Annual Report
for 2024
The report in PDF format is an unofficial document. The official report is publicly available in the European Single Electronic Format
Another Year of Growth
Annual
Report
for 2024
Zagreb, March 2025
Annual Report of HPB Group
Content
Introduction .............................................................................4
Vision and Mission ..................................................................5
Key Financial Indicators ........................................................7
Statement by the President of the
Management Board ................................................................. 9
Management Board of
Hrvatska poštanska banka p.l.c. ........................................11
Macroeconomic Review ........................................................13
Business Environment ..........................................................19
Statement of the Management Board
on the Condition of Group of
Hrvatska poštanska banka, p.l.c. ...................................... 23
Internal Control System and
Risk Management Functions ............................................. 53
Development Plan of Hrvatska poštanska banka .......... 61
Statement on the application of the
Corporate Governance Code .............................................. 67
Hrvatska poštanska banka
Organizational Structure ................................................... 77
Subsidiary Operations Overview .......................................81
Sustainability Report ........................................................... 85
Independent Auditor's Report on Limited
Assurance on the Consolidated Sustainability
Report of the HPB Group ................................................. 168
Responsibilities of the Management Board for the
preparation and approval of the Annual Report ......... 173
Independent Auditor's Report on the Audit
of the Unconsolidated and Consolidated
Annual Financial Statements ........................................... 174
Financial Reports ............................................................... 185
Regulatory Financial Statements for the
Croatian National Bank .................................................... 315
Branch Network and Contacts .........................................330
33
▲
The Annual Report provides a comprehensive summary of
financial information, an overview of operations, a sustaina-
bility report and audited financial statements accompanied
by the independent auditor's opinion for the year ended
31 December 2024. This document is presented in English.
The original and official Annual Report is published in Croatian.
Legal status
The Annual Report encompasses the annual financial state-
ments, prepared in compliance with the statutory account-
ing standards for banks within the Republic of Croatia and
audited in alignment with International Standards on Auditing.
The Annual Report has been prepared in accordance with
the Accounting Act and the Companies Act, which require the
Management Board to report to shareholders at the Annual
General Meeting.
In line with the Accounting Act, the statutory financial
statements include the statement of financial position, the
profit and loss account along with the statement of other
comprehensive income, the statement of changes in equity
and reserves, the cash flow statement, and the accom-
panying notes to the financial statements. Furthermore,
the Companies Act, specifically Articles 250.a and 250.b,
mandates the submission of an annual report detailing the
condition of the Bank and other entities within the HPB Group.
Abbreviations
In the Annual report Hrvatska poštanska banka p.l.c. is
referred to as «the Bank» or «HPB», Hrvatska poštanska
banka Group is referred to as «the HPB Group» or just «the
Group», the Croatian National Bank is referred to as «the
CNB» or «HNB», Republic of Croatia is referred to as «RH»
or «HR» and the Croatian Bank for Reconstruction and
Development is referred to as «the CBRD» or «HBOR».
Exchange rates
For the purpose of converting amounts in foreign currencies
into euro amounts, the following average exchange rates of
the CNB were used:
Introduction
December 31, 2024
1 EUR = 1.044400 USD
December 31, 2023
1 EUR = 1.105000 USD
44
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Annual Report of HPB Group
Key Financial Indicators
1
General and Administrative Expenses, Depreciation and Amortization and Other Cost
GROUP (EUR '000 ) 2024 2023 2022 2021 2020
Basic Indicators
Profit for the Year 74 83 127 27 24
Operating Profit 112 99 28 41 39
Total Assets 7,882 7,046 5,540 3,694 3,380
Loans to Customers 2,869 2,910 3,062 1,892 1,954
Received Deposits 6,733 5,923 4,641 3,111 2,815
Share Capital and Reserves 560 534 457 353 329
Other Indicators
Return on Equity 45.40% 51.30% 78.56% 16.68% 15.10%
Return on Assets 0.93% 1.18% 2.29% 0.73% 0.72%
Operating expenses
1
to Operating
Income Ratio
50.17% 53.15% 79.18% 62.36% 64.10%
BANK (EUR '000 ) 2024 2023 2022 2021 2020
Basic Indicators
Profit for the Year 74 81 18 27 24
Operating Profit 112 94 24 41 38
Total Assets 7,883 7,046 4,563 3,694 3,380
Loans to Customers 2,869 2,910 2,107 1,892 1,954
Received Deposits 6,734 5,924 3,924 3,112 2,816
Share Capital and Reserves 560 534 347 352 328
Other Indicators
Return on Equity 45.46% 49.77% 10.92% 16.64% 14.99%
Return on Assets 0.93% 1.14% 0.39% 0.73% 0.71%
Operating expenses
1
to Operating
Income Ratio
49.85% 50.56% 76.01% 62.03% 63.78%
Regulatory Capital 512 505 345 349 307
Capital Adequacy 21.13% 22.51% 23.57% 25.65% 21.82%
77
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Annual Report of HPB Group
Dear and esteemed shareholders,
In the banking industry, “normal” years have become increas-
ingly rare, and 2024 was no exception. However, I take
great pride in saying that Hrvatska poštanska banka (HPB)
remained steadfast in its strategic course—expanding market
share and reinforcing the foundations for sustainable growth.
As anticipated, 2024 served as a year of consolidation follow-
ing HPB’s record-breaking expansion in 2023.
Total assets recorded a robust 11.9% growth, reaching
EUR 7.9 billion as of December 31, 2024. This led to a record-
high market share of 9.4%, reaffirming that HPB’s ascent into
the top five banks in Croatia at the end of 2023 was not a
fleeting milestone, but a firmly cemented position.
While our long-term priority remains strengthening market
presence—driven by the belief that a bank’s relevance
creates value for all stakeholders—HPB’s growth is already
evident in its strong profitability. In 2024, HPB Plc. achieved
a net profit of EUR 73.6 million. Although this represents an
8.7% decline from the record-breaking previous year, it still
stands as the second-highest result in the Bank’s history, with
a historically above-average return on equity (ROE) of 13.5%.
The decline in net profit was primarily attributed to EUR 21.7
million in provisioning costs, compared to EUR 0.4 million in
provision income the year before—an overall EUR 22 million
swing, underscoring our highly prudent risk management
approach. This strategic decision reinforces the Bank’s resil-
ience against potential macroeconomic challenges in key
export markets.
Our core operations remain robust. Operating profit
before provisions grew by 21.9%, reaching EUR 111.8 million,
supported by strong revenue growth and disciplined cost
management—despite unavoidable inflationary pressures.
This record-high operating profit is a testament to HPB’s
ability to sustain growth in a complex economic environment.
Looking ahead, we remain committed to ensuring that our
expanding market share continues to generate long-term
value.
On the revenue side, net interest income rose by EUR
32 million (21.9%), primarily due to higher liquidity levels and
persistently elevated central bank deposit rates. Non-interest
income also increased, reflecting the successful integration
of Nova hrvatska banka and growth in transaction and card
business volumes. As a result, total operating income rose by
20.7% year-over-year, with the cost-to-income ratio remain-
ing below 50%, underscoring the Bank’s efficiency—even as
total assets have more than doubled over the past five years.
The successful integration of Nova hrvatska banka,
finalized in June 2024, further strengthened HPB’s finan-
cial position and performance while unlocking human and
IT resources for future growth initiatives. The insights gained
from this process have reinforced our ability to turn challenges
into opportunities, contributing to yet another transformative
year that firmly positions HPB among the leading banks in
Croatia. HPB’s achievements continue to garner industry
and public recognition. In 2024, the Bank was honored with
the prestigious Zlatna kuna award as the most successful
bank, while our HPB SUPER ŠTEDNJA product received the
Best Buy award. Additionally, our LinkedIn community grew
beyond 10,000 followers, solidifying HPB’s position among
the most-followed banks in Croatia.
Over the past five years, we have quadrupled HPB’s
market capitalization, with the share price outperforming
key benchmark indexes such as CROBEX, EURO STOXX,
and EURO STOXX BANKS. In 2024, we distributed EUR
5.3 million in dividends from 2022 earnings, while a record
dividend payout of EUR 48.4 million from 2023 earnings was
approved in 2024.
In 2024, HPB further strengthened its commitment to
sustainability—both in response to institutional investor
expectations and as part of our long-term strategic vision.
Key initiatives included integrating environmental risks into
our credit processes and enhancing climate risk assessment
methodologies with more sophisticated scenario modeling.
Looking ahead to 2025, we are already advancing with
a strategy centered on market share expansion, operational
excellence, profitability, and sustainability. Our priorities
include maintaining a solid return on equity, further enhancing
our digital platforms, and continuing our prudent risk manage-
ment approach, applying the same disciplined decision-mak-
ing that has guided us over the past five years. We aim to
leverage HPB’s position as one of Croatia’s top five banks
to remain a reliable partner, delivering value to our clients,
employees, and you—our shareholders.
On behalf of the Management Board of Hrvatska poštan-
ska banka, I extend my sincere gratitude to our shareholders
and Supervisory Board members for their collaboration and
support, as well as to our clients for their trust in HPB as a key
player in the domestic market.
Marko Badurina
President of the Management Board
Statement by the President
of the Management Board
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Annual Report of HPB Group
Management
board
Marko Badurina
President of the
Management Board
Anto Mihaljević
Member of the
Management Board
Ivan Soldo
Member of the
Management Board
Tadija Vrdoljak
Member of the
Management Board
Josip Majher
Member of the
Management Board
Area of responsibility
• Large Companies
and Public Sector
• Financial Markets
• Compliance
Division
• Internal Audit
• Management Board
Office
• HR
• Legal affairs
• Strategic
development
• Sustainability Office
• Digitization of
Business
• Retail
• Direct Channels
Banking
• SME
• Marketing
• Quality Service
Management
• Service Development
and Sales Personnel
Office
• Credit Risk
Management of
natural person
• Credit Risk
Management
of legal entities
• Strategic Risk and
Risk Control
• Collection
Management
• Financial
management
• ALM
• Procurement and
General Affairs
• Corporate Security
• Business Support
• IT
• Products and Delivery
Processes Management
Division
• Organization and
Project Management
Experience
• 2019 – HPB d.d.
President of the
Management Board
• 2017 – Sberbank
d.d. Advisor to the
Business Strategy
Board for Financial
Markets, Investment
Banking, Financial
Institutions
• 2013 – Sberbank
d.d. Deputy Director
of the Financial
Markets Division
• 2012 – Volksbank
d.d. Deputy Director
of the Financial
Markets Division
• 2007 – Volksbank
– Liquidity and
Trading
Management
• 2019 – HPB d.d.
Member of the
Management Board
• 2019 – Kentbank d.d.
Director for Retail
• 2017 – Allianz Zagreb
d.d. Director of Sales
Support
• 2015 – Zagrebačka
banka d.d. Sales
Management Director
for Individual Banking
Clients
• 2010 – Zagrebačka
banka d.d. The
Director of the
Region Zagreb
• 2005 – Zagrebačka
banka d.d. The
Director of the
Region
Sjeverozapadna
Hrvatska
• 2003 – Zagrebačka
banka d.d. Leasing
Sales Manager
• 2001 – Zagrebačka
banka d.d. Head of
Sales Controlling
• 1999 – Fer count
d.o.o. Trainee Auditor
• 2019 – HPB d.d.
Member of the
Management Board
• 2018 – Raiffeisen
Bank International
AG, Executive
Director, Risk
Management of
Financial Institutions
and States
• 2015 – Raiffeisen
Bank International
AG, Director, Risk
Management of
Financial Institutions
and States
• 2013 – Raiffeisen
Bank International
AG, Risk Manager,
Senior Risk Manager
• 2011 – Raiffeisen
Bank International
AG
• Analitičar, Senior
Analyst banks and
Financial Institutions
• 2010 – Ipreo Ltd
Analitičar Global
Markets
• 2005 – FIMA Fas
d.o.o. Assistant
Director
• 2005 – KPMG
Croatia d.o.o. Junior
Associate
• 2023 – HPB d.d.
Member of the
Management Board
• 2023 – HPB d.d.,
Direktor of
Digitalization of
Business
• 2022 – Nova
hrvatska banka PLC,
President of the
Management Board
• 2018 – CROATIA
BANKA PLC,
Member of the
Management Board
• 2017 –
Agromeđimurje PLC,
President of the
Management Board
• 2016 – AGROKOR
PLC Retail, Director
of Projects
• 2012 – KONZUM,
PLC, Director
• 2009 – Hypo Alpe
Adria Bank PLC,
Member of the
Management Board
• 2007 – Slavonska
bankaPLC, Hypo
Alpe Adria Bank PLC
Advisor to the
Management Board,
Procurator
• 2023 – HPB d.d.
Member of the
Management Board
• 2021 – Ministry of
Labour, Pension
System, Family and
Social Policy, Cabinet of
the Minister, Special
Advisor
• 2020 – V20 Turizam Ltd
– Hotel Blue Zagreb,
Director / Partner 2016
– CROATIA
INSURANCE
COMPANY Plc.,
Director, Insurance of
Corporate clients and
SME
• 2012 – CROATIA
INSURANCE
COMPANY Plc.,
Director, Corporate
client Management
Service
• 2011 – CROATIA
INSURANCE
COMPANY Plc., Head
of Department for
Developement of
External Sales Network
• 2009 – CROATIA
INSURANCE
COMPANY Plc., Senior
specialist for improving
sales channels with
financial institutions
Management Board of
Hrvatska poštanska banka p.l.c.
Note: organizational jurisdiction as of December 31, 2024
1111
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Annual Report of HPB Group
Macroeconomic Review
The global business environment in 2024 remained shaped
by geopolitical forces, with the war in Ukraine continuing to
exert a dominant influence, alongside other crisis hotspots
such as conflicts in the Middle East. hese risks translated
into higher energy prices and disruptions in global supply
chains, slowing the pace of disinflation. However, the most
impactful international event was the U.S. presidential elec-
tion, which triggered a fundamental shift in global relations,
primarily through the disruption of existing alliances and the
reinforcement of protectionist policies, including proposed
tariffs, whose full economic effects are likely to unfold in the
years ahead.
Protectionist and deglobalization trends—ceteris pari-
bus—continue to erode the eurozone’s competitive position,
indirectly weighing on Croatia’s economic prospects. In 2024,
preliminary estimates suggest that eurozone GDP expanded
by just 0.7%, while Croatia’s key trading partners recorded
only marginal growth or economic contraction. In this context,
Croatia’s GDP growth of 3.8% represents an above-average
outcome, positioning the country among the eurozone’s
strongest performers. Household consumption remained a
key driver of economic growth, reflecting a structural charac-
teristic of the domestic economy, with a 3.2% contribution—
the second highest in the past decade. Notably, investment
activity sustained its strong upward trajectory for the third
consecutive year, buoyed by resilient business confidence
and sustained economic optimism for the years ahead.
Net exports, however, weighed on real GDP growth with
a negative contribution of -2.5%, largely driven by robust
domestic consumption. A key downside factor was the
contraction in industrial production over the past year, stem-
ming from weaker demand for domestic products and inter-
mediate goods. However, this decline reflects challenges in
export markets rather than underlying structural weaknesses
in the domestic economy. The strong absorption of EU funds
remains a crucial driver of investment and public spending,
helping to offset negative trends and reinforcing the prospects
for sustained above-average growth in the national economy.
Source: CBS, www.dzs.hr (MSI Gross Domestic Product, Form 12.1.1.4.), processed by HPB
2016 2017 2018 2019 2020 2021 2022 2023 2024
GDP – real growth rate 3.5% 3.3% 2.9% 3.1% (8.3%) 12.6% 7.3% 3.3% 3.8%
GDP – nominal growth rate 3.5% 4.6% 5.0% 5.2% (7.6%) 15.0% 15.9% 15.4% 9.5%
GDP deflator
-
1.3% 2.1% 2.1% 0.7% 2.3% 8.6% 12.1% 5.7%
Contribution to real GDP growth
- household consumption 1.8% 1.8% 1.9% 2.3% (2.9%) 6.3% 4.0% 1.8% 3.2%
- government expenditure 0.2% 0.5% 0.4% 0.7% 0.8% 0.7% 0.5% 1.6% 1.0%
- gross fixed capital investment 0.9% 0.3% 0.9% 2.6% (1.4%) 1.1% 2.2% 2.2% 2.3%
- net exports 0.2% (0.7%) (1.9%) (0.1%) (5.2%) 5.1% (0.5%) 1.5% (2.5%)
- change in inventory and other 0.3% 1.5% 1.6% (2.4%) 0.4% (0.6%) 1.1% (3.7%) (0.2%)
Y-o-Y rate of change in real GDP
- household consumption 3.2% 3.2% 3.4% 4.1% (5.2%) 10.7% 6.9% 3.0% 5.6%
- government expenditure 1.0% 2.0% 1.6% 3.1% 3.4% 2.8% 2.2% 7.1% 4.5%
- gross fixed capital investment 4.7% 1.4% 4.4% 12.8% (6.3%) 4.8% 10.4% 10.1% 9.9%
- goods and services exports 7.0% 6.9% 3.6% 6.8% (23.2%) 32.7% 27. 0% (2.9%) 0.9%
- goods and services imports 6.5% 8.5% 7.4% 6.7% (12.3%) 17. 3% 26.5% (5.3%) 5.3%
Gross domestic product
Decomposition of gross domestic product (GDP) growth by components
1313
▲
Prices
Consumer price index (year-on-year rate of change in %)
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
201820172016 2019 2020 2021 2022 2023 2024
Core consumer price indices
- excluding energy
Consumer price indices
3.8
3.4
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
11.0
13.0
15.0
Source: CNB, CNB, www.hnb.hr (forms h-j1 and h-j2); Processing: HPB
1414
Annual Report of HPB Group
Source: CSB (cro. DZS), www.dzs.hr (Form 1.2 Consumer price indices according to the ECOICOP classification), Processing: HPB
Year-on-year price change rate of selected components of the consumer price index
2017 2018 2019 2020 2021 2022 2023 2024
Consumer price index
– total
1.1% 1.5% 0.8% 0.1% 2.6% 10.7% 8.0% 2.6%
Food and non-alcoholic
beverages
2.9% 1.0% (0.1%) 1.9% 1.6% 15.8% 12.9% 3.4%
Alcoholic beverages and
tobacco
2.4% 2.8% 4.4% 3.6% 5.9% 3.7% 5.6% 3.7%
Clothing and footwear 0.8% (1.3%) (0.9%) (0.6%) (0.1%) 7.0 % 8.5% 1.1%
Housing. water. electricity.
gas and other fuels
(2.7%) 2.7% 3.1% (1.0%) 1.6% 10.0% 7.1% -
Furnishings. household
equipment and routine
household maintenance
0.1% 0.4% 0.8% 0.3% 1.0% 12.4% 9.5% 1.4%
Health 1.1% 1.4% (0.9%) 1.2% 0.8% 2.0% 6.4% 4.9%
Transpor t 3.3% 3.5% (0.3%) (4.3%) 8.3% 14.2% 1.2% 1.8%
Communication (1.6%) (0.2%) (0.2%) 1.5% 1.1% 0.3% 2.6% (0.1%)
Recreation and culture 0.8% 0.9% 0.7% 0.1% 1.7% 7. 2% 7.3% 4.1%
Education 0.8% 0.4% 0.8% (0.4%) 0.5% 1.1% 3.6% 4.9%
Restaurants and hotels 5.1% 3.0% 3.0% 1.5% 2.9% 13.3% 15.0% 9.3%
Miscellaneous goods and
services
0.3% 0.7% 0.3% 2.0% 0.9% 7. 4% 9.0% 5.0%
A comparison of consumer price index trends and the
core consumer price index (excluding energy) indicates
that inflationary pressures eased up until the final quarter
of 2024, continuing the downward trajectory that began
in 2022. However, this trend reversed in the last quarter of
the business year, with the consumer price index reaching
2.8%, while the core index excluding energy stood at 3.8% in
December. This reversal was primarily driven by persistent
increases in service and food prices, as well as the expiration
of administrative price caps on energy.
A detailed analysis of consumer basket subcomponents
offers further insight into the key drivers of average annual
consumer price growth. Given the significant share of food
costs in household spending, the ongoing rise in food prices
had a notable impact on consumer behavior and perceptions
of inflationary pressure. While energy prices had a neutral
impact on overall inflation throughout the year, the removal
of price regulation led to renewed cost pressures in this
category. Meanwhile, services continued their steady upward
trend, remaining the single most influential component in
overall inflation dynamics.
1515
▲
Employment and Wages
Number of employees
(left axis)
Nominal gross salary (EUR)
(right axis)
Real gross salary (EUR)
(right axis)
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-23
Apr-23
Jul-23
Oct-23
Jan-24
Apr-24
Jul-24
Oct-24
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
0
200,000
400,000
600,000
800,000
1,200,000
1,000,000
1,400,000
1,600,000
1,800,000
2,000,000
0
200
400
600
800
1,200
1,000
1,400
1,600
1,800
2,000
Source: CNB, www.hnb.hr (Bulletin, Additional economic, financial, and monetary indicators), Processing: HPB
The number of employed persons continued to rise, averag-
ing 1.7 million in 2024 compared to 1.65 million in the previous
year. This upward trend reflects the growing demand for labor
driven by a favorable economic environment and sustained
optimism fueled by above-average GDP growth year after
year. Meanwhile, wage growth has been influenced by the
spillover effects of adverse demographic trends on the
domestic labor market, leading to continued increases in both
nominal and real gross earnings. Additionally, tax reforms
introduced in 2024 contributed to easing the impact of infla-
tion on household budgets.
Comparative movement of the number and gross income of employees
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Annual Report of HPB Group
Public Finances
Total government revenues in the first nine months of
2024 amounted to EUR 28.6 billion, falling short of total
government expenditures by EUR 77 million. Indirect taxes
accounted for 42.3% of total revenues during the first three
quarters of the fiscal year, reflecting the strong contribution
of household consumption to overall economic activity. On
the expenditure side, social benefits totaling EUR 9.2 billion
and employee compensation amounting to EUR 7.9 billion
remained the largest budgetary items. These expenditures
nearly matched the full-year levels recorded in the previous
fiscal year, primarily due to rising costs and wage growth.
Capital expenditures in the first nine months reached 65.7%
of last year's total, amounting to EUR 2.7 billion.
The reduction in reference interest rates, following a
shift in monetary policy direction, had a favorable impact
on government debt financing costs, with expectations of
an even more pronounced effect in the coming year. The
interest burden on budgetary expenditures in the first nine
months of 2024 stood at 3.54%, compared to 3.35% in 2023.
By opting to finance budgetary needs through domestic
financial markets—particularly via retail bond issuances—
the government has made a significant contribution to the
future development of the local capital market. A responsible
and disciplined approach to public finances, maintaining
the budget deficit below the target threshold of 3% of GDP,
alongside positive economic prospects, has led to a further
improvement in Croatia’s credit rating. All three major credit
rating agencies now classify Croatia as an investment-grade
country, with either positive or stable outlooks.
Source: CNB, www.hnb.hr (Non-financial accounts of general government, Form h-i_1), Processing: HPB
Difference between total revenues and total expenditures of the consolidated general government (in EUR millions)
(2,000)
(1,500)
(1,000)
(500)
500
1,000
1,500
2017 2018 2019 2020 2021 2022 2023 2024
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
1717
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Annual Report of HPB Group
Business Environment
The number of credit institutions operating in the Croatian
market has been steadily declining due to market consoli-
dation and the cessation of smaller banks' operations. This
trend was further reinforced by Hrvatska poštanska banka’s
merger with Nova hrvatska banka in 2023, following the earlier
integrations of Jadranska banka and HPB Stambena štedi-
onica in 2019. In 2024, the number of institutions remained
unchanged, with 19 commercial banks and one housing
savings bank operating as of December 31, 2024.
Sector concentration, measured by the market share of
the five largest banks, has risen from an already high 74%
in 2017 to over 80% by the end of 2019, further increasing
to 82.82% at the close of 2024. Conversely, the Herfindahl-
Hirschman Index (HHI) measuring the concentration of assets
within credit institutions, after years of continuous growth,
recorded a slight decline in 2024 to 1,631 points, indicating
an increase in market competition.
Number of credit institutions and Herfindahl-Hirschman Index (HHI) for bank asset concentration
A defining feature of financial markets across Central and
Eastern Europe is the predominance of banks under foreign
ownership, and Croatia is no exception. For years, foreign-
owned banks and housing savings banks have accounted for
approximately 90% of the total assets within the credit insti-
tution sector, with European Union-based banks—primarily
Italian, Austrian, and Hungarian—holding a dominant position.
HPB remains one of the two remaining state-owned banks.
As of December 31, 2024, it ranked fifth among Croatian credit
institutions by total assets, with a market share of 9.37%. The
only other state-owned bank, Croatia banka d.d., accounted
for 0.35% of the system’s assets, bringing the combined
share of state-owned banks to 9.72%.
Source: Croatian National Bank, www.hnb.hr (revised performance indicators of credit institutions from 2008 to 2023, Selected indicators of
structure, concentration, and performance of credit institutions as of 31.12.2024.), processed by HPB
33
32 32
31
30
29
27 27
25
24
21
20 20 20
5
5 5
5
5
5
5
5
5
5
4
3 3 3
1
1 2
1
1
1
1
1 1
1
1
700
800
900
1.000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
0
5
10
15
20
25
30
35
40
45
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
20 19
1
2024
19
1
Banks Housing savings bank Savings banks HHI index (right axis)
1919
▲
2017 2018 2019 2020 2021 2022 2023 2024
Return on Assets (ROA) 0,85 1,21 1,37 0,61 1,17 1,00 1,75 1,88
Return on Equity (ROE) 5,91 8,40 9,82 4,40 8,75 8,18 15,46 16,37
Cost-income-ratio (CIR) 48,98 48,05 46,32 54,99 48,72 52,51 41,02 39,91
NPL share (NPL) 8,73 7,49 5,47 5,42 4,33 3,01 2,62 2,36
NPL coverage 61,64 60,41 68,01 64,05 63 ,16 66,98 69,04 66,31
Capital adequacy ratio 23,80 23,14 24,80 24,92 25,85 24,57 23,94 23,79
Liquidity coverage ratio (LCR) 190,83 164,38 173,71 181,94 202,48 242,38 238,08 230,90
Key performance indicators for credit institutions (in %)
Source: Croatian National Bank, www.hnb.hr (revised performance indicators of credit institutions for 2017–2023, unaudited performance
indicators of credit institutions as of 31.12.2024.), processed by HPB
The total assets of the sector grew by EUR 5.6 billion in
2024, representing a year-over-year increase of 7.13%. This
continued the sustained expansion of the financial sector’s
asset base, despite the frequent retail issuances of govern-
ment securities, which diverted funds from the banking sector
to the state budget via the Croatian National Bank.
Reflecting this, deposits with the central bank and loans
and advances continued to represent the most significant
asset components. The trend of gradual asset quality
improvement persisted, with the share of non-performing
loans (NPLs) decreasing to 2.36% at the end of 2024 from
2.62% at the end of 2023. Notably, NPLs in the household
loan portfolio declined from 4.23% to 3.66%, while the NPL
ratio for non-financial corporations dropped from 5.07% to
4.51%, largely driven by economic growth.
According to preliminary, unaudited data, credit institu-
tions recorded a net profit of EUR 1.53 billion in 2024, contin-
uing a streak of record-high net earnings. This performance
was primarily driven by increased revenues from deposits
held with the central bank. Consequently, profitability indi-
cators significantly exceeded historical averages, alongside
improvements in cost efficiency. The sector remained highly
capitalized, with liquidity indicators staying at elevated levels
due to the continued growth of funds held in bank transaction
accounts with the central bank.
2020
Annual Report of HPB Group
Credit Institutions – Overview of Selected Indicators Trends in 2024 (Ranking and Comparison of the Top 10 Banks
by Market Share and Selected Categories)
Asset growth
No. Institution name
Y-T-D
(%)
1 Slatinska banka d.d. 24.66
2 Croatia banka d.d. 22.15
3 Erste&Steiermärkische Bank d.d. 14.00
4 KentBank d.d. 13.19
5
Hrvatska poštanska banka d.d.
11.87
6 Banka Kovanica d.d. 10.14
7 Karlovačka banka d.d. 6.80
8 OTP banka d.d. 6.37
9 Partner banka d.d. 6.31
10
Addiko Bank d.d.
6.30
Capital adequacy
No. Institution name
Total capital
ratio (%)
1 J&T BANK d.d. 34.98
2 Samoborska BANK d.d. 32.99
3 Addiko Bank d.d. 32.25
4 Privredna BANK Zagreb d.d. 26.12
5 Zagrebačka BANK d.d. 25.01
6 Erste&Steiermärkische Bank d.d. 24.45
7 Karlovačka BANK d.d. 24.07
8 KentBank d.d. 21.55
9 Croatia BANK d.d. 21.42
10
Hrvatska poštanska banka d.d.
21.13
Return on equity
No. Institution name
ROE
(%)
1 Zagrebačka banka d.d. 19.23
2 Karlovačka banka d.d. 18.94
3 Privredna banka Zagreb d.d. 18.67
4 Istarska kreditna banka Umag d.d. 18.37
5 BANK Kovanica d.d. 17.19
6 Erste&Steiermärkische Bank d.d. 14.74
7 OTP BANK d.d. 14.73
8 Raiffeisenbank Austria d.d. 14.02
9
Hrvatska poštanska banka d.d.
13.47
10
Agram BANK d.d.
12.96
Profitability
No. Institution name
Profit or (–) loss for
the year in 000 EUR
1 Zagrebačka banka d.d. 449,641
2 Privredna banka Zagreb d.d. 436,977
3 Erste&Steiermärkische Bank d.d. 225,426
4 OTP banka d.d. 152,322
5 Raiffeisenbank Austria d.d. 90,691
6 Hrvatska poštanska banka d.d. 73.632
7 Addiko banka d.d. 38,140
8 Istarska kreditna banka Umag d.d. 12,834
9 KentBank d.d. 9,557
10 Karlovačka banka d.d. 9,553
Liquidity coverage ratio
No. Institution name
LCR
(%)
1 J&T BANK d.d. 1.286,33
2 Istarska kreditna banka Umag d.d. 606.56
3 Samoborska banka d.d. 513.63
4 Karlovačka banka d.d. 417. 22
5 Addiko Bank d.d. 329.71
6 Banka Kovanica d.d. 284.28
7 Podravska banka d.d. 273.49
8 Hrvatska poštanska banka d.d. 261.40
9 Raiffeisenbank Austria d.d. 260.39
10 Privredna banka Zagreb d.d. 242.85
Market share
No. Institution name
Share in total
assets
1 Zagrebačka banka d.d. 25.16
2 Privredna banka Zagreb d.d. 20.19
3 Erste&Steiermärkische Bank d.d. 17.9 6
4 OTP banka d.d. 10.15
5
Hrvatska poštanska banka d.d.
9.37
6 Raiffeisenbank Austria d.d. 8.14
7 Addiko Bank d.d. 2.78
8 KentBank d.d. 0.98
9 Istarska kreditna banka Umag d.d. 0.94
10
Podravska banka d.d.
0.86
Source: Croatian National Bank (HNB), www.hnb.hr (Data on the operations of credit institutions as of December 31, 2024 – provisional
unaudited figures); processed by HPB.
2121
▲
2222
Annual Report of HPB Group
Statement of the Management Board
on the Condition of Group of
Hrvatska poštanska banka, p.l.c.
Establishment and beginnings of HPB
The Bank was established in October 1991, with its regis-
tered office in Zagreb. Its inaugural business address was at
Tkalčićeva Street 7. Fifty founders/shareholders subscribed
to and acquired the Bank's shares, among whom the busi-
ness partners of Croatian Post and Telecommunication 'HPT'
were prominent. HPT, being the largest shareholder, provided
the initial premises and personnel for the Bank's operations.
Registered as a universal banking organization, the Bank was
authorized to conduct 'all cash, deposit, credit, and guarantee
operations with legal entities and all banking operations with
natural persons, including the provision of payment services.
In response to the retail and corporate demand for banking
services, particularly in local areas without banks, the Bank
leveraged the extensive network of HPT offices to introduce
banking services. This included the acceptance of retail and
corporate deposits, particularly from HPT business partners.
Starting in May 1992, the Bank began offering international
foreign exchange payment services and accepting the first
foreign exchange deposits. Throughout that year, the benefits
of the newly established financial institution were recognized
not only by its founders and HPT’s business partners but also
by smaller private businesses, which began depositing their
funds with the Bank. Pursuant to the Regulation on Recovery
of Debts and Funds Placed With Poštanska štedionica
Beograd – Croatian Subsidiary, Zagreb (dated March 25,
1992, Official Gazette 15/92), the Bank was designated as
the legal successor of the aforementioned subsidiary. This
significantly enhanced its potential and activities, encom-
passing the exchange of passbooks and current accounts,
assimilation of savers and depositors, and recovery of claims.
Initially, the Bank primarily engaged in retail banking,
accepting HRD (dinar) and HRK deposits from individuals,
managing payroll and pension payments, investing surplus
funds in money markets, and providing short-term loans to
legal entities. Despite the challenging operating conditions,
the Bank consistently achieved growth in its balance sheet
and profitability.
In 1995, the Bank acquired a building at Jurišićeva Street
4, which has served as its headquarters ever since and
remains unchanged to this day.
Business expansion
The Bank's first branch opened in Split in April 2003, marking
the start of a significant expansion of its business network.
This network has since grown to encompass 56 business
units as of today.
In July 2005, the Bank founded HPB-nekretnine, a real
estate limited liability company, and HPB Invest, a limited
liability company for investment fund management, thereby
establishing the Hrvatska poštanska banka Group.
The Group's development continued in 2006 with the
establishment of HPB Stambena Štedionica, a public limited
company specializing in housing savings. This entity was
successfully merged with the parent company on December
2, 2019, as part of a business rationalization and optimization
effort.
Diversification of the ownership structure
and capital strengthening
Through public share offering in September 2015, the Bank
successfully raised its equity by EUR 73 million, leveraging
both private and public equity investments. The diversified
shareholding structure now includes pension funds, invest-
ment funds, and other private investors, who contributed EUR
40.6 million to acquire a 25.5% ownership stake The Republic
of Croatia invested EUR 32.4 million, reducing its and its
related persons' ownership from 99% to 74.5%. In 2021, this
stake rose to 77.3% following the transfer of shares resulting
from the dissolution of the Prosperus Economic Cooperation
Fund, a Bank shareholder. The shares were distributed to
the fund's participants: the Croatian Bank for Reconstruction
and Development, which passed its shares to the Republic
History and Key Events in the Development of Hrvatska poštanska banka
p.l.c.
2323
▲
of Croatia, and the Fund for Financing the Decommissioning
and Disposal of Radioactive Waste and Spent Nuclear Fuel
from the Krško Nuclear Power Plant, wholly owned by the
Republic of Croatia.
Acquisition and merger of Jadranska
banka pl.c. Šibenik
In a historic move for the bank in 2018, it capitalized on an
opportunity for inorganic growth by acquiring a 100% owner-
ship stake in Jadranska Banka p.l.c. Šibenik (JABA) on July
14, 2018. JABA was previously undergoing a resolution
process. The acquisition was swiftly followed by the initiation
of a merger process with the bank, culminating successfully
on April 1, 2019. Subsequently, JABA was integrated as a
regional centre within the bank, yielding positive synergistic
and financial impacts on the bank's capital.
Acquiring Sberbank p.l.c., stabilizing
operations, rebranding as the New
Croatian bank, and integration into HPB
Following the onset of Russian aggression against Ukraine,
Sberbank’s Croatian subsidiary experienced a sharp deteri-
oration in liquidity due to an uncontrolled withdrawal of client
funds, leading to the initiation of a resolution process on
March 1, 2022.
HPB had performed exceptionally well since 2019, signif-
icantly strengthening its capital position and positioning itself
for new acquisitions. When the Single Resolution Board and
the Croatian National Bank (CNB) invited interested banks to
acquire Sberbank p.l.c., HPB responded swiftly and decisively,
acquiring a 100% ownership stake in Sberbank p.l.c. through
an expedited procedure for HRK 71,000,000.00, securing all
necessary regulatory approvals. This transaction success-
fully averted potential systemic risks that could have arisen
from the failure of Sberbank p.l.c. Croatia.
Following the successful resolution of Sberbank, the
Croatian National Bank (CNB) Council, at its session held
on April 13, 2022, issued a Decision formally concluding the
resolution procedure for Sberbank p.l.c. at precisely 11:59:59
p.m. on the same day.
HPB assumed control and management of Sberbank
on April 14, 2022, from which point it has operated within
the HPB Group under the name Nova Hrvatska Banka p.l.c.
(NHB). This acquisition further strengthened the HPB Group
by expanding its client portfolio and branch network for both
retail and corporate banking, reinforcing its strategic objec-
tives of developing a domestically owned banking group and
contributing to Croatia’s economic growth and prosperity.
