Macroeconomic Data and Banking System of North Macedonia

Macroeconomic data and the Banking system of the Republic of North Macedonia 30.06 2022

Macroeconomic Environment Key economic indicators 2019 2020 2021 Q1 2022 Q2 2022 Industrial production volume index 102,5 annual Industrial production volume index 3.70% -9,5 % 1,4 % 3.5% 2.5% External Trade (%) total import 10.0 -9.7 26.8 29.4 28.7 Trade Import amounts 368.518 Mio. DEN, increased 28,7% annual, Export amounts 252.736 Mio. DEN, increased 20,3% annual, External Trade (%) total export 9.5 -9.9 19.7 16.8 20.3 Real GDP growth (%) 3,90 -6,1 4,0 2,4 2.8 Central Government Budget surplus/deficit (% GDP) -2.1 -8.1 -5.4 -0.8 -0,4 GDP growth 2.8% Inflation (CPI%) 0.8 1.2 3,2 7,7 10,0 Current Account Bal. (EUR'm) -368,3 -366,0 -415,7 -392,4 -235.19 Inflation 10,0% Gross External Debt (EUR'm) 8,154.4 8,536.1 9,547.3 9976.83 FX Reserves 3116.11 Mio.EUR FX Reserves (EUR'm) 3,262.60 3359,87 3643,28 3272,54 3116.11 Foreign direct invest. (EUR'm) 363.3 154.7 435.2 107.5 138,8 Reference rate 2% Unemployment(%) 17,30 16,40 15,2 14,8 14,5 MKD/EUR 61.51 61.69 61.69 61,69 61,66 Labour Market Rate of unemployment 14,5 % Source : NBRM BASIC ECONOMIC INDICATORS FOR REPUBLIC OF NORTH MACEDONIA The credit rating of the state: Rating BB+ with a negative outlook Fitch Rating s Source : www.fitchratings.com (Rating Report Republic of North Macedonia 19 May 2022)

Macedonian Banking sector: Assets state owned 4% annual change (%) quarterly change (%) in millions of denars 06/2021 09/2021 12/2021 03/2022 06/2022 Greece 23% domestic shareholders 21% Total assets of the Banking system 603,407 608,595 638,666 635,968 643,906 6.71% 1.25% Loans 367,152 371,861 383,627 393,812 404,440 10.16% 2.70% Deposits 444,639 451,675 468,844 454,700 455,635 2.47% 0.21% Switzerland 1% Capital & reserves 76,753 75,257 73,779 76,626 79,655 3.78% 3.95% ASSETS Bulgaria 6% FOREIGN CAPITAL-PARTICIPATION 76.29% 643,906 638,666 635,968 Slovenia 18% 75.41% 75.37% 74.36% 608,595 603,407 72.89% Turkey 13% Germany 4% Austria 10% 06/2021 09/2021 12/2021 03/2022 06/2022 2017 2018 2019 2020 2021 The Banking sector consists of 13 active banks, 5 large (amounts 523.393 Mio. Den.) 81% in total assets, 5 medium (amounts 101.209 Mio. Den.) Financial intermediation Financial intermediation 16% in total assets, 3 small (amounts 19.304 Mio. DEN) 3% in total assets and 2 saving houses. Participation of foreign capital 76,29% Total assets of the Banking system registered the amount of 643.906 Mio. Den., increased by 6,71% annual and 1.25% quarterly, which is 88.3 87.7 86.8 85.53 83.2 supported by the growth of the deposit 2,47% annual and 0.21% quarterly and the capital position of the banks which increased by 3,78% annual, 64.8 64.6 64.4 61.15 3.95% quarterly. Total loans increased by 10.16 % annual, 2.70% quarterly. 58.9 53.4 53.0 53.0 52.96 52.2 The level of financial intermediation measured by: he ratio of total assets and GDP is 83,2 % which indicates the dominant position of banks in the financial system Total deposits from non-financial sector/GDP is 58.9% Total gross loans to non-financial sector/GDP is 52,2% 06/2021 09/2021 12/2021 03/2022 06/2022 Financial intermediation Total assets/GDP/ Financial intermediation Total deposits from non-financial sector/GDP/ Source NBRSM, Department for financial stability, Last revision to GDP figures (at current prices): 02.09.2022. Financial intermediation Total gross loans to non-financial sector/GDP/

