 167 Profit from continuing operations 1,666 3,156 2,076 2,196 953 1,876 Profit from discontinued operations — — — — — — Profit for the year 1,666 3,156 2,076 2,196 953 1,876 Balance at year-end (in millions of CZK) Equity 22,537 21,514 19,230 19,476 19,128 16,945 Deposits and loans from banks 2,437 4,838 2,250 21,923 3,174 4,259 Deposits from customers 138,620 114,551 118,999 91,704 103,053 121,812 Due from financial institutions 2,351 1,455 54,115 47,757 23,423 34,379 Loans and advances to customers 98,795 68,320 71,528 69,109 76,139 74,668 Total assets 175,037 151,722 150,104 142,996 133,114 154,851 Financial ratios Return on Equity 7,56% 15,49% 10,73% 11,38% 5,28% 11,62% Return on Assets 1,02% 2,09% 1,42% 1,59% 0,66% 1,30% Capital adequacy 14,96% 16,48% 15,31% 15,98% 15,88% 13,91% Operating expenses/operating income 49,58% 47,29% 45,16% 40,84% 47,83% 44,65% Average number of employees 816 813 719 728 717 689 Assets per employee 215 187 209 196 186 225 Administrative expenses per employee (3) (3) (4) (3) (3) (3) Profit after tax per employee 2 4 3 3 1 3 8 PRESENTATION PART J&T BANKA, a. s. Selected financial indicators – individual in millions of CZK 2020 2019 2018 2017 2016 2015 Annual results Profit before tax 1,349 3,619 1,919 1,855 1,854 1,963 Tax (292) (740) (385) (359) (302) (230) Profit for the year 1,057 2,879 1,534 1,496 1,552 1,733 Balance at year-end (in millions of CZK) Equity 20,888 19,991 18,606 18,998 18,943 16,799 Deposits and loans from banks 1,405 4,492 3,048 22,009 3,338 4,343 Deposits from customers 132,428 107,549 112,936 84,484 93,833 117,058 Due from financial institutions 2,287 1,442 53,734 46,670 21,105 33,661 Loans and advances to customers 93,381 62,959 66,966 63,785 69,714 70,042 Total assets 166,236 141,889 143,766 134,940 123,554 146,990 Financial ratios Return on Equity 5,17% 14,92% 8,16% 7,89% 8,68% 11,12% Return on Assets 0,69% 2,02% 1,10% 1,16% 1,15% 1,27% Capital adequacy 16,73% 18,28% 17,26% 18,45% 17,75% 15,83% Operating expenses/operating income 47,14% 42,90% 42,21% 43,26% 39,75% 39,08% Average number of employees 553 529 485 468 454 443 Assets per employee 301 268 296 288 272 332 Administrative expenses per employee (4) (4) (4) (4) (4) (4) Profit after tax per employee 2 5 3 3 3 4 9 Foreword Dear clients, business partners, friends, 2020 was an exceptionally challenging year, both economically and personally. We all are social beings, and the inevitable restrictions on social contacts did not make the past year any easier to bear. I am therefore happy to report that despite this challenging period, our Bank managed to create profit exceeding CZK one billion, successfully launched a bond issue of over CZK 13 billion in volume, and provided funding for several project across the economy. We are pleased that the bond issues offered to investors in previous years have been duly repaid, and that the majority of funds in which our clients invested reported appreciation in the past year. Last year, we also managed to move the Bank’s headquarters to new premises. The Javor building had served us well for 18 years, through a period of dynamic growth during which the Bank grew not only through its balances, but also in the number Štěpán Ašer, MBA of employees, clients and business partners. However, we outgrew these premis- Board Member es. Our new offices at Rustonka will provide a better base for our clients, business and Chief Executive Officer partners and employees, offering modern offices and more meeting rooms, as well as J&T BANKA, a.s. large number of vaults, including a special vault for works of art. Due to the restrictions stemming from the measures adopted in relation to the COVID-19 outbreak, life in the new premises is still rather humble, but we are already looking forward to meeting you in the new J&T Café or in the Magnus Art Gallery which is part of the premises. The year ahead will be more difficult than the previous ones in many aspects. We are facing a period of heightened insecurity; a period which will see changes in many paradigms. At a macro level, the big question is what the effects of the monetary expansion and the state of public finances will be. For many years, we have been talking about the threat of rising inflation, and we are already noticing some signals in the guise of growth in the prices of stock and real estate. In the real economy, we will also face many insecurities and see many changes. Changes in consumer behaviour will permanently change trade and services. The restrictions during the outbreak have changed the mode of work and many changes will remain and impact the office space market as well as housing requirements. The COVID-19 outbreak has shown us the fragility of suppliers’ relations, and producers will have to think about the means of improving their stability. This may mean relocations or increased stocking up. In our markets, the European Green Deal will play a significant role in the years to come. How can we protect our assets in an increasingly insecure environment? Invest or go down. This is the long and short of our experts’ recommendation on the protection of one’s savings and property. The loss of purchasing power in relation to consumer prices as well as the price of investment assets will present a significant threat in the coming years. In our opinion, the solution is to reduce the volume of interest-earn- ing assets in the family portfolio, and to invest more into assets connected to the real economy. With this advice in mind, we founded the J&T INVESTMENTS SICAV, a.s. Fund last year, as we believe our clients look for more investment opportunities outside the bond market to protect their assets. The fund is built on long-term partnerships with major companies and entrepreneurs, and invests in real assets in real estate, industry and service segments. The fund should also become a major building block of our clients’ long-term portfolios. 10 PRESENTATION PART J&T BANKA, a. s. I would like to thank you for your trust and cooperation in the past year. Long-term partnerships are one of the main prerequisites of our success. I believe that together, we will be successful in 2021, whether you are looking for investment opportunities to protect your family assets, or whether you need funds for your business development. Prague, 28 April 2021 Štěpán Ašer, MBA Board Member and Chief Executive Officer J&T BANKA, a.s. 11 Report of the Board of Directors Structure of deposits 33.2% On demand 9.9% 47.3% 2020 12 months and more 1 month and more 8.3% 3 months and more 1.3% 6 months and more 34.2% On demand 48.3% 6.6% 12 months and more 2019 1 month and more 10% 3 months and more 0.9% 6 months and more 12 PRESENTATION PART J&T BANKA, a.

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