To maximize the synergistic effects and benefits for share-
holders and clients, HPB and NHB adopted a resolution on
December 20, 2022, to initiate the legal, formal, and opera-
tional merger of Nova Hrvatska Banka p.l.c. into HPB.
On March 1, 2023, HPB, as the acquiring entity, and
NHB, as the merging entity, signed a Merger by Acquisition
Agreement. The Croatian National Bank approved the merger
with its Decision dated April 12, 2023, and on July 3, 2023, the
Commercial Court in Zagreb issued a ruling registering the
merger, thereby formally completing the legal aspects of the
integration. The operational aspects of the merger were fully
finalized on June 3, 2024.
The Merger by Acquisition did not result in an increase in
HPB’s share capital as the acquiring entity. Instead, it entailed
the transfer of NHB’s assets and liabilities to HPB without any
changes to HPB’s shareholder structure.
In addition to acquiring Sberbank, on July 4, 2022, HPB
executed a transaction for the purchase of claims and equity
stakes related to the credit-deposit and other financial relation-
ships of Nova Hrvatska Banka p.l.c. from Pronam Nekretnine
d.o.o. and SBERBANK EUROPE AG (in liquidation), with a
total transaction value of EUR 74,000,000. The legal merger
of the entity was completed on March 14, 2023.
Transition to the euro
In line with the defined plans and timelines for replacing the
Croatian kuna with the euro, HPB was among the first banks
to successfully adapt all its systems to the euro, commencing
regular operations promptly at 8:00 AM on Monday, January
2, 2023. Given its significant role in pension payments, the
bank ensured immediate and uninterrupted disbursement to
retirees across Croatia, alongside the continued provision of
all other banking services.
Due to the extensive scope of diverse business activities
required for a timely transition, hundreds of individual devel-
opment tasks, meetings, and team coordination efforts were
carried out, with IT specialists dedicating over 80,000 working
hours to this project. A total of approximately 250 minor and
major modifications were made to the IT system, making this
one of the most extensive projects in the bank’s history. As of
January 1, 2023, with the euro officially becoming the currency
of the Republic of Croatia, the bank, in accordance with legal
requirements, executed the necessary alignment of its share
capital and nominal share values with the provisions of the
Act on the Introduction of the Euro as the Official Currency in
the Republic of Croatia (Official Gazette nos. 57/22 and 88/22
– correction) and the Act on Amendments to the Companies
Act (Official Gazette no. 114/22). In this context, following the
Resolution of the General Assembly on August 30, 2023, the
Commercial Court of Zagreb registered the adjustment of the
share capital in September 2023. This alignment, required by
the introduction of the euro, resulted in an increase of EUR
741,650.41, charged to legal reserves, and included amend-
ments to the Articles of Association. Following the adjustment,
the bank’s share capital stands at EUR 161,970,000, divided
into 2,024,625 ordinary shares, each with a nominal value of
EUR 80.00. The total number of issued ordinary shares of the
bank remained unchanged
2424
Annual Report of HPB Group
10/1991
Establishment of HPB
as a subsidiary of
Croatian Post
and Telecommunications
("HPT")
12/1995
Purchase and
relocation
to a new headquarter
in the famous building at
Jurišićeva 4, Zagreb
4/2003
The first
HPB branch
opened in Split
7/2005
Corporate rebranding
and the adoption of a new
logo and a new slogan
("My Bank")
12/2010
The Republic
of Croatia becomes
the majority shareholder
through recapitalization
9/2015
HPB's
recapitalization
through a combined
private and
public offer
(HRK 550 million)
7/2018
Acquisition of
Jadranska banka p.l.c.
Šibenik
3/2022
Acquisition of
Sberbank p.l.c.,
which becomes
Nova hrvatska
banka p.l.c.
7/2022
Acquisition of
Pronam nekretnine Ltd.
Zagreb
7/2023
Merger of
Nova hrvatska
banka p.l.c.
6/2024
Operational
merger of
Nova hrvatska
banka p.l.c.
Significant Milestones in 2024
1/2024 –
12/2024
Successful launch
and completion of the
second and third cycles
of HPB Super
Štednja
6/2024
Successful completion
of the operational
merger of NHB
with Hrvatska
poštanska
banka
6/2024
HPB recognized
with the
"Best Buy" award
for best savings
product
10/2024
HPB wins the
Zlatna kuna award
for the most successful
bank in 2023
12/2024
Dividend approved
at the Extraordinary
General Meeting
Significant Milestones in the Corporate History of HPB p.l.c.
2525
▲
Business Activities of Hrvatska poštanska banka
The Bank provides a comprehensive suite of banking and financial services, catering primarily to retail and corporate clients.
These services include:
a variety of deposit and credit products in both domestic and foreign currencies for corporate and retail clients,
transactional services,
issuance of guarantees, avals, and related products,
factoring, financial lease services,
securities-related services,
creditworthiness analysis and information services for both legal entities and natural persons natural persons carrying
out their business independently,
activities related to the sale of insurance policies in accordance with the law governing insurance,
electronic money issuance,
issuing and administering other payment instruments, when not classified as payment services under specific legislation,
miscellaneous banking products and services, such as safes and Western Union services.
2626
Annual Report of HPB Group
Regulatory Framework
The foundational and operational conditions for the Bank as
a credit institution in the Republic of Croatia are governed by
the Credit Institutions Act (Official Gazette Nos. 159/2013,
19/2015, 102/2015, 15/2018, 70/2019, 47/2020, 146/2020,
and 151/2022) and the Companies Act (Official Gazette Nos.
125/2011, 111/2012, 68/2013, 110/2015, 40/2019, 34/2022,
114/2022, 18/2023, 130/2023, and 136/2024).
For the Bank’s operations, subordinate regulations issued
by the Croatian National Bank (CNB), as the competent regu-
latory authority, are of particular relevance. These regulations
govern the Bank’s core activities and operations related to
its core business, most notably the Decision on Governance
Arrangements (Official Gazette Nos. 96/2018, 67/2019,
145/2020, 145/2021, 51/2023, and 28/2024).
The provision of investment and ancillary services, as
well as the conduct of investment activities in the Republic
of Croatia, is regulated by the Capital Markets Act (Official
Gazette Nos. 65/2018, 17/2020, 83/2021, 151/2022, and
85/2024), alongside subordinate regulations of the Croatian
Financial Services Supervisory Agency (HANFA) and rele-
vant EU regulations that directly or through their transposition
into Croatian law ensure a unified capital market framework
across the European Union. The Payment Services Act
(Official Gazette Nos. 66/2018, 114/2022, and 136/2024),
including its accompanying subordinate regulations, governs
the payment services provided by the Bank. Additionally, in
carrying out activities related to the sale of insurance poli-
cies, the Bank adheres to the Insurance Act (Official Gazette
Nos. 30/2015, 112/2018, 63/2020, 133/2020, 151/2022, and
152/2024) and related regulations.
As the Republic of Croatia—either directly or through state-
owned companies—is the majority shareholder of the Bank,
the Bank also complies with specific laws and regulations
applicable to majority state-owned companies. Furthermore,
as the Bank’s shares are listed on the regulated market of
the Zagreb Stock Exchange, the Bank qualifies as an issuer
and is therefore subject to the Capital Markets Act in relation
to the obligations of issuers whose securities are admitted to
trading on a regulated market. This includes compliance with
subordinate regulations issued by HANFA and relevant EU
regulations, the most significant of which is Regulation (EU)
No. 596/2014 of the European Parliament and of the Council
of April 16, 2014, on market abuse (Market Abuse Regulation),
repealing Directive 2003/6/EC and related Commission
Directives 2003/124/EC, 2003/125/EC, and 2004/72/EC.
The Bank applies European Union regulations, includ-
ing those directly enacted by the European Parliament and
Council. Among these, the most notable is Regulation (EU)
No. 575/2013 of the European Parliament and of the Council
of June 26, 2013, on prudential requirements for credit insti-
tutions and investment firms, amending Regulation (EU) No.
648/2012 (Official Journal of the EU L 176/2013). Additionally,
delegated and implementing regulations of the European
Commission are directly applicable to credit institutions
operating in Croatia. Other relevant legal instruments regulate
corporate operations within the Republic of Croatia, as well
as the activities of Croatian entities and credit institutions
engaged in cross-border transactions (e.g., regulations of
other jurisdictions and international agreements related to
anti-money laundering (AML), international payment transac-
tions, etc.).
The Croatian Financial Services Supervisory Agency
(HANFA) serves as the competent authority overseeing
the Bank’s operations as a credit institution that provides
investment and ancillary services and conducts investment
activities. The Croatian Deposit Insurance Agency super-
vises compliance with credit institutions’ obligations under the
Deposit Insurance Act (Official Gazette Nos. 146/2020 and
119/2022). The Croatian National Bank (CNB) establishes
rules, procedures, and instruments for the resolution of
credit institutions in accordance with the Resolution of Credit
Institutions and Investment Firms Act (Official Gazette Nos.
146/2020, 21/2022, 27/2024, and 145/2024).
The Agency for Personal Data Protection oversees compli-
ance with data protection regulations, primarily Regulation
(EU) 2016/679 of the European Parliament and of the Council
of April 27, 2016, on the protection of individuals concerning
the processing of personal data and the free movement of
such data, repealing Directive 95/46/EC (General Data
Protection Regulation – GDPR). The Agency also enforces
the Act on the Implementation of the General Data Protection
Regulation (Official Gazette No. 42/2018).
As a reporting entity under the Anti-Money Laundering
and Terrorist Financing Prevention Act (Official Gazette Nos.
108/2017, 39/2019, and 151/2022), the Bank undertakes meas-
ures, actions, and procedures prescribed by this Act to prevent
and detect money laundering and terrorist financing, ensuring
the implementation of preventative measures to safeguard
the financial system from illicit activities. Furthermore, the
Bank complies with the European Banking Authority (EBA)
Guidelines on Money Laundering and Terrorist Financing
Risk Factors (EBA/GL/2021/02) and the EBA Guidelines on
Compliance (EBA/GL/2022/05) and integrates them into its
operational framework.
Additionally, the Bank adheres to the Restrictive Measures
Act (Official Gazette No. 133/2023), which governs the imple-
mentation of restrictive measures (sanctions) enforced by the
Republic of Croatia in accordance with EU legal acts, United
Nations resolutions, and other international organizations’
decisions aimed at protecting democratic values, the rule
of law, human rights, and international legal principles, as
well as maintaining international peace, preventing conflicts,
and enhancing global security. Beyond this Act, the Bank
also complies with other relevant regulations on restrictive
measures.
2727
▲
Hrvatska
poštanska banka,
p.l.c.
HPB Invest
Ltd.
HPB-nekretnine
Ltd.
Overview of HPB Group and and the Bank's Position within the Group
Hrvatska poštanska banka, a public limited company, is part of a group of related entities as defined by the Credit Institutions
Act and is a 100% shareholder in the following companies, together constituting the HPB Group:
Hrvatska poštanska banka p.l.c. does not constitute a part of a concern as defined by the Companies Act.
Parent
company
Industry State Ownership %
HPB Invest Ltd. Investment Funds Management Croatia 100.00
HPB-nekretnine Ltd.
Real Estate Agency and
Construction
Croatia 100.00
Subsidiaries
2828
Annual Report of HPB Group
HPB-R-A Share
HPB stock is listed on the Official Market of the Zagreb Stock Exchange. The last share price at the end of the reporting period
in 2024 was EUR 318.00 (trading day December 30, 2024), representing an increase of 70.05 percent compared to the last
recorded price in 2023 (EUR 187.00 on the trading day December 29, 2023).
Trading of the HPB-R-A share during the reporting period was as follows:
Stock Data and Details
Issue date December 12, 2000
ISIN HRHPB0RA0002
Segment Official Market of the Zagreb Stock Exchange
Listed quantity 2,024,625
Share price as at December 30, 2024 (in EUR) 318.00
Market capitalization (in EUR million) 643.83
Q1 24 Q2 24 Q3 24 Q4 24
Last price in EUR
80
130
180
230
280
330
380
max. ytd 2024.:
EUR 344,00
(December, 11)
min. ytd 2024.:
EUR 184,00
(January, 3)
2929
▲
Σ = 74.57% Σ = 25.43%
44.90% 8.76% 11.93%
OTHER
SHAREHOLDERS
Hrvatska
poštanska banka
p.l.c.
CROATIAN
PENSION
INSURANCE
INTITUTE
8.98%
CROATIAN
DEPOSIT
INSURANCE
AGENCY
CROATIAN
POST
REPUBLIC
OF CROATIA
equity holdings managed by the Ministry of Physical Planning, Construction and State Assets
companies owned by the Republic of Croatia
private institutional shareholders and individuals
Source: SKDD
The Republic of Croatia, through the Ministry of Physical Planning, Construction and State Assets, along with other state
institutions and legal entities under its ownership, held a 74.57% stake in the Company's share capital and voting rights
as of December 31, 2024.
Ownership Structure of Hrvatska poštanska banka p.l.c.
On December 31, 2024 the Bank's ownership structure was as follows:
3030
Annual Report of HPB Group
equity holdings managed by the Ministry of Physical Planning, Construction and State Assets
companies owned by the Republic of Croatia
private institutional shareholders and individuals
Business Overview and Financial Summary
Net profit
The operating profit before provisions was EUR 112.3 million. The provisioning cost for loan losses and other financial and
non-financial asset adjustments amounted to EUR 14.4 million, while expenses from the reversal of provisions for liabilities and
charges totaled EUR 7.8 million.
Operating profit before provisions
2022 2023 20242020 2021
Operating profit (EUR million) Operating profit / avg.asset
38.4
41.4
23.6
93.7
1.2 % 1.2 %
0.6 %
1.6 %
112.3
1.5 %
2022 2023 20242020 2021
Net profit (EUR MN) ROAE
73.6
13.5 %
7.5 %
7.9 %
18.3 %
24.2
26.8
17.6
80.6
5.0 %
3131
▲
In 2024, the Bank achieved a net profit after taxes amounting to EUR 73.6 million.
Net Operating Income Composition for the period from January 1 to December 31
Cost management 2020 – 2024
Operating costs increase mainly due to the extensive integration and project efforts associated with the merger of Nova
Hrvatska Banka, alongside an overall increase in expenses driven by inflation. The Bank consistently endeavors to ensure cost
management is executed with utmost efficiency.
67.2% 22.1% 10.7%
63.8% 23.5% 12.7%
2024
2020
2021
2022
2023
Net interest income Net fee income
Other non-interest income
76.9% 15.5%
7.6%
79.4% 15.8% 4.8%
71.8% 27.9%
0.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
EUR 96 MN EUR 112 MN EUR 68 MN EUR 67 MN EUR 75 MN
6 1 3 2
10
9
9
12
22
25
28
38
30
32
35
44
0
13
43
56
63.8%
62.0%
76.0%
50.6%
49.8%
49.8%
58.5%
72.7%
49.7%
0
100
200
2020 2021 2022 2023 2024
Total
In EUR MN
60.3%
Employee cost Depreciation and amortization C/I (headline)
General and administrative cost
Deposit insurance
C/I (ex. deposit insurance)
Total operating income amounts to EUR 224 million.Net interest income of EUR 178 million accounted for 79 percent of total
operating income.
3232
Annual Report of HPB Group
Provisions for losses
Although asset growth was recorded in 2024, it did not result in an increase in risk-weighted assets.
Assets and RWA
2022 2023 20242020 2021
15.0
7.7
1.2
0.4
(0.7)
1.2
(0.3)
(1.7)
(2.7)
(0.1)
(2.8)
(13.1)
(1.3)
0.0
(1.6)
EUR million
Credit loses - loans Credit loses - other Non-financial assets
+133.2 %
32.6 % 31.4 %
2020 2021 2022 2023 2024
Assets (EUR million) RWA (EUR million) RWA/Assets
41.2 %
37.8 %
7.9
2.4
1.4 1.4 1.5
2.2
3.4
3.7
4.6
7.0
30.4 %
+72,2 %
3333
▲
Assets composition
(December 31, 2023) (December 31, 2024)
Cash. receivables from CNB and other banks Investment securities
Loans and receivables from customers Tangible. intangible and other assets
Structure of total loans
(December 31, 2023)
46%
54%
46% 54%
Structure of total loans
(December 31, 2024)
retail
corporate
retail
corporate
3,107
916
2,910
113
3,801
1,104
2,869
109
-3.9 %
-1.4 %
+20.6 %
+22.3 %
EUR million
At the end of 2024, the Bank's assets amounted to EUR 7.883 billion, representing an increase of EUR 837 million (+11.9%)
year on year. With 36.4 percent, loans and receivables from clients constitute the most significant portion of the asset structure.
3434
Annual Report of HPB Group
Total deposits increased by 13.3 percent. The growth in sight deposits in 2024 amounted to EUR 435 million, while term
deposits grew by EUR 346 million.
Liabilities and equity composition
(December 31, 2023) (December 31, 2024)
Term deposits A vista deposits Other liabilities Equity
Structure of total deposits
(December 31, 2023)
retail
corporate
financial markets
Structure of total deposits
(December 31, 2024)
retail
corporate
financial markets
2,114
3,748
650
534
51%48%
1%
2,460
4,183
680
560
+4.9 %
+4.6 %
+11.6 %
+17.1 %
49%50%
1%
EUR million
3535
▲
RETAIL SEGMENT OPERATIONS
Retail operations are conducted via the Bank's extensive
network, including 6 regional centres, 60 canter and 4 outlets,
e-branch, in addition to leveraging the distribution network of
Croatian Post, which encompasses over 1,000 post offices
throughout the Republic of Croatia.
The year 2024 was marked by continued positive trends in
retail deposits, with an increase of EUR 266 million, bringing
total deposits to EUR 3.278 billion as of December 31, 2024,
representing an 8.8 percent growth.
Regarding deposit structure, 2024 saw a return to historical
trends. Following the significant term deposit growth in 2023,
there was a shift towards sight deposits in 2024, which grew by
22.6 percent to EUR 1.823 billion, while term deposits declined
by 4.6 percent, amounting to EUR 1.455 billion at year-end.
The year 2024 marked a rebound in lending activity, with
EUR 324 million in total loans disbursed, 75 percent of which
were non-purpose cash loans. This led to a EUR 47.3 million
increase in the gross loan portfolio for housing and other loans.
Overview of Business Segment Operations
545 thousand
Total clients
25.5 thousand
New clients
3636
Annual Report of HPB Group
3
9
14
22
12
5
Pula
1
Poreč
1
Gospić
1
Knin
1
Sinj
1
Trilj
1
Split
3
Imotski
1
Makarska
1
Metković
1
Dubrovnik
1
Konavle
1
Zadar
3
Rijeka
1
Karlovac
1
Sisak
1
Velika Gorica
2
Dugo Selo
1
Zaprešić
1
Zagreb
16
Bjelovar
1
Koprivnica
1
Varaždin
1
Čakovec
1
RSC
Središnja
Hrvatska
RSC
Sjeverna
Hrvatska
RSC
Istra i
Kvarner
RSC
Dalmacija
- sjever
RSC
Dalmacija
- jug
RSC
Istočna
Hrvatska
Virovitica
1
Valpovo
1
Đakovo
1
Vodice
1
Šibenik
3
Solin
1
Slavonski
Brod
1
Požega
1
Donji
Miholjac
1
Našice
1
Beli Manastir
1
Cavtat
1
Vinkovci
1
Vukovar
1
Osijek
2
Trogir
1
Kaštel
Stari
1
Branch network
1,016
post offices for
euro payment transaction
and contracting
Bank's products and
service for retail customers
992
locations for
corporate clients
141
location for retail credit
operations in the financial
corner of Croatian Post
6
regional
centres
60
centres
4
outlets
3737
▲
Throughout 2024, the card operations segment achieved
significant milestones, including the successful operational
merger and migration of Nova hrvatska banka into Hrvatska
poštanska banka, the introduction of new products and tech-
nologically advanced card acceptance devices, and numer-
ous business process enhancements.
One of the key achievements in 2024 was the successful
migration of card products from Nova hrvatska banka. This
complex process, requiring meticulous planning and coordi-
nation, was seamlessly completed, ensuring service continu-
ity and customer satisfaction.
In May 2024, following the operational merger, the Bank
migrated the entire card product portfolio, replacing all debit
and credit cards, including seven distinct card products for
both retail and corporate clients. Additionally, the merchant
portfolio and ATMs from Nova hrvatska banka were inte-
grated into the Bank’s system.
As part of this migration process, the Bank undertook
extensive optimization efforts, ultimately leading to a 1
percent reduction in the card portfolio compared to 2023,
resulting in a total of 720 thousand valid cards.
Of this total, 97 percent were issued to retail clients, while
3 percent were issued to corporate clients.
The Bank processed a total of 49.1 million transactions,
reflecting a 12.8 percent increase year-on-year. The total
transaction volume amounted to EUR 2.7 billion, represent-
ing a 17.3 percent increase compared to 2023. Transactions
conducted using HPB-issued cards reached 40.1 million,
marking a 16.6 percent growth compared to the previous year.
These results were driven by the merger with Nova
Hrvatska Banka, various internal initiatives, and partnerships
with business collaborators.
The Bank also focused on enhancing customer benefits,
including the implementation of post-purchase installment
payments via digital channels and Bank branches. This
service is now available to eligible debit card users and
holders of the Visa "One for All" charge credit card, offering
greater financial flexibility. Additionally, cash withdrawals with
HPB cards are now enabled at Tisak sales points.
As part of the operational migration, the Bank strength-
ened its card acceptance network, allowing bill payments
at over 3,000 EFT-POS terminals, as well as at Tisak and
Konzum sales points. This was one of the most complex and
significant migration processes in the Bank’s card operations,
demonstrating its ability to successfully manage large-scale
challenges while ensuring continuity and quality of service for
end users.
To maintain a high standard of reliability and service for
merchants, the Bank completed the certification and imple-
mentation of the latest version of Verifone EFT-POS termi-
nals, initiating a terminal network renewal program, which will
be carried out progressively.
The Bank remains highly competitive in the ATM segment,
both in terms of the number of ATMs available and the range of
services offered. The ATM network is continuously optimized
based on client needs, and in 2024, it was expanded with the
latest series of Diebold Nixdorf cash and deposit ATMs.
Security remains a top priority in card operations. In
2024, the Bank successfully implemented electrochemical
protection on ATMs, ensuring full compliance with regulatory
requirements. Additionally, in collaboration with business
partners, the Bank launched the implementation of one of
the most advanced electronic security systems to prevent
unauthorized access to ATM safes. These measures further
demonstrate the Bank's commitment to safeguarding assets
and client data.
DIRECT BANKING DIVISION OPERATIONS
Card Operations
553
ATM
720 thousand
Valid cards
17
various card products
3,195
EFT-POS terminals
3838
Annual Report of HPB Group
In addition to these initiatives, the Bank conducted a series
of optimizations and system upgrades to further enhance the
quality of its card products while ensuring compliance with
regulatory and industry standards.
Digital banking
The expansion of digital banking services remains a key
trend, particularly within mHPB mobile banking. At the close
of 2024, the mHPB retail client base reached 160 thousand,
reflecting a 5 percent increase compared to the previous
year. The number of transactions grew by 17 percent, while
the transaction volume recorded a significant 36 percent
increase year-on-year.
In the corporate segment, the number of Internet Banking
users surpassed 15 thousand, marking a 5 percent increase
compared to 2023. Additionally, corporate mobile banking
adoption recorded a 17 percent rise, while the transaction
volume processed via mHPB for corporate users grew by 70
percent.
With clients increasingly turning to digital channels for their
financial needs, the Bank remains focused on innovation and
digital transformation. Our goal is not only to meet evolving
client demands but also to proactively develop cutting-edge
solutions that align with future banking trends.
The year 2024 was marked by the Bank’s integration with
Nova Hrvatska Banka, activities related to the operational
merger of Nova Hrvatska Banka into HPB, and business
stabilization following the merger.
As part of the operational merger, the following key digital
functionalities were implemented:
• A seamless digital migration solution for NHB app
users, allowing them to transition to HPB apps
remotely, without the need to visit a branch,
• The ability for retail ustomrs who own credit cards but
do not hold a transaction account to contract mHPB
mobile banking,
• A post-transaction installment splitting service for ATM
withdrawals and credit card payments, accessible via
mHPB mobile banking,
Additionally, as part of a bank-wide initiative to enhance
online payment security, the Bank continuously upgraded
mHPB and Internet Banking functionalities throughout 2024,
focusing on minimizing online fraud risks by introducing:
• Setting daily transaction limits for online payments,
• Creating a list of verified recipients,
• Implementing robust measures for secure customer
authentication,
• Establishing a blacklist for managing suspicious recip-
ient accounts,
• Introducing first payment validation via Push
notification,
• Overhauling the m-Token redistribution process.
Significant efforts were dedicated to the development of
Adaptive Authentication for Internet Banking, an advanced
risk-based fraud prevention system designed to dynamically
adjust client authentication requirements in real time based
on assessed risk levels.
In parallel, we focused on enhancing the user experience
by developing innovative digital solutions:
• Online contracting of SuperSmart accounts
The digital onboarding process for HPB
SuperSmart current and giro accounts was
streamlined and optimized, allowing clients to
open accounts entirely online via the e-Branch,
eliminating the need for in-branch visits.
• Advancements in PSD2 integration
Continuous expansion and refinement of
PSD2 interfaces enhanced both function-
ality and the user experience, ensuring
seamless and secure transactions.
With innovation at the core of our strategy, we are commit-
ted to staying ahead of industry trends and driving digital
transformation, providing clients with secure, fast, and user-
friendly banking solutions.
3939
▲
Overview of retail products and services:
Product group Products and services in 2024
Accounts
• Current account – local currency
• Basic account / Basic account for vulnerable groups - local currency
• Special purpose accounts – local currency / foreign currency
• Switching payment accounts – local currency / foreign currency
• Giro account – local currency / foreign currency
• Foreign currency account
• SuperSmart HPB account – local currency
• Payment operations – national / international, cash / non-cash, local currency / foreign
currency
• Payment operations – national, cross-border, and international payments
• SEPA Instant Payments – 24/7/365
• SEPA direct debits
• Reporting – monthly / annually
• Foreign check processing
• Standing orders
Savings
• Demand deposit – EUR / fx
• Flexy Kockica children's savings account – local currency
• Non-purpose term deposits – EUR /fx
• Multipurpose term deposits – EUR / fx
• Term savings with multiple deposits – EUR
• Annuity savings – EUR / fx
Loans
Housing Loans
• Housing loan with fixed interest rate
• Housing loan without mortgage with fixed interest rate
• Housing loan under the Housing Loan Subsidization Act
• Housing loan for apartment purchase under the Socially stimulated housing construction
program A with fixed interest rate
• Housing loan based on HPB Housing savings
Multipurpose loans
• Tourist loan with fixed interest rate
• Loan for private high school or grammar school enrollment fees, undergraduate,
graduate, and/or postgraduate study with fixed interest rate
• Loan for settling overdrafts on the current account in the Bank
Non-purpose loans
• Non-purpose loan
• Non-purpose loan for pensioners with combination of fixed and variable interest rate
• Non-purpose loan for pensioners
• Lombard loan secured by term deposit
• Non-purpose mortgage loan with a fixed interest rate
• Non-purpose loan for clients with housing loan based on Law on Subsidizing Housing
Loans
Cards
• Debit Mastercard contactless card
• VISA Electron / Debit current account card
• Maestro current account card
• Mastercard debit gyro account card
• VISA prepaid card
• VISA prepaid card for young people - IDEEEŠ!
• Visa installments card
• Gold Mastercard card
• Mastercard Pošta & HPB card
• Mastercard credit card (revolving)
• Mastercard deferred payment card (charge)
4040
Annual Report of HPB Group
Product group Products and services in 2024
E - banking
• mHPB
• mToken
• Internet banking
• SMS / e-mail services
• e-account
• e-cash
• e-citizens
HPB Invest
• HPB Focus 2026 fund
• HPB Short-term bond fund
• HPB bond fund
• HPB Bond plus fund
• HPB Global fund
• HPB Equity fund
Croatia Insurance
Non-life insurance
• Accident insurance
• Health insurance
• Insurance of goods in transit
• Insurance against fire and natural forces
• Insurance against other damage to property
• General liability insurance
• Credit insurance
• Insurance against miscellaneous financial loss
• Travel insurance
Life insurance
• Endowment insurance
• Term insurance
• Pure endowment insurance
Supplemental life insurance
• Accidental death benefit rider
• Other Supplemental life insurance
Croatia Insurance
Voluntary Pension
Fund Ltd.
• CROATIA INSURANCE 1000A voluntary pension fund
• CROATIA INSURANCE voluntary pension fund
• CROATIA INSURANCE 1000C voluntary pension fund
Other
• Brokerage services - Credit Intermediary Services
• RoboAdvice application advisory services - determining the suitability of open
investment funds for clients
• Suitability assessment of open investment funds for clients
• Execution only
• Foreign exchange operations
• Safe deposit boxes
• ORYX Assistance – Home Assistance
• ORYX Assistance – Roadside Assistance
• Triglav Assistance – Home Assistance
• Triglav Assistance – Roadside Assistance
4141
▲
CORPORATE SEGMENT OPERATIONS
1,629
total clients
EUR 987 mil
loan volume
874
local government and self-government units
and associated companies
EUR 2,263 mil
deposit volume
Large Corporates and Public Sector Division served 1,629
clients, with a commitment to continually enhancing services
and integrating innovative solutions to more effectively fulfill
client requirements. The year 2024 was marked by the oper-
ational merger of Nova Hrvatska Banka (NHB) into Hrvatska
poštanska banka, which, alongside organic portfolio growth,
significantly contributed to the expansion of the client base,
loan volumes, and deposits.
The gross loan portfolio for legal entities in the Large
Corporates and Public Sector Division amounted to EUR
987.2 million, with commercial enterprises and national funds
holding the largest share. HPB remains committed to support-
ing companies and industries that drive economic growth and
value creation.
As of December 31, 2024, total deposits from legal entities
in this division reached EUR 2,262.9 million, of which EUR
1,958.2 million were demand deposits, primarily from clients
in the Central State segment. This deposit growth was also
influenced by the acquisition of new clients and the overall
liquidity of the financial system.
The overall financial system's high liquidity and intense
competition among banks presented substantial challenges.
The performance in the segments of large corporate, the
central state, and local government units in 2024 was shaped
by the need to adapt to the risks associated with market
volatility, sparked by the war in Ukraine, the aftermath of the
pandemic, rising interest rates, and intense pricing competi-
tion within the banking sector.
The large corporate segment experienced a continued
recovery in 2024, following the upward trend that began in
2023. However, major investments remained subdued, and
the year ended under the influence of inflationary pressures
and a slowdown in contracted projects. The primary demand
was for liquidity financing and refinancing of existing obli-
gations, as companies sought more favorable interest rates
and lower financing costs. The strongest loan growth was
recorded in the large corporate segment, driven by intensive
client acquisition efforts throughout 2023 and 2024, resulting
in steady growth throughout the year. By focusing on credit-
worthy clients and financing working capital, the Bank was
able to compensate for the absence of investment loans.
Local government units continued to base their funding
strategies on competitive public tenders, aiming to secure the
most cost-effective financing options. Within this environment,
the Bank carefully positioned itself, capitalizing on opportu-
nities that aligned with its pricing strategy. The Central State
remained largely self-financed through bond and treasury bill
issuances, significantly limiting opportunities for bank lending.
Local government units' investments in municipal infra-
structure contributed to an impressive performance and a
significant growth in the Bank's loan portfolio. A significant
advancement was also achieved in financing working capital
for both new and existing clientele. The Bank continues to
finance long-term investments, maintaining its strong market
position.
The Bank continued to develop new products and expand
its specialized services, particularly in co-financing projects
with European funds through the established EU desk. This
initiative provides expert support to both public and private
sector clients in financing and executing projects. Additionally,
project financing solutions were introduced to support large-
scale infrastructure, energy, and tourism projects, aligning
with the expected increase in demand for investment loans.
The Bank maintained strong partnerships with HBOR and
HAMAG-BICRO, as well as EIB, GGF, and EFSE, continuing
successful collaborations across various financing programs.
Looking ahead, the Large Corporates and Public Sector
Division will remain dedicated to intensive collaboration and
credit support for large enterprises, state entities, and local
government units. The strategic focus will be on diversify-
ing the loan portfolio, with an emphasis on private-sector
large enterprises and local government financing, while
also increasing non-interest income and expanding service
offerings.
Large Corporates and Public Sector Division
4242
Annual Report of HPB Group
Small and medium enterprises
*
* tradesmen
The SME Division serves over 15,000 clients, with a strong
emphasis on business innovation and continuous improve-
ments in financing opportunities.
In 2024, we remain committed to supporting the Croatian
economy by fostering the growth of micro, small, and medi-
um-sized enterprises. The SME Division focuses on creating
comprehensive financial solutions tailored to the needs of
small and medium-sized business owners.
As of December 31, 2024, the gross placements to entities
within the SME Division amounted to EUR 387 million, with
value adjustments totaling EUR 45 million. The division’s total
deposits reached EUR 617 million, with EUR 401 million in
demand deposits and EUR 216 million in term deposits. A
particularly noteworthy development in 2024 was the substan-
tial increase in term deposits, reinforcing the division’s role in
curbing inflation in Croatia and further strengthening confi-
dence in the Bank.
HPB continues to develop holistic financial solutions for
small and medium-sized enterprises, steadily advancing
toward business and operational excellence. Our goal is to
deliver faster, more efficient, and highly competitive services,
solidifying Hrvatska poštanska banka’s position as the lead-
ing bank in the SME segment.
The Bank remains focused on streamlining and acceler-
ating the loan approval process, ensuring easier and faster
access to financing for clients.
HPB continues to strengthen its strategic partnership
with Croatian Post, expanding its banking service network
and bringing banking closer to clients across the country.
This initiative enables entrepreneurs to access essential
banking services—including transaction account setup, digi-
tal banking, card issuance, lending services, and payment
processing—even in locations where the Bank does not have
a physical branch or center. This partnership has made HPB
the largest distribution network for essential banking products
and services in Croatia.
The SME Division also places significant focus on port-
folio optimization and regulatory compliance, leading to an
increase in active clients and a fully updated client database
in line with regulatory requirements.