Macedonian Banking sector: Structure of assets and managing the Liquidity risk Asset structure Liquid assets /total assets Liquid assets /total assets Other assets 8% Highly liquid assets 29 % 33.0 32.4 31.9 31.6 32.0 31.0 30.11 30.0 28.77 29.0 Total credit exposure 63 % 28.0 27.0 26.0 06/2021 09/2021 12/2021 03/2022 06/2022 Loans/Total assets participates by 62,81 % while the rest of 8 % is other assets. In structure of total assets highly liquid assets participates by 29%*, total credit exposure 63.50% 62.81% 63.00% (100%) and it confirm the satisfactory volume of liquidity at its disposal the Macedonian banking System. Liquidity Coverage Ratio is 247,4%, which is three times higher than the regulatory minimum 62.50% 61.92% 62.00% 61.50% 61.10% 60.85% liabilities with liquid assets remained stable of 45,7% refers to appropriate liquidity risk management by the banks. Stable share of liquid assets in total assets of banking system and coverage of short-term 61.00% 60.50% 60.07% 60.00% 59.50% Source: REPORT ON RISKS IN THE BANKING SYSTEM OF THE REPUBLIC OF MACEDONIA , Indicators on the banking system Liquid assets: cash,treasury bills, government bonds Non-financial sub.: state, non-financial companies, households, nonprofit ins. and nonresidents 59.00% 58.50% 06/2021 09/2021 12/2021 03/2022 06/2022

Macedonian Banking sector: Loans Loans - households LOANS Credit portfolio Car loans 0,10 % 53% 404,440 52% 52% 52% 51% 51% 51% 393,812 51% real estate loans 32 % 383,627 50% 49% 371,861 48% 367,152 48% 48% 48% 47% 47% 47% 46% Credit cards & consumer loans 66 % 45% 44% 06/2021 09/2021 12/2021 03/2022 06/2022 06/2021 09/2021 12/2021 03/2022 06/2022 Non.fin.com Loans - households in millions of denars annual change (%) quarterly change (%) Loans - households 06/2021 09/2021 12/2021 03/2022 06/2022 Total loans amounts 404.440 Mio. DEN. prevail households 51%, increased by 10,16% annual or 2,70% quarterly. Households' loans: consumer loansand credit cards increased by 4,53% annual or 2,04% quarterly. housing loans, increased by 13,18% annual or 3.26% quarterly. car loans reduced by (-7,43%) annual or (-1,47 %) quarterly. Housing loans 63,975 65,679 67,984 70,121 72,409 13.18% 3.26% Consumer loans and credit cards 141,316 142,649 144,213 144,773 147,721 4.53% 2.04% Car loans 248 248 242 233 230 -7.43% -1.47% other 3,933 4,053 3,802 3,646 3,607 -8.28% -1.06% Total 209,471 212,630 216,241 218,772 223,967 6.92% 2.37%

Macedonian Banking sector: Loans Loan concentration by economic activity Other annual, and 1,07% quarterly. Loans of non-financial companies participate with 48%, increased by 9,97 % Transport and storage Loans structure by economic activity of non-financial companies : Trade Trade 30%, increased by 4,37% annual or 1.85% quarterly. Electricity, gas, steam and air conditioning supply Industry 22%, increased by 10,15% annual or reduced (-1.43%) quarterly. Construction Construction 16%, increased by 14,71% annual or reduced (-0.81%) quarterly. Industry 0 20,000 40,000 60,000 80,000 06/2022 03/2022 12/2021 09/2021 06/2021 annual change (%) 10.15% 14.71% quarterly change (%) -1.43% -0.81% Loan concentration by economic activity 06/2021 51,355 34,623 09/2021 51,550 35,629 12/2021 52,722 38,192 03/2022 57,391 40,039 06/2022 56,570 39,717 Industry Construction Electricity, gas, steam and air conditioning 33.35% 20.22% supply Trade 10,512 73,720 14,876 46,128 231,214 9,432 72,758 15,426 48,203 232,998 10,277 76,884 15,998 49,694 243,768 11,660 75,540 14,644 52,309 251,584 14,018 76,939 15,222 51,800 254,265 4.37% 2.32% 12.30% 9.97% 1.85% 3.94% -0.97% 1.07% Transport and storage Other Total in millions of denars

Macedonian Banking sector: Loans Rate of non-performing loans 06/2021 09/2021 12/2021 03/2021 06/2021 annual change (%) quarterly change (%) 3.6% 3.5% 3.6% 3.5% 3.4% Non-performing loans / Total loans 3.5% 3.6% 3.2% 3.1% 3.2% - 0.3 0.1 3.3% Rate of non- performing loans (non-financial companies 3.2% 3.2% 3.2% 3.1% 69.4% 65.3% 66.3% 66.4% 66.0% -3.4 -0.4 3.1% 3.0% 2.9% 2.8% 06/2021 09/2021 12/2021 03/2022 06/2022 NPL Coverage 70.0% 69.4% Rate of non-performing loans 3,2%, reduced by (-0,3) pp annual and increased by 0,1 pp quarterly. 69.0% 68.0% Coverage of non-performing loans with impairment (non-financial companies) 66% reduced by (-3,4) pp annual or (-0,4) pp quarterly. 66.44% 67.0% 66.28% 66.0% 66.0% 65.3% 65.0% 64.0% 63.0% 06/2021 09/2021 12/2021 03/2022 06/2022

Macedonian Banking sector: Liabilitys structure LIABILITIE S STRUCTURE annual change (%) quarterly change (%) Liability's structure 100% 06/2021 09/2021 12/2021 03/2022 06/2022 13% 14% 15% 16% 17% 90% 12% 80% 13% 12% 12% 12% 70% Deposits' 455,635 2.47% 0.21% 444,639 451,675 468,844 454,700 60% 50% Capital & reserves 79,655 3.78% 3.95% 76,753 75,257 73,779 76,626 40% 74% 74% 73% 71% 71% 30% Other liabilities 108,616 32.43% 3.80% 82,015 81,663 96,043 104,642 20% 10% 643,906 6.71% 1.25% Total 603,407 608,595 638,666 635,968 0% in millions of denars 06/2021 09/2021 12/2021 03/2022 06/2022 Deposits' Capital & reserves Other liabilities Capital adequacy ratio Capital adequacy ratio 17.4% participate by 71%, regarding previous year are increased by 2.47% or 0.21% quarterly. In the structure of liabilities, the deposits amount 455,635 Mio. DEN are dominant that 17.3% 17.3% 17.3% 17.30% or 3,95% quarterly. Capital & reserves amount 79.655 Mio. DEN., participate with 12 %, increased by 3.78% annual, 17.3% 17.2% 17.1% and likewise indicates on the capacity and coverage of the risks from Banks activity as well as stabile level on Banking sector solvency Capital adequacy ratio is 17,30 % and regarding previous year is increased by 0,30 pp 17.0% 17.0% 16.9% 16.8% 06/2021 09/2021 12/2021 03/2022 06/2022

Macedonian Banking sector: Deposits Participation of subjects in millions of denars Deposits structure 100% 500,000 90% 80% 450,000 70% 60% 400,000 50% 350,000 40% 30% 300,000 20% 250,000 10% 0% 06/2021 09/2021 12/2021 03/2022 06/2022 200,000 Households 67% 67% 66% 67% 68% 150,000 Non.fin.com 30% 30% 30% 29% 28% 100,000 50,000 annual change (%) quarterly change (%) 0 06/2021 132,812 09/2021 134,128 12/2021 142,478 03/2022 131,825 06/2022 127,119 -4.29% 5.21% 2.47% -3.57% 2.18% 0.21% Non.fin.com Households 296,333 301,337 309,051 305,135 311,774 Deposits' 444,639 451,675 468,844 454,700 455,635 Household's annual5.21% Structure of Deposits: Deposits from households participate with 68%, increased by 5,21% annual and 2.18% quarterly, Total deposits annual2.47% Nonfinancial corporations participate with 28%, reduced by (-4.29 %) annual and (-3.57%) quarterly.