15,258
total clients
EUR 387 mil*
loan volume
6
regional centers
EUR 617 mil
deposit volume
4343
▲
Overview of products and services in the corporate segment:
Product group Products and services in 2024
Payment
operations
• Transaction account
• Entrepreneur Packages
• Escrow account
• Payment operations – national, cross-border, and international
• Account Statement detailing the changes and balances
• Solvency data (BON2)
• SEPA Direct Debits
• SEPA Credit Transfers
• SEPA Instant Credit Transfer
• Electronic Funds Transfer at Point of Sale (EFTPOS)
• E-commerce
SME financing
Short-term financing
• Business Overdrafts
• Working Capital Loans
• Revolving Loan Facility
• Refinancing Loan/Debt Consolidation Loan
• Interim Financing Loan/Bridge Loan
• Margin Loan
• Loan Against Fixed Deposits
• Loan for Tourism Season Preparation
• Agricultural (Agro) Loan
• Discounting of Bills of Exchange Issued by Creditworthy Companies
• Discounting of Securities, Bonds, Commercial Papers, and Bills of Exchange Endorsed
by Government Institutions
• Purchase of Receivables from Creditworthy Companies (Factoring)
• Purchase of Receivables from Government Institutions (Factoring)
Long-term financing
• Working Capital and Permanent Working Capital Loan
• Investment Loan for Fixed Assets
• Refinancing Loan/Debt Consolidation Loan
• Loan Against Fixed Deposits
• Loan for Tourism Season Preparation
• Agricultural (Agro) Loan
• Energy Efficiency and Renewable Energy Loan
• Loan for Repairs and Maintenance of Common Areas in Residential Buildings
• Post-Earthquake Reconstruction Loan for Buildings
Financial Monitoring Frameworks
• Framework for Utilizing Short-Term and Long-Term Financial Products (Loans,
Guarantees, Letters of Credit)
• Receivables Purchase Framework
Special Loan Programs – in Partnership with HBOR
• Loan Program: Youth, Women, and Start-up Entrepreneurship
• Loan Program: Private Sector Investment
• Loan Program: EU Projects
• Loan Program: Export Preparation
• Loan Program: Working Capital
• Loan Program: Financial Restructuring
• Framework Loan for Working Capital Financing
• Framework Loan for Investment Financing
• Insurance of Performance-related Export Guarantees
• Insurance of Exporters’ Working Capital Loan Portfolio
• Loan Program for Small and Medium-Sized Enterprises (SMEs) and Mid-Cap
Companies – A guarantee scheme designed to facilitate access to financing for SMEs
and mid-cap enterprises under the framework of the National Recovery and Resilience
Plan (NRRP)
4444
Annual Report of HPB Group
Product group Products and services in 2024
SME financing
Special Loan programs – in cooperation with HAMAG-BICRO
• HAMAG Individual Guarantees for Rural Development
• ‘PLUS’ Guarantee Program with Interest Rate Subsidies – A financing initiative
combining guarantees with interest rate subsidies, funded through the National
Recovery and Resilience Plan
Special Loan Programs – other
• Loans in cooperation with the Ministry of Croatian Veterans for micro, small and
medium-sized enterprises of Croatian veterans and children of Croatian veterans
• Loans in collaboration with the Croatian Audiovisual Center
• Long-term Investment Loans for Energy Efficiency (Green for Growth Fund, GGF)
• Long-term Loans for Financing Investments and Working/Permanent Working Capital
(European Fund for Southeast Europe, EFSE)
Large corporates
financing
Short-term financing
• Business Overdrafts
• Working Capital Loans
• Revolving Loan Facility
• Refinancing Loan/Debt Consolidation Loan
• Interim Financing Loan/Bridge Loan
• Margin Loan
• Loan Against Fixed Deposits
• Loan for Tourism Season Preparation
• Agricultural (Agro) Loan
• Discounting of Bills of Exchange Issued by Creditworthy Companies
• Discounting of Securities, Bonds, Commercial Papers, and Bills of Exchange Endorsed
by Government Institutions
• Purchase of Receivables from Creditworthy Companies (Factoring)
• Purchase of Receivables from Government Institutions (Factoring)
Long-term financing
• Working Capital and Permanent Working Capital Loan
• Investment Loan for Fixed Assets
• Refinancing Loan/Debt Consolidation Loan
• Loan Against Fixed Deposits
• Loan for Tourism Season Preparation
• Products and services in 2024
• Agricultural (Agro) Loan
• Energy Efficiency and Renewable Energy Loan
• Loan for Repairs and Maintenance of Common Areas in Residential Buildings
• Post-Earthquake Reconstruction Loan for Buildings
• Project financing
Financial Monitoring Frameworks
• Framework for Utilizing Short-Term and Long-Term Financial Products (Loans,
Guarantees, Letters of Credit)
• Receivables Purchase Framework
Special Loan Programs – in Partnership with HBOR
• Loan Program: Private Sector Investment
• Loan program: Public sector investment
• Loan Program: EU Projects
• Loan Program: Export Preparation
• Loan Program: Working Capital
• Loan Program: Financial Restructuring
• Framework Loan for Working Capital Financing
• Framework Loan for Investment Financing
• Insurance of Performance-related Export Guarantees
• Portfolio Insurance Program for Working Capital Loans for Exporters
• Loan Program for Small and Medium-Sized Enterprises (SMEs) and Mid-Cap
Companies – A guarantee scheme designed to facilitate access to financing for SMEs
and mid-cap enterprises under the framework of the National Recovery and Resilience
Plan (NRRP)
4545
▲
Product group Products and services in 2024
Large corporates
financing
Special Loan Programs – other
• Loans in collaboration with Local Government and Self-Government Units
• Loans in collaboration with the Croatian Audiovisual Center
• Long-term Investment Loans for Energy Efficiency (Green for Growth Fund, GGF)
Guarantees and
letters of credit
• Performance guarantees
• Payment guarantees
• Counter-Guarantees and Superguarantees
• Standby Letters of Credit
• Nostro (Import) Letters of Credit
• Loro (Export) Letters of Credit
• Documentary Collections
Cards
• VISA Business debit
• VISA Bonus Plus
• VISA Prepaid business card
• VISA Business deferred payment card
E - banking
• mHPB
• mToken
• Internet banking
• SMS service
Deposits
• Term deposits
• Demand deposits
• MREL deposit
Letter of Intent
• Non-binding Letter of Intent
• Binding Letter of Intent
Other
• HPB Invest products
• HPB nekretnine services
4646
In 2024, inflation rates began to decline, leading to a policy
shift by central banks. The European Central Bank (ECB)
responded by lowering its reference interest rate from 4.50%
to 3.15%, while the deposit rate was reduced from 4.00% to
3.00%. Similarly, the Federal Reserve (FED) cut its bench-
mark interest rate from 5.25%-5.50% to 4.25%-4.50%.
The continued growth in client deposits had a posi-
tive impact on liquidity management, and, combined with
high interest rates, contributed to record-breaking interest
income. In addition to its standard deposit activities on the
interbank and fund markets, the Financial Markets Division
made significant strides in corporate deposits, concluding
agreements worth EUR 3 billion throughout the year. This
expansion further boosted interest income. The Bank placed
daily liquidity surpluses—which peaked at EUR 3.6 billion by
year-end—into overnight deposits with the ECB.
Alongside domestic treasury bill issuances, the Bank
successfully participated in treasury bill auctions from various
Eurozone member states. Other investments were primarily
directed toward fixed-income securities, which continued
their upward trajectory in 2024, positively impacting trading
income.
Equity markets continued their upward trend in 2024,
driven by the onset of interest rate reductions. Through its
equity and mixed fund holdings in HPB Invest, as well as a
nearly 50% rise in the share price of Hrvatski Telekom, the
Bank recorded a substantial increase in value, positively influ-
encing trading revenue.
Due to exceptionally high liquidity levels, the Bank did
not participate in the ECB’s regular repo auctions in 2024. It
successfully maintained regulatory liquidity ratios, with the
liquidity coverage ratio (LCR) reaching a high of 261% by
year-end.
The volume of foreign exchange trading with corporate
clients and exchange offices remained on par with the
previous year. Thanks to effective foreign exchange position
management with minimal risk exposure, the Bank’s results in
this segment aligned with projections.
The Bank remains a key player in the cash operations
market, leveraging its extensive branch and exchange office
network and its partnership with FINA cash services to provide
competitive cash trading and supply solutions. Following the
adoption of the euro, this segment experienced a notable
decline, yet volumes were maintained at 2023 levels.
Investment banking
In 2024, the capital markets were characterized by further
stock price appreciation on global exchanges, driven by lower
inflation rates and strong financial performance from listed
companies.
Total trading volume on the Zagreb Stock Exchange (ZSE)
increased by 23.6% compared to 2023, while order book
equity trading rose by 10%. The CROBEX index recorded a
26% annual increase.
The capital markets continued to be shaped by the Ministry
of Finance’s focus on bond and treasury bill issuances for
retail investors.
The Bank maintained its role as a co-arranger for the
Croatian Ministry of Finance’s bond issuances on the domes-
tic market, reinforcing its strong position in government secu-
rities trading.
In the custody and depository services segment, the Bank
continued to focus on service enhancements and regulatory
compliance, achieving sustained growth in assets under
custody and depository management.
FINANCIAL MARKETS OPERATIONS
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Annual Report of HPB Group
Products Description
Domestic
Trading
• Engages in the buying and selling of financial instruments on the domestic market
• Clients independently select which stocks to buy or sell, set their prices, and manage
their portfolio distribution
• Brokers advise clients on the investment risks associated with specific stocks, current
market prices, market peculiarities, stock movements, and recommend diversifying
investments across multiple stocks
Regional
Trading
• Facilitates trading of financial instruments in Montenegro, Serbia, Macedonia, and Bosnia
and Herzegovina
• Clients independently select which stocks to buy or sell, set their prices, and manage
their portfolio distribution
• Brokers advise clients on the investment risks associated with specific stocks, current
market prices, market peculiarities, stock movements, and recommend diversifying
investments across multiple stocks
Global
Trading
• Offers trading on leading global financial markets
• Clients independently select which stocks to buy or sell, set their prices, and manage
their portfolio distribution
• Brokers advise clients on the investment risks associated with specific stocks, current
market prices, market peculiarities, stock movements, and recommend diversifying
investments across multiple stocks
Portfolio
Management
• A specialized service allowing clients to entrust their funds to the bank for management
• The service is aimed at those seeking to invest in securities and financial instruments
over a period longer than one year for additional returns
• Clients receive monthly, or more frequent, reports detailing all portfolio activities and
financial instrument value changes, i.e. a report on the movement of the value of invested
funds
Investment
Services
• Investment services include investment advisory services, consulting on capital
structure, business strategies, mergers and acquisitions, among other investment
banking services
Securities
Issuance
• The Bank manages issuances for the following financial instruments:
a) debt financial instruments - short-term (commercial papers) and long-term (bonds)
b) equity financial instruments - shares
• Services encompass the entire issuance process, including organization, preparation,
and conducting of securities registration and payment, along with other issuer-required
tasks for a successful transaction
Securities
Custody
• Primarily involves the safekeeping of assets and the execution of transaction settlements,
alongside corporate action monitoring
• Targeted at active capital market participants, investment and pension funds, institutional
investors, and retail and corporate clients investing in financial instruments
• Services include asset custody and safekeeping, transaction settlement on client orders,
asset valuation, corporate action alerts, income collection from financial instruments,
AGM representation, legislative change notifications
Financial Markets Products and Services Overview:
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Products Description
UCITS/AIF
Investment and
Pension Fund
Depository
Services
• A depository is a credit institution domiciled in Croatia or a branch of a credit institution
from another EU member state, established in Croatia and authorized by the CNB (or the
competent authority of that member state) to perform asset storage and administration
services for clients, including custody and related services:
- fund control tasks
- fund cash flow monitoring
- fund asset storage
• The depositary is responsible for maintaining distinct accounts for each fund's assets,
ensuring a clear separation from the assets of other funds, the depositary's own assets,
and those of other clients and the management company. It oversees compliance with
regulatory requirements and fund directives during the investment of fund assets. The
depositary notifies the regulatory authority about the valuation of fund assets and share
prices, processes transactions as instructed by the management company concerning
the fund's assets, and reports on corporate actions. It facilitates voting at shareholder
meetings, collects income and entitlements for the fund, and verifies that fund revenues
are utilized according to regulatory and corporate directives. Additionally, the depositary
is tasked with reporting any significant non-compliance with legal regulations and
company policies to the regulator, ensuring the integrity and transparency of fund
operations.
Moj broker -
Web Trader
• My Broker - Web Trader service allows clients to trade securities and monitor their
portfolio status online, independent of the bank broker's working hours.
• Features include:
- placing orders for the purchase and / or sale of financial instruments on the ZSE
- cancelling, or modifying buy/sell orders on the ZSE
- checking portfolio status
- accessing account balance and transactions
- viewing real-time stock prices on the ZSE with the top 50 offers,
and
- secure data exchange.
Short-term loans
for Buying Financial
Instruments
(Margin Loans)
• Short-term loans for retail and corporate entities aimed at purchasing financial
instruments listed on the Margin Loan Financial Instruments List, in line with daily
determined investment limits for each instrument
• The repayment term is up to 12 months
• Loans granted up to 100% of the pledged financial instruments' value, ranging from a
minimum of EUR 6,000 to a maximum of EUR 260,000.
FX Transactions
- Spot
• Users: Both domestic and international retail and corporate clients, and financial
institutions
• Purpose:
- buying foreign currencies for overseas payments or account deposits
- selling foreign currencies from abroad inflows
- foreign currency conversions
FX Transactions
- Forward
• Users: Domestic and international corporate clients, and financial institutions
• Purpose:
- buying and selling foreign currencies at a pre-agreed rate for settlement dates
beyond two business days from the agreement date
- buying foreign currencies for overseas payments or account deposits
- selling foreign currencies from abroad inflows
- foreign currency conversions
FX Swap
• Users: Domestic and international corporate clients, and financial institutions
• Purpose:
- An agreement for the simultaneous purchase and sale of currencies at
predetermined rates, comprising a spot and a forward transaction of opposite
directions.
- SWAP contracts involve currency exchange until maturity, essentially serving as a
currency swap until the agreed upon date.
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Annual Report of HPB Group
Products Description
Cash
trading
• Purpose: Manages the bank's cash position by maintaining optimal levels of both foreign
and domestic cash reserves.
Given
Deposits
• Users: Banks
• Purpose: Short-term financing
• Terms: Typically up to one year, with the possibility of longer terms
• Access: Funds are accessible from the value date until the maturity of the contracted
deposit.
Received
Deposits
• Users: Domestic and foreign banks and financial institutions
• Purpose: Earning yields on unutilized EUR or foreign currency funds
• Terms: Fixed-term agreements, usually up to one year
• Access: Funds are locked during the deposit term; early withdrawal agreements may exist
with certain financial institutions.
Repo/Reverse
Repo Loans
• Users: Domestic corporate clients and financial institutions
• Purpose:
- A contractual agreement where financial assets (securities) are exchanged for cash It
includes a commitment to execute a reverse transaction on a future date.
- This agreement includes two transactions: both the purchase and sale of a security at
a predetermined price
- It operates as a collateralized loan agreement, where one party offers a financial
security as collateral in return for cash from the other party
- The repo contract ensures that all benefits and associated risks of the security
ownership remain with the original owner
- A reverse repo contract involves opposite transactions to those in a repo contract
• Terms: Similar to money market deposits, typically up to one year, but longer periods can
be negotiated.
Securities Trading
(Bonds, Treasury
Bills, CNB Bills,
Commercial Papers,
Shares)
• Users: Domestic corporate clients and financial institutions
• Purpose: Investing available funds in debt securities with fixed returns issued by states,
local governments, cities, or corporations
• Terms:
- Short-term debt securities are issued for terms up to one year
- Long-term debt securities have maturities longer than one year
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Annual Report of HPB Group
Risk Management
At HPB, risk management is executed via a comprehensive
system incorporating a variety of procedures and methodol-
ogies designed to identify, assess, monitor, and mitigate the
array of risks the bank might face. The establishment of this
risk control framework aims at minimizing unforeseen impacts
and safeguarding the bank's operational stability, including
the fulfillment of its obligations. This system undergoes regu-
lar updates to both its qualitative and quantitative measures,
adhering to key principles in risk evaluation and management:
• Establishing thresholds for risk tolerance based on
both internal risk limits and regulatory standards,
• Continual enhancement of processes for risk identi-
fication, measurement, assessment, and monitoring,
• Ongoing advancement of risk measurement and moni-
toring techniques, aligning with the evolution of the
risk control function and supportive IT infrastructure.
HPB inherently encounters a variety of risks in its client deal-
ings. The objectives in managing these risks include:
• Promoting stable and secure growth through a robust
risk management framework.
• Enhancing the bank's risk profile,
• Implementing an integrated management system with
uniform procedures across the bank.
Given the breadth and intricacy of its operations, HPB
focuses on the following major risks within its risk manage-
ment framework:
• Credit Risk,
• Market Risk,
• Liquidity Risk,
• Interest Rate Risk in the Banking Book,
• Operational Risk.
Credit Risk
Credit risk presents the likelihood of loss due to a borrower's
failure to meet obligations to a credit institution. It stands
as the predominant risk for HPB, as it does for all banking
institutions.
In light of its significance, HPB dedicates substantial
efforts to managing credit risk through established policies,
procedures, and internal regulations.
The goal of managing credit risk is to maintain a high-qual-
ity credit portfolio that supports earnings and growth in lend-
ing activities. This is achieved by optimizing the return on
investment while maintaining a balanced risk-reward ratio in
line with funding cost.
Credit risk management at HPB involves multiple levels of
governance, including:
• The Management Board,
• Designated committees (e.g., the Credit Committee)
and individuals,
• Clear operational and organizational delineation
between market-facing (front office) and risk manage-
ment (back office) functions,
• Corporate Credit Risk Management Division,
• Retail Credit Risk Management Division,
• Strategic Risk Management and Risk Control Division.
HPB's approach to credit risk includes setting specific
limits to manage exposure effectively.
To control and manage credit risk, various parameters are
monitored, such as borrowers' creditworthiness, punctuality
in meeting obligations to HPB, collateral quality, compliance
with regulatory and internal capital adequacy requirements,
and overall portfolio quality. Additionally, comprehensive
assessments and recoverability evaluations are conducted
for lending propositions before approval.
Furthermore, HPB addresses concentration risk and
currency-induced credit risk within its overarching credit risk
management strategy, applying consistent methodologies to
mitigate these risks effectively.
Internal Control System and
Risk Management Functions
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Market risk
Market risk encompasses several types of risks associated
with financial market activities, including position risk, foreign
exchange (FX) risk, and commodity risk.
• Position risk pertains to potential losses from fluctua-
tions in the prices of financial instruments or derivatives,
• FX risk relates to potential losses arising from changes
in foreign exchange rates and/or the price of gold,
• Commodity risk involves potential losses due to fluctu-
ations in commodity prices.
HPB's market risk management structure includes:
• The Management Board,
• A clear operational and organizational distinction
between the trading front office and the risk manage-
ment back office,
• The Assets and Liabilities Management Committee,
• Strategic Risk Management and Risk Control Division.
Market risk tolerance is guided by predefined exposure
limits to market risks. HPB has established specific limits at
various levels—portfolio, sub-portfolio, and instrument level—
tailored to the nature of the financial instrument and relevant
market risk exposure measures. Additionally, stop-loss limits
are set for individual equity securities identified as trading
assets to manage risk effectively.
For the assessment and valuation of market risk expo-
sure, HPB employs a methodology that includes the Value
at Risk (VaR) method, measures of interest rate sensitivity
(BPV), and limits related to the nominal amount of the instru-
ment, ensuring comprehensive oversight and management of
market risks.
Liquidity risk
Liquidity risk involves the potential loss due to a bank's inability
to fulfill its financial obligations when they come due, encom-
passing both the bank's operational needs and its financial
commitments. This risk is intricately linked with two primary
aspects, which HPB manages collectively:
• Funding Liquidity Risk: The risk that the bank might not
be able to meet its current and future cash and collat-
eral requirements without adversely impacting its daily
operations or financial outcomes.
• Market Liquidity Risk: The risk that arises from the
bank's inability to efficiently close or offset positions at
prevailing market prices due to market disruptions or
lack of market depth.
The framework for managing liquidity risk at HPB includes:
• The Management Board,
• The Assets and Liabilities Office,
• The Assets and Liabilities Management Committee,
with a dedicated Liquidity Subcommittee,
• Strategic Risk Management and Risk Control Division,
• Financial Markets Division.
HPB's approach to measuring and estimating liquidity risk
exposure utilizes: The calculation of the Liquidity Coverage
Ratio (LCR), Assessment of structural liquidity through indi-
cators such as the Net Stable Funding Ratio (NSFR) and
Additional Liquidity Monitoring Metrics (ALMM).
The propensity to assume liquidity risk is determined by
established liquidity risk exposure limits. To manage liquidity
risk effectively, suitable thresholds have been implemented
for the liquidity coverage ratio as well as for structural liquidity
indicators.
Interest Rate Risk in the Banking Book
Interest Rate Risk in the Banking Book pertains to the poten-
tial for loss due to fluctuations in interest rates that impact the
bank's non-trading portfolio.
The framework for managing Interest Rate Risk in the
Banking Book involves:
• Oversight by the Management Board,
• Guidance from the Assets and Liabilities Management
Office,
• Strategic oversight from the Strategic Risk
Management and Risk Control Division,
• Coordination by the Assets and Liabilities Management
Office.
The bank's approach to IRRBB is guided by defined expo-
sure limits to interest rate risk within the banking book.
To effectively manage IRRBB, the bank sets limits based
on the impact of interest rate changes on the economic value
of the banking book relative to regulatory capital, and on net
interest income variations. Additionally, the bank evaluates
the Value at Risk (VaR) for positions that are sensitive to inter-
est rate movements, further reinforcing its risk management
strategy.
Operational risk
Operational risk encompasses the possibility of losses stem-
ming from inadequacies or failures in internal procedures,
staff actions, technological systems, or external occurrences,
inclusive of legal liabilities.
The organizational structure for managing operational risk
comprises:
• Oversight by the Management Board,
• A dedicated Operational Risk Management team,
including an Operational Risk Manager, Support Staff
for Operational Risk, and Liaison Officers,
• An Operational Risk Management Committee,
• Corporate Security Office,
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Annual Report of HPB Group
• Compliance Division,
• Strategic Risk Management and Risk Control Division.
The methodology for measuring or assessing operational
risk exposure involves gathering and analyzing data on past
operational risk events, conducting risk and control self-as-
sessments, evaluating IT risk, analyzing the business impact
with consideration of the ongoing viability plan, and assessing
risks outsourced. Furthermore, the Bank assesses how the
introduction of new products might alter its risk profile.
To mitigate operational risk, the Bank primarily employs
an internal control system and, where applicable, risk transfer
strategies (hedging). Additionally, it maintains a robust going
concern management system.
Other risks
Other risks within HPB's operations, while present, are
considered less critical compared to the major risks detailed
earlier. The methodologies and strategies for managing these
risks are somewhat simpler.
Concentration risk occurs when there is significant
exposure, whether direct or indirect, to a single entity, a group
of interconnected entities, or a central counterparty. This
risk is further compounded when exposures share common
characteristics, like operating in the same industry, being
located in the same geographic region, engaging in similar
business activities, or relying on the same collateral provider.
Such concentration can elevate the risk of substantial losses,
potentially threatening the bank's operational stability or
significantly altering its risk profile.
Collateral Value Risk assumes inconvenient market
movements of assets used as collateral which will be a collat-
eral trigger and cashed in for receivables collection.
Sovereign Risk is the risk of loss arising when a govern-
ment or its agencies fail to meet their financial obligations,
potentially impacting other domestic borrowers' ability to fulfill
their foreign debts.
Strategic Risk emanates from flawed business decisions
or an inability to adapt to economic shifts, leading to potential
losses.
Management Risk arises from limitations in establish-
ing sophisticated governance structures, mechanisms, and
controls.
Credit Value Adjustment Risk (CVA) involves adjusting
the portfolio's value to reflect mid-market prices. This risk
impacts all over-the-counter (OTC) derivatives across busi-
ness activities, excluding credit derivatives used to mitigate
credit risk exposure. CVA mirrors the present market valuation
of a counterparty's credit risk from the institution's perspective,
not the counterparty's market credit risk. The Bank routinely
monitors and reports on CVA risk, which remains relatively
minor given the extent of its operations.
Compliance Risk is the potential for financial or reputa-
tional damage from failing to adhere to regulations, standards,
codes of conduct, and internal policies.
Business Risk refers to unexpected declines in business
volume or profit margins that could severely affect the bank's
market value. They are often triggered by market downturns,
competitive shifts, or changes in consumer behaviour.
Legal Risk includes risks from litigation due to contractual
breaches, legal actions against the bank, or decisions that
adversely affect its operations and financial health.
Regulatory Risk pertains to changes in laws and regu-
lations that could impact the bank's business model and
profitability.
Furthermore, the Bank acknowledges the significance
of ESG elements in its operations and is actively working on
formulating and implementing these elements within its risk
management system, with a particular emphasis on environ-
mental risks.
Environmental, Social, and Governance (ESG) Risks
encompass the potential negative financial implications for the
Bank stemming from the influence of environmental, social, or
governance elements (ESG elements) on the Bank’s engage-
ments or its invested capital.
Environmental risk entails the possibility of financial losses
for the Bank due to the impact of environmental elements on
the Bank’s contractual obligations or investments. These risks
are tied to environmental objectives including:
• Mitigating the effects of climate change,
• Adapting to climate change,
• The sustainable management and conservation of
aquatic and marine ecosystems,
• Transitioning towards a circular economy,
• Pollution prevention and control,
• Preserving and restoring biodiversity and ecosystems
Environmental risk covers both the immediate physical
risks and the broader transition risks.
Social risk involves the risk of financial losses due to the
impact of current or future effects of social factors on the
Bank’s contractual relationships or invested capital.
Governance risk pertains to the risk of financial losses
resulting from the current or future effects of governance
factors on the Bank’s contractual relationships or invested
capital.
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Internal Audit plays a crucial role in ensuring that management
and all employees adhere to and implement the Bank's inter-
nal control systems effectively. These systems are detailed in
the Bank's internal policies and operational guidelines, with
a particular focus on preventative measures and the early
identification of any potential issues or shortcomings.
Internal Audit independently evaluates the adequacy and
effectiveness of internal controls within each area under
review.
Internal controls encompass a series of processes and
procedures designed to manage risk appropriately, ensure
the efficiency of operations, the integrity of financial and
other reporting, and adherence to both internal policies and
external regulatory requirements. They provide a reasonable
assurance that business goals will be met efficiently, within
set timeframes, and in compliance with relevant regulations.
Internal controls are embedded within the operational and
management processes of the Bank, involving both leader-
ship and staff at all levels. Key pillars of the internal control
system include:
• Well-defined lines of accountability,
• Delimitation of powers and responsibilities,
• Specific control mechanisms, and
• A robust internal audit function.
Internal Audit
Internal Audit operates as an independent and self-governing
entity within the organization, adhering to the professional
standards of internal auditing and applicable laws. Its govern-
ance structure is based on a dual-reporting principle, with
administrative accountability to the Management Board and
functional accountability to the Supervisory Board or Audit
Committee.
Organized into specialized teams with expertise in specific
areas, Internal Audit focuses on: Information Systems,
Financial Markets, Risk Management, Retail Banking, and
General Audits.
The Internal Audit Charter guarantees its independence
and organizational freedom, ensuring direct and unrestricted
access to data, personnel, and premises. Audit activities
proceed through four stages: planning, testing, reporting, and
follow-up, with planning rooted in a risk-based assessment.
The Annual Work Plan, endorsed by the Management
Board upon the Audit Committee and Supervisory Board's
approval, guides these activities.
Internal Audit's scope encompasses the bank's entire
operation, including retail banking, risk management, infor-
mation systems, financial markets, and general operations.
Audit findings are reported to the auditee's responsible
party, the relevant Management Board member, the Audit
Committee, and the Supervisory Board, ensuring compre-
hensive awareness and oversight of audit outcomes, recom-
mendations, and compliance timelines. Individual internal
audit reports/findings are presented to the Audit Committee
during board meetings. This process is facilitated by the
Administration Office as a standard part of document submis-
sion procedures.
Internal Audit compiles semi-annual and quarterly work
reports, which are then submitted to the Management Board,
Audit, and Supervisory Boards. Additionally, the quarterly
reports are specifically provided to both the Management
Board and the Audit Committee.
The report on work activities encompasses an overview of
the annual work plan's execution, including a comprehensive
list of both routine and special tasks carried out, as well as
planned activities that were not executed, with justifications
for their omission. Additionally, it offers a concise summary
of critical observations made during audits, evaluates the
performance of the risk management framework, and delivers
an account on the adoption of audit-driven recommendations,
proposals, and corrective actions, detailing any non-imple-
mentation along with the rationale behind it.
Compliance monitoring function
The compliance monitoring function is organized within the
Compliance Division.
Executive Director - Compliance Division, who oversees
the Compliance Monitoring Function, bears responsibility for
the operation of the compliance control activities. This role
encompasses specific duties and responsibilities as defined
by the Bank's internal regulations, including but not limited to:
• coordinating compliance risk management,
• assessing compliance risks annually,
• formulating the division's annual work plan, opera-
tional strategies, methodologies, and budget,
• semi-annual reporting to the Management Board, Risk
Committee, and Supervisory Board,
• issuing an annual assessment of the Bank's adher-
ence to regulations related to investment services and
activities,
• submitting at least an annual summary of activities
regarding investment services and investment activ-
ity execution to the Management Board, the Risk
Committee, and the Supervisory Board.
Executive Director - Compliance Division, Deputy
Executive Director - Compliance Division, Director of
Compliance and Data Protection Department including the
employees within the Compliance Unit who undertake compli-
ance monitoring tasks (hereinafter: the Compliance Monitoring
Function) operate independently from the business sectors
where compliance risks emerge, avoiding conflicts of interest.
Internal Audit
5656
Annual Report of HPB Group
The remuneration for the Compliance Monitoring
Function's leaders and staff are not directly tied to specific
operations and dealings within areas, processes, and activ-
ities where compliance risks emerge. The Bank's policies
strictly regulate the acceptance of gifts and other benefits,
secondary employment, memberships in boards of other enti-
ties, and scenarios potentially leading to conflicts of interest
to ensure impartiality.
Leaders and employees tasked with Compliance
Monitoring are empowered to seek and gain access to all
necessary information, data, documents, IT systems, and
additional resources required for performing their responsi-
bilities. It's mandatory for other bank organizational units to
assist by providing the information sought.
The responsibilities, extent, and method of operation, or
rather, the working methodology and the system for report-
ing by the Compliance Monitoring Function to the Executive
Board, Risk Committee, and Supervisory Board, are outlined
in the following internal documents:
1. Business Compliance Policy;
2. Rulebook on Business Coordination;
3. Business Compliance Methodology.
Compliance monitoring tasks encompass:
1. Identifying and evaluating the compliance risks the Bank
faces or might face,
2. Providing guidance to management and other relevant
personnel on applying applicable laws, standards, and
rules, including updates on developments in these areas,
3. Analyzing the impact of changes in relevant regulations
on the Bank's operations,
4. Reviewing the compliance of new products or proce-
dures with applicable laws and regulatory changes, in
collaboration with the risk control function,
5. Managing sensitive information as per capital market
regulations and maintaining required records and
registers,
6. Overseeing the documentation of phone conversations
and electronic communications related to investment
services and activities,
7. Managing the system for addressing client complaints
concerning investment services and activities,
8. Overseeing compliance activities related to investment
product management,
9. Monitoring and ensuring the qualifications and profes-
sional standards of employees involved in investment
services and activities,
10. Offering an overarching assessment of the Bank's adher-
ence to regulations governing investment services and
activities,
11. Informing the Management Board, Supervisory Board,
and Risk Committee about compliance risks and other
control functions if high compliance risk is identified,
12. Collaborating and sharing information with the Strategic
Risk and Risk Control Sector regarding compliance risks
and risk management,
13. Advising on the development of training programs related
to compliance,
14. Checking operations against relevant regulations and
reporting on these checks,
15. Ensuring that Bank employees comply with legal and
other regulations and uphold the high ethical and profes-
sional standards outlined in the Bank's Code of Ethics,
and reporting findings to the Management Board,
16. Overseeing the Bank's operational compliance with
Articles 80 and 81 of the Capital Market Act and the
regulations on organizational requirements and rules of
business conduct for providing investment services and
activities.
The compliance function actively engages with the Bank's
management and staff across various organizational units,
offering guidance on adhering to applicable regulations and
fulfilling specific business responsibilities. It plays a crucial
role in ensuring compliance with regulatory requirements,
identifying compliance risks, and managing them effectively.
This function must maintain its objectivity and independence
while collaborating with other organizational units.
The compliance monitoring function also collaborates
closely with the Internal Audit office and the Strategic Risk
management and Risk Control Division. This partnership is
particularly focused on overseeing the adoption of recom-
mendations from supervisory and regulatory bodies, ensuring
a cohesive approach to governance and risk management
across the bank's operations. This collaboration focuses on
monitoring the implementation of recommendations from
supervisory and regulatory bodies, aiming to establish a
robust internal control system across all business areas with-
out duplicating efforts or creating conflicts of responsibility.
Furthermore, the compliance function liaises with external
auditors and relevant regulatory authorities (CNB, HANFA),
assisting in the execution or oversight of the implementation
of their recommendations to the Bank.
By January 31st of each year, the Executive Director of the
Compliance Division presents the annual compliance moni-
toring function's work plan to the Management Board, Risk
Committee, and Supervisory Board for approval.
Additionally, as part of the annual report, the Executive
Director annually evaluates compliance risks, aligning the
assessment with the compliance priority categories outlined
in the Compliance Policy, and reviews the bank's adherence
to applicable regulations.
The annual report is submitted to the CNB by March 31st
for the preceding year.
Annually, within the context of the annual report concern-
ing investment services and activities, the Executive Director
of the Compliance Division delivers a comprehensive review
of the bank's adherence to the Capital Market Act, Regulation
(EU) No. 596/2014, Regulation (EU) No. 600/2014, and related
regulations enacted by CFSSA.
The annual report on compliance activities related to
investment services and activities must be filed with the
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Croatian Financial Services Supervisory Agency (CFSSA) by
31 March for the preceding year.
Annually, as part of their review of the Compliance
Function's annual report, the Bank's Management assesses
the effectiveness and appropriateness of the Compliance
Function's procedures. Based on this evaluation, they draw
conclusions regarding the performance of the Compliance
Function, report these findings to the Risk Committee and the
Supervisory Board, and implement measures to address any
identified shortcomings.
The oversight of the Compliance Function's activities is
conducted by the Internal Audit Office, which provides contin-
uous and comprehensive monitoring of the Bank’s operations.
5858
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Annual Report of HPB Group
The development plan outlined in this section is largely
based on the Hrvatska poštanska banka Business Strategy
2023–2026, which was approved by the Supervisory Board
on February 27, 2023, in accordance with Article 48 of the
Credit Institutions Act.
The Bank continues to pursue its vision of increasing its
relevant market influence through mergers and acquisitions
(M&A) as well as organic expansion, maintaining an agile
approach to growth. By adopting a proactive market strategy,
one of the most important medium-term objectives—entering
the Top 5 banks in Croatia—has been successfully achieved.
The impact of this achievement is expected to be further
amplified through the planned strengthening of the Bank’s
digital capabilities and functionalities. Regardless of the
evolving sentiment towards sustainable development, the
Bank remains committed to supporting the green economy
and circular economic principles, as they align with its mission
of fostering better living conditions in Croatia.
Geopolitical risks, including the war in Ukraine and a
potential recession among Croatia’s key foreign trade part-
ners, could trigger events that materialize risks and tempo-
rarily affect the Bank’s development plan. However, beyond
these geopolitical challenges, the banking sector—both
globally and in Croatia—is undergoing a profound trans-
formation driven by technological advancements in AI and
FinTech. These innovations have already started, and will
increasingly continue, to reshape the financial landscape by
partially or entirely bypassing traditional financial intermedi-
aries in service provision, fundamentally altering the sector
while operating outside the scope of extensive regulatory
requirements.
The primary challenges and risks the Bank faces in a
competitive landscape include inadequate investment in
emerging technologies and future growth, elevated funding
costs, operational inefficiencies, demographic shifts, limi-
tations in competitively compensating top talent, restricted
knowledge-sharing (a common advantage of larger financial
groups), and capital constraints.
The strategy outlined in this document aims to position
the Bank to achieve its long-term target state ("vision")
while fulfilling HPB’s core business purpose ("mission"). To
address future challenges and leverage its distinct position as
the largest domestically owned commercial bank, the Bank
has defined its vision and mission as follows:
Development Plan of
Hrvatska poštanska banka
Mission:
We are creating conditions
for a better life in Croatia.
Vision:
The largest banking group in Croatian ownership
that takes the best possible care of its clients,
shareholders and community.
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Sustainable Operations –To achieve its mission, the Bank is committed to contributing to economic development with-
out jeopardizing the needs of future generations. The Bank is focused on sustainable development, ensuring a balance
between environmental, social, and governance (ESG) factors, which serve as a cornerstone for achieving all business
objectives.
Croatian Post Distribution Channel – The Bank’s most significant differentiating factor. Its contractual, IT, and owner-
ship integration with Croatian Post establishes the largest branch network in Croatia, facilitating the distribution and sale
of financial products from HPB’s portfolio. The introduction of new products into the Croatian Post network will enhance
results for both strategic partners while providing greater value to clients.
Digitalization – The Bank is focused on tracking banking trends and responding to emerging non-banking competition,
while also anticipating increasingly sophisticated client needs. Digitalization is no longer a competitive advantage for credit
institutions—it is a prerequisite for survival. To implement its digital transformation, the Bank will enhance the functionality
of products and services from a client-centric perspective, while simultaneously improving internal efficiency through auto-
mation and process optimization. As part of these efforts, the Bank’s IT architecture will be restructured, reducing reliance
on the core banking system, shifting key IT system functionalities to flexible satellite applications, and implementing a new
data management system as a key enabler of data-driven decision-making.
Growth through M&A – In recent years, the Bank has successfully executed multiple strategic acquisitions, significantly
enhancing internal expertise and competencies. The success of these transactions, alongside their financial and syner-
getic benefits, positions the Bank to capitalize on future market opportunities and further expand its market share.
The following areas have been identified as the foundations of development
- pillars of development:
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Annual Report of HPB Group
Pillars of Development
SUSTAINABLE
BUSINESS
CROATIAN
POST
CHANNEL
GROWTH
THROUGH
M&A
DIGITALIZATION
ESG as a foundation
for business transformation
The client comes first
Strengthening
the market position
Digitization of business
Completion of the merger
of Nova Hrvatska banka
Implementation of ESG factors in
business processes; integration
of risk and materiality assessment
Development of E2E digital
acquisition channels
Consideration of opportunities
for inorganic growth
New model of non-financial
reporting; new standards
Availability of products and services
through the largest
distribution channel
To become an excellent place
to work and develop
Sustainability as a corporate priority
for all three factors
Speed and efficiency
in customer support
Achieving goals through an effective
management system; achieving competitive
-
ness in the part of payment of receipts
Ethical and effective leadership
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Retail operations
Retail banking remains a strategic pillar of the Bank’s oper-
ations. In the upcoming period, we will continue to focus on
enhancing existing products and introducing new offerings,
alongside improving service quality and customer experience,
with the goal of expanding our base of active clients. Our
acquisition strategy includes tailored offers and partnerships
with select employers and strategic partners. Recognizing
that continuous service enhancement is key to achieving our
growth objectives, we remain committed to ongoing employee
training and regular service quality assessments.
The first half of 2024 was primarily dedicated to finalizing
the operational integration of Nova Hrvatska Banka’s portfolio,
during which we further advanced the digitalization of product
contracting processes and enhanced product functionalities
to elevate the overall customer experience.
In 2025, our primary focus will be on digital transformation
and the implementation of the Bank’s new core system, while
simultaneously expanding product functionalities through
initiatives such as introducing new banking packages, digital-
izing account opening and loan applications, and streamlining
processes to enhance the customer experience. In the retail
lending segment, the Bank’s strategic priority will be on hous-
ing loans, reaffirming our commitment to supporting Croatian
citizens in securing housing solutions by offering competitive
financing conditions.
Large Corporates and Public Sector
Operations
The Large Corporates and Public Sector Division is stead-
fast in its commitment to vigorously expanding our business
connections with existing clients and actively pursuing new
partnerships, guided by the highest standards of banking
practices In this endeavor, we will carefully balance market-
driven commercial opportunities with the Bank's prudent risk
management approach.
Future business expansion will be driven by increasing
the base of active large clients in both domestic and foreign
private ownership, facilitated by investment credit lines, work-
ing capital financing, documentary operations in domestic
and international markets, and a comprehensive range of
payment services. The merger of Nova Hrvatska Banka
into Hrvatska poštanska banka has played a key role in this
expansion, resulting in a larger client base, an expanded
portfolio, and an infusion of specialized expertise and best
banking practices within the integrated bank.
The division is dedicated to enhancing financial monitor-
ing services for greenfield investments across sectors such
as energy, water, communal services, housing, and tourism.
This commitment is rooted in the principle of backing projects
of the highest quality that boast solid capitalization and
demonstrate a high degree of future cash flow reliability from
operations.
Moreover, we take a tailored approach to client engage-
ment, aligning our strategies with their industry affiliations.
This leads to further specialization aimed at enriching our
overall business relationships with clients. In this process, we
meticulously consider the maximum exposure to credit risk
for each industry, aligned with the macroeconomic indicators
relevant to those sectors.
Client acquisition efforts will focus on creditworthy busi-
nesses with established banking relationships, including large
corporate entities and state and local government institutions.
By segmenting its client base, the Bank aims to offer tailored,
high-quality financial solutions to new clients while maintain-
ing strict risk management standards—a strategy that has
already proven successful in previous periods. The goal is to
implement a specialized sales and relationship management
model that effectively meets client needs and expectations.
Through various acquisition tools, such as client data-
bases, pre-selection processes, and targeted sales initi-
atives, the Bank will expand its client portfolio while further
strengthening relationships with existing clients. In line with
this strategy, the Bank will align credit process quality with
product approval structures while ensuring a high degree of
flexibility in financial solutions. Automation and digitalization
have already been embraced as key trends, enabling the
Bank to build a modern sales infrastructure that allows for
faster and more efficient banking services, while maintaining
long-term, high-quality client relationships.
The Division will persist in its primary objective of broad-
ening business collaborations and extending loans to clients
and industries significantly contributing to the growth of
Croatia's GDP, particularly in manufacturing, exporting, and
energy production sectors. Central to ensuring effective risk
management, a tailored approach to each client is manda-
tory, involving a comprehensive assessment of their financial
health, the industry's potential, and the viability of the specific
business transactions they undertake. The Division's future
activities will be significantly influenced by sustainable devel-
opment, particularly within the large enterprise segment. The
Bank is actively preparing for this by establishing procedures
to assess and incorporate environmental, social, and govern-
ance (ESG) considerations into its operations.
To further enhance its market position, optimize revenue,
and provide top-tier services, the Division will continue to
strengthen collaboration with Croatian Post p.l.c., particularly
in expanding its client base among local government units
and their associated companies. The extensive presence
of Croatian Post provides a valuable opportunity for client
acquisition, leading to increased product and service sales,
particularly in payment services and card products.
The Bank will also continue to develop its business rela-
tionship with FINA, one of its most significant partners in the
payment services segment. Efforts will focus on improving
cash management services in collaboration with large corpo-
rate clients requiring on-site cash deposit solutions.
In the deposit segment, our strategy emphasizes enhanc-
ing transactional relationships with major companies and
corporations, alongside nurturing ongoing collaborations
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Annual Report of HPB Group
with governmental and public entities, as well as local
administrative units and their subsidiaries. We aim for a
strategic equilibrium between managing interest costs and
fulfilling our liquidity demands to serve our clients' markets
efficiently. Such a strategic stance reinforces our reputation
as a dependable partner for corporate clients, reflected in the
continuous growth of new fixed and demand deposits.
The Division’s overarching ambition is to be a trusted
banking partner for corporate clients, leveraging its expertise
to enhance their business success while ensuring sustaina-
ble growth, profitability, and portfolio stability. These strategic
priorities will serve as guiding principles for the future, rein-
forcing Hrvatska poštanska banka’s position as one of the
leading credit institutions in the market.
SME operations
The SME Business Division is steadfast in its commitment to
business efficiency and productivity, deepening the strategic
partnership with Croatian Post, embracing digital transforma-
tion, enhancing employee skills, and leveraging synergy with
all organizational units of the Bank to elevate service quality
and support entrepreneurs.
By expanding lending activities and targeting segments
and entrepreneurs that generate economic value, the Division
aims to make a significant contribution to the development of
Croatia and its entrepreneurial sector. To further strengthen
its market position, optimize revenue, and provide the best
possible service to clients, the SME Business Division will
leverage its collaboration with Croatian Post, particularly
in the payment services segment and product contracting
through its extensive distribution network.
The Division will continuously work on enhancing service
quality and will make every effort to fully automate existing
processes, ensuring faster response times and improved
client communication regarding product and service agree-
ments. By streamlining operations, the Division aims to deliver
an efficient, modern, and client-focused banking experience
for entrepreneurs.
Financial market operations
The integration of Croatia into the European Monetary Union
and the establishment of a unified banking market have
opened new opportunities for Croatian banks.
This is particularly evident in access to the European
Central Bank’s (ECB) monetary policy operations, which
have facilitated liquidity and portfolio management for banks
operating in Croatia.
For Croatian banks, the most significant benefit has been
the ability to place overnight deposits with the ECB, though in
the future, we anticipate expanded access to the full range of
ECB instruments, ensuring greater stability and operational
flexibility within the Eurozone’s unified financial market.
We expect high liquidity levels to persist, allowing banks
to continue utilizing overnight deposits at the ECB. Given the
ongoing cycle of ECB interest rate reductions and investor
expectations, further cuts in reference interest rates appear
likely.
The ECB is expected to continue reducing its balance
sheet through the phasing out of bond purchase programs.
However, given the high liquidity in the market, Eurozone
countries should be able to refinance their maturing debt and
cover projected budget deficits without significant widening of
bond spreads, despite political uncertainties in some of the
largest member states.
In line with ECB forecasts and inflation slowdown trends,
further interest rate reductions are expected, particularly on
the shorter end of the yield curve. Meanwhile, mid- and long-
term yields have already declined significantly compared to
the previous year, and we expect them to remain within the
range observed at the end of 2024.
Rating agencies have recognized Croatia’s strong macro-
economic performance by upgrading its investment rating to
A level, which has substantially lowered spreads on Croatian
bonds. We expect these spreads to remain stable at current
levels.
In the investment banking segment, activities will focus on
expanding the client network and developing new investment
services and custody offerings, further strengthening the
Bank’s position in the financial markets.
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Annual Report of HPB Group
Application of the Corporate
Governance Code
Pursuant to Article 272.p of the Companies Act and Article
22 of the Accounting Act, the Management and Supervisory
Boards declare that, as an issuer listed on the regulated
market of the Zagreb Stock Exchange, the Bank complies
with the Corporate Governance Code (the “Code”), jointly
developed by the Croatian Financial Services Supervisory
Agency (HANFA) and the Zagreb Stock Exchange (ZSE).
The Code is publicly available on their official websites: www.
zse.hr and www.hanfa.hr.
Banka The Bank operates in substantial alignment
with best corporate governance practices and the recom-
mendations of the Code. Any departures from specific
Code provisions, resulting from the application of legal and
regulatory requirements specific to credit institutions, are
explained in the Annual Corporate Governance Compliance
Questionnaire, which is approved by the Management and
Supervisory Boards and published on the websites of the
ZSE (www.zse.hr), within the Official Register of Regulated
Information maintained by HANFA (www.hanfa.hr), and on
the Bank’s website (www.hpb.hr).
Additionally, the Bank adheres to the Corporate
Governance Code for Companies in Which the Republic of
Croatia Holds Shares or Stakes, adopted by the Government
of the Republic of Croatia at the end of 2017 ("Official
Gazette," No. 132/2017). In line with this Code, the Bank
seeks to promote transparency and operational efficiency, as
well as to strengthen relationships with its business environ-
ment through the application of anti-corruption provisions and
mechanisms, measures, and procedures for conflict-of-inter-
est management.
Beyond adhering to the recommendations of these Codes,
and in accordance with regulations governing credit institu-
tions, the Bank continuously works on enhancing corporate
governance and business transparency as fundamental pillars
of shareholder, investor, client, employee, and stakeholder
protection. In doing so, the Bank considers its organizational
structure, strategy, and business objectives, ensuring effec-
tive oversight of the Management and Supervisory Boards'
responsibilities. Special emphasis is placed on robust risk
assessment and reporting processes, as well as the estab-
lishment of appropriate internal control mechanisms.
The Bank has implemented a comprehensive inter-
nal control system, ensuring effective direct supervision
through the integration of procedures and processes that
monitor operational efficiency, financial reporting reliability,
and compliance with legal and regulatory requirements, as
well as best industry practices. This internal control system
operates through the three lines of defense, which function
independently: risk monitoring, compliance monitoring, and
internal audit. The key characteristics of the internal control
system include the independence of control functions,
responsible for identifying, assessing, and managing risks,
including risk control and compliance functions. The internal
audit function oversees the entire operations of the Bank and
its Group, assessing the adequacy and effectiveness of the
established internal control framework.
To mitigate risks in financial reporting, the Bank has estab-
lished an appropriate internal control and risk management
system, ensuring clear segregation of responsibilities across
organizational units in line with internal policies. Furthermore,
effective internal controls have been integrated into busi-
ness processes and operations. At the same time, the Bank
engages an external auditor and has established ongoing
financial oversight mechanisms to ensure compliance and
informed decision-making in this area. A description of the
Bank’s internal control and risk management framework,
particularly concerning financial reporting, is an integral and
essential part of our operations. These elements are detailed
in the Bank’s business description, as outlined in Note 2 of
the financial statements.
Significant Shareholders and
Restrictions on Share Rights
The Republic of Croatia is the largest individual shareholder
of the Bank, holding a 44.90% stake. Alongside Croatian Post
Inc., the Croatian Deposit Insurance Agency, the Croatian
Pension Insurance Institute, and the NEK Fund, these enti-
ties collectively hold approximately 77% of the Bank's share
capital and voting rights at the General Assembly.
Pursuant to the Bank’s Articles of Association, each share
carries one vote, meaning that there are no restrictions on
voting rights nor any limitations on the exercise of these rights.
Shareholders exercise their rights at the Bank’s General
Assembly, which decides on matters prescribed by the
Companies Act and the Bank’s Articles of Association. The
General Assembly is typically convened by the Management
Board but may also be convened at the request of the
Supervisory Board or shareholders, in accordance with the
relevant provisions of the Companies Act.
A shareholder may participate and vote at the General
Assembly either in person or through a proxy, provided that
they register their attendance no later than six days prior
Statement on the application of the
Corporate Governance Code
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to the meeting and are registered as a shareholder in the
Central Depository & Clearing Company Inc. on the last day
for submitting participation applications.
In accordance with the Bank’s Articles of Association,
the Management Board is authorized to allow shareholders
to exercise some or all of their rights remotely via electronic
communication, even if they do not physically attend or
participate through a proxy at the venue where the General
Assembly is held. In such cases, the invitation to the General
Assembly will specify the technical and detailed require-
ments for participation via electronic communication. The
Management Board is also authorized to permit the live trans-
mission of the General Assembly via audio and video stream-
ing, which will be explicitly stated in the meeting invitation.
The functioning of the General Assembly is governed
by the Companies Act and the Rules of Procedure of the
General Assembly, which are available on the Bank’s website
(www.hpb.hr).
Appointment and Dismissal Rules of
the Management Board, Amendments
to the Articles of Association, and
Special Powers of the Management
Board
As a legal entity of special interest to the Republic of
Croatia, as designated by the Decision on Legal Entities of
Special Interest to the Republic of Croatia ("Official Gazette,"
numbers 147/2021 and 78/2023), the criteria and proce-
dures for electing and appointing candidates to the Bank’s
Management Board (including the President and members)
are prescribed by the Croatian Government's Regulation
on the Conditions for Electing and Appointing Members to
Supervisory and Management Boards of Entities of Special
Interest to the Republic of Croatia and the Manner of Their
Selection ("Official Gazette," number 12/2019) (Government
Regulation).
Under the Bank’s Articles of Association, the Management
Board consists of at least two and at most five members, with
the Supervisory Board determining the exact number. The
Supervisory Board appoints the President and members of
the Management Board for a term of up to five years, with the
possibility of unlimited reappointment.
In addition to the requirements stipulated in the
Government Regulation, a Management Board member
must fulfill the criteria prescribed by the Companies Act, the
Credit Institutions Act, and the Decision on the Assessment
of the Suitability of the Chairperson of the Management
Board, Member of the Management Board, Member of the
Supervisory Board, and Key Function Holder in a Credit
Institution ("Official Gazette" numbers 20/2021 and 104/2022).
Appointment is subject to the prior approval of the Croatian
National Bank.
The suitability of Management Board members is
assessed based on their competence, qualifications, and abil-
ity to ensure the lawful, secure, and stable execution of their
responsibilities. Collectively, Management Board members
must possess the necessary expertise, skills, and experience
to independently and effectively manage the Bank, particu-
larly in understanding its operations and key risks.
Management Board members are required to perform
their duties on a full-time basis and maintain an employment
relationship with the Bank.
The Supervisory Board has the authority to dismiss
the President and members of the Management Board
for valid reasons, while the President and members of the
Management Board may submit their resignation in writing.
Amendments to the Articles of Association may only be
enacted through a resolution of the General Assembly, which
is considered adopted if it receives approval from three-quar-
ters of the share capital represented at the General Assembly.
The Management Board is responsible for drafting amendment
proposals, which must first be submitted to the Supervisory
Board for approval. Upon receiving the Supervisory Board’s
consent, the proposal is forwarded to the General Assembly
for final approval.
At the General Assembly on August 30, 2023, the
Management Board was authorized to acquire own shares
on the organized securities market from the date of the reso-
lution until the end of 2026. The total capital allocated for such
acquisitions, including shares already held by the Bank, must
not exceed 1% of the Bank’s share capital at the time of acqui-
sition. The Management Board was also authorized to dispose
of own shares outside the organized market, in accordance
with regulatory requirements related to variable remuneration,
as per the Bank and HPB Group’s Remuneration Policy, while
adhering to all applicable regulatory restrictions.
Based on the above authorization from the General
Assembly, the Management Board launched the Own Share
Buyback Program on November 8, 2023, with a duration of
two years. The program allows for the acquisition of up to
300 own shares, with a total allocation of up to EUR 65,000,
intended for variable remuneration payments in line with the
Bank and HPB Group’s Remuneration Policy.
During 2024, in accordance with the ongoing Buyback
Program, the Bank repurchased a total of 49 own shares on
the Zagreb Stock Exchange on February 13, 2024. Since the
Bank did not hold any treasury shares prior to this transaction,
following the acquisition, it held a total of 49 own shares with-
out voting rights, equivalent to 0.002420% of the Bank’s share
capital, at a total purchase price of EUR 9,898.
On December 12, 2024, the Bank disposed of all 49 own
shares outside the regulated market of the Zagreb Stock
Exchange, executing the Share Transfer Agreements. As of
December 31, 2024, the Bank no longer held any treasury
shares in its account.
Details of these transactions were duly published in
accordance with legal requirements and are available on
the Zagreb Stock Exchange website (www.zse.hr), HANFA's
Official Register of Regulated Information (www.hanfa.hr),
and the Bank's website (www.hpb.hr), ensuring transparency
and regulatory compliance.
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Annual Report of HPB Group
The selection and appointment process for Supervisory Board
members, as well as the qualifications required of candidates,
are prescribed by the Croatian Government’s Regulation on
the Conditions for the Selection and Appointment of Members
to Supervisory and Management Boards of Legal Entities
of Special Interest to the Republic of Croatia and on the
Manner of Their Selection ("Official Gazette," No. 12/2019)
(Government Regulation).
According to the Bank’s Articles of Association, the
Supervisory Board may have up to seven members, all of
whom are appointed and dismissed by the General Assembly.
In addition to meeting the requirements set out in the
Government Regulation, a Supervisory Board member must
satisfy the conditions prescribed by the Companies Act, the
Credit Institutions Act, and the Decision on the Assessment
of the Suitability of the Chairperson of the Management
Board, Member of the Management Board, Member of the
Supervisory Board, and Key Function Holder in a Credit
Institution ("Official Gazette" numbers 20/2021 and 104/2022).
Appointment is subject to the prior approval of the Croatian
National Bank.
The collective expertise, capabilities, and experience of
Supervisory Board members are essential for independent
and autonomous supervision of the Bank’s operations,
particularly in understanding its activities and key risks.
A member’s suitability for the Supervisory Board hinges on
their alignment with specified conditions and characteristics
that ensure competent, lawful, secure, and stable execution
of their duties.
The powers of the Supervisory Board are regulated by the
Companies Act, the Credit Institutions Act, the Decision
on the management system, and the Bank's Articles of
Association.
In the period from January 1 to December 31, 2024, the
Bank's Supervisory Board operated with three members:
• Marijana Miličević, M.Sc. in Economics, President
• prof. Ph.D. Mislav Ante Omazić, Deputy President,
• Marijana Vuraić Kudeljan, M.Sc., Member
The current Supervisory Board members were elected at
the General Assembly on May 10, 2021, for a four-year term,
which commenced on August 13, 2021, following the prior
approval of the Croatian National Bank, as required under the
Credit Institutions Act.
The members of the Supervisory Board do not hold shares
in the Bank.
In the course of 2024, within the incumbent Supervisory
Board, the independence requirement was discharged at all
times by one member of the Supervisory Board, ensuring
the functioning of the Supervisory Board and its committees
in compliance with the provisions of applicable statutory
regulations.
The Supervisory Board typically convenes quarterly, with
additional meetings held as necessary but at least semi-an-
nually. For urgent and significant matters, the Supervisory
Board can make decisions without convening a meeting. In
such cases, members cast their votes in writing, by telephone,
or via email.
In 2024, the Supervisory Board held eight regular meet-
ings, discussing key aspects of the Bank’s operations. The
attendance record for these meetings is provided below:
Member of the
Supervisory Board
Total number of sessions
Attendance at sessions
Number of sessions %
Marijana Miličević
8
8/8 100.00
Mislav Ante Omazić 8/8 100.00
Marijana Vuraić Kudeljan 8/8 100.00
Supervisory Board - Composition and Role
In addition to regular meetings, the Supervisory Board
adopted 110 resolutions electronically via email, particularly
in instances requiring prompt decision-making. The majority
of these resolutions pertained to granting approvals for the
Bank’s exposure to specific clients in accordance with legal
requirements and other decisions requiring Supervisory
Board approval.
Throughout 2024, the Supervisory Board and its
committees held regular sessions, with all members actively
participating, ensuring continuous oversight of the Bank’s
operations. The Board maintained a balanced composition
and demonstrated the necessary expertise required for the
supervision of a credit institution, with each member contrib-
uting effectively to aligning its activities with regulatory and
business requirements. The annual suitability assessment
of Supervisory Board members, conducted in accordance
with regulations applicable to credit institutions, reaffirmed
this commitment. The Suitability Assessment Committee,
established within the Bank, determined that in 2024, the
Supervisory Board’s composition was well-balanced in terms
of skills, experience, competencies, age, and gender. The
assessment confirmed that the members uphold high moral
standards, possess a diverse set of knowledge, capabilities,
and practical experience essential for their roles, and meet
the specific regulatory requirement that at least one member
has expertise in accounting and/or financial statement
auditing. Additionally, the composition of the Board ensures
adequate gender representation, with women comprising
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Member of the Audit
Committee
Total number of sessions
Attendance at sessions
Number of sessions %
Mislav Ante Omazić
11
11/11 100.00
Željko Lovrinčević 11/11 100.00
Ivana Radeljak Novaković 11/11 100.00
Audit Committee
66.7% of its members, exceeding the target representation
level. Following the results of the annual suitability assess-
ment, the General Assembly, at its session on August 29,
2024, confirmed that each Supervisory Board member is fit
for their role, that the Board collectively possesses the exper-
tise required for independent supervision of the Bank’s oper-
ations and key risks, and that the prescribed gender diversity
target has been met.
The Management Board and the Supervisory Board
maintained a constructive and cooperative relationship,
consistently sharing relevant information essential for fulfilling
their respective responsibilities, thereby contributing to the
effectiveness of the supervisory function. The Supervisory
Board oversaw the Bank’s operations, guided its business
strategy, and actively supported its implementation in accord-
ance with the law, the Bank’s Articles of Association, and the
Supervisory Board’s Rules of Procedure, relying on reports
from the Management Board on matters of significance for
the Bank’s business and financial position. The Supervisory
Board had continuous access to request and obtain informa-
tion from the Management Board regarding aspects of the
Bank’s operations that had or could have a material impact on
its position, particularly information related to risk profile, for
which the Management Board ensured appropriate access.
Throughout 2024, successful and transparent collab-
oration was evident in the open dialogue between the
Management Board and the Supervisory Board. Members
of the Management Board regularly attended Supervisory
Board meetings, providing reports on matters within their
areas of responsibility and offering additional clarifications
as requested. This ensured that the Supervisory Board could
thoroughly discuss all agenda items, take informed positions,
and adopt the necessary decisions. Based on this coopera-
tion, the Supervisory Board evaluates its collaboration with
the Management Board as highly effective.
The Supervisory Board has established the following
committees: the Audit Committee, the Risk Committee, the
Remuneration Committee, the Nomination Committee, and
the ESG Committee, all tasked with making competent
assessments on matters within their respective mandates.
The Management Board has ensured access to all neces-
sary information and data for the effective operation of the
Supervisory Board, as well as the availability of relevant
expert services, control functions, and, where required, exter-
nal advisors specializing in areas under each committee’s
jurisdiction.
From January 1 to August 27, 2024, the Audit Committee
operated with three members:
• Ph.D. Željko Lovrinčević as Chair
• Prof. Ph.D. Mislav Ante Omazić as Vice-Chair
• Ivana Radeljak Novaković as a Member
Following changes in committee roles, from August 28 to
December 31, 2024, the composition was adjusted, with:
• Prof. Ph.D. Mislav Ante Omazić as Chair
• Ph.D. Željko Lovrinčević as Vice-Chair
• Ivana Radeljak Novaković as a Member
By the resolution of the Bank’s General Assembly on May
10, 2021, external experts Ivana Radeljak Novaković and
Željko Lovrinčević were appointed to the Audit Committee,
with the latter fulfilling the independence requirement
stipulated by applicable regulations. To meet the statutory
minimum number of Audit Committee members as required
under Article 65, Paragraph 3 of the Audit Act ("Official
Gazette" No. 127/2017, 27/2024, 85/2024, and 145/2024), the
Bank’s Supervisory Board, by its decision on August 13, 2021,
appointed Mislav Ante Omazić, an independent member of
the Supervisory Board, as a member of the Audit Committee.
In its current composition, two members, Mislav Ante Omazić
and Željko Lovrinčević, fulfill the independence criteria in rela-
tion to the Bank, ensuring the committee's operations comply
with relevant regulations.
The Audit Committee convened for eleven regular meet-
ings in 2024, achieving full attendance across all sessions.
The attendance record for the Audit Committee meetings in
2024 is detailed in the table below:
7070
Annual Report of HPB Group
Additionally, the committee rendered nine decisions
outside of meetings via email, addressing matters requiring
urgent resolution.
The committee's deliberations spanned areas under its
jurisdiction, adhering to the Credit Institutions Act, the Audit
Act, the Public Sector Internal Control System Act, and EU
Regulation No. 537/2014, ensuring comprehensive oversight
and governance.
2024 Audit Committee Report
Throughout 2024, the Bank's Audit Committee operated with
three members, with internal role changes occurring within
the committee over the year.
Following mutual agreement among the Audit Committee
members and based on the committee’s decisions on the
election of the Chair and Vice-Chair, from January 1 to
August 27, 2024, Željko Lovrinčević served as Chair, Mislav
Ante Omazić as Vice-Chair, and Ivana Radeljak Novaković
as a Member. From August 28 to December 31, 2024, the
committee underwent role adjustments, with Mislav Ante
Omazić assuming the role of Chair, Željko Lovrinčević serving
as Vice-Chair, and Ivana Radeljak Novaković continuing as a
Member.
In 2024, the Audit Committee convened 11 regular meet-
ings, deliberating and making decisions within its mandated
scope and responsibilities as defined by its founding decision
and Rules of Procedure. Beyond its scheduled sessions, the
committee also rendered nine decisions via email, address-
ing matters requiring urgent resolution.
As part of its responsibilities, the Audit Committee
supported the Supervisory Board in fulfilling its oversight
duties, specifically by monitoring the effectiveness of the
internal control system and risk management framework
related to financial reporting. In this capacity, the committee
supervised the financial reporting process by analyzing and
reviewing financial statements on a quarterly and annual
basis, ensuring the integrity of the Bank's financial informa-
tion, as well as the accuracy and consistency of accounting
methods applied, including consolidation criteria for HPB
Group’s financial statements.
The committee also oversaw the external audit process,
tracking the execution and status of the external audit plan. It
reported to the Supervisory Board on the results of the stat-
utory audit, following thorough discussions and analyses of
the certified auditor’s report. This included evaluations of key
audit findings and assessments of the Bank’s collaboration
with external auditors. Representatives of the external auditor
appointed for the Bank and HPB Group’s financial statement
audit attended three of the Audit Committee’s meetings.
Additionally, the Audit Committee carried out the selection
process for the external auditor responsible for auditing the
Bank and HPB Group’s financial statements and verifying
the sustainability report for 2024. The committee fulfilled its
mandate by providing recommendations to the Supervisory
Board regarding the selection of the auditor, engagement
conditions, and appointment terms, following a comprehen-
sive review of the auditor’s independence, objectivity, and
remuneration.
In overseeing the efficiency of the internal audit system,
the Audit Committee reviewed the annual internal audit plan
and periodic reports, as well as all significant issues within
this domain.
The Chair of the Audit Committee regularly reported to the
Supervisory Board on the committee’s activities, key issues
discussed, and conclusions reached, ensuring the commit-
tee’s continued independence and autonomy in executing
its duties. Additionally, outside of its regular sessions, the
committee rendered seven decisions via email in situations
requiring prompt resolution within its jurisdiction.
Discussions at the Risk Committee meetings addressed
topics within its scope of responsibility, in accordance with
the Credit Institutions Act and its associated regulatory
provisions.
Member of the
Risk Committee
Total number of sessions
Attendance at sessions
Number of sessions %
Marijana Vuraić Kudeljan
7
7/7 100,00
Marijana Miličević 7/7 100,00
Mislav Ante Omazić 7/7 100,00
Risk Committee
Throughout 2024, the Risk Committee operated with three
members:
• Marijana Vuraić Kudeljan, M.Sc., Chair
• Marijana Miličević, M.Sc. in Economics, Member
• Prof. Ph.D. Mislav Ante Omazić, Member
The Risk Committee held seven regular meetings in 2024,
with all members in attendance. The attendance at the Risk
Committee meetings in 2024 is detailed in the table below:
7171
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Additionally, outside of its regular sessions, the committee
rendered seven decisions via email in situations requiring
prompt resolution within its jurisdiction.
Discussions at the Risk Committee meetings addressed
topics within its scope of responsibility, in accordance with
the Credit Institutions Act and its associated regulatory
provisions.
2024 Risk Committee Report
Throughout 2024, the Risk Committee operated with three
members: Marijana Vuraić Kudeljan as Chair, Marijana
Miličević as a Member, and Mislav Ante Omazić as a Member.
The Risk Committee held seven regular meetings in 2024,
with all members in attendance. Additionally, outside of its
regular sessions, the committee rendered seven decisions
via email in situations requiring prompt resolution within its
jurisdiction. Discussions at the Risk Committee meetings
addressed topics within its scope of responsibility, in accord-
ance with the Credit Institutions Act and its associated regu-
latory provisions.
Tijekom In 2024, the Risk Committee continued to support
the Supervisory Board in fulfilling its strategic supervisory
responsibilities, particularly in defining an effective risk appe-
tite framework in alignment with the Bank’s business strat-
egy, risk management policy, corporate culture, and values.
Special emphasis was placed on the efficient monitoring of
risks and the overall risk management framework within the
Bank.
Within its scope of duties and responsibilities, the Risk
Committee reviewed regular reports on risk management and
control, analyzing the implementation of capital management
strategies and all key risks, including liquidity risk, market
risks, credit risk, operational risk, and reputation risk.
The committee assessed the adequacy of these strat-
egies in relation to the approved risk appetite and overall
risk management approach. Additionally, the committee
conducted a general assessment of environmental risks, a
method through which the Bank aims to establish sustainabil-
ity objectives within the environmental segment. This process
involved evaluating environmental factors, their correlation
with the Bank’s business model and interdependencies, iden-
tifying risks that may arise from these factors, and defining
material topics for further strategic activities.
The Risk Committee reviewed and approved the 2024
work plans for the Risk Control Function, the Compliance
Monitoring Function, and the Anti-Money Laundering and
Counter-Terrorist Financing Division, as well as their regu-
lar reports. Meetings dedicated to discussing annual plans
and reports were attended by individuals responsible for the
respective control functions, including the designated officer
for anti-money laundering and counter-terrorist financing.
Member of the
Remuneration Committee
Total number of sessions
Attendance at sessions
Number of sessions %
Marijana Miličević
5
5/5 100.00
Marijana Vuraić Kudeljan 5/5 100.00
Mislav Ante Omazić 5/5 100.00
Remuneration Committee
Throughout 2024, the Remuneration Committee operated
with three members:
• M.Sc. in Economics Marijana Miličević, Chair
• M.Sc. Marijana Vuraić Kudeljan, Member
• Prof. Ph.D. Mislav Ante Omazić, Member
The Committee held five regular meetings in 2024, with
full attendance from all members. The attendance at the 2024
Remuneration Committee meetings is detailed in the table
below:
Additionally, it made 24 decisions outside of meetings
via email in cases requiring urgent resolutions within its
jurisdiction.
Discussions at the Remuneration Committee meetings
focused on matters within its mandate, in accordance with
the Credit Institutions Act and its implementing regulations.
2024 Remuneration Committee Report
Odbor Throughout 2024, the Remuneration Committee
operated with three members: Marijana Miličević as Chair,
Marijana Vuraić Kudeljan as a Member, and Mislav Ante
Omazić as a Member.
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Annual Report of HPB Group
The Committee held five regular meetings in 2024, with
full attendance from all members. Additionally, it made 24
decisions outside of meetings via email in cases requiring
urgent resolutions within its jurisdiction. Discussions at the
Remuneration Committee meetings focused on matters
within its mandate, in accordance with the Credit Institutions
Act and its implementing regulations.
In 2024, the Remuneration Committee continued to
support the Supervisory Board in reviewing and analyzing
the principles of the Bank's and HPB Group’s Remuneration
Policy. The Committee monitored the implementation of
remuneration rules by assessing procedures and practices
related to remuneration within the Bank and its subsidiar-
ies, ensuring compliance with regulatory requirements and
performance management policies.
Amid regulatory changes, the Committee reviewed and
issued a positive opinion on the updated provisions of the
Remuneration Policy for Management Board and Supervisory
Board members before its final approval by the General
Assembly on August 29, 2024.
In fulfilling its duties, the Committee regularly reviewed
reports on the implementation of the remuneration policy, the
achievement of objectives, key performance indicators (KPIs),
benchmark values, and the weighting of KPIs for 2023, along
with their allocation for 2024. Additionally, the Committee over-
saw the identification of employees with a significant impact
on the HPB Group's risk profile, reviewed the Remuneration
Report for the Management Board and Supervisory Board
members, and considered other proposals and topics related
to remuneration within the Supervisory Board’s purview.
Member of the Nomination
Committee
Total number of sessions
Attendance at sessions
Number of sessions %
Marijana Miličević
2
2/2 100.00
Marijana Vuraić Kudeljan 2/2 100.00
Mislav Ante Omazić 2/2 100.00
Nomination Committee
Throughout 2024, the Nominations Committee operated with
three members:
• M.Sc. in Economics Marijana Miličević, Chair
• M.Sc. Marijana Vuraić Kudeljan, Member
• prof. Ph.D. Mislav Ante Omazić, Member.
The Committee convened for two regular meetings with
full attendance by all members. The attendance at the 2024
Nomination Committee meetings is detailed in the table
below:
Discussions during these meetings addressed topics
within the Committee’s mandate, in accordance with the
Credit Institutions Act and its implementing regulations.
2024 Nomination Committee Report
Throughout 2024, the Nomination Committee operated with
three members: Marijana Miličević as Chair, Marijana Vuraić
Kudeljan as a Member, and Mislav Ante Omazić as a Member.
The Committee held two regular meetings in 2024, with
full attendance from all members. Discussions during these
meetings addressed topics within the Committee’s mandate,
in accordance with the Credit Institutions Act and its imple-
menting regulations.
In 2024, the Nomination Committee continued to fulfill its
role in evaluating the suitability of members of the Supervisory
Board, the Management Board, and key function holders. The
Committee conducted regular annual suitability assessments,
ensuring compliance with statutory regulations, subordinate
legislation, and the Bank’s internal policies governing suita-
bility evaluations.
To ensure continuity in decision-making and the effective
functioning of the Management Board, the Committee, in
accordance with the Bank’s Management Board Succession
Plan and corporate governance best practices, reviewed
and approved the selection of deputies/successors for
Management Board members. This process was carried out
in consultation with the President of the Supervisory Board
and the President of the Management Board, reinforcing the
Bank’s commitment to structured and strategic leadership
planning.
7373
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Member of the ESG
Committee
Total number of sessions
Attendance at sessions
Number of sessions %
Mislav Ante Omazić
5
5/5 100.00
Marijana Miličević 5/5 100.00
Marijana Vuraić Kudeljan 5/5 100.00
ESG Committee
Throughout 2024, the ESG Committee operated with three
members:
• prof. Ph.D. Mislav Ante Omazić, Chair,
• M.Sc. in Economics Marijana Miličević, Member
• Marijana Vuraić Kudeljan M.Sc., Member
The Committee convened five regular meetings with full
attendance. The attendance at the ESG Committee meetings
in 2024 is detailed in the table below:
Additionally, it made decisions via email on one occasion
to address urgent matters within its purview.
The Committee's discussions focused on managing
environmental, social, and governance (ESG) factors and
standardizing processes related to implementing ESG risks
into business operations in accordance with the overarching
corporate governance framework.
2024 ESG Committee Report
Throughout 2024, the ESG Committee operated with three
members: Mislav Ante Omazić as Chair, with Marijana
Miličević and Marijana Vuraić Kudeljan serving as Members.
The Committee held five regular meetings in 2024, with
full attendance from all members. In addition to these meet-
ings, the Committee made one decision via email to address
an urgent matter within its scope. Discussions during these
sessions focused on managing environmental, social, and
governance (ESG) factors, as well as standardizing processes
for integrating ESG risks into business operations in align-
ment with the broader corporate governance framework.
In 2024, the ESG Committee played a key role in over-
seeing the Bank’s ESG strategy and aligning its policies with
evolving regulatory requirements. One of the key milestones
achieved was the approval of the HPB Group Sustainability
Report for 2023, prepared in accordance with the Global
Reporting Initiative (GRI) guidelines.
In pursuit of compliance with European and national legis-
lative frameworks for achieving carbon neutrality by 2050,
the Committee reviewed and approved the Bank’s Climate
Strategy until 2050 and the Transition Plan for a Low-Carbon
Economy by 2030. These documents define short, medium,
and long-term key performance indicators (KPIs), specific
actions and steps required for their achievement, resource
allocations, as well as roles and responsibilities in implement-
ing the Climate Strategy.