Macedonian Banking sector: Profitability Return on average assets (ROAA) Return on average equity (ROAE) Cost-to-income ratio 48.04% 06/2022 06/2022 1.71% 06/2022 14.30% 03/2022 1.65% 50.4% 03/2022 13.96% 03/2022 12/2021 1.49% 12/2021 12.9% 47.4% 12/2021 09/2021 1.61% 09/2021 13.4% 06/2021 1.54% 46.9% 09/2021 06/2021 12.6% 1.30% 1.40% 1.50% 1.60% 1.70% 1.80% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 46.5% 06/2021 44.0% 45.0% 46.0% 47.0% 48.0% 49.0% 50.0% 51.0% Banking sector has stabile rates of profitability measured by : Return on average asset (ROAA) 1,71%, increased by 0,17 pp annual or 0,06 pp quarterly. Return on average equity (ROAE) 14,30%, increased by 1.70 pp annual or 0.34 pp quarterly. 48,04 % of total income cover operating costs of the Banks 60.99% of total income is net interest income Net interest income / total income 62.58% 63.00% 62.00% 60.99% 60.51% 61.00% annual change (pp) quarterly change (pp) Profitability 06/2021 09/2021 12/2021 03/2022 06/2022 60.00% 59.35% 58.66% Return on average assets (ROAA) Return on average equity (ROAE) 59.00% 1.54% 1.61% 1.49% 1.65% 1.71% 0,17 0,06 58.00% 12.6% 13.4% 12.9% 13.96% 14.30% 1,70 0,34 57.00% 56.00% Cost-to-income ratio 46.5% 46.9% 47.4% 50.4% 48,04% 1,50 -2,39 06/2021 09/2021 12/2021 03/2022 06/2022 Net interest income / total income 58.66% 60.51% 59.35% 62.58% 60,99% 2,33 -1,60

Macedonian Banking sector: Interest rates on granted loans and received deposits Weighted interest rates on granted loans 06/2021 09/2021 12/2021 03/2022 06/2022 Weighted interest rates on received deposits 06/2021 09/2021 12/2021 03/2022 06/2022 I. INTEREST RATES ON TOTAL GRANTED LOANS (Denar and foreign currency) II. INTEREST RATES ON TOTAL RECEIVED DEPOSITS (Denar and foreign currency) 4.54 4.46 4.37 4.30 4.27 0.84 0.78 0.74 0.70 0.67 III. INTEREST RATES ON DENAR LOANS (in denar without currency clause) IV. INTEREST RATES ON DENAR DEPOSITS (in denar without currency clause) 4.89 4.79 4.65 4.58 4.57 1.21 1.10 1.08 1.03 1.03 1211. Loans for house purchases 3.58 3.56 3.53 3.52 3.51 21. Households 1212. Consumer loans 6.28 6.14 6.05 5.98 5.89 1.19 1.08 1.08 1.04 1.01 22. Nonfinancial Corporations (public and other) A122. Nonfinancial Corporations (public and other) 3.70 3.61 3.51 3.46 3.48 1.28 1.22 1.03 0.94 1.12 V. INTEREST RATES ON FOREIGN CURRENCY LOANS (in denar with currency clause and foreign currency) VI. INTEREST RATES ON FOREIGN CURRENCY DEPOSITS (in denar with currency clause and foreign currency) 4.11 4.08 4.02 3.96 3.91 0.49 0.47 0.45 0.44 0.40 C121601. Loans for house purchases, granted in EUR 3.94 4.23 4.15 4.05 3.99 C21. Households 0.44 0.43 0.42 0.40 0.39 C121602. Consumer loans, granted in EUR 5.25 5.33 5.44 5.35 5.25 C122. Nonfinancial Corporations (public and other) 3.37 3.34 3.23 3.21 3.13 C22. Nonfinancial Corporations (public and other) 1.02 0.91 0.85 0.98 0.73 Weighted interest rates on granted loans 4,27% reduced by (-0,27) pp annual or (-0,03) pp quarterly Denar 4,57%, reduced by (-0,32) pp annual or (-0,01) pp quarterly Foreign currency 3,91%, reduced by (-0,20) pp annual or (-0,05) pp quarterly Weighted interest rates on received deposits 0,67% reduced by (-0,17) pp annual or (-0,03) pp quarterly Denar 1,03%, reduced by (-0,18) pp annual or at the level of the previous quarter Foreign currency 0,40%, reduced by (-0,09) pp annual or (-0,04) pp quarterly. Source: National Bank of the Republic of North Macedonia, Monetary Statistics Department Weighted interest rates on granted loans and received deposits, outstanding amounts, by months