Given the growing regulatory expectations, the Committee
also reviewed and approved the Bank’s Methodology for
Calculating Taxonomy Indicators, as well as updated versions
of the Sustainability Reporting Policy, the HPB Group Code of
Ethics, and the Bank’s Anti-Corruption Policy.
Management Board
- Composition and Role
The powers, duties, and responsibilities of the Management
Board in managing the Bank’s operations, as well as in repre-
senting and acting on behalf of the Bank, are defined by the
Companies Act, the Credit Institutions Act, the Decision on
the Governance System, the Bank’s Articles of Association,
and the Rules of Procedure of the Management Board.
In line with business process requirements, the
Management Board establishes standing and ad hoc commit-
tees. The Bank’s standing committees include the Credit
Committee, the Asset and Liability Management Committee,
the Operational Risk Management Committee, and the
Change and Project Management Committee.
From January 1 to December 31, 2024, the Management
Board operated with five members:
• M.Sc. Marko Badurina, President of the Management
Board
• Ivan Soldo, Member of the Management Board
• Anto Mihaljević, Member of the Management Board
• Ph.D. Tadija Vrdoljak, Member of the Management
Board
• Josip Majher, Member of the Management Board.
All members of the Management Board are employed by
the Bank on a full-time basis and do not hold shares in the
Bank.
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Annual Report of HPB Group
Diversity Policy for Members of the
Management Board and Supervisory
Board
The Diversity Policy for members of the Management Board
and Supervisory Board, adopted by the General Assembly
of the Bank, aims to establish the necessary standards that
ensure diversity and gender representation within the Bank’s
governing and supervisory bodies.
The target level of representation for the currently under-
represented gender—women—in the Bank’s governing body
is set at a minimum of 33.3%, with the goal of achieving this
target over a five-year period from 2021 to 2026. At present,
this target has been met at the overall governing body level.
As of the reporting period, the Supervisory Board is
composed of two women and one man, resulting in a female
representation of 66.7%, which surpasses the minimum
target of 30% female representation in the Supervisory Board.
Conversely, the Management Board, consisting of the
Chairman and four members, does not currently meet the
gender diversity criteria, as female representation stands
at 0%, which is below the long-term target of at least 20%
female participation in the Management Board.
Throughout 2024, the Supervisory Board and Management
Board maintained a balanced composition in terms of skills,
experience, competencies, and age, as reflected in the biog-
raphies of Board members published on the Bank’s website
(www.hpb.hr). This balance was further affirmed by the
Croatian National Bank, which, in granting its prior approval
for specific appointments, considered the positive results of
the suitability assessments, conducted on both an individual
and collective basis for the members of both bodies.
Acknowledging the significance of fostering diversity and
preventing discrimination within the workplace and recruit-
ment processes, the Bank boasts a commendably high
proportion of women in key management roles (as elaborated
in the section on Human Resources Management in Hrvatska
poštanska banka). This demonstrates an ongoing commit-
ment to enhancing inclusiveness and ensuring a discrimina-
tion-free environment across all levels of Bank management.
Overview of Diversity Policy
Aligned with its Ethical Code, the Bank values and respects
natural and cultural differences among individuals. All employ-
ees are treated equally, regardless of gender, age, nationality,
ethnicity, religion, language, socioeconomic background, or
any other potential basis for discrimination. In line with this
commitment, the General Assembly of the Bank adopted
the Diversity Policy for Members of the Management Board
and Supervisory Board in 2021, ensuring a non-discrimina-
tory selection process for these governing bodies and other
key management positions. When appointing Management
Board members, Supervisory Board members, and other key
executives, the Bank does not discriminate based on gender,
age, or any other factor. The Bank maintains a relatively
high representation of women in key management positions,
along with individuals from different age groups, educational
backgrounds, expertise, and professional experiences. This
approach supports the Bank’s diversity strategy, which is
based on enhancing inclusivity in corporate governance and
promoting equal career advancement opportunities at all
levels, regardless of gender.
With regard to employee remuneration and working condi-
tions, the Bank’s management actively fosters a balance
between professional and private life, aiming to create a
healthy and supportive work environment that ensures equal
opportunities for both genders. All employees have the same
potential for professional success, with career progression
based solely on individual performance and achievements.
The collective experience of the Bank’s key management
team is built on a well-balanced mix of knowledge and skills,
ensuring that all functions are effectively managed and that
the Bank’s strategic objectives are successfully achieved.
No.
during
2020
Proportion
during
2020
No.
during
2021
Proportion
during
2021
No.
during
2022
Proportion
during
2022
No.
during
2023
Proportion
during
2023
No.
during
2024
Proportion
during
2024
Men
20 5 7.15% 17 54.83% 14 53.85% 20 55.55% 17 44.74%
Women
15 42.85% 14 4 5.17% 12 46.15% 16 44.45% 21 55.26%
Gender Composition of the Bank's Key Management from 2020 to 2024:
7575
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7676
Annual Report of HPB Group
PROFIT
CENTER
OPERATING
BUSINESS
SUPPORT
RISK, COLLECTION
AND FINANCIAL
MANAGEMENT
PROFESSIONAL
SUPPORT TO THE
MANAGEMENT
BOARD
LEGEND:
Internal Audit
Office
Organization and
Project Management
Office
Marketing Office
Human Resources
Division
Legal Affairs
Office
Assets and Liabilities
Office
Strategic Development
Office
SUPERVISORY
BOARD
MANAGEMENT
BOARD
Digitalization Office
Audit
Committee
Renumeration
Committee
Nomination
Committee
Risk
Committee
ESG
Committee
Office of the
Management Board
Compliance
Division
Corporate Security
Division
Procurement and Asset
Management Office
Service Quality
Office
Service Model and
Salesforce Development
Office
ESG Office
Large Corporates
and Public Sector
SME
Retail
Financial Markets
Products and Process
Delivery
Direct Banking
IT
Business Support
Collection
Strategic Risk
and Risk Control
Retail Credit
Risk
Financije
Corporate Credit
Risk
Finance
Hrvatska poštanska banka
Organizational Structure
The Bank's operations are organizationally structured through 28 units - 16 divisions and 12 offices, as outlined below:
7777
▲
The Bank's organizational units are divided into four funda-
mental business areas:
1. Management Support,
2. Profit Centre,
3. Business Support,
4. Risk Management, Collections, and Finance.
Each business segment functionally and technologically
integrates certain organizational units of the Bank to enhance
the efficiency of management and organization of the Bank's
activities.
1. The Management Support segment involves task groups
designed to offer specialized support to the Management
Board in reaching business goals and in the governance and
administration of the Bank.
Management Support includes the following divisions and
offices:
• Internal Audit Office
• Office of the Management Board
• Compliance division,
• Organization and Project Management Office,
• Human Resources Division,
• Marketing Office,
• Corporate Security Division,
• Service Quality Office,
• Legal Affairs Office,
• Procurement and Asset Management Office,
• Assets and Liabilities Office,
• Strategic Development Office,
• Service Model and Salesforce Development Office,
• Sustainability Office,
• Digitalization Office.
Internal Audit Office functions as the Bank's unit responsi-
ble for evaluating the effectiveness of internal controls, risk
management processes, compliance functions, and auditing
the IT systems.
Office of the Management Board serves as an organiza-
tional unit offering support to the Bank's standing committees
and bodies, while also facilitating expert guidance in manag-
ing the corporate communications of the Bank and its group
entities.
Compliance division is tasked with aligning the Bank's
activities with regulatory standards, safeguarding data
privacy, administering fraud prevention efforts, and execut-
ing protocols for anti-money laundering and combating the
financing of terrorism.
Organization and Project Management Office is tasked
with analyzing and enhancing the Bank's organizational
structure and business processes, alongside managing vari-
ous projects.
Human Resources Division is charged with recruitment,
employee development, fostering employee growth and
organizational capabilities, shaping and applying perfor-
mance management and remuneration policies, managing
employment relations, and overseeing the rights and obliga-
tions emanating from employment contracts.
Marketing Office is responsible for crafting and executing
marketing and promotional strategies for the Bank.
Corporate Security Division ensures the security of the
Bank's information infrastructure, as well as the safety of its
personnel and assets.
Service Quality Office focuses on enhancing customer
service quality by conducting regular satisfaction surveys and
research, aiming to suggest service improvements based on
feedback.
Legal Affairs Office offers comprehensive legal support
across all organizational units within the Bank.
Procurement and Asset Management Office oversees the
procurement of goods and services, handles general and
record-keeping affairs, manages the Bank's ongoing and
investment maintenance, and controls assets acquired in lieu
of unpaid claims.
Assets and Liabilities Office is tasked with balancing the
Bank's assets and liabilities, managing currency exposures,
market risks, and liquidity risks.
Strategic Development Office is charged with steering the
Bank and the HPB Group's business development, oversee-
ing the strategic planning process, and ensuring the strategic
objectives are effectively met.
Service Model and Salesforce Development Office
supports the enhancement and development of the Bank's
service delivery model and sales team, focusing on improv-
ing interactions and transactions with individuals and SMEs.
Sustainability Office is dedicated to integrating environ-
mental, social, and governance (ESG) considerations into
the Bank's business practices, aiming to align operations with
sustainable development goals.
Digitalization Office is responsible for formulating and
implementing the Bank's digital strategy, driving the digital
transformation efforts to modernize and enhance banking
operations and customer experiences.
2. Profit Centre encompasses interconnected task groups
structured into organizational divisions where all of the Bank's
products and services are sold.
7878
Annual Report of HPB Group
This area includes:
• Retail Division,
• SME Division,
• Large Corporates and Public Sector Division,
• Financial Markets Division.
Retail Division operates as a key organizational unit within
the Bank, dedicated to offering a comprehensive suite of
banking and financial services to individual clients. It oversees
the coordination of regional consumer centres and integrates
the services of both Bank and Croatian Post d.d. (HP) as
pivotal distribution networks. This division is also responsible
for centrally overseeing all collaborative operations with HP,
ensuring seamless service delivery and maximizing customer
reach.
SME Division forms strategic business relationships with the
Bank's SME clients, conducting its operations on the foun-
dation of market-driven principles. This division focuses on
tailoring banking and financial solutions to meet the unique
needs of small and medium-sized businesses.
Large Corporates and Public Sector Division is a key
organizational unit of the Bank dedicated to developing and
maintaining business relationships with clients in the realms
of large corporations and the public sector. This division
operates under market-based principles, ensuring tailored
banking and financial services that align with the specific
needs and challenges of larger enterprises and governmental
entities.
Financial Markets Division acts as a vital segment of
the Bank, dedicated to the trading of financial instruments
under the Bank's umbrella, ensuring liquidity and the bank's
currency management. This division also provides a suite of
investment services and performs investment activities and
related ancillary services, both for and on behalf of the Bank's
clientele, within the framework of the Bank's operational
spectrum.
3. Business Support area integrates a series of task groups
structured into organizational units dedicated to facilitating
the sales of products and services as well as bolstering the
Bank's comprehensive operational framework.
Business Support area comprises:
• Product and Delivery Process Division,
• Direct Banking Division,
• Business Support Division,
• IT Division
Product and Delivery Process Division is tasked with
optimizing processes, products, and services to align with
customer requirements and achieve the Bank's business and
sales objectives.
Direct Banking Division oversees the seamless function-
ality and expansion of all direct banking channels, including
WEB, mBanking and eBanking, to distribute the Bank's and
its group's products and services. This division also manages
card-related operations, such as ATMs and POS systems.
Business Support Division delivers essential operational
backing to the revenue-generating sections of the Bank,
overseeing both domestic and foreign payment processing.
Additionally, this division is tasked with cash management
and ensuring the Bank and Croatian Post (HP) branches are
adequately stocked with cash for daily transactions.
IT Division provides comprehensive IT support across all
segments of the Bank, ensuring robust, secure, and efficient
technological infrastructure and services.
4. Risk Management, Collections, and Finance area
integrates task clusters within organizational units dedicated
to overseeing risk management, collection of the Bank's
receivables, and steering financial operations.
This area includes:
• Retail Credit Risk Management Division,
• Corporate Credit Risk Management Division,
• Strategic Risk Management and Risk Control Division,
• Collection Division,
• Finance Division.
Retail Credit Risk Management Division serves as a key
organizational unit within the Bank, specializing in the risk
assessment function. It oversees the evaluation of individual
clients' creditworthiness and and integrates credit risk evalu-
ations into the consumer lending approval process.
Corporate Credit Risk Management Division functions
as an essential organizational unit of the Bank, dedicated to
the risk assessment function. It manages the assessment of
corporate clients' creditworthiness and integrates credit risk
evaluations into the business lending approval process.
Strategic Risk Management and Risk Control Division
functions as a key organizational unit of the Bank, tasked
with overseeing strategic risks. This division is charged with
the comprehensive analysis and management of various
risk types that currently affect or could potentially impact the
Bank's operations. Its core objective is to minimize exposure
to diverse risks, thereby bolstering the Bank's operational
stability and effectiveness.
Collection Division operates as a vital section within the
Bank, responsible for overseeing debt restructuring initiatives
as well as initiating and managing early and forced collection
processes.
Finance Division functions as a key unit within the Bank,
managing its accounting framework, executing mandatory
reporting duties, financial oversight, and the enhancement of
the Bank’s management reporting system.
7979
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8080
Annual Report of HPB Group
HPB Invest Ltd.
HPB HPB Invest Ltd. (hereinafter "the Company") was
established to specialize in the formation and manage-
ment of UCITS (Undertakings for Collective Investment in
Transferable Securities) funds. As of December 31, 2024, the
Company manages six open-ended mutual funds available
for public investment: HPB Short-Term Bond Fund, HPB
Bond Fund, HPB Bond Plus Fund, HPB Global Fund, HPB
Equity Fund, and HPB Fokus 2026 Fund.
The total assets under management across these publicly
offered investment funds amounted to EUR 57.2 million as of
December 31, 2024 (2023: EUR 44.2 million). The average
assets based on month-end balances for 2024 stood at EUR
47.6 million, compared to EUR 48.3 million in the previous
year.
Following a stable and largely positive 2023, finan-
cial markets in 2024 continued their upward trajectory,
generating stable and favorable returns. Consequently,
UCITS fund assets experienced steady growth throughout
most of the year, particularly in the second half. Interest rates
declined as expected, driven by easing inflationary pres-
sures, while robust corporate earnings further boosted asset
valuations, positively impacting fund performance. However,
unexpected late-year inflationary concerns momentarily
dampened investor confidence regarding further interest rate
reductions, triggering a moderate correction in bond prices.
Despite this, 2024 remains a highly successful year for UCITS
fund performance.
During the year, the Company completed the merger of
the HPB Shor t-Term Euro Bond Fund into the HPB Short-Term
Bond Fund, with the latter continuing to operate. Additionally,
HPB Invest launched a new fund, HPB Fokus 2026, marking
the Company’s first newly introduced fund in nearly six years.
HPB Invest was honored with an award from the Association of Investment and Pension Funds of the Croatian Chamber of
Commerce (HGK) for HPB Bond Plus Fund, recognized as the best-performing fund in Croatia in 2023 within the conservative
mixed fund category.
As of December 31, 2024, HPB Invest's market share stood at 1.77%, reflecting a marginal decrease from the 1.93%
recorded at the end of the previous year.
At the close of 2024, the Company employed 11 staff members.
Subsidiary Operations Overview
As of December 31, 2024, the net assets under management per fund are as follows:
* Yield for HPB Fokus 2026 Fund refers to the period from its inception on November 29, 2024, to year-end.
Fond Assets under management
EUR '000
Annual Yield as of
31 Dec 2024
HPB Equity Fund 6,598 25.92%
HPB Global Fund 14,874 14.89%
HPB Short-Term Bond Fund 7,02 9 2.67%
HPB Bond Fund 21,962 2.90%
HPB Fokus 2026 Fund 1,095 *-0.37%
HPB Bond Plus Fund 5,673 3.88%
Total 57,231 ---
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Development Strategy
HPB HPB Invest Ltd., a dedicated UCITS fund manage-
ment company, remains committed to professional asset
management and delivering high-quality service to ensure
the preservation and sustainable growth of clients' financial
assets. By continuously investing in the company’s devel-
opment—through professional, personnel, organizational,
and technological advancements, alongside increasingly
stringent legal and regulatory compliance—HPB Invest Ltd.
aims to provide an attractive portfolio of funds and investment
products. These offerings, backed by expert management
and competitive returns, are designed to meet the diverse
needs of investors based on their investment objectives, time
horizon, and risk appetite.
Risk Management Overview
The Company closely monitors and evaluates key risk cate-
gories, including credit risk, liquidity risk, operational risk,
conflict of interest risk, and reputational risk. Together, these
risks define the overall risk profile of the Company.
Adhering to a cautious asset management strategy, the
Company solely invests in conservative instruments, such as
bank deposits, debt securities, money market instruments,
and cash funds. This strategy positions the Company's risk
stance as low, classified as level 1.
As of the reporting date, the company had no significant
exposure to market or liquidity risk. Its primary exposure to
credit risk arises from the fair value of financial instruments,
with positive valuations reflected in the statement of financial
position.
The Company encounters operational risk as an inherent
aspect of its day-to-day activities. To effectively manage this
risk, it implements a structured approach by providing quar-
terly updates to the Company's Management on incidents
that qualify as operational risks.
The main risks affecting regular business operations
include the potential decline in assets under management due
to client withdrawals and the risk of asset value depreciation.
To mitigate these risks and enhance its operational
integrity, the Company heavily invests in a robust internal
control system. This system is pivotal in ensuring operational
effectiveness, adherence to legal and regulatory standards,
and the timely recognition and mitigation of risks facing the
Company.
8282
Annual Report of HPB Group
HPB-nekretnine Ltd.
HPB-Nekretnine Ltd. (hereafter referred to as "the Company")
is a real estate-focused entity, established in August 2005,
and is wholly owned by HPB plc. The Company’s share
capital amounts to EUR 631,866.75 (equivalent to HRK
4,760,800.00, converted at the fixed exchange rate of 1 EUR
= 7.53450 HRK), which has been fully paid in.
The Company's core business activities include (1) real
estate valuation and related engineering services such as
financial supervision, (2) real estate advisory and brokerage
services, (3) energy certification, and (4) real estate manage-
ment and operations. As of December 31, 2024, the Company
employed 14 staff members.
At the end of the reporting period, HPB-Nekretnine Ltd.
held total assets of EUR 955,202.76, while recording a loss
of EUR 29,991.34 in 2024 due to a one-time provision for
legal proceedings. The Company achieved its highest-ever
revenue from external clients (those not affiliated with HPB
Group) since its establishment.
At the close of 2024, the Company employed 14 staff
members.
Development Strategy
Going forward, the focus will be on enhancing operational
efficiency and service quality for clients of Hrvatska poštan-
ska banka plc., while expanding the scope of services
related to the analysis of energy and environmental impacts
of projects and properties. By further digitalizing its opera-
tions, the Company aims to improve efficiency and transpar-
ency, thereby enhancing productivity at both the employee
and company-wide level. Additionally, through a proactive
approach toward external clients, the Company plans to
continue increasing the share of external clients in its total
revenue.
Risk Management Overview
The principal financial risks faced by the Company are market
risk and liquidity risk. Market risk arises from the unpredictable
demand for the Company’s specialized services, influenced
by real estate market volatility due to factors such as inflation,
rising costs of energy, increasing interest rates on bank loans,
and adverse global political conditions. This encompasses
challenges related to lessees’ payment defaults and potential
declines in demand for property valuation services, inherently
linked to liquidity risk given the significant service component
in the Company’s offerings. The Company adheres to risk
management practices defined by Hrvatska poštanska banka
plc. to navigate these uncertainties.
The Company also owns a portion of a commercial
property in Vinkovci, consisting of multiple office spaces.
This investment carries an operational risk, as it represents
a 267/900 ownership share in a commercial building with a
total area of approximately 10,000 m², which is in suboptimal
structural condition. To mitigate this risk and maximize asset
utilization, the Company regularly publishes public tenders for
leasing and selling these office spaces, with the objective of
commercializing as many units as possible.
8383
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84
86
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Contents of Sustainability Report
About This Sustainability Report ...............................88
Scope of Sustainability Reporting .................................88
Reporting Period and Timeframe ..................................88
Sustainability Reporting Frameworks and Standards ......88
Revisions and Updates Since the Last Report ................89
Data Accuracy and Reliability .......................................89
Report Approval, Validation, and Assurance ................89
Forewords ........................................................................................ 90
Foreword by the Chairman of the
ESG Committee of the Supervisory Board ...................91
Foreword by the President of the Management Board .91
Sustainability as a Core Pillar of Responsible
Development .................................................................... 93
ESG Governance and Management Framework .......... 93
Our Commitment to Sustainability Principles ................94
Embedding Sustainability in Our Value Chain ..............95
Engaging with Our Stakeholders ................................. 96
Driving Sustainability Through Initiatives
and Strategic Memberships ...........................................98
Awards and Recognitions for Excellence
in Business and Social Impact .....................................99
Alignment with ISO 26000:2020 Sustainability
Guidelines ......................................................................99
Sustainability Governance and Oversight ................... 101
Corporate Governance ................................................ 101
ESG Committee ...........................................................102
Appointment Process of the Governing Body ............. 102
Diversity of the Governing Body ..................................103
Remuneration Policy ...................................................103
Professional Training and Capacity Building ...............104
Three Lines of Defense Model ....................................104
Sustainability Office .....................................................105
Strategic Priorities for 2024 ......................................... 105
Sustainable and Responsible Banking ......................... 109
Sustainable Financing ................................................109
Taxonomy Indicators ............................................109
Incentive-Based Financing ................................... 119
ESG Questionnaire for Customers........................ 121
Sustainable Investment ..............................................122
Principles for Responsible Banking (PRB) ..................123
Double Materiality Assessment .................................... 127
Impact Materiality .......................................................127
Financial Materiality .....................................................130
ENVIRONMENTAL SUSTAINABILITY:
Our Adaptation to Climate Change ............................ 139
Climate Transition Plan and Emission Reduction
Strategy ........................................................................139
Managing Environmental Risks .................................. 141
Environmental Risk Impact Assessment............... 141
Materiality of Environmental Risks
in Banking Operations ........................................... 141
Greenhouse Gas Emissions .......................................143
Greenhouse Gas Emissions Inventory for 2024 ... 143
Energy Efficiency and Sustainable
Resource Management .........................................146
Carbon Reduction Targets and
Emission Control Measures .................................. 147
SOCIAL SUSTAINABILITY:
Driving Meaningful Social Impact .............................. 149
Our People and Organizational Culture ......................149
HPB Group Workforce Structure...........................150
Diversity, Equity, and Inclusion for
Stronger Decision-Making..................................... 151
Fair Compensation and Equitable Pay Practices 152
Employee Learning, Training, and Development ..153
Work-Life Balance ................................................155
Health, Safety, and Employee Well-being .............155
Commitment to Human Rights
and Ethical Standards ...........................................156
Collective Bargaining and Employee
Representation .....................................................157
Strengthening Employee Engagement
and Workplace Dialogue .......................................157
Customer-Centric Approach .......................................158
Safeguarding Data Privacy and
Information Security ..............................................158
Inclusive Banking: Accessibility
and Service Availability .........................................159
Consumer Protection and Ethical Business
Practices ................................................................159
Enhancing Consumer Experience
and Engagement ...................................................160
CORPORATE GOVERNANCE:
Upholding the Highest Standards ............................... 163
Ethical Business Conduct and Compliance ...............163
Corporate Governance Policies and
Code of Conduct ...................................................163
Internal Control and Audit ......................................164
Anti-Corruption and Anti-Bribery Measures .........164
Reporting Irregularities/ Whistleblowing ...............165
Responsible Supplier Engagement ............................ 165
87
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Scope of Sustainability
Reporting
To provide a comprehensive and transparent overview
of sustainability-related business activities, the 2024
Sustainability Report has been prepared on a consolidated
basis for the HPB Group. This report encompasses sustain-
ability management practices at Hrvatska poštanska banka
(HPB, the Bank), HPB Invest Ltd., and HPB-nekretnine Ltd.
As the third consolidated Sustainability Report issued by
the HPB Group, it delivers a holistic and stakeholder-oriented
approach, ensuring the availability of key sustainability infor-
mation for both the general public and key stakeholders.
The reported indicators span multiple value chain cate-
gories, incorporating data from relevant stakeholder groups,
subject to data availability.
Reporting Period and
Timeframe
This report presents a detailed account of the impacts, risks,
and opportunities associated with sustainability within the
HPB Group for the 2024 financial year, covering the period
from January 1 to December 31, 2024.
To ensure a structured assessment of sustainability
performance, reporting is classified into three distinct time-
frames: short-term, which covers a period of up to one year;
medium-term, which spans from one to five years; and long-
term, which refers to a period exceeding five years.
Sustainability Reporting
Frameworks and Standards
The content of this Sustainability Report is based on the
following regulatory requirements and sustainability reporting
guidelines:
• Directive (EU) 2022/2464 of the European Parliament
and the Council of December 14, 2022, amending
Regulation (EU) No 537/2014, Directive 2004/109/
EC, Directive 2006/43/EC, and Directive 2013/34/
EU regarding corporate sustainability reporting
(Corporate Sustainability Reporting Directive, CSRD)
• Commission Delegated Regulation (EU) 2023/2772 of
July 31, 2023, supplementing Directive 2013/34/EU of
the European Parliament and the Council concerning
sustainability reporting standards
• Regulation (EU) 2019/2088 of the European
Parliament and the Council of November 27, 2019,
on sustainability-related disclosures in the financial
services sector (Sustainable Finance Disclosure
Regulation, SFDR)
• Regulation (EU) 2020/852 on establishing a frame-
work to facilitate sustainable investment, amending
Regulation (EU) 2019/2088 (EU Taxonomy Regulation)
and Commission Delegated Regulation (EU)
2021/2139 of June 4, 2021, supplementing Regulation
(EU) 2020/852 by setting technical screening criteria
to determine under which conditions an economic
activity is considered to significantly contribute to
climate change mitigation or adaptation, and whether
it causes significant harm to any other environmental
objective
• Regulation (EU) 575/2013 of the European Parliament
and the Council of June 26, 2013, on prudential
requirements for credit institutions and investment
firms, amending Regulation (EU) 648/2012 (Capital
Requirements Regulation, CRR)
• Guidelines issued by the European Banking Authority
(EBA) and the European Central Bank (ECB), specify-
ing disclosure requirements related to environmental,
social, and governance (ESG) risks
• Accounting Act
• Audit Act
• Capital Market Act
• Guidelines on benchmarking practices regarding
remuneration policies, gender pay gaps and approved
higher ratios under Directive 2013/36/EU (EBA/
GL/2022/06) of June 30, 2022.
Additionally, as part of this report, HPB Group provides
updates on its progress in implementing the six key Principles
for Responsible Banking (PRB), as required by its commit-
ment as a signatory to the UN Principles for Responsible
Banking (PRB) and a participant in the United Nations
Environment Programme Finance Initiative (UNEP FI). The
report also outlines the Bank’s adherence to the ten princi-
ples of responsible business under the United Nations Global
Compact (UNGC), of which HPB Group has been a member
since 2007.
About This Sustainability Report
ESRS 2 (BP-1, BP-2)
PRB Principle 1
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Sustainability Report
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Revisions and Updates
Since the Last Report
The 2024 Sustainability Report has been prepared in accord-
ance with the European Sustainability Reporting Standards
(ESRS). While previous reports were aligned with the
internationally recognized Global Reporting Initiative (GRI)
framework, this Report applies a different set of sustainability
reporting standards. However, every effort has been made to
ensure maximum content comparability between this Report
and the 2023 Sustainability Report.
Wherever possible, and subject to data availability and
differences in reporting frameworks, tables include compara-
tive data from the previous year.
Any methodological updates and corrections to previously
reported information are clearly disclosed and explained
throughout the 2024 Sustainability Report, ensuring full
transparency and consistency.
Data Accuracy and
Reliability
Ensuring the accuracy and quality of reported data is a key
priority. Due to limited direct-source availability, certain anal-
yses incorporate sector-wide averages obtained from publicly
accessible, reliable sources. As many data points are based
on projections, estimates, and third-party disclosures, the
potential for variations or discrepancies cannot be entirely
eliminated.
The availability of high-quality sustainability data
remains a major challenge, particularly in the assessment of
sustainability risks. This is further compounded by the lack
of standardized methodological guidelines and the fact that
many HPB Group clients are still in the process of aligning
with regulatory reporting requirements, limiting the availa-
bility of necessary data for financial institutions. To address
these challenges, we are actively refining and advancing our
methodologies in accordance with regulatory frameworks,
available data sources, and industry best practices.
This Report has been prepared using the best available
data at the time of publication and reflects our current under-
standing of regulatory requirements.
Throughout 2024, HPB Group has made significant
progress in preparing for the implementation of new ESRS
sustainability reporting standards, focusing on developing a
comprehensive data collection and management framework.
With the support of Finance in Motion GmbH, the investment
manager of the EFSE Fund, the Bank has successfully imple-
mented an advanced IT solution to enhance data governance,
automate calculations, improve transparency, and optimize
resource efficiency.
Report Approval, Validation,
and Assurance
The 2024 Sustainability Report has been reviewed, approved,
and signed by all members of the Management Board of HPB,
with the endorsement of the Supervisory Board and the Chief
Trade Union Representative.
To ensure credibility and transparency, the Report has
undergone an independent limited assurance engagement
conducted by the auditing firm BDO Croatia d.o.o.
Report Availability:
The HPB Group Sustainability
Report for 2024, along with all
previous reports, is available
in both Croatian and English
on the HPB website.
Contact:
Sustainability Office
Email: uop@hpb,hr
89
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Forewords
90
Sustainability Report
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Dear Stakeholders,
It is my pleasure to present the 2024 Sustainability Report, which,
for the first time, is fully integrated into the HPB Group Annual
Report and aligned with the European Sustainability Reporting
Standards (ESRS). This report is more than a reflection of our
progress, it represents our commitment to responsible banking,
sustainable growth, and creating long-term value for society.
In an era of climate change, social inequality, and rapid
technological transformation, the financial sector plays a crucial
role in shaping a more resilient, inclusive, and sustainable future.
As the largest domestically owned bank and one of the top five
financial institutions in Croatia, we recognize our responsibility to
lead by example, supporting our clients, employees, sharehold-
ers, and the wider community in navigating this transition.
At HPB, our mission is to create the conditions for a better
life in Croatia, which means strengthening climate resilience,
enabling a sustainable economic transition, and ensuring the
protection of natural resources. This report provides a transpar-
ent overview of the initiatives we have implemented, as well as
our strategic goals and commitments across key sustainability
areas.
Over the past year, we have taken significant steps to
deepen the integration of sustainability principles into our
business model. We have strengthened our environmental
risk assessment methodology, embedded climate-related risks
into our credit processes, and set clear climate targets, includ-
ing a commitment to reducing greenhouse gas emissions. To
enhance our sustainability reporting capabilities, we have also
implemented an advanced IT solution for data management.
Beyond environmental sustainability, we continue to actively
promote social responsibility, expanding our financial literacy
programs, volunteering initiatives, and community support
efforts, while prioritizing the development and well-being of our
employees.
While we take pride in our achievements, we are also fully
aware that sustainable development is an ongoing journey,
one that requires collaboration, innovation, and decisive action.
Looking ahead, we remain committed to accelerating our impact,
continuously improving our practices, and driving meaningful
changes.
I would like to extend my heartfelt appreciation to our employ-
ees, customers, and partners for their trust and partnership.
Your engagement and support inspire us to push further, setting
even more ambitious goals in our pursuit of a sustainable future.
Sincerely,
Marko Badurina
President of the Management Board
Dear Stakeholders,
It is both an honor and a privilege to address you on behalf
of the ESG Committee of the Supervisory Board of Hrvatska
poštanska banka as we present the 2024 Sustainability Report,
an integral part of the HPB Group Annual Report. This report is
more than a summary of our sustainability efforts, it is a reflec-
tion of our commitment to responsible banking, long-term value
creation, and a sustainable future. As a financial institution that
proudly carries the name Hrvatska, we recognize our duty not
only to our stakeholders but also to the wider community, the
environment, and future generations.
U In an era where global challenges are reshaping industries,
the financial sector has a unique role to play, as both a driver and
an enabler of sustainable progress. At HPB, we fully embrace
this responsibility, ensuring that our strategies, investments, and
operations contribute to a greener, more inclusive, and resilient
economy. The ESG Committee and the Supervisory Board
remain steadfast in supporting the Bank’s vision, promoting
transparency, innovation, and long-term financial stability to
benefit not just our institution, but society as a whole.
Over the past year, HPB Group has taken bold steps in
advancing sustainability, integrating responsible business prac-
tices across all aspects of our operations. Through strategic initi-
atives and sound decision-making, we continue to strengthen
the Bank’s resilience, competitiveness, and leadership in
sustainable finance.
This Report serves not only as a testament to our achieve-
ments but also as a reaffirmation of our commitment to contin-
uous progress. I am confident that, through the collective
dedication of our Management Board, employees, clients, and
partners, we will accelerate our impact, setting even more ambi-
tious sustainability milestones in the years ahead.
I extend my deepest appreciation to the Management Board
and all HPB Group employees for their dedication and to you,
our stakeholders, for your unwavering trust and support. Your
engagement is essential in shaping a more sustainable and
responsible financial system, one that meets the needs of today
while safeguarding the future.
Sincerely,
Prof. PhD. Mislav Ante Omazić
Chairman of the ESG Committee of the Supervisory Board
Foreword by the President
of the Management Board
Foreword by the Chairman
of the ESG Committee of
the Supervisory Board
91
◄
92
Sustainability Report
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The core elements of HPB Group’s strategy and business
model, including market analysis, geographical presence,
product and service portfolio, value chain structure, distri-
bution channels, and key financial performance indicators,
are detailed in the sections Macroeconomic environment,
Business environment, Management Board Statement of
Condition of HPB p.l.c. and Development plan of Hrvatska
poštanska banka p.l.c., of the Annual Report.
Comprehensive information regarding the total workforce
and its structure is provided in the section Social sustaina-
bility - HPB Group Workforce Structure of the Sustainability
Report.
At HPB Group, sustainability is embedded in our long-
term strategy, serving as a fundamental pillar of our develop-
ment. By aligning our business operations with sustainable
economic growth, we strive to create value while ensuring
that the needs of future generations remain uncompromised.
Our approach is built on achieving a harmonized balance
between environmental, social, and governance (ESG)
factors, which underpins the realization of our strategic and
financial objectives.
We view sustainability as a continuous commitment, one
that demands ongoing assessment, risk management, and
value-driven opportunities. By maintaining proactive engage-
ment with key stakeholders, we ensure that our approach
remains transparent, accountable, and forward-looking.
Through this, we provide a comprehensive insight into our
actions, initiatives, and measurable progress in advancing
sustainable business practices.
ESG Governance and
Management Framework
The Environmental, Social, and Governance (ESG)
Management Policy (hereinafter referred to as the ESG
Policy) outlines HPB Group’s approach to sustainability
governance, ensuring the effective management of material
ESG topics relevant to the Group as a financial institution
and in compliance with regulatory requirements. Serving
as the foundational framework for sustainability, this Policy
is aligned with HPB Group’s strategic direction, establishing
principles, procedures, and processes for the integration of
ESG factors across all business segments and operations.
As a core pillar of the Bank’s operations, the ESG Policy
provides strategic guidance for business areas and activities
with environmental and social impact, defines our sustain-
ability objectives, and sets forth governance principles for
managing environmental, social, and corporate governance
matters.
This Policy is developed in accordance with key regulatory
frameworks, including the Paris Agreement, the European
Green Deal, the European Banking Authority (EBA)
Guidelines, and relevant European and national sustainability
reporting directives.
The ESG Policy provides a structured framework for
responsible and effective business practices, focusing on the
following key areas:
Energy Efficiency & Carbon Management – Reducing
HPB Group’s carbon footprint by implementing ener-
gy-efficient practices across all business processes and
operations
ESG Risk Identification & Integration – Embedding ESG
risk assessment and categorization into all operational
and decision-making processes within HPB Group
Sustainable Finance & Capital Allocation – Redirecting
capital towards sustainable investments, accelerating
the energy transition, and fostering responsible busi-
ness practices among clients, suppliers, and partners
Diversity, Equity & Inclusion (DEI) – Promoting a diverse
and inclusive work environment, ensuring that all
employees feel valued and empowered, while fostering
talent development and transparent career progression
Corporate Governance & Ethical Leadership – Upholding
the highest standards of governance, ensuring contin-
uous regulatory compliance, and aligning all business
processes and operations with best practices and the
Code of Ethics
Transparent & Compliant ESG Reporting – Delivering
clear, reliable, and comprehensive disclosures on HPB
Group’s environmental, social, and governance perfor-
mance, in full alignment with regulatory requirements.
Sustainability As A Core Pillar
Of Responsible Development
ESRS 2 (BP-2, SBM-1, SBM-3)
PRB Principle 1
93
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At HPB, we are committed to integrating sustainability prin-
ciples into our business strategy, corporate policies, and
stakeholder relationships to drive long-term value creation
and responsible growth. Our approach is built on the follow-
ing key commitments:
Delivering long-term value for all stakeholders –
Strengthening operational efficiency, supporting
economic development, and contributing to the well-be-
ing of society and the environment
Respecting human rights, fostering diversity, equity, and
inclusion – Creating an inclusive and empowering work
environment where every employee has the opportunity
to reach their full potential
Minimizing environmental impact – Enhancing resource
efficiency in energy, water, and materials use, improving
waste management, promoting the circular economy,
and financing environmentally sustainable activities
Practicing responsible finance and integrating ESG risk
management – Strengthening our approach to environ-
mental and climate risk management, supporting clients
in transitioning to sustainable business models, and
establishing clear standards for responsible financing
Ensuring full compliance with sustainability regulations
and legal obligations
Upholding ethical business conduct and strong corpo-
rate governance – Embedding integrity in sales and
marketing practices, ensuring data protection and infor-
mation security, and enforcing anti-corruption measures
Promoting transparency and accountability – Providing
accurate, timely, and reliable disclosures on our environ-
mental and social impact, and aligning our sustainability
reporting with global standards.
Diversity and Non-Discrimination Principles
HPB Group is committed to cultivating an inclusive and
equitable workplace where individual differences are valued,
diversity is embraced, and discrimination is strictly prohibited.
Our Diversity and Non-Discrimination Principles ensure equal
access to professional training, career advancement, and
retraining opportunities, as well as fair treatment in employ-
ment conditions, social security, healthcare, labor rights, and
participation in employee representation bodies or unions.
As a signatory of the Diversity Charter, which advocates
for inclusive business practices, HPB Group recognizes
diversity as a fundamental value and a cornerstone of a
positive workplace culture. We are dedicated to fostering
an environment of respect, fairness, and equal opportunity,
where employment decisions are based solely on skills, quali-
fications, and professional merit, free from discrimination and
harassment.
Human and Child Rights Principles
HPB Group is committed to upholding the highest standards
in employment practices, working conditions, and child
protection, ensuring that every child has the right to a safe,
healthy, and secure future, a principle deeply embedded in
our corporate mission and sustainability strategy.
We strictly adhere to minimum age employment require-
ments, in full compliance with international labor standards
and national legislation, safeguarding children from exploita-
tion and potential risks. We fully recognize and respect chil-
dren’s rights, as outlined in the United Nations Convention on
the Rights of the Child, ensuring that every child, regardless
of background, status, or circumstances, has the right to life,
survival, development, and meaningful participation in society.
As part of our commitment to Human and Child Rights
Principles, HPB Group actively provides regular training to
employees on child protection and human rights, supports
local and national initiatives dedicated to child welfare and
protection, and collaborates with organizations and stake-
holders that advocate for children’s rights and well-being.
Sponsorship and Donation Principles
HPB Group’s approach to sponsorships and donations is
guided by the principles of transparency, integrity, excel-
lence, impartiality, and fairness, ensuring that all activities
are conducted ethically and responsibly. We are committed
to preventing conflicts of interest, complying with anti-money
laundering (AML) and counter-terrorism financing (CTF)
regulations, and maintaining a strong focus on efficiency,
effectiveness, and corporate social responsibility.
These commitments are embedded in our Sponsorship
and Donation Principles, which establish a clear, structured,
and accountable framework for the fair and transparent
allocation of funds, while safeguarding the Bank’s integrity,
reputation, and long-term sustainability, as well as that of the
applicants.
Our Commitment to Sustainability Principles
94
Sustainability Report
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Embedding Sustainability in Our Value Chain
The 10 Principles of the UN Global Compact
As a signatory of the United Nations Global Compact (UNGC),
we are committed to upholding the ten principles of responsi-
ble business conduct, which include the protection of human
rights, adherence to labor standards encompassing freedom
of association, the prohibition of child and forced labor, and
the elimination of discrimination, as well as environmental
protection and the fight against corruption.
Supplier Principles
HPB Group Supplier Principles outline the key expectations
and commitments required from suppliers who engage or
seek to establish a long-term business relationship with the
Group. Acceptance of these principles is a prerequisite for
cooperation with HPB Group.
Client Principles
The Client Principles, together with the HPB Group Code
of Ethics, establish clear guidelines on ethical conduct and
responsibility. While the Code of Ethics sets standards
for employee interactions with clients, the Client Principles
outline expectations for clients' adherence to ethical values,
ensuring alignment with HPB Group’s commitments to human
rights, environmental protection, anti-corruption efforts, and
non-discrimination.
HPB Group upholds high ethical business standards, ensuring full compliance with Croatian and EU laws and regulations, as
well as financial market standards and internal policies. We actively encourage our suppliers, business partners, clients, and
other stakeholders to align with our ethical values and sustainability goals.
95
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At HPB Group, we are committed to being a responsible and
transparent partner to our stakeholders. Trust, accountability,
and open communication form the foundation of our relation-
ships, ensuring meaningful engagement and long-term value
creation.
Recognizing the broad impact of our activities, we actively
foster dialogue, collaboration, and knowledge-sharing. By
maintaining proactive and structured engagement, we seek
to understand stakeholder expectations and respond within
our capabilities and regulatory framework. Through contin-
uous feedback loops, we integrate stakeholder insights into
our sustainability strategies and decision-making processes.
Engaging with Our Stakeholders
ESRS 2 (SBM 2)
PRB Principle 4
Shareholders Employees
Regulatory
Bodies
Business
Partners
Clients
Public
Authorities
Local
Communities
Industry
Associations
and
Professional
Organizations
Other
Financial
Institutions
Media
Nature
(Silent
Stakeholder)
HPB Group Key Stakeholder Framework
We utilize a diverse range of communication channels, customized for different stakeholder groups. These include corporate
digital platforms (website, intranet, LinkedIn, Facebook, Instagram, YouTube), newsletters, targeted CRM campaigns, stake-
holder events, workshops, and educational initiatives. Our experts also participate in industry forums, conferences, and public
discussions, support collaborative sustainability initiatives, and conduct stakeholder surveys to further enhance engagement.
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Stakeholders Communication Channels Focus Areas
Shareholders • General Assembly, corporate website,
transparent reporting, sustainability reports
• Presentation and communication of
sustainability performance indicators,
achieved results, and future objectives
Regulatory Bodies • Meetings and sessions, transparent
reporting
• Sustainability updates, regulatory
compliance, feedback on adherence to
legal requirements
Public Authorities • Consultations, participation in conferences
and forums
• Joint initiatives supporting community
development and quality of life
improvements in Croatia
Local Communities • Volunteering programs, sponsorships and
donations, social media, community
partnerships
• Identifying local needs, financial literacy
programs, and social impact initiatives
Industry
Associations and
Professional
Organizations
• Sponsorships, social media, industry
partnerships
• Sustainability discussions, knowledge
sharing, and collaboration on ESG topics
Other Financial
Institutions
• Meetings, conferences, corporate website,
social media
• Regular ESG-related discussions within
the Croatian Banking Association’s ESG
working group
Business Partners • Meetings, conferences, corporate website,
social media
• Information exchange on sustainability
factors and responsible business practices
Clients • Corporate website, contact center,
newsletters, CRM campaigns, social
media, client events, branch network
• Transparent updates on sustainability
activities, ESG educational materials,
regulatory compliance guidance
Employees • Internal portal (HPB Intra), email
communications, online events, meetings,
training sessions, employee engagement
programs
• Continuous ESG education, sustainability-
related updates, knowledge-sharing
workshops
Media • Corporate website, press releases, media
partnerships, press conferences
• Sustainability-related news, corporate
transparency, media inquiries
Nature (Silent
Stakeholder)
• Environmental impact reports • Progress on climate adaptation and
mitigation, Climate Strategy objectives
Stakeholder Engagement and Communication Channels
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Driving Sustainability Through Initiatives
and Strategic Memberships
Aligned with its strategic commitment to sustainable business practices, HPB actively contributes to the development of a
sustainable society by collaborating with organizations that share its principles, values, and understanding of sustainability's
importance. Throughout 2024, HPB remained an active member of numerous national and international associations and
initiatives, reinforcing its engagement in responsible finance, environmental sustainability, and corporate governance. These
include:
• United Nations Global Compact (UNGC)
• UN Global Compact Hrvatska
• Croatian Business Council for Sustainable Development (HR PSOR)
• United Nations Environmental Programme Finance Initiative, UNEP FI
• Principles for Responsible Banking, PRB
• International Institute for Climate Action, IICA
• Croatian Banking Association (HUB)
• Croatian Employers’ Association (HUP)
• Croatian Chamber of Economy (HGK)
• American Chamber of Commerce in Croatia (AmCham Croatia)
• International Chamber of Commerce, ICC
• Croatian Exporters Association (HIZ).
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Awards and Recognitions
for Excellence in Business
and Social Impact
In October 2024, HPB was awarded the Zlatna kuna, the
prestigious recognition from the Croatian Chamber of
Economy (HGK), for being the most successful bank in 2023.
The Bank also earned the Best Buy Award medal for
HPB SUPER ŠTEDNJA, ranking as the top bank in Croatia for
offering the best price-to-quality ratio in savings opportunities.
On April 19, 2024, in celebration of World Investment
Funds Day, HPB Bond Plus, an investment fund managed by
HPB Invest, was recognized as the best conservative mixed
fund of 2023.
In December 2024, as part of the European Week of Sport,
HPB received the #BeCROactive Award in the Workplace
category. This initiative, modeled after the European
Commission’s #BeActive Awards, honors organizations that
excel in promoting physical activity and workplace well-being.
Further affirming its commitment to health and well-be-
ing, HPB was granted the "Company Friendly to Health"
certification, a recognition valid for five years, acknowledging
the Bank’s efforts in fostering a health-conscious work envi-
ronment. A key initiative supporting this was the installation
of 22 automated external defibrillators (AEDs) across HPB’s
branch network in Croatia.
For the eighth consecutive year, HPB’s commitment to
employee development and workplace excellence was reaf-
firmed with the Employer Partner Certificate, recognizing
its outstanding human resource management practices.
Alignment with ISO
26000:2020 Sustainability
Guidelines
ESRS 2 (BP-2)
HPB Group operates in full compliance with the ISO
26000:2020 international standard for social responsibility,
one of the most widely recognized frameworks for corporate
sustainability. By adopting this standard, HPB reinforces a
culture of social responsibility, promoting a shared under-
standing of sustainability principles both within the organiza-
tion and across its broader stakeholder network.
With a steadfast commitment to enhancing social respon-
sibility, HPB ensures full adherence to legal and regulatory
requirements. A comprehensive review of internal processes,
procedures, and documented information has confirmed the
Bank’s alignment with the provisions of ISO 26000:2020,
demonstrating its dedication to responsible business prac-
tices and sustainable development.
99
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Corporate Governance
ESRS 2 (GOV-1)
HPB’s corporate governance framework is structured as a
dualistic system, in accordance with the Bank’s Articles of
Association. It consists of the Management Board and the
Supervisory Board, with the General Assembly as the third
key governing body. To ensure effective decision-making and
accountability, clearly defined governance procedures are
in place for each body. While the Management Board and
Supervisory Board have distinct responsibilities, they share
a collective duty to safeguard the Bank’s long-term success
and ensure that its strategic direction aligns with societal and
stakeholder interests.
The Management Board is responsible for the Bank’s
overall business operations, the execution of its strategic
objectives, and upholding HPB’s reputation as a responsi-
ble and trustworthy financial institution. As the Bank’s legal
representative, it is authorized to act on behalf of HPB in all
business, legal, and regulatory matters. The Management
Board also formulates and implements the Bank’s strategy
and business plans, integrates risk management and inter-
nal control frameworks, and fosters strong relationships
with shareholders and key stakeholders. Each business
plan is designed to drive growth and stability, with a focus
on strengthening governance, enhancing risk oversight, and
improving internal controls.
The Supervisory Board plays a monitoring and oversight
role, ensuring that the Bank’s operations and business
conduct align with corporate governance standards and
regulatory expectations. It evaluates the Management
Board’s performance in achieving strategic goals, oversees
its engagement with shareholders and stakeholders, and
ensures the Bank maintains a robust internal control and risk
management system.
The Supervisory Board is supported by the following
committees:
• Audit Committee
• Remuneration Committee
• Risk Committee
• Nomination Committee
• ESG Committee.
Both the Management Board and the Supervisory Board
are responsible for establishing a culture of accountability,
integrity, and ethical leadership. They set clear expectations
for ethical conduct among employees and external stake-
holders, implement sound governance structures, and facil-
itate effective collaboration in the best interests of the Bank.
By acting in full compliance with regulatory frameworks and
internal policies, they together with the General Assembly
ensure the consistent application of corporate governance
best practices.
The names of the Management Board and Supervisory
Board members are provided in the sections Management
Board - Composition and Role and Supervisory Board -
Composition and Role, of the Annual Report.
Sustainability Governance And Oversight
ESRS 2 (GOV-1, GOV-2, GOV-3, GOV-5)
PRB Principle 1, 5, 6
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ESG Committee
ESRS 2 (GOV-1)
Established in late 2022, the ESG Committee is responsible
for overseeing HPB’s compliance with sustainability guide-
lines and ensuring the effective integration of ESG principles
into the Bank’s operations and reporting framework. The
Committee plays a crucial governance role, ensuring that
environmental, social, and governance (ESG) factors are
effectively embedded in corporate strategy, risk management,
and decision-making processes.
The ESG Committee’s key responsibilities include:
• Supervising the implementation and ongoing refine-
ment of methodologies for ESG risk management and
sustainability integration
• Overseeing the enforcement of the ESG Management
Policy, ensuring alignment with sustainability princi-
ples and regulatory requirements
• Regularly reviewing and updating the core principles
of the ESG Management Policy to reflect emerging
best practices
• Ensuring the appropriate integration of ESG risks into
business processes, in accordance with HPB’s corpo-
rate governance framework
• Monitoring the establishment and achievement of
non-financial sustainability objectives, ensuring they
align with the Bank’s strategic priorities
• Assessing the impact of environmental and climate-re-
lated risks on the Bank’s risk profile and resilience
• Reviewing social sustainability principles, focusing
on employee relations, investor expectations, and
community engagement
• Overseeing governance-related policies and
processes, particularly in relation to anti-corruption
measures, conflict of interest prevention, diversity
and inclusion in management structures, and gender
equality initiatives.
Appointment Process
of the Governing Body
ESRS 2 (GOV-1)
Under its designation as a legal entity of special interest
by the Decision on Legal Entities of Special Interest to the
Republic of Croatia (Official Gazette, Nos. 147/2021 and
78/2023), the criteria and procedures for electing and appoint-
ing members to the Bank’s Management Board, including the
requirements candidates must meet for the roles of Chair and
Board Members, are governed by the Croatian Government's
Regulation on the Conditions for Electing and Appointing
Members to Supervisory and Management Boards of Entities
of Special Interest to the Republic of Croatia and the Manner
of Their Selection (Official Gazette, No. 12/2019) (hereinafter:
Government Regulation).
As outlined in the Bank’s Articles of Association, which
is publicly available on the Bank’s website, the Management
Board consists of a minimum of two and a maximum of five
members, with the Supervisory Board determining the exact
number. The Supervisory Board appoints the President and
members of the Management Board for a term of up to five
years, with the possibility of unlimited reappointment.
In addition to the conditions prescribed by the Government
Regulation, candidates for the Management Board must
meet the eligibility criteria set out in the Companies Act, the
Credit Institutions Act, and the Decision on the Assessment
of the Suitability of the Chairperson of the Management
Board, Member of the Management Board, Member of the
Supervisory Board, and Key Function Holder in a Credit
Institution (Official Gazette, Nos. 20/2021 and 104/2022).
Furthermore, all candidates must obtain prior approval from
the Croatian National Bank before assuming their appointed
roles.
Additionally, the internal Policy on the Target Structure of
the Management Board and the Suitability Assessment of the
President and Members of the Management Board, which is
publicly available on the Bank’s website, further defines the
desired composition of the Management Board, the eligibility
requirements for membership, and the related governance
procedures and assessment activities.
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Diversity of the
Governing Body
ESRS 2 (GOV-1)
HPB Group is committed to fostering a diverse and
balanced leadership structure, ensuring that the composition
of its governing bodies reflects a broad range of perspec-
tives and expertise. In defining the optimal composition of
its leadership, the Bank considers education, professional
experience, gender, and age, as well as, where applicable,
geographical background. This approach is aligned with
the nature and scope of HPB’s operations and the risks it
currently faces or may encounter in the future.
Recognizing gender equality as a core value of the
European Union and upholding the principle of equal
opportunities, HPB has set diversity objectives for the
2021–2026 period. To support these objectives, the Bank
has adopted a Diversity Policy for the Management Board
and the Supervisory Board, which serves as a key compo-
nent of HPB’s corporate governance framework. This policy
promotes diversity in education, professional experience, age
structure, and geographical representation, while defining
clear goals and principles for gender balance in governance
and executive leadership. It outlines HPB’s approach to diver-
sity within the Management and Supervisory Boards, sets
targets for the representation of underrepresented genders,
and establishes a structured strategy and timeline for achiev-
ing these goals.
As part of its commitment to improving gender balance,
HPB aims to achieve at least 33.30% female representation
in its governing bodies by 2026. As of December 31, 2024, the
total share of women in HPB’s governing body stands at 25%.
In accordance with the Law on the Prevention of Conflicts
of Interest ("Official Gazette," No. 143/2021), the presidents
and members of management boards of companies in
majority state ownership are considered public officials and,
therefore, cannot be deemed independent from the Bank.
Within the Bank’s governing body, comprising Management
Board members and Supervisory Board members, 12.5% of
members were independent in 2024.
Remuneration Policy
ESRS 2 (GOV-3)
The Supervisory Board ensures that transparent and well-de-
fined policies and procedures are in place for determining the
remuneration of Management Board members, aligning their
interests with the Bank’s long-term objectives and the ethical
and responsible implementation of its corporate strategy. To
support this, the Supervisory Board of HPB has established
the Remuneration Committee, which provides guidance
and recommendations to the Management Board and the
Supervisory Board, overseeing the development and regular
review of the core principles of the Remuneration Policy.
The Management Board has adopted the Remuneration
Policy of Hrvatska poštanska banka and HPB Group, which
has been approved by the Supervisory Board. This policy
establishes a fair, objective, and transparent remuneration
system across HPB and its subsidiaries. It is fully aligned with
the Bank’s sustainability strategy, incorporating environmen-
tal, social, and governance (ESG) factors as key elements
in defining corporate values and long-term business priori-
ties. By implementing this policy, HPB Group promotes a
sustainable business model, integrating comprehensive risk
management, including ESG-related risks. The policy also
incorporates sustainability-driven objectives, encouraging
employees to maximize their positive impact while mitigating
ESG-related risks.
The Remuneration Policy is based on the principle of equal
pay for equal work or work of equal value, ensuring that remu-
neration is free from discrimination based on gender, race,
ethnicity, language, religion, political or other beliefs, national
or social origin, or any other discriminatory factor. HPB Group
actively monitors gender pay gaps, reports on findings, and
implements corrective measures when necessary to ensure
gender pay equity.
Sustainability performance does not impact the variable
remuneration of governing bodies or employees across HPB
Group.
The Remuneration Committee is responsible for conduct-
ing an annual review of the Remuneration Policy to assess
its alignment with regulatory requirements, industry best
practices, governance principles, and internal remuneration
frameworks.
Women’s
Representation
(as of 31/12/2024)
Target for
2021–2026
Management
Board
0.00% At least 20%
Supervisory
Board
66.70% At least 20%
Overall
Average
25.00% At least 33.30%
Gender Representation in the Governing Body
* The data presented refers to HPB.
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Professional Training
and Capacity Building
ESRS 2 (GOV-1)
To ensure the effective fulfillment of its responsibilities, HPB
Group has adopted policies and procedures that establish
structured training and continuous education programs for the
Management Board and the Supervisory Board, in accord-
ance with legal and regulatory requirements. These policies
define key business areas where specialized training and
ongoing professional development are deemed necessary.
HPB Group regularly provides targeted training sessions
for the Management Board and the Supervisory Board,
covering the following areas:
• Financial markets
• Accounting and auditing
• Regulatory framework
• Risk management, including identification, measure-
ment, monitoring, control, and mitigation of key risks in
a credit institution
• Corporate governance, including internal control
systems
• Anti-money laundering (AML) and counter-terrorism
financing (CTF), and the risks associated with AML/
CTF for credit institutions
• International restrictive measures (sanctions)
• Climate, environmental, social, and governance (ESG)
risks
• Financial data analysis for credit institutions.
Three Lines of Defense
Model
ESRS 2 (GOV-1, GOV-2, GOV-5)
HPB Group’s corporate governance framework mandates
lawful, ethical, and professional conduct in all business
activities. Management Board members, Supervisory Board
members, and employees are required to operate in full
compliance with applicable laws and regulations, internal
policies, corporate values, and banking industry standards.
As part of its risk management and compliance structure,
HPB Group has implemented the Three Lines of Defense
Model, ensuring a systematic and structured approach to risk
oversight. The first line of defense consists of all organiza-
tional units and employees, particularly those in management
positions, who are responsible for ensuring compliance within
their respective areas. The Finance Department ensures
compliance with financial and tax regulations, the Human
Resources Department oversees compliance with labor laws,
employment policies, and remuneration regulations, while
the Sustainable Business Department ensures adherence
to sustainability-related regulatory requirements. These units
collectively form the first line of defense, addressing compli-
ance risks and corporate governance obligations.
To further strengthen regulatory compliance and provide
an independent assessment of compliance risks, HPB
Group has established a dedicated Compliance Function
within the Compliance Division, which serves as the second
line of defense. This function ensures ongoing regulatory
compliance across all business units, manages the Bank’s
personal data protection and privacy framework, and over-
sees anti-money laundering (AML) and counter-terrorism
financing (CTF) measures. Through these mechanisms,
HPB Group enhances protection for clients, shareholders,
employees, business partners, and the broader community.
The Compliance Division works closely with all organizational
units, the Management Board, the Supervisory Board, regu-
lators, and supervisory authorities and is divided into three
departments: the Compliance Monitoring Department, the
Personal Data Protection Department, and the AML, CTF,
and International Sanctions Department.
As the third line of defense, HPB Group has established
an Internal Audit Function, which operates as an independent
unit responsible for evaluating the Bank’s adherence to legal
and regulatory requirements. Internal Audit ensures inde-
pendence and objectivity in audit processes, defines audit
authorities, responsibilities, and competency requirements,
and conducts systematic risk management, control, and
governance assessments. In cases where illegal activities or
breaches of risk management rules are identified, which may
jeopardize liquidity, solvency, or the Bank’s financial security,
the Internal Audit Office is required to notify the Management
Board and the Supervisory Board.
The Audit Committee is responsible for assessing the
effectiveness of the Three Lines of Defense framework at least
once per year and reporting its findings to the Supervisory
Board.
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Sustainability Office
ESRS 2 (GOV-1)
The Sustainability Office is an organizational unit within HPB,
established in 2022 to lead the Bank’s sustainability trans-
formation and drive positive change in alignment with HPB’s
strategic development goals. Positioned within the special-
ized advisory functions supporting the Management Board,
the Sustainability Office plays a pivotal role in embedding
sustainability principles across the Bank’s operations.
In response to rapid market shifts and the increasing
impact of climate change, the Management Board of HPB
has embraced a broader responsibility beyond financial
performance. Recognizing that sustainability is integral to
long-term business resilience, HPB established a dedicated
unit to oversee, implement, and monitor the transformation
toward a sustainable business model, ensuring a structured
approach to managing all aspects of this transition.
The core mandate of the Sustainability Office is to inte-
grate sustainability factors across all areas of the Bank’s
operations. This comprehensive and demanding process
requires close collaboration with all organizational units. It
involves driving changes in business processes, fostering
a culture of sustainability, and ensuring compliance with
increasingly complex regulatory requirements.
Strategic Priorities for 2024
ESRS 2 (GOV-2)
PRB Principle 1
The initiatives we undertake and the goals we strive to
achieve are guided by the 17 United Nations Sustainable
Development Goals (SDGs) and the 10 Principles for
Responsible Banking (PRB). HPB Group recognizes its role
and responsibility in addressing global challenges, fostering
societal well-being, and safeguarding the environment. Our
strategic focus is directed toward sustainability objectives
that are most relevant to financial institutions and that align
closely with our long-term sustainability vision.
While HPB Group is committed to supporting all 17 SDGs,
we prioritize areas where our actions can generate the most
significant positive impact.
Sustainability Topics Addressed by the Management
Board and ESG Supervisory Board Committee in 2024:
• Adoption of the Climate Strategy until 2050 and the
Transition Plan for a Low-Carbon Economy until 2030
• Approval of the GHG Emission Calculation
Methodology for HPB Group
• Approval of the Bank’s Taxonomy Indicator Calculation
Methodology
• Adoption of a documented conclusion on the results of
the general environmental risk assessment
• Publication of the 2023 Sustainability Report
• Adoption of HPB Group’s new Code of Ethics
• Adoption of HPB Group’s new Anti-Corruption Policy
• Approval of the new Rulebook on Sustainability
Reporting.
105
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The following table outlines the key sustainability themes and initiatives that shaped HPB Group’s sustainability agenda in 2024.
ESG Segment Key Activity Measures
Relevant
SDGs
ENVIRONMENT
Development of
methodologies and
metrics for
environmental
objectives from the
Climate Strategy and
HPB Group's
Transition Plan
Base year 2023 defined for GHG emissions and Green
Asset Ratio (GAR) with initial values established
SDG 12
SDG 13
Defined targets focusing on GHG emission reduction and
GAR increase, in line with regulatory framework
Enhancement of
environmental risk
assessment
methodology
Increased granularity – assessment at cadastral plot level SDG 13
Broader spectrum of physical risks included (rising sea
levels, wind strength)
Integration of climate change projections based on NGFS
scenarios up to 2050
Integrating
Environmental Risk
Assessment into
Credit Operations
Sector policies defined from an environmental risk
perspective (credit criteria, restrictions, thresholds, and
exclusions)
SDG 13
Methodology established for determining environmental
(ENV) ratings for industries and clients
ESG questionnaire integrated into credit documentation
Implementation of
educational
programs for clients
Awareness campaign conducted on the purpose and
guidelines for ESG questionnaire completion
SDG 13
Awareness campaign on the application of the EU
Taxonomy Regulation
SOCIAL
Employee
well-being
Activities
implemented in
accordance with ISO
26000: Guidelines on
Social Responsibility
Continuous assessment and improvement of business
practices in line with sustainability standards
SDG 3
SDG 4
SDG 5
SDG 8
SDG 12
SDG 13
Investment in
employee
development,
well-being, and
safety
312 external and 78 internal training sessions conducted SDG 4
Various benefits introduced to enhance work-life balance SDG 3
Psychological counseling services provided, participation
in HPB Sport activities, and various initiatives promoting a
healthy lifestyle
SDG 3
Employee
satisfaction survey
91.4% of employees participated in organizational vitality
assessmen
SDG 3
Key sustainability themes in 2024
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ESG Segment Key Activity Measures
Relevant
SDGs
SOCIAL
Community
Corporate
volunteering
Volunteer Club established SDG 3
SDG 8
15 volunteering initiatives organized, involving 119
volunteers
Financial literacy
program
Educational initiatives conducted in 8 counties, targeting
schoolchildren and students
SDG 3
SDG 4
Focus on European Money Week activities
Collaboration with the Croatian Banking Association (HUB)
on the Finance for New Generations project for young
entrepreneurs
Business
partnerships
Safer Schools and Kindergartens project in collaboration
with the Red Cross
SDG 3
SDG 4
GOVERNANCE
Preparation for
sustainability
reporting in
accordance with
ESRS standards for
the 2024 reporting
period
Implementation of an IT solution for sustainability data
management and reporting
SDG 13
Integration of ESG
questionnaire into
Bank operations
ESG questionnaire developed for collecting sustainability-
related data from clients
SDG 13
ESG questionnaire data management process established
Client awareness campaign conducted and questionnaire
rollout initiated
Implementation of
UNEP FI Principles
for Responsible
Banking
Portfolio impact analysis conducted SDG 8
SDG 13
First sustainability report published in line with UNEP FI
membership requirements
SMART targets set in key impact areas
ESG questionnaire
integration for
suppliers
Supplier Principles already incorporated into procurement
process
SDG 12
SDG 13
Supplier questionnaire development, process definition,
and supplier assessment methodology in progress
107
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HPB Group acknowledges its critical role in facilitating the
transition to a low-carbon economy and mitigating envi-
ronmental impact by channeling its investment and lending
activities toward sustainable initiatives. Recognized through
the double materiality assessment, sustainable finance has
been identified as a key area of influence, underscoring HPB
Group’s positive contribution to the financial sector and the
wider economy.
By embedding sustainability into its operations and imple-
menting educational initiatives, HPB Group actively encour-
ages sustainable practices among its clients and stakehold-
ers, empowering them on their path to a more sustainable
future.
Sustainable Financing
ESRS E1
PRB Principle 3
Aligned with its strategic commitment to sustainability, HPB
Group remains dedicated to advancing lending programs that
support sustainable investments, with a particular emphasis
on renewable energy, emerging technologies, and sustainable
construction. The Bank has established a framework for the
development of sustainable financial products and is actively
adapting its existing offerings to better align with evolving
market needs and regulatory expectations. Additionally, HPB
is enhancing its data management model to strengthen trans-
parency and improve the monitoring of sustainable financing
initiatives.
Redirecting capital toward sustainable and innovative
projects to facilitate greenhouse gas emission reductions
is a key pillar of HPB Group’s Climate Strategy through
2050. Further details on this commitment are outlined in the
Environmental Sustainability chapter.
Taxonomy Indicators
The Green Asset Ratio (GAR) is becoming an increasingly
important benchmark for banks, serving both as a measure of
their environmental responsibility and as a means of aligning
with global sustainability frameworks. As a key indicator of
sustainable finance, GAR reflects the proportion of a bank’s
lending and investment activities that comply with the EU
Taxonomy Regulation. It quantifies taxonomy-aligned assets
as a percentage of total covered assets, helping stakeholders
better understand the contribution of financial institutions to
environmental and climate objectives.
At HPB, GAR serves as a guiding metric for improving
data governance related to taxonomy compliance and
reporting while also enabling the assessment of sustainability
performance across financed entities.
In compliance with regulatory obligations, HPB reports
on its Green Asset Ratio, with the 2024 GAR calculation
conducted in accordance with the Bank’s Taxonomy Indicator
Calculation Methodology, adopted in April 2024, in full align-
ment with the EU Taxonomy Regulation.
Under its Climate Strategy through 2050 and Transition
Plan through 2030, HPB has set a goal to increase
itsGreen Asset Ratio, considering the gradual expansion
of sustainability reporting requirements, the rising number
of clients subject to taxonomy-aligned disclosures, and the
improvement in data collection processes.
By scaling up its GAR, HPB strengthens its commitment
to global climate goals, advances energy efficiency, and
supports environmentally sustainable investments, while
simultaneously enhancing long-term financial stability,
competitiveness, and corporate reputation.
The GAR calculation is highly dependent on data availa-
bility and quality, particularly on the accuracy and complete-
ness of client-provided information. A major challenge in
determining GAR and in defining its target value is the limited
awareness among clients regarding EU Taxonomy require-
ments and disclosure expectations. This knowledge gap can
result in incomplete, inaccurate, or unavailable data, directly
affecting the final GAR calculation. Additionally, the GAR
percentage is influenced by HPB’s portfolio composition and
business model, particularly the share of clients subject to
sustainability reporting obligations, as these entities provide
the necessary data for the Bank’s assessment.
The Bank used the latest available data to calculate GAR.
This includes data collected directly from our clients and
publicly available client sustainability reports.
The presentation of key performance indicators is in
line with the requirements of the Commission Delegated
Regulation (EU) 2021/2178 and Regulation (EU) No 575/2013
of the European Parlamanet and of the Council. The data is
presented according to availability.
Due to limited data availability, presentation of KPI off-bal-
ance sheet exposures (Template 5) is not included. Likewise,
as the Bank presents KPI’s for loans only, calculation is
based entirely on counterparty income and not on counter-
party CapEX.
Sustainable And Responsible Banking
109
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Summary of GAR KPIs (Turnover based)
KPI - Turnover based
% coverage
(over total assets)*
Climate
change
mitigation
Climate
change
adaptation
Total
(Climate change mitigation +
Climate change adaptation)
GAR stock 0.19% 0.00% 0.19% 0.23%
GAR flow 0.29% 0.00% 0.29% 0.83%
* % of assets covered by the KPI over banks´ total assets
GAR - sector information
* Due to limited data availability, only the total gross carrying amount per sector is presented without breakdown by climatic goals.
a
b
c
e
f
h
i
k
l
n
o
q
r
Breakdown
by sector
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
Mn EUR
Of which
environ-
mental
sustainable
(CCM)
Mn EUR
Of which
environ-
mental
sustainable
(CCM)
Mn EUR
Of which
environ-
mental
sustainable
(CCA)
Mn EUR
Of which
environ-
mental
sustainable
(CCA)
Mn EUR
Of which
environ-
mental
sustainable
(CCM+CCA)
Mn EUR
Of which
environ-
mental
sustainable
(CCM+CCA)
A.01
Crop and animal
production,
hunting and
related service
activities
51.74 0.00
C.19
Manufacture of
coke and refined
petroleum
products
69.94 0.01
C.26
Manufacture of
computer,
electronic and
optical products
21.12 0.45
C.27
Manufacture of
electrical
equipment
41.21 0.00
C.29
Manufacture of
motor vehicles,
trailers and
semi-trailers
14.88 0.03
E.38 Skupljanje,
oporaba i
zbrinjavanje
otpada
74.68 3.94
F.42
Civil engineering
103.53 0.35
H.51
Air transport
0.00 0.00
110
Sustainability Report
▲
111
◄
Assets for the calculation of GAR -Turnover based
Sustainability Report 111
Million EUR
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
31 December 2024
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
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
adaptation
Of which
enabling
Of which
specialised
lending
Of which
transitional/
adaptation
Of which
enabling
1
GAR - Covered assets in both numerator and
denominator
2
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
1,024 19 6 0 0 0 0 0 0 0 0 19 6 0 0 0
3
Financial corporations
96
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4
Credit institutions
31
0
0
0
0
0
5
Loans and advances 0 0 0 0 0 0
6
Debt securities, including UoP
31
0
0
0
0
0
7
Equity instruments
0
0
0
0
0
8
Other financial corporations 66 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
9
of which investment firms
0
0
0
0
0
0
10
Loans and advances
0
0
0
0
0
0
11
Debt securities, including UoP 0 0 0 0 0 0
12
Equity instruments
0
0
0
0
0
13
of which management companies
1
0
0
0
0
0
14
Loans and advances 0 0 0 0 0 0
15
Debt securities, including UoP
0
0
0
0
0
0
16
Equity instruments
1
0
0
0
0
17
of which insurance undertakings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
18
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Debt securities, including UoP
0
0
0
0
0
0
20
Equity instruments 0 0 0 0 0 0
21
Non-financial corporations (subject to NFRD
disclosure obligations)
143 19 6 0 0 0 0 0 0 0 0 19 6 0 0 0
22
Loans and advances 132 19 6 0 0 0 0 0 0 0 0 19 6 0 0 0
23
Debt securities, including UoP
10
0
0
0
0
0
24
Equity instruments
0
0
0
0
0
25
Households
781
0
0
0
0
0
26
of which loans collateralised by residential
immovable property
781 0 0 0 0 0
27
of which building renovation loans
0
0
0
0
0
0
28
of which motor vehicle loans
0
0
0
0
0
0
29
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Housing financing
0
0
0
0
0
0
31
Other local government financing
0
0
0
0
0
0
32
Collateral obtained by taking possession:
residential and commercial immovable
properties
4 0 0 0 0 0
33
TOTAL ASSETS IN THE DENOMINATOR (GAR)
1,024
19
6
0
0
0
0
0
0
0
0
19
6
0
0
0
112
Million EUR
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
31 December 2024
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
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
adaptation
Of which
enabling
Of which
specialised
lending
Of which
transitional/
adaptation
Of which
enabling
Assets excluded from the numerator for GAR
calculation (covered in the denominator)
34
Nefinancijska društva
35
EU Non-financial corporations (not subject to
NFRD disclosure obligations)
827
36
Loans and advances
826
37
of which loans collateralised by commercial
immovable property
38
of which building renovation loans
39
Debt securities 0
40
Equity instruments
1
41
Non-EU Non-financial corporations (not
subject to NFRD disclosure obligations)
0
42
Loans and advances
0
43
Debt securities
0
44
Equity instruments 0
45
Derivatives
0
46
On demand interbank loans 10
47
Cash and cash-related assets
134
48
Other assets (e.g. Goodwill, commodities etc.)
1,18 4
49
TOTAL ASSETS IN THE DENOMINATOR (GAR)
3,180
Other assets excluded from both the numerator
and denominator for GAR calculation
50
Sovereigns 1,344
51
Central banks exposure
3,655
52
Trading book
66
53
TOTAL ASSETS EXCLUDED FROM NUMERATOR
AND DENOMINATOR
5,065
54
TOTAL ASSETS
8,245
55
Financial guarantees
56
Assets under manasement
57
of which debt securities
58
of which equity instruments
Sustainability Report 112
Sustainability Report
▲
113
◄
Assets for the calculation of GAR - KPI flow (Turnover based)
Sustainability Report 113
Million EUR
q
r
s
t
u
v
w
h
y
z
aa
ab
ac
ad
ae
af
31 December 2024
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
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
adaptation
Of which
enabling
Of which
specialised
lending
Of which
transitional/
adaptation
Of which
enabling
1
GAR - Covered assets in both numerator and
denominator
2
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
142 13 2 0 0 0 0 0 0 0 0 13 2 0 0 0
3
Financial corporations
30
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4
Credit institutions
0
0
0
0
0
0
5
Loans and advances 0 0 0 0 0 0
6
Debt securities, including UoP
0
0
0
0
0
0
7
Equity instruments
0
0
0
0
0
8
Other financial corporations 30 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
9
of which investment firms
0
0
0
0
0
0
10
Loans and advances
0
0
0
0
0
0
11
Debt securities, including UoP 0 0 0 0 0 0
12
Equity instruments
0
0
0
0
0
13
of which management companies
0
0
0
0
0
0
14
Loans and advances 0 0 0 0 0 0
15
Debt securities, including UoP
0
0
0
0
0
0
16
Equity instruments
0
0
0
0
0
17
of which insurance undertakings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
18
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Debt securities, including UoP
0
0
0
0
0
0
20
Equity instruments 0 0 0 0 0 0
21
Non-financial corporations (subject to NFRD
disclosure obligations)
71 13 2 0 0 0 0 0 0 0 0 13 2 0 0 0
22
Loans and advances 71 13 2 0 0 0 0 0 0 0 0 13 2 0 0 0
23
Debt securities, including UoP
0
0
0
0
0
0
24
Equity instruments
0
0
0
0
0
25
Households
41
0
0
0
0
0
26
of which loans collateralised by residential
immovable property
41 0 0 0 0 0
27
of which building renovation loans
0
0
0
0
0
0
28
of which motor vehicle loans
0
0
0
0
0
0
29
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Housing financing
0
0
0
0
0
0
31
Other local government financing
0
0
0
0
0
0
32
Collateral obtained by taking possession:
residential and commercial immovable
properties
0 0 0 0 0 0
33
TOTAL ASSETS IN THE DENOMINATOR (GAR)
142
13
2
0
0
0
0
0
0
0
0
13
2
0
0
0
114
Sustainability Report 114
Million EUR
q
r
s
t
u
v
w
h
y
z
aa
ab
ac
ad
ae
af
31 December 2024
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
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
adaptation
Of which
enabling
Of which
specialised
lending
Of which
transitional/
adaptation
Of which
enabling
Assets excluded from the numerator for GAR
calculation (covered in the denominator)
34
Nefinancijska društva
35
EU Non-financial corporations (not subject to
NFRD disclosure obligations)
226
36
Loans and advances
226
37
of which loans collateralised by commercial
immovable property
38
of which building renovation loans
39
Debt securities 0
40
Equity instruments
0
41
Non-EU Non-financial corporations (not
subject to NFRD disclosure obligations)
0
42
Loans and advances
0
43
Debt securities
0
44
Equity instruments 0
45
Derivatives
0
46
On demand interbank loans 4
47
Cash and cash-related assets
0
48
Other assets (e.g. Goodwill, commodities etc.)
175
49
TOTAL ASSETS IN THE DENOMINATOR (GAR)
548
Other assets excluded from both the numerator
and denominator for GAR calculation
50
Sovereigns 166
51
Central banks exposure
869
52
Trading book
11
53
TOTAL ASSETS EXCLUDED FROM NUMERATOR
AND DENOMINATOR
1,046
54
TOTAL ASSETS
1,593
55
Financial guarantees
56
Assets under manasement
57
of which debt securities
58
of which equity instruments
Sustainability Report
▲
GAR KPI stock
Sustainability Report 115
115
◄
% (compared to total covered assets
in the denominator)
a b c d e f g h i j k l m n o p
31 December 2024
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) TOTAL (CCM + CCA)
Proportion of eligible assets funding taxonomy
relevant sectors
Proportion of eligible assets funding taxonomy
relevant sectors
Proportion of eligible assets funding taxonomy
relevant sectors
Proportion
of total
assets
covered
Of which environmentally sustainable Of which environmentally sustainable Of which environmentally sustainable
Of which
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
transitional
Of which
enabling
1
GAR 0.60% 0.19% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.60% 0.19% 0.00% 0.00% 0.00% 0.23%
2
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
1.86% 0.58% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.86% 0.58% 0.00% 0.00% 0.00% 0.23%
3
Financial corporations 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00%
4
Credit institutions 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
5
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
6
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
7
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
8
Other financial corporations 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00%
9
of which investment firms 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
10
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
11
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
12
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
13
of which management companies 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
14
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
15
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
16
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
17
of which insurance undertakings 0.00% 0.00% 0.00% 0.00% 0.00% 5.06% 0.29% 0.00% 0.00% 0.00% 5.06% 0.29% 0.00% 0.00% 0.00% 0.00%
18
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 5.06% 0.29% 0.00% 0.00% 0.00% 5.06% 0.29% 0.00% 0.00% 0.00% 0.00%
19
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
20
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
116
Izvještaj o održivosti 116
% (compared to total covered assets
in the denominator)
a b c d e f g h i j k l m n o p
31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of eligible assets funding taxonomy
relevant sectors
Proportion of eligible assets funding taxonomy
relevant sectors
Proportion of eligible assets funding taxonomy
relevant sectors
Proportion
of total
assets
covered
Of which environmentally sustainable Of which environmentally sustainable Of which environmentally sustainable
Of which
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
transitional
Of which
enabling
21
Non-financial corporations subject to
NFRD disclosure obligations
13.33% 4.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 13.33% 4.13% 0.00% 0.00% 0.00% 0.23%
22
Loans and advances 14.36% 4.45% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 14.36% 4.45% 0.00% 0.00% 0.00% 0.23%
23
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
24
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
25
Households 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
26
of which loans collateralised by
residential immovable property
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
27
of which building renovation loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
28
of which motor vehicle loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
29
Local government financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
30
Housing financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
31
Other local governments financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
32
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Sustainability Report
▲
GAR KPI flow
117
◄
Sustainability Report 117
% (compared to total covered assets
in the denominator)
q r s t u v w x y z aa ab ac ad ae af
31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of new eligible assets funding
taxonomy relevant sectors
Proportion of new eligible assets funding
taxonomy relevant sectors
Proportion of new eligible assets funding
taxonomy relevant sectors
Proportion
of total new
assets
covered
Of which environmentally sustainable Of which environmentally sustainable Of which environmentally sustainable
Of which
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
adaptation
Of which
enabling
Of which
specialised
lending
Of which
transitional/
adaptation
Of which
enabling
1
GAR 2.42% 0.29% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.42% 0.29% 0.00% 0.00% 0.00% 0.83%
2
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
9.32% 1.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 9.32% 1.13% 0.00% 0.00% 0.00% 0.83%
3
Financial corporations 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
4
Credit institutions 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
5
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
6
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
7
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
8
Other financial corporations 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
9
of which investment firms 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
10
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
11
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
12
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
13
of which management companies 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
14
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
15
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
16
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
17
of which insurance undertakings 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
18
Loans and advances 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
19
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
20
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
118
Sustainability Report 118
% (compared to total covered assets
in the denominator)
q r s t u v w x y z aa ab ac ad ae af
31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of new eligible assets funding
taxonomy relevant sectors
Proportion of new eligible assets funding
taxonomy relevant sectors
Proportion of new eligible assets funding
taxonomy relevant sectors
Proportion
of total new
assets
covered
Of which environmentally sustainable Of which environmentally sustainable Of which environmentally sustainable
Of which
specialised
lending
Of which
transitional
Of which
enabling
Of which
specialised
lending
Of which
adaptation
Of which
enabling
Of which
specialised
lending
Of which
transitional/
adaptation
Of which
enabling
21
Non-financial corporations subject to
NFRD disclosure obligations
18.68% 2.27% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 18.68% 2.27% 0.00% 0.00% 0.00% 0.83%
22
Loans and advances 18.68% 2.27% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 18.68% 2.27% 0.00% 0.00% 0.00% 0.83%
23
Debt securities, including UoP 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
24
Equity instruments 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
25
Households 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
26
of which loans collateralised by
residential immovable property
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
27
of which building renovation loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
28
of which motor vehicle loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
29
Local government financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
30
Housing financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
31
Other local governments financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
32
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Sustainability Report
▲
Incentive-Based Financing
HPB Group fosters strong partnerships with national and
international development institutions, with a particular
emphasis on its longstanding collaboration with the Croatian
Bank for Reconstruction and Development (HBOR).
These partnerships enable HPB to offer preferential financing
terms for investments that drive innovation, energy efficiency,
environmental sustainability, and business competitiveness,
including support for export-oriented enterprises. Through
these agreements, HPB provides access to specialized credit
lines designed for targeted entrepreneur groups, such as
women entrepreneurs, startups, and agricultural businesses.
Among the financing programs offered, credit lines estab-
lished in cooperation with the Green for Growth Fund and
the European Fund for Southeast Europe support client
investments that improve energy efficiency, reduce CO
2
emissions, promote renewable energy projects, and foster
sustainable business practices. These initiatives are particu-
larly aimed at young entrepreneurs, minority-led businesses,
and women entrepreneurs, reinforcing HPB’s commitment to
inclusive and responsible financing).
HPB also maintains a longstanding partnership with the
Croatian Agency for SMEs, Innovation, and Investments
(HAMAG-BICRO), primarily in the area of guarantee
programs. This collaboration allows HPB to facilitate invest-
ment financing under more favorable conditions, providing
both improved commercial terms and reduced collateral
requirements, making funding more accessible to a broader
range of businesses.
In addition to these guarantee programs, HPB clients
can benefit from interest rate subsidies under the National
Recovery and Resilience Plan (NPOO) for projects focused
on green transition, eco-friendly production, resource effi-
ciency, digital transformation, and overall market competitive-
ness. By participating in this initiative, HPB actively supports
the sustainable transformation of the Croatian economy,
helping businesses adapt to the evolving landscape of green
and digital transition. A key advantage for subsidy recipi-
ents and for the broader economy is the alignment of their
operations with sustainability standards, as all investments
financed under NPOO must adhere to strict environmental
sustainability principles.
Beyond national-level initiatives, HPB collaborates with
regional and local government units (cities and counties)
to foster entrepreneurial growth, with a strong focus on small
and medium-sized enterprises (SMEs). These partnerships
typically involve interest rate subsidies provided by counties
for economic activities deemed high-priority at the regional
level, further supporting local business development.
119
◄
City / Municipality / County Program / Business Partnership
Bjelovarsko-bilogorska County Financing of the 2024 Spring Sowing Season
Dubrovnik-Neretva County SME Development Program (2022–2024) – "Poticaj 2022" Project
City of Vinkovci Interest rate subsidies for loans related to residential building renovations
Koprivnica-Križevci County
HBOR Credit Programs: "Youth, Women, and Startup Entrepreneurship" & "Private
Sector Investments"
Lika-Senj County
"Youth, Women, and Startup Entrepreneurship" & "Working Capital Loans" – Interest
Rate Subsidies
Osijek-Baranja County HBOR Credit Program: "Private Sector Investments" – Interest Rate Subsidies
Zadar County
"Success Through Credit" Program – Interest Rate Subsidies
HBOR Credit Programs: "Youth, Women, and Startup Entrepreneurship" & "Private
Sector Investments"
Šibenik-Knin County SME Financing Program
Primorje-Gorski Kotar County
"Youth, Women, and Startup Entrepreneurship" – Interest Rate Subsidies
"Working Capital Loans" – Interest Rate Subsidies
Zagreb County
"HBOR Credit Subsidy Program," "Youth, Women, and Startup Entrepreneurship,"
"Working Capital Loans," and "Private Sector Investments" – Interest Rate Subsidies
Split-Dalmatia County SME and Craft Financing Program – Interest Rate Subsidies
By leveraging these specialized financing programs, HPB reduces the cost of investment financing for projects involving new
technologies, innovation, and sustainable business practices. Additionally, the Bank optimizes financial costs for entrepreneurs
from underrepresented groups, including young entrepreneurs, minority-owned businesses, senior entrepreneurs, women
entrepreneurs, and persons with disabilities. Through these initiatives, HPB simultaneously enhances the sustainability of its
portfolio while facilitating access to financing that contributes to macroeconomic stability and sustainability goals.
Active Business Partnerships with Local and Regional Governments
120
Sustainability Report
▲
ESG Questionnaire for Customers
As part of our commitment to sustainability and responsible
banking, HPB successfully integrated the ESG questionnaire
into its business processes in 2024. This initiative marks a
significant step toward advancing sustainable finance and
ensuring compliance with evolving regulatory requirements
related to environmental, social, and governance (ESG)
factors.
The centralized ESG data collection platform, devel-
oped in collaboration with the Croatian Credit Obligations
Registry (HROK) and leading banks in Croatia, has been
operational since early 2024. This platform enables banks
to systematically collect key sustainability-related data from
customers while allowing all legal entities to complete the
ESG questionnaire free of charge, regardless of their indus-
try, size, or sustainability reporting obligations. Although the
questionnaire is primarily designed for large businesses, the
European Commission’s plans foresee its future expansion
to small and medium-sized enterprises (SMEs), further rein-
forcing sustainability transparency across the financial sector.
HPB has played a pivotal role in developing the platform
and designing the ESG questionnaire, marking a major
advancement in sustainable finance. The data collected will
contribute to a more comprehensive assessment of clients'
sustainability performance and enhance ESG risk manage-
ment practices. This initiative underscores HPB Group’s
commitment to driving sustainable business practices and
fostering positive societal change.
To facilitate a smooth adoption process, HPB has proac-
tively informed its clients about the questionnaire’s imple-
mentation, purpose, and benefits through various communi-
cation channels, including informational materials and direct
outreach.
121
◄
Sustainable Investment
By incorporating environmental, social, and governance
(ESG) factors into our investment decision-making and advi-
sory processes, HPB Group contributes to long-term value
creation while enhancing overall portfolio returns.
As a financial market participant and investment advisor,
HPB has fully integrated sustainability risks into its investment
processes, as outlined in the Sustainability and Responsible
Investment Policy for Investment Services, which is publicly
available on the Bank’s website.
For the portfolios managed by the Bank, sustainability
risks refer to ESG-related risks arising from investments in
financial instruments issued by entities whose business prac-
tices may expose them to such risks. Poor ESG risk manage-
ment increases the likelihood of adverse events, potentially
affecting issuer performance, financial stability, and market
perception (e.g., higher costs, reputational risks). This, in turn,
may influence the issuer’s financial instrument pricing (market
risk), creditworthiness (credit risk), and overall liquidity (liquid-
ity risk). To mitigate these risks, HPB actively monitors the
weighted average ESG rating of its portfolios, ensuring that
sustainability risks remain contained within broader financial
risk management frameworks.
Currently, the portfolios managed under HPB’s portfolio
management service fall into the category of neutral or main-
stream investment products, meaning they do not explicitly
aim to promote sustainability factors or qualify as sustainable
investments under Articles 8 and 9 of the EU Sustainable
Finance Disclosure Regulation (SFDR) (Regulation (EU)
2019/2088). However, despite this classification, sustain-
ability remains an integral component of HPB’s investment
decision-making process, and sustainability risks are system-
atically considered in all investment activities.
When managing client portfolios and making investment
decisions, HPB assesses principal adverse impacts (PAIs) on
sustainability factors by applying exclusion policies, engage-
ment strategies, and ESG performance monitoring. Principal
adverse impacts refer to the potential negative effects that
investment decisions may have on sustainability factors,
which HPB carefully evaluates as part of its commitment to
responsible investing.
In accordance with this commitment, HPB does not invest
in financial instruments issued by entities involved in the
production or trade of controversial weapons, the extraction
of fossil fuels, or activities generating revenue through human
rights violations, labor rights abuses, child exploitation,
corruption, or bribery. Furthermore, investments in entities
operating under international sanctions or within authoritar-
ian regimes are also excluded from all managed portfolios.
Beyond these exclusions, HPB actively seeks to reduce
portfolio exposure to greenhouse gas emissions, carbon foot-
print, water consumption, hazardous waste generation, and
biodiversity risks, while supporting increased investments in
renewable energy sources.
Za For the assessment and measurement of principal
adverse impacts, HPB adheres to the regulatory framework
and sustainability indicators prescribed by the EU Sustainable
Finance Disclosure Regulation (SFDR) and its related
Regulatory Technical Standards (RTS). The Bank publishes
Principal Adverse Impact (PAI) reports on its website, with
the next report covering the reference period from January
1 to December 31, 2024 scheduled for publication by June
30, 2025.
122
Sustainability Report
▲
Principle 2:
Impact and Target Setting
An initial portfolio impact analysis was conducted in the previ-
ous reporting period, identifying our most significant positive
and negative impact areas. The findings of this analysis were
published in the 2023 Sustainability Report and serve as the
foundation for our target-setting process.
Portfolio Impact Analysis
As part of our comprehensive portfolio assessment, HPB
analyzed the entire credit product portfolio across three key
business segments: retail banking, small and medium-sized
enterprises (SMEs), and large corporations. This analysis
enabled us to identify the most significant areas of both posi-
tive and negative impact.
In 2024, we further expanded the scope of analysis within
the retail segment, incorporating demographic and gender-
based data in relation to loan volumes, account balances,
savings deposits, product adoption rates, and overall
customer numbers.
Principle 1:
Alignment
HPB’s sustainability strategy is aligned with the Sustainable
Development Goals (SDGs), the Paris Agreement, and other
relevant national and European frameworks and guidelines.
The business processes we implement, the activities we
undertake, and the targets we set are all based on this regu-
latory framework. Additionally, our operations comply with
ISO 26000:2020, the internationally recognized standard for
social responsibility.
The internal policies governing sustainability-related
business processes are detailed in this Report, within the
thematic standards section.
References: chapters About This Sustainability Report,
Sustainability as a Core Pillar of Responsible Development,
Environmental Sustainability and Corporate Governance.
Beyond portfolio structure analysis within the retail
segment, we conducted an in-depth materiality assessment,
identifying priority impact areas most relevant to the Croatian
market.
Given our exposure across large corporate and SME port-
folios, we further evaluated our positive and negative impact
across specific themes.
The most significant negative impacts were identified in
healthcare, wages, climate stability, resource use, and waste
management, while the most notable positive impacts were
found in employment, wage growth, and SME development.
In addition to our own portfolio assessment and national
priorities, we aligned our evaluation with UNEP FI guidelines,
particularly insights from Leading the Way to a Sustainable
Future: Priorities for a Global Responsible Banking Sector.
HPB recognizes its key role in addressing climate change,
Principles for Responsible Banking (PRB)
As a signatory of the United Nations Environment Programme Finance Initiative (UNEP FI), HPB is committed to implementing
the six Principles for Responsible Banking (PRB) within a defined timeframe, while ensuring transparent monitoring and annual
reporting on progress.
In the 2023 Sustainability Report, the Bank for the first time reported on the integration of PRB into its operations, placing
particular emphasis on the impact analysis conducted as a foundation for setting SMART targets (Principle 2). This section
provides an overview of the key measures undertaken to implement the six PRB principles, with references to detailed sections
outlining our progress. Throughout this Report, relevant chapters are clearly marked, directing readers to additional information
on the practical application of each principle.
123
◄
0
10
20
30
40
50
60
70
80
90
Credit Savings Number of products
Senior (+60) Middle-aged (30-60) Youth (18-30)
Male
Female
0
10
20
30
40
50
60
70
80
90
Credit Savings Number of products
both within its operational processes and through the financ-
ing of client activities. By reducing our portfolio’s negative
environmental impact, we not only contribute to climate
stability but also support biodiversity conservation and overall
societal well-being.
Through our commitment to supporting our clients’ sustain-
able transition, we strive to foster a healthier, more resilient,
and diverse economic environment.
Strategic Goals
Following our initial portfolio impact analysis in 2023, we
identified Circular Economy as a key negative impact area
and Service Accessibility & Quality as a core positive impact
area.
In 2024, we prioritized efforts to reduce negative environ-
mental impacts, with a stronger focus on Climate Stability and
Circular Economy. The objectives set align with our Climate
Strategy 2050 and Transition Plan for a Low-Carbon Economy
2030, specifically targeting greenhouse gas (GHG) emis-
sion reductions across our portfolio and an increase in the
share of green assets.
Beyond our SMART targets, HPB remains committed to
continuing investments in initiatives that enhance customer
service quality and strengthen engagement with stakeholders.
> References:
chapters Sustainable Financing, Greenhouse Gas Emissions
Representation of age-gender groups by credit indicators, savings, and product distribution
124
Sustainability Report
▲
Principle 4:
Stakeholders
At HPB, we believe that real progress happens through
collaboration. By engaging proactively with our stakeholders,
we work toward shared sustainability goals, fostering partner-
ships that drive meaningful change. Open dialogue, transpar-
ency, and continuous engagement are at the core of how we
operate. We invest heavily in communication, joint initiatives,
and sustainability reporting, ensuring our stakeholders and
clients stay informed and involved.
Understanding the expectations, needs, and perspectives
of those we work with helps us identify key impacts, navigate
challenges, and seize opportunities. By actively listening
and responding, we not only strengthen trust but also turn
engagement into a strategic advantage for long-term sustain-
able growth.
> References:
chapter Sustainability as a Core Pillar of Responsible Development
- Engaging with Our Stakeholders
Principle 5:
Governance
At HPB, we recognize the significant impact and responsibility
our business has on both society and the environment. Our
governance structure is designed to align with the interests of
society, ensuring strong corporate governance through stra-
tegic planning, responsible decision-making, and meaningful
stakeholder engagement.
For us, responsible corporate governance means trans-
parent decision-making, effective risk management, and
full compliance with regulatory and ethical standards. By
embedding sustainability into our leadership framework, we
reinforce trust, accountability, and long-term value creation.
> References:
chapters Sustainability Governance and Oversight and Corporate
Governance
Principle 6:
Transparency
Throughout 2024, we further deepened our commitment to the
Principles for Responsible Banking by establishing our first
measurable targets and impact metrics. With a strong focus
on accountability and progress tracking, we are ensuring that
our efforts to minimize negative impacts are continuously
monitored and transparently reported. At HPB, we strive for
absolute transparency, providing accurate, timely, and relia-
ble information on our environmental and social impacts, as
well as the actions we take to enhance positive outcomes and
mitigate risks.
The 2024 Sustainability Report was externally reviewed by
an independent auditor, resulting in a limited assurance state-
ment, further reinforcing our commitment to accountability.
> References:
chapters About This Sustainability Report, Sustainability
Governance and Oversight and Corporate Governance
Principle 3:
Clients & Customers
At HPB, we see our clients as partners in the transition to
a more sustainable future. Through a responsible and
forward-thinking approach, we actively encourage them
to integrate sustainability into their operations by offering
tailored financial solutions that support energy efficiency,
environmental protection, innovation, and the development
of sustainable technologies. In partnership with national and
international institutions, we provide preferential financing
solutions for sustainable projects, guiding our clients towards
financial instruments that support environmentally and
socially responsible business operations.
Beyond financing, we are committed to empowering our
clients with knowledge. Through various communication
channels, we keep them informed about regulatory changes,
emerging obligations, and best sustainability practices.
Raising awareness is key because when businesses under-
stand the impact of their decisions, they become active
contributors to positive change.
A key tool introduced in 2024 is the ESG Questionnaire,
designed to help clients evaluate their sustainability perfor-
mance and align their operations with ESG criteria. This initi-
ative reflects our shared commitment to responsible banking
and long-term value creation.
> References:
chapter Sustainable Financing
125
◄
126
Sustainability Report
▲
In our 2024 Sustainability Report, we highlight the material
sustainability topics and indicators that have shaped our
engagement over the past year.
The Report’s structure is informed by our double materi-
ality assessment, which provides a framework for identifying
critical current and potential impacts, risks, and opportuni-
ties—both positive and negative. This approach considers
direct effects arising from our operations as well as broader
impacts driven by our business relationships and the wider
economic and social landscape.
The double materiality assessment incorporates due dili-
gence principles such as identifying, preventing, and mitigat-
ing adverse impacts on people and the environment across
our value chain.
As an essential component of our sustainability strategy,
the double materiality assessment allows us to prioritize key
environmental, social, and governance (ESG) topics that are
most relevant to HPB Group and its stakeholders. By leverag-
ing this methodology, we gain a deeper understanding of our
risks, opportunities, and impact areas, ensuring that we focus
on sustainability themes that deliver the most meaningful
outcomes.
Building on these insights, we define clear goals and
action plans designed to minimize negative impacts, maxi-
mize positive contributions, and strengthen our ability to
navigate evolving sustainability challenges.
In determining material impacts, risks, and opportunities,
we incorporate insights and feedback from our key stakeholder
groups, who are directly affected by our business activities.
While we did not use a survey-based questionnaire for this
assessment, we carefully analyzed stakeholder perspectives
gathered through ongoing dialogue, workshops, and other
communication channels outlined in the chapter Sustainability
as a Strategic Driver of Development. However, given that
stakeholder perspectives are often shaped by individual
experiences and limited access to information, our materiality
analysis primarily reflects HPB Group’s business context,
market landscape, and industry-specific considerations.
This 2024 double materiality assessment builds upon the
initial evaluation conducted in the same year, integrating new
ESRS guidelines and recommendations while refining our
assessment methodology.
The double materiality assessment comprises two key
dimensions:
1. Impact Materiality – Evaluating HPB Group’s environ-
mental, social, and governance (ESG) impacts that
hold significance for all stakeholders
2. Financial Materiality – Identifying external ESG risks
and opportunities that may influence HPB Group’s
financial performance, development, and market
position.
Impact Materiality
To identify both actual and potential positive and negative
impacts, HPB Group carried out a comprehensive assess-
ment process aligned with its business activities and operat-
ing environment. From the full scope of sustainability topics
defined by the ESRS standards, we selected a broad set of
relevant themes across all three sustainability pillars - envi-
ronmental, social, and governance (ESG), which were then
subjected to further analysis and evaluation.
Following this initial selection, we performed an in-depth
analysis of our business operations within each identified
sustainability topic. This assessment was informed by scien-
tific and analytical research on the impacts of financial insti-
tutions, stakeholder feedback, regulatory frameworks, and
internal expert evaluations. The objective was to determine
the actual and potential positive and negative impacts HPB
Group generates, contributes to, or is directly linked to through
its activities, products, services, and business relationships.
In this phase we defined 13 topics, or sub-topics, which we
then used to determine significance.
The final phase of our double materiality assessment
involved evaluating impact significance and defining priorities.
The assessment considered four key factors: scale, scope,
remediability (the possibility of reversing a negative impact),
and likelihood (for potential impacts). The scoring categories
for scale (range 0 – none to 5 – absolute), scope (range
0 – none to 5 – global), remediability (range 0 – very easy
to remedy to 5 – non-remidable/irreversible) and likelihood
(range 1 – none to 4 – extremely high) were established by
internal policy.
The significance of impact was defined by score sum of
all scoring factors criteria aligned with internally set scoring
thresholds which are aligned with ESRS guidelines. Based
on thresholds, impacts with less then 5 scoring points are
considered as minimal, 5 to 7 as informative, 8 to 10 as impor-
tant, 11 to 13 as significant and over 13 as critical.
This structured approach allows HPB Group to prioritize
key sustainability topics, refine its strategic focus, and ensure
that its business decisions support long-term resilience,
transparency, and accountability.
The key material issues from an impact materiality
perspective are outlined in the Impact Materiality Table below.
Double Materiality Assessment
ESRS 2 (GOV-4, SBM-3, IRO-1, IRO-2)
127
◄
Impact Materiality
Sustainable Financing
Thematic ESRS
Standard
Positive Impact
Actual or
Potential
ESRS E1
CLIMATE
CHANGE
Climate
Change
Adaptation
The Bank plays a significant role in driving the transition to a low-carbon economy
and reducing environmental impact by directing its investment and lending activities
toward sustainable projects.
Through leadership and educational initiatives, HPB promotes sustainable practices
among clients and stakeholders, actively supporting them in their transition.
The Bank has established a framework for sustainable product development and is
currently enhancing existing products and services while implementing a data
management model to ensure greater transparency and accuracy in tracking
sustainable financing.
Actual
Access to Products and Services
Thematic ESRS
Standard
Positive Impact
Actual or
Potential
ESRS S4
CONSUMERS
AND END
USERS
Consumer
Social Inclusion
Accessibility and affordability of banking products and services are key priorities for
clients when choosing a financial institution. Accessibility encompasses a
nationwide network of branches and ATMs, digitalization and online banking
services, support for persons with disabilities, as well as financial literacy programs
and customer education.
Since its founding, HPB has invested significantly in expanding access to banking
services. Through a strategic partnership with Hrvatska pošta (HP), HPB has
become the most accessible bank in Croatia, providing services even in the
country’s most remote areas. The Bank also continuously enhances its digital
services to enable clients to conduct more financial transactions online.
HPB has been offering free financial literacy programs for years, addressing the
most pressing banking topics for diverse client groups.
Additionally, by establishing performance goals, measuring success, and
incentivizing sales staff, the Bank applies methodologies and practices designed to
protect consumers and ensure compliance with ethical business conduct. This
includes fair, transparent, and professional service delivery that respects consumer
rights and interests.
Actual
Sustainable financing
Carbon footprint of the Bank's activities
Carbon footprint of the Bank's portfolio
Work-life balance
Training and skills development
Data privacy
Access to reliable information
Access to products and services
Responsible marketing practices
Corruption and bribery
Minimal
impact
Informative
impact
Important
impact
Significant
impact
Critical
impact
Gender equality and equal pay for
work of equal value
8
5
7
9
11
5
7
8
10
4
6
Impact Materiality Matrix
128
Sustainability Report
▲
Carbon Footprint of the Bank’s Portfolio
Thematic ESRS
Standard
Negative Impact
Actual or
Potential
ESRS E1
CLIMATE
CHANGE
Climate Change
Mitigation
The majority of the Bank’s greenhouse gas (GHG) emissions, over 90%, originate
from Category 15 of Scope 3, which encompasses emissions from its financial
activities.
To mitigate long-term negative environmental impacts, the Bank’s lending and
investment focus must be directed toward low-carbon sectors and sustainable
business practices.
HPB is committed to shifting its financing activities toward industries that have a
positive environmental impact while reducing exposure to activities with adverse
environmental effects.
In 2023, the Bank calculated its Scope 3, Category 15 emissions for the first time
and, through its Climate Strategy, established a target for reducing the GHG
emissions of its portfolio. This marks a significant step in aligning HPB’s financial
activities with sustainability objectives and fostering a transition to a low-carbon
economy.
Actual
Gender Equality and Equal Pay for Work of Equal Value
Segment Negative Impact
Actual or
Potential
ESRS S1
OWN
WORKFORCE
Equal
Treatment and
Opportunities
for All
U Industry data shows that, on average, women in the banking sector earn less than
men and remain underrepresented in senior and executive roles.
HPB actively monitors gender pay differences across its workforce. In cases where
material disparities between male and female employees are identified, the Bank
analyzes the root causes and implements targeted corrective measures where
necessary. Furthermore, HPB ensures that any existing pay gaps do not stem from
a remuneration policy that is not gender-neutral.
The latest analysis found that among employees with the greatest influence on the
Bank’s risk profile (identified staff), excluding governing bodies, the pay gap favors
women. However, in other employee categories, both managerial and specialist
positions, a gender pay gap was observed in favor of men.
Since the identified gender pay gap is concentrated in a specific category of
managerial and specialist roles, the Bank has set an annual target to reduce this
disparity for the affected job category.
Actual
Data Privacy
Segment Negative Impact
Actual or
Potential
ESRS S4
CONSUMERS
AND END
USERS
Impacts Related
to Consumer
and End-User
Information
As digital threats continue to evolve, the security of consumer and end-user
information remains a critical priority. In the event of a cyberattack compromising the
confidentiality, integrity, or availability of the Bank’s information systems, HPB could
face financial, regulatory, and reputational risks due to the loss or inaccessibility of
sensitive data and services.
The risk of impersonation attacks targeting HPB’s clients is also increasing.
Fraudsters attempt to deceive customers into disclosing their credentials or making
unauthorized transactions, ultimately leading to financial loss.
To mitigate these risks, HPB has implemented a comprehensive information security
management system, incorporating a range of organizational and technical
measures. A dedicated unit is responsible for cybersecurity, fraud prevention, and
the ongoing monitoring of emerging threats. Additionally, the Bank conducts regular
security and business continuity testing while providing continuous employee
training to enhance awareness of information security risks.
Actual
129
◄
Financial Materiality
The external environment encompasses a broad range of
factors and conditions that directly or indirectly shape HPB
Group’s operations and development, often in unpredictable
and uncertain ways. While it presents new growth opportu-
nities, it also introduces risks and challenges that must be
identified proactively to ensure resilience and enable timely
and effective responses.
To understand how climate and market dynamics may
affect our business, revenue, growth, and market position,
we conducted a financial materiality assessment leveraging
internal expertise. This process allowed us to pinpoint the
areas with the most significant financial impact and ensure
our strategy is aligned with evolving risks and opportunities.
Our financial materiality assessment mirrors the scope of
our impact materiality evaluation, applying a financial lens to
sustainability topics by assessing their influence on business
performance, strategic development, and risk management.
Each topic was analyzed across three-time horizons: short-
term (up to one year), medium-term (one to five years), and
long-term (beyond five years), ensuring a forward-looking
approach that aligns with HPB’s broader risk management
framework and regulatory reporting obligations. For each
identified potential risk, we evaluated its scale (range 0
– none to 5 – absolute) and likelihood (range 1 – none to 4
– extremely high) based on internally defined rating criteria.
In order to determine prioritised topics, governed by expert
analysis of interlinkages between defined scale and likelihood
of impact, we assigned a financial materiality score to each
sustainability topic as shown in the table below.
0-None 1-Minimal 2-Low 3-Medium 4-High 5-Absolute
4-Extremely high 0 1 2 3 4 4
3-High 0 1 1 2 3 4
2-Low 0 0 0 1 2 3
1-None 0 0 0 0 0 0
Scoring threshold
4 Critical
3 Significant
2 Important
1 Informative
0 Minimal
Given the existing regulatory requirements for environmental risk management, HPB has
established a structured process for identifying and quantifying material environmental risks.
Accordingly, our financial materiality assessment for environmental topics is grounded in
findings from our comprehensive risk management framework, ensuring consistency and
strategic alignment.
The key material topics from a financial materiality perspective are presented in the Financial
Materiality Table.
Financial Materiality Scoring Scale
SCALE
LIKEHOOD
130
Sustainability Report
▲
Environmental Risk Management
Thematic
ESRS
Risks Opportunities
Time
Horizon
ESRS E1
CLIMATE
CHANGE
Adaptation to
Climate
Change
Failure to manage environmental risks can lead to significant
financial losses, threaten business sustainability, and
negatively impact the Bank’s competitiveness and
reputation. Physical environmental risks are localized risks
tied to properties financed by the Bank. If unmanaged, such
risks could expose the Bank to financial losses.
Additionally, HPB’s clients face transition risks and
operational adjustments, which may result in higher costs or
lower revenues, affecting their ability to meet financial
obligations to the Bank.
If HPB does not integrate environmental risk management, it
may also increase exposure to sectors with high greenhouse
gas emissions (e.g., oil, gas, metals, mining, transportation),
which would directly impact the Bank’s Scope 3 emissions.
Identifying and
assessing
environmental risks
within HPB’s portfolio,
including evaluating
climate change-related
threats, strengthens
both the Bank’s
resilience and that of its
clients.
Financing climate
transition presents an
opportunity to expand
lending activities and
revenue streams while
helping high-emission
clients transition to
low-carbon operations
and navigate transition-
related costs.
Medium /
Long-Term
Financial Materiality
To ensure a precise understanding of our impacts, we
conducted a detailed assessment down to the sub-sub-
topic level, identifying key material issues within each area.
However, in this Sustainability Report, we present disclosures
at the topic level, providing comprehensive insights in line with
thematic standards that reflect our most significant positive
and negative impacts on the environment and society, as well
as the external factors influencing our business.
Our reporting aligns with the material topics identified
through this process, covering ESRS E1 (Climate Change),
ESRS S1 (Own Workforce), ESRS S4 (Consumers and End
Users), and ESRS G1 (Business Conduct).
Certain environmental themes ESRS E2 (Pollution), ESRS
E3 (Water and Marine Resources), ESRS E4 (Biodiversity
and Ecosystems), and ESRS E5 (Circular Economy) are not
included in this Report, as HPB Group, given the nature of its
business, does not have a direct or significant impact in these
areas. Likewise, social topics under ESRS S2 (Workers in
the Value Chain) and ESRS S3 (Affected Communities) have
been excluded due to limited access to reliable data required
by these reporting standards, as well as the predominantly
indirect nature of our influence in these areas.
However, as we continuously evolve our approach to
responsible business, we recognize the potential for a more
meaningful impact through initiatives such as supplier ques-
tionnaires and responsible procurement practices. With this
in mind, we anticipate addressing ESRS S2 in future itera-
tions of this Report, further strengthening our commitment to
sustainable value chains.
Fair Compensation
Segment Risks Opportunities
Time
Horizon
ESRS S1
OWN
WORKFORCE
Working
Conditions
Inflation can have a significant impact on salary adequacy.
Insufficient compensation may lead to increased employee
dissatisfaction and decreased productivity, ultimately
resulting in higher turnover rates.
Inadequate salaries can also drive up operational costs due
to the need for employee replacements, recruitment,
onboarding, and training.
Additional financial pressures may arise from wage
adjustments driven by inflation, as well as potential revenue
losses caused by reduced efficiency, higher attrition, and
challenges in attracting skilled talent in a competitive labor
market.
Continuous
improvement of working
conditions and
organizational culture
can enhance employee
satisfaction and
productivity, ultimately
reducing costs and
driving business
growth.
Long-Term
131
◄
Segment Theme Disclosure Requirement
Relevant /
Not
relevant
Chapter
General Disclosures
ESRS 2 - General Disclosures
Letter to Stakeholders - Forewords
BP-1 – General basis for preparation of
sustainability statements
-
About this sustainability report
BP-2 – Disclosures in relation to specific
circumstances
- About this sustainability report
Alignment with ISO 26000:2020 Sustainability
Guidelines
Sustainability as a Core Pillar of Responsible
Development
GOV-1 – The role of the administrative,
management and supervisory bodies
- Sustainability Governance and Oversight
(Corporate Governance, ESG Committee,
Appointment Process of the Governing Body,
Diversity of the Governing Body, Three Lines of
Defense Model, Sustainability Office)
GOV-2 – Information provided to and
sustainability matters addressed by the
undertaking’s administrative, management
and supervisory bodies
- Sustainability Governance and Oversight
(Three Lines of Defense Model, Strategic Priorities
for 2024)
GOV-3 - Integration of sustainability-related
performance in incentive schemes
- Sustainability Governance and Oversight
(Remuneration Policy)
GOV-4 - Statement on due diligence - Double Materiality Assessment
GOV-5 - Risk management and internal
controls over sustainability reporting
- Sustainability Governance and Oversight
SBM-1 – Strategy, business model and value
chain
- Sustainability as a Core Pillar of Responsible
Development
SBM-2 – Interests and views of stakeholders - Engaging with Our Stakeholders
SBM-3 - Material impacts, risks and
opportunities and their interaction with
strategy and business model
- Sustainability as a Core Pillar of Responsible
Development
Double Materiality Assessment
Environmental Sustainability
Social Sustainability
Corporate Governance
IRO-1 - Description of the processes to
identify and assess material impacts, risks and
opportunities
- Double Materiality Assessment
IRO-2 – Disclosure requirements in ESRS
covered by the undertaking’s sustainability
statement
- Double Materiality Assessment
Environment
ESRS E1 - Climate change
E1-1 – Transition plan for climate change
mitigation
Relevant Transition Plan for Climate Change Mitigation
Managing Environmental Risks (Environmental Risk
Impact Assessment)
Greenhouse Gas Emissions
(Greenhouse Gas Emissions Inventory for 2024)
E1-2 – Policies related to climate change
mitigation and adaptation
Relevant Transition Plan for Climate Change Mitigation
Environmental Risk Impact Assessment
Greenhouse Gas Emissions
Energy Efficiency and Sustainable Resource
Management
Carbon Reduction Targets and Emission Control
Measures
ESRS Disclosure Requirements covered by Sustainability Report ESRS 2 (IRO-2)
132
Sustainability Report
▲
Segment
Theme
Disclosure Requirement
Relevant /
Not
relevant
Chapter
General Disclosures
ESRS 2 - General Disclosures
Letter to Stakeholders
-
Forewords
BP-1 – General basis for preparation of
sustainability statements
-
About this sustainability report
BP-2 – Disclosures in relation to specific
circumstances
-
About this sustainability report
Alignment with ISO 26000:2020 Sustainability
Guidelines
Sustainability as a Core Pillar of Responsible
Development
GOV-1 – The role of the administrative,
management and supervisory bodies
-
Sustainability Governance and Oversight
(Corporate Governance, ESG Committee,
Appointment Process of the Governing Body,
Diversity of the Governing Body, Three Lines of
Defense Model, Sustainability Office)
GOV-2 – Information provided to and
sustainability matters addressed by the
undertaking’s administrative, management
and supervisory bodies
-
Sustainability Governance and Oversight
(Three Lines of Defense Model, Strategic Priorities
for 2024)
GOV-3 - Integration of sustainability-related
performance in incentive schemes
-
Sustainability Governance and Oversight
(Remuneration Policy)
GOV-4 - Statement on due diligence
-
Double Materiality Assessment
GOV-5 - Risk management and internal
controls over sustainability reporting
-
Sustainability Governance and Oversight
SBM-1 – Strategy, business model and value
chain
-
Sustainability as a Core Pillar of Responsible
Development
SBM-2 – Interests and views of stakeholders
-
Engaging with Our Stakeholders
SBM-3 - Material impacts, risks and
opportunities and their interaction with
strategy and business model
-
Sustainability as a Core Pillar of Responsible
Development
Double Materiality Assessment
Environmental Sustainability
Social Sustainability
Corporate Governance
IRO-1 - Description of the processes to
identify and assess material impacts, risks and
opportunities
-
Double Materiality Assessment
IRO-2 – Disclosure requirements in ESRS
covered by the undertaking’s sustainability
statement
-
Double Materiality Assessment
Environment
ESRS E1 - Climate change
E1-1 – Transition plan for climate change
mitigation
Relevant
Transition Plan for Climate Change Mitigation
Managing Environmental Risks (Environmental Risk
Impact Assessment)
Greenhouse Gas Emissions
(Greenhouse Gas Emissions Inventory for 2024)
E1-2 – Policies related to climate change
mitigation and adaptation
Relevant
Transition Plan for Climate Change Mitigation
Environmental Risk Impact Assessment
Greenhouse Gas Emissions
Energy Efficiency and Sustainable Resource
Management
Carbon Reduction Targets and Emission Control
Measures
Segment Theme Disclosure Requirement
Relevant /
Not
relevant
Chapter
Environment
ESRS E1 - Climate change
E1-3 – Actions and resources in relation to
climate change policies
Relevant Transition Plan for Climate Change Mitigation
Greenhouse Gas Emissions
Managing Environmental Risks
Energy Efficiency and Sustainable Resource
Management
Carbon Reduction Targets and Emission Control
Measures
E1-4 – Targets related to climate change
mitigation and adaptation
Relevant Transition Plan for Climate Change Mitigation
Carbon Reduction Targets and Emission Control
Measures
E1-5 – Energy consumption and mix Not relevant Energy Efficiency and Sustainable Resource
Management
E1-6 – Gross Scopes 1, 2, 3 and Total GHG
emissions
Relevant Greenhouse Gas Emissions
(Greenhouse Gas Emissions Inventory for 2024)
E1-7 – GHG removals and GHG mitigation
projects financed through carbon credits
Not relevant Greenhouse Gas Emissions
E1-8 – Internal carbon pricing Not relevant Greenhouse Gas Emissions
E1-9 – Anticipated financial effects from material
physical and transition risks and potential
climate-related opportunities
Relevant Managing Environmental Risks
Environmental Risk Impact Assessment
ESRS E2 - Pollution
E2-1 – Policies related to pollution Not relevant -
E2-2 – Actions and resources related to
pollution
Not relevant -
E2-3 – Targets related to pollution Not relevant -
E2-4 – Pollution of air, water and soil Not relevant -
E2-5 – Substances of concern and
substances of very high concern
Not relevant -
E2-6 – Anticipated financial effects from
pollution-related impacts, risks and
opportunities
Not relevant -
ESRS E3 - Water and
marine resources
E3-1 – Policies related to water and marine
resources
Not relevant -
E3-2 – Actions and resources related to water
and marine resources
Not relevant -
E3-3 – Targets related to water and marine
resources
Not relevant -
E3-4 – Water consumption
Not relevant
-
E3-5 – Anticipated financial effects from water
and marine resources-related impacts, risks
and opportunities
Not relevant -
ESRS E4 - Biodiversity and
ecosystems
E4-1 – Transition plan and consideration of
biodiversity and ecosystems in strategy and
business model
Not relevant -
E4-2 – Policies related to biodiversity and
ecosystems
Not relevant -
E4-3 – Actions and resources related to
biodiversity and ecosystems
Not relevant -
E4-4 – Targets related to biodiversity and
ecosystems
Not relevant -
E4-5 – Impact metrics related to biodiversity
and ecosystems change
Not relevant -
E4-6 – Anticipated financial effects from
biodiversity and ecosystem-related risks and
opportunities
Not relevant -
133
◄
Segment Theme Disclosure Requirement
Relevant /
Not
relevant
Chapter
Environment
ESRS E5 - Resource use and
circular economy
E5-1 – Policies related to resource use and
circular economy
Not relevant -
E5-2 – Actions and resources related to
resource use and circular economy
Not relevant
-
E5-3 – Targets related to resource use and
circular economy
Not relevant -
E5-4 – Resource inflows Not relevant -
E5-5 – Resource outflows Not relevant -
E5-6 – Anticipated financial effects from
resource use and circular economy-related
impacts, risks and opportunities
Not relevant -
Social
ESRS S1 - Own workforce
S1-2 – Processes for engaging with own
workers and workers’ representatives about
impacts
Relevant Strengthening Employee Engagement and
Workplace Dialogue
S1-3 – Processes to remediate negative
impacts and channels for own workers to raise
concerns
Relevant Strengthening Employee Engagement and
Workplace Dialogue
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
Relevant
Diversity, Equity, and Inclusion for Stronger
Decision-Making
Fair Compensation and Equitable Pay Practices
S1-5 – Targets related to managing material
negative impacts, advancing positive impacts,
and managing material risks and opportunities
Relevant Diversity, Equity, and Inclusion for Stronger
Decision-Making
Fair Compensation and Equitable Pay Practices
S1-6 – Characteristics of the undertaking’s
employees
Not relevant HPB Group Workforce Structure
S1-7 – Characteristics of non-employee
workers in the undertaking’s own workforce
Not relevant HPB Group Workforce Structure
S1-8 – Collective bargaining coverage and
social dialogue
Not relevant Collective Bargaining and Employee Representation
S1-9 – Diversity metrics Not relevant Fair Compensation and Equitable Pay Practices
S1-10 – Adequate wages Relevant Fair Compensation and Equitable Pay Practices
S1-11 – Social protection Not relevant Health, Safety, and Employee Well-being
S1-12– Persons with disabilities Not relevant Diversity, Equity, and Inclusion for Stronger
Decision-Making
S1-13 – Training and skills development
metrics
Not relevant Employee Learning, Training, and Development
S1-14 – Health and safety metrics Not relevant Health, Safety, and Employee Well-being
S1-15 – Work-life balance metrics Not relevant Work-Life Balance: Supporting Well-Being and
Productivity
S1-16 – Compensation metrics (pay gap and
total compensation)
Relevant Fair Compensation and Equitable Pay Practices
S1-17 – Incidents, complaints and severe
human rights impacts
Not relevant Commitment to Human Rights and Ethical
Standards
ESRS S2 - Workers in the value chain
S2-1 – Policies related to value chain workers Not relevant -
S2-2 – Processes for engaging with value
chain workers about impacts
Not relevant
-
S2-3 – Processes to remediate negative
impacts and channels for value chain workers
to raise concerns
Not relevant -
S2-4 – Taking action on material impacts on
value chain workers, and approaches to
managing material risks and pursuing material
opportunities related to value chain workers,
and effectiveness of those action
Not relevant -
S2-5 – Targets related to managing material
negative impacts, advancing positive impacts,
and managing material risks and opportunities
Not relevant -
134
Sustainability Report
▲
Segment Theme Disclosure Requirement
Relevant /
Not
relevant
Chapter
Social
ESRS S3 - Affected communities
S3-1 – Policies related to affected
communities
Not relevant -
S3-2 – Processes for engaging with affected
communities about impacts
Not relevant
-
S3-3 – Processes to remediate negative
impacts and channels for affected
communities to raise concerns
Not relevant -
S3-4 – Taking action on material impacts on
affected communities, and approaches to
managing material risks and pursuing material
opportunities related to affected communities,
and effectiveness of those actions
Not relevant -
S3-5 – Targets related to managing material
negative impacts, advancing positive impacts,
and managing material risks and opportunities
Not relevant -
ESRS S4 - Consumers and end-users
S4-1 – Policies related to consumers and
end-users
Relevant Safeguarding Data Privacy and Information Security
Consumer Protection and Ethical Business
Practices
Enhancing Consumer Experience and Engagement
S4-2 – Processes for engaging with
consumers and end-users about impacts
Relevant Enhancing Consumer Experience and Engagement
S4-3 – Processes to remediate negative
impacts and channels for consumers and
end-users to raise concerns
Relevant Consumer Protection and Ethical Business
Practices
Enhancing Consumer Experience and Engagement
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
Relevant Safeguarding Data Privacy and Information Security
Inclusive Banking: Accessibility and Service
Availability
Consumer Protection and Ethical Business
Practices
Enhancing Consumer Experience and Engagement
S4-5 – Targets related to managing material
negative impacts, advancing positive impacts,
and managing material risks and opportunities
Relevant Safeguarding Data Privacy and Information Security
Governance
ESRS G1 - Business conduct
G1-1– Corporate culture and Business
conduct policies and corporate culture
Not relevant Corporate Governance Policies and Code of
Conduct
Internal Control and Audit
Anti-Corruption and Anti-Bribery Measures
Reporting Irregularities/ Whistle-Blowing
G1-2 – Management of relationships with
suppliers
Not relevant Responsible Supplier Engagement
G1-3 – Prevention and detection of corruption
and bribery
Not relevant Anti-Corruption and Anti-Bribery Measures
G1-4 – Confirmed incidents of corruption or
bribery
Not relevant Anti-Corruption and Anti-Bribery Measures
G1-5 – Political influence and lobbying
activities
Not relevant Corporate Governance
G1-6 – Payment practices Not relevant Responsible Supplier Engagement
135
◄
Disclosure Requirement and related datapoint
Relevant /
Not relevant
Chapter
ESRS 2 GOV-1 Board's gender diversity paragraph 21 (d)
-
Diversity of the Governing Body
ESRS 2 GOV-1 Percentage of board members who are independent
paragraph 21 (e)
-
Diversity of the Governing Body
ESRS 2 GOV-4 Statement on due diligence paragraph 30 - Double Materiality Assessment
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities
paragraph 40 (d) i
-
Sustainable Investment
ESRS 2 SBM-1 Involvement in activities related to chemical production
paragraph 40 (d) ii
-
Sustainable Investment
ESRS 2 SBM-1 Involvement in activities related to controversial weapons
paragraph 40 (d) iii
-
Sustainable Investment
ESRS 2 SBM-1 Involvement in activities related to cultivation and
production of tobacco paragraph 40 (d) iv
-
Sustainable Investment
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14
Relevant
Transition Plan for Climate Change
Mitigation
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks
paragraph 16 (g)
Relevant
Transition Plan for Climate Change
Mitigation
ESRS E1-4 GHG emission reduction targets paragraph 34
Relevant
Carbon Reduction Targets and Emission
Control Measures
ESRS E1-5 Energy consumption from fossil sources disaggregated
by sources (only high climate impact sectors) paragraph 38
Not relevant
Not applicable
ESRS E1-5 Energy consumption and mix paragraph 37
Not relevant
Energy Efficiency and Sustainable
Resource Management
ESRS E1-5 Energy intensity associated with activities in high climate
impact sectors paragraphs 40 to 43
Not relevant
Not applicable
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions
paragraph 44
Relevant
Greenhouse Gas Emissions Inventory
for 2024
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55
Relevant
Greenhouse Gas Emissions Inventory
for 2024
ESRS E1-7 GHG removals and carbon credits paragraph 56
Not relevant
Greenhouse Gas Emissions
ESRS E1-9 Exposure of the benchmark portfolio to climate-related
physical risks paragraph 66
Relevant
Managing Environmental Risks
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic
physical risk paragraph 66 (a)
Relevant
Phased-in Disclosure Requirement
ESRS E1-9Location of significant assets at material physical risk
paragraph 66 (c)
Relevant
Phased-in Disclosure Requirement
ESRS E1-9 Breakdown of the carrying value of its real estate assets by
energy-efficiency classes paragraph 67 (c).
Relevant
Phased-in Disclosure Requirement
ESRS E1-9 Degree of exposure of the portfolio to climate- related
opportunities paragraph 69
Relevant
Phased-in Disclosure Requirement
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
Not relevant
-
ESRS E3-1 Water and marine resources paragraph 9
Not relevant
-
ESRS E3-1 Dedicated policy paragraph 13
Not relevant
-
ESRS E3-1 Sustainable oceans and seas paragraph 14
Not relevant
-
ESRS E3-4 Total water recycled and reused paragraph 28 (c)
Not relevant
-
ESRS E3-4 Total water consumption in m3 per net revenue
on own operations paragraph 29
Not relevant -
ESRS 2- IRO 1 - E4 paragraph 16 (a) i Not relevant -
ESRS 2- IRO 1 - E4 paragraph 16 (b)
Not relevant
-
ESRS 2- IRO 1 - E4 paragraph 16 (c)
Not relevant
-
ESRS E4-2 Sustainable land / agriculture practices or policies paragraph
24 (b)
Not relevant -
ESRS E4-2 Sustainable oceans / seas practices or policies
paragraph 24 (c)
Not relevant
-
ESRS E4-2 Policies to address deforestation paragraph 24 (d) Not relevant -
ESRS E5-5 Non-recycled waste paragraph 37 (d)
Not relevant
-
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39
Not relevant
-
List of datapoints in cross-cutting and topical standards that derive from other EU legislation
136
Sustainability Report
▲
Disclosure Requirement and related datapoint
Relevant /
Not relevant
Chapter
ESRS 2- SBM3 - S1 Risk of incidents of forced labour paragraph 14 (f)
Not relevant
Commitment to Human Rights and
Ethical Standards
ESRS 2- SBM3 - S1 Risk of incidents of child labour paragraph 14 (g)
Not relevant
Commitment to Human Rights and
Ethical Standards
ESRS S1-1 Human rights policy commitments paragraph 20
Not relevant
Our Commitment to Sustainability
Principles
HPB Group Workforce Structure
Diversity, Equity, and Inclusion for
Stronger Decision-Making
Employee Learning, Training,
and Development
ESRS S1-1 Due diligence policies on issues addressed by the fundamental
International Labor Organisation Conventions 1 to 8, paragraph 21
Not relevant
Our Commitment to Sustainability
Principles
ESRS S1-1 Processes and measures for preventing trafficking in human
beings paragraph 22
Not relevant
-
ESRS S1-1 Workplace accident prevention policy or management system
paragraph 23
Not relevant
Health, Safety, and Employee
Well-being
ESRS S1-3 Grievance/complaints handling mechanisms paragraph 32 (c)
Not relevant
Strengthening Employee Engagement
and Workplace Dialogue
ESRS S1-14 Number of fatalities and number and rate of work-related
accidents paragraph 88 (b) and (c)
Not relevant
Health, Safety, and Employee
Well-being
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness
paragraph 88 (e)
Not relevant
Health, Safety, and Employee
Well-being
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a)
Relevant
Fair Compensation and Equitable
Pay Practices
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b)
Relevant
Fair Compensation and Equitable
Pay Practices
ESRS S1-17 Incidents of discrimination paragraph 103 (a)
Not relevant
Commitment to Human Rights
and Ethical Standards
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and
OECD paragraph 104 (a)
Not relevant
Commitment to Human Rights
and Ethical Standards
ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour in the
value chain paragraph 11 (b)
Not relevant
-
ESRS S2-1 Human rights policy commitments paragraph 17
Not relevant
-
ESRS S2-1 Policies related tovalue chain workers paragraph 18
Not relevant
-
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights
principles andOECD guidelines paragraph 19
Not relevant
-
ESRS S2-1 Due diligence policies on issues addressed by the fundamental
International Labor Organisation Conventions 1 to 8, paragraph 19
Not relevant
-
ESRS S2-4 Human rights issues and incidents connected to its upstream
and downstream value chain paragraph 36
Not relevant
-
ESRS S3-1 Human rights policy commitments paragraph 16
Not relevant
-
ESRS S3-1 Non-respect of UNGPs on Business and Human Rights, ILO
principles or and OECD guidelines paragraph 17
Not relevant
-
ESRS S3-4 Human rights issues and incidents paragraph 36
Not relevant
-
ESRS S4-1 Policies related to consumers and end-users paragraph 16 Relevant Customer-Centric Approach
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and
OECD guidelines paragraph 17
Not relevant
Sustainability as a Core Pillar of
Responsible Development
(Our Commitment to Sustainability
Principles)
ESRS S4-4 Human rights issues and incidents paragraph 35
Not relevant
Enhancing Consumer Experience
and Engagement
ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b)
Not relevant
Corporate Governance Policies
and Code of Conduct
ESRS G1-1 Protection of whistle-blowers paragraph 10 (d)
Not relevant
Reporting Irregularities/
Whistle-Blowing
ESRS G1-4 Fines for violation of anti-corruption and anti-bribery laws
paragraph 24 (a)
Not relevant
Anti-Corruption and Anti-Bribery
Measures
ESRS G1-4 Standards of anti-corruption and anti-bribery paragraph 24 (b)
Not relevant
Anti-Corruption and Anti-Bribery
Measures
137
◄
Our
Approach
to Climate
Change
Adaptation
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Recognizing our direct and indirect impact on the environment
and natural resources, HPB Group has identified key areas of
influence in the process of adapting to and mitigating climate
change. In alignment with ambitious regulatory and legisla-
tive goals to achieve carbon neutrality by 2050, the Bank’s
Management Board, with the approval of the Supervisory
Board, has adopted the HPB Group Climate Strategy 2050.
This strategy is grounded in key regulatory frameworks,
including the Paris Agreement, the European Green Deal,
and Croatia’s Low-Carbon Development Strategy.
The adoption of the Climate Strategy is a strategic imper-
ative for the Bank, reinforcing its dedication to sustainable
business practices, which form a core pillar of its 2023–2026
Business Strategy. By embedding environmental, social, and
governance (ESG) considerations across all operational
segments, the Bank is actively shaping its transformation
toward long-term sustainability.
The Climate Strategy establishes the guiding principles,
priority impact areas, and clear objectives that drive HPB
Group’s efforts to reduce environmental risks, support climate
adaptation, and accelerate the transition to a low-carbon
economy.
ENVIRONMENTAL SUSTAINABILITY:
Our Approach to Climate Change
Adaptation
ESRS E1
PRB Principle 1, 2, 6
Transition Plan for Climate Change Mitigation
ESRS E1-1, E1-2, E1-3, E1-4, ESRS 2 (SBM-3)
ENVIRONMENT
139
◄
Building on our identified climate impact areas, we have
set clear targets and, as a core component of the HPB Group
Climate Strategy 2050, developed a Transition Plan to a
Low-Carbon Economy by 2030.
This Transition Plan establishes key performance indica-
tors (KPIs) across different time horizons, detailing specific
actions, responsibilities, and the resources required to
achieve our Climate Strategy objectives. To remain effective
and relevant, the plan is continuously updated and refined,
incorporating the latest scientific insights, industry develop-
ments, and the evolving transition progress of our clients.
Through this framework, we are committed to mitigating
climate-related risks, channeling capital toward sustainable
economic activities, and empowering stakeholders with the
knowledge and tools needed for a successful transition to a
climate-resilient economy.
Climate Strategy Goals
Impact Area Goal Impact on Bank & Economy Resilience
Environmental Risk
Management
Strengthen management of physical
and transition risks
More structured and effective monitoring of
environmental risks; Focus on industries and clients
with lower exposure to environmental risks and/or
positive environmental impact
Sustainable
Products
Financing sustainable projects Stronger market positioning in sustainable finance;
Supporting clients in transitioning to low-carbon
business models; Enhancing climate resilience
among clients
Energy Efficiency &
Carbon Footprint
Reduce greenhouse gas emissions More energy-efficient operations; Expanding the
share of low-emission economic activities in the
portfolio; Lowering climate impact both through direct
operations and the portfolio
Client Education &
Internal Capacity
Building
Raising awareness of sustainability Easier regulatory compliance; Increased
transparency; Strengthening internal and client
capabilities to implement sustainability policies
Principles of the Climate Strategy
Principle Implementation Approach
Sustainability in
Financial Decisions
Integrating environmental criteria into all financial decision-making processes while promoting
investments in sustainable projects and technologies
Support for the
Sustainability
Transition
Providing financial and advisory support to clients transitioning to sustainable and low-carbon
business models
Transparency and
Accountability
Ensuring transparency in financial investments, climate-related risks, and the measures HPB
Group is taking to reduce its carbon footprint
Education and
Awareness
Educating employees, clients, and the community on the importance of sustainability, climate
change, and the role each stakeholder can play in minimizing environmental impact
Innovation and
Technological
Development
Encouraging innovation and the development of technologies that support a low-carbon economy,
including investments in renewable energy, emission-reduction technologies, and sustainable
infrastructure
Partnerships and
Collaborations
Engaging with key stakeholders to share knowledge, resources, and best practices in advancing
sustainable development
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Understanding that climate-related risks pose a significant
threat to both the economy and financial institutions, HPB
Group remained steadfast in 2024 in its commitment to iden-
tifying, assessing, and integrating environmental risks into
its business operations. Aligning with regulatory frameworks
and supervisory expectations, we continue to strengthen our
approach to ensure long-term resilience in an evolving finan-
cial and environmental landscape.
Through our double materiality assessment, we have
identified environmental risk management as a potentially
material factor in terms of financial materiality, as failing to
manage these risks effectively could impact the Bank’s finan-
cial stability, counterparty exposures, and asset performance.
Recognizing the importance of this area, we have
positioned environmental risk management as a strategic
priority within the HPB Group Climate Strategy. As part of
our Transition Plan to 2050, we have set two short-term
key performance indicators (KPIs) to accelerate progress:
embedding environmental risks into the Bank’s risk manage-
ment system and integrating them into the credit process.
These actions not only enhance our operational resilience
but also support the broader shift toward a climate-conscious
financial sector.
Environmental Risk Impact
Assessment
ESRS E1-1, E1-2, E1-3, E1-9
The Environmental Risk Impact Assessment process, initially
established in 2023 and conducted again at the end of 2024,
encompasses both a general environmental risk assessment
and an evaluation of the material significance of environmen-
tal risks in relation to the Bank’s existing risk management
framework.
This process involves identifying environmental risks
across Croatia, where the Bank operates, and assessing
them based on the vulnerability of economic sectors to which
the Bank is exposed. We analyze physical and transition
risks, determine transmission channels through which these
risks could impact the Bank’s operations, and assess their
likelihood using climate scenario projections across differ-
ent time horizons. For physical risk assessments, we apply
climate projections developed by The Network for Greening
the Financial System (NGFS), evaluating risks under three
scenarios: Orderly, Disorderly, and Hot House World. For
transition risks, we rely on European Central Bank (ECB)
climate scenarios, considering Accelerated Transition, Late-
Push Transition, and Delayed Transition pathways. Based on
the findings of the general environmental risk assessment
and the probability of risk occurrence, we conduct a mate-
riality assessment of environmental risks in relation to credit,
market, liquidity, and operational risks. Where environmental
factors significantly increase the Bank’s risk exposure, we
classify them as material prudential risks.
The general environmental risk assessment is conducted
in accordance with HPB’s Internal Rulebook on the
Identification, Determination, and General Assessment
of Environmental Risks, adopted in 2023. Meanwhile, the
materiality assessment methodology for environmental risks
is defined by HPB’s Internal Methodology for Assessing the
Materiality of Environmental Risks, also adopted in 2023.
These methodologies, along with other internal policies
governing the implementation of these processes and the
conclusions of risk assessments, are approved by the Bank’s
Management Board with the consent of the Supervisory
Board.
Materiality of Environmental Risks
in Banking Operations
The materiality assessment of environmental risks was
conducted in relation to credit, market, liquidity, and opera-
tional risks, considering environmental risk drivers and trans-
mission channels alongside the characteristics of the Bank’s
portfolio.
Impact of Environmental Risk on Credit Risk
When assessing the impact of environmental risk on credit
risk, physical and transition risks are evaluated separately.
Physical risk assessment primarily covers the real estate
collateral portfolio, with increased granularity in 2024—now
assessed at the land parcel level, compared to the previous
year’s assessment at the municipality level. This methodo-
logical enhancement significantly influenced the results and
conclusions. The latest analysis covers 63% of the real estate
portfolio at the land parcel level, while the remaining portion
was assessed using a conservative risk evaluation approach
at the municipality level.
Additionally, the physical risk assessment includes the
corporate loan portfolio (large enterprises), where exposure
is analyzed at the industry level for economic activities repre-
senting at least 10% of total exposure in this portfolio.
The transition risk assessment for corporate clients is
based on the Bank’s internal ESG industry rating, developed
according to the ESG Rating Methodology for Industries and
Managing Environmental Risks
ESRS E1-1, E1-2, E1-3, E1-9
ENVIRONMENT
141
◄
Economic Activities. This methodology ranks industries based
on publicly available pollution data, under the assumption
that high-polluting industries will face the greatest adaptation
costs due to the necessity of transitioning to a sustainable
economy.
For individual clients, the primary transition risk assessed
is the trend in energy prices, specifically, the ability of indi-
viduals, depending on their income levels, to absorb rising
energy costs without impacting their ability to meet loan obli-
gations. A materially significant long-term exposure to energy
price increases was identified in cash loan portfolios. Despite
an overall increase in average wages, in the long run, a higher
rate of loan defaults is expected among individuals whose
incomes consistently remain below the national average.
Impact of Environmental Risk on Operational, Market,
and Liquidity Risk
Operational risk was assessed based on the Bank’s expo-
sure to potential business continuity disruptions under stress
scenarios triggered by environmental risks stemming from
climate change, as well as exposure to legal and reputational
risks.
The materiality assessment of environmental risks on
market risk involved an analysis of the issuer structure within
the Bank’s trading book, evaluating potential vulnerabilities to
environmental and climate-related factors.
For liquidity risk, the assessment focused on the impact
of environmental factors on corporate clients’ transition risks
and the resulting effects on the Bank’s net cash outflows.
This included evaluating the potential impact on deposit
outflows, increased drawdowns from irrevocable credit lines,
and reduced inflows, all of which could influence the Bank’s
overall liquidity position).
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Greenhouse Gas Emissions
ESRS E1-1, E1-2, E1-3, E1-6
HPB Group is committed to understanding, measuring, and
mitigating its impact on climate change and the environment.
By setting clear and realistic emission reduction targets, the
Group is establishing a solid foundation for its transition to
sustainable business practices.
Energy efficiency and carbon footprint reduction have
been identified as core impact areas within the HPB Group
Climate Strategy 2050, which sets two key long-term objec-
tives: reducing the Bank’s operational emissions and lowering
financed emissions. To support these goals, the Transition
Plan 2030 defines key performance indicators (KPIs), using
2023 as the baseline year and 2030 as the target year.
The Bank’s portfolio carbon footprint, which includes
Scope 3 – Category 15 emissions, has been recognized
as a significant negative impact in the double materiality
assessment, as emissions from the Bank’s financed activities
account for over 90% of HPB Group’s total emissions.
ESRS E1-7, E1-8
HPB Group’s Transition Plan does not include investments in
carbon offset projects or climate mitigation initiatives financed
through carbon credits, nor does the Bank invest in carbon
capture and storage technologies within its own operations.
Additionally, HPB does not currently apply an internal carbon
pricing mechanism as part of its climate strategy.
Greenhouse Gas Emissions
Inventory for 2024
ESRS E1-1, E1-6
As part of our commitment to enhancing energy efficiency and
reducing our climate impact, HPB Group has been actively
working since 2022 to improve the quality of data used for
calculating greenhouse gas (GHG) emissions across all three
Scopes.
GHG emissions calculations are conducted in line with the
internally approved Greenhouse Gas Emissions Calculation
Methodology, formally endorsed by the Management Board
and Supervisory Board.
The 2024 calculation remains fully aligned with the GHG
Global Corporate Protocol Standards (GHG Protocol), an
internationally recognized framework that ensures consist-
ency, transparency, and efficiency in measuring, reporting,
and managing emissions. This methodology allows HPB
Group to systematically identify and quantify emissions
sources across its operations.
For emissions arising from the Bank’s core financial
activities, including financing and lending, categorized under
Scope 3, Category 15, HPB Group applies the Platform
for Carbon Accounting Financials (PCAF) methodology in
accordance with the GHG Protocol, ensuring a standardized
and robust approach to measuring financed emissions).
Emissions data for Scope 1, Scope 2, and Scope 3 are
collected annually for the previous year, covering the entire
reporting period from January 1 to December 31. Data
collection is conducted at the entity level, including HPB, HPB
Invest, and HPB Nekretnine, and incorporates all available
information required to calculate emissions. However, data
availability remains a key challenge, particularly for Scope 3,
Category 15, where estimates are applied in line with PCAF
methodologies where necessary.
The calculation of HPB Group’s emissions is based on
relevant emission factors sourced from national and interna-
tional public databases.
ENVIRONMENT
143
◄
Scope 1 – Direct Emissions
Scope 1 includes direct GHG emissions from sources owned or controlled by HPB Group. Identified emission sources for the
reporting year include:
• Natural gas combustion (measured in kWh)
• Diesel fuel combustion (measured in liters)
• Gasoline combustion (measured in liters).
Scope 2 Emissions
Scope 2 emissions encompass indirect greenhouse gas (GHG) emissions associated with the purchase of electricity, steam,
heating, or cooling consumed by HPB Group. The following activities were identified as sources of Scope 2 emissions:
• Electricity consumption (measured in kWh)
• Heating via district heating systems (measured in kWh).
Baseline Year
2023
Reporting Year
2024
Absolute
Difference
Percentage
Change
Scope 1 (tCO
2
e) 6 49.41 762.28 112.87 +17.38%
Baseline Year
2023
Reporting Year
2024
Absolute
Difference
Percentage
Change
Scope 2 (tCO
2
e) 597.05 706.39 109.34 +18.31%
Scope 1 Emissions
Scope 2 Emissions
In 2024, Scope 1 emissions increased compared to 2023, primarily due to a rise in on-site working hours following the
restructuring of the remote work model. Additionally, improved data quality and broader data availability from suppliers contrib-
uted to more precise calculations, affecting the reported Scope 1 emissions.
Similar to Scope 1, Scope 2 emissions increased in 2024 compared to 2023. This rise is primarily attributed to the higher
number of working hours conducted at HPB Group’s office locations following the reorganization of the remote work model.
Additionally, the improved quality and expanded dataset provided by suppliers contributed to a more comprehensive and
precise emissions calculation.
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Scope 3 Emissions
Scope 3 emissions account for indirect greenhouse gas (GHG) emissions that arise from assets not owned or directly controlled
by HPB Group but influenced by its business activities. Given the nature of HPB Group’s operations, several reporting catego-
ries have been identified as material within Scope 3.
Category Description Metric
Category 1
Purchased goods and
services
€ (includes operational and administrative costs)
Category 3
Fuel- and energy-
related emissions
kWh and liters
Category 5
Waste generated in
operations
Tons (measured waste from HPB Group operations)
Category 6 Business travel € (includes costs incurred from official business travel)
Category 7 Employee commuting km (survey-based data on employee commuting patterns)
Category 15 Investments € (includes financed emissions from financial services)
Scope 3 Categories Included in the Calculation
Baseline Year
2023
Reporting Year
2024
Absolute
Difference
Percentage
Change
Scope 3 - Category 1 (tCO
2
e) 2,860.12 2,838.43 -21.69 -0.76%
Scope 3 - Category 3 (tCO
2
e) 16.09 18.44 2.35 +14.61%
Scope 3 - Category 5 (tCO
2
e) 0.185 0.17 -0.02 - 8.11%
Scope 3 - Category 6 (tCO
2
e) 60.83 88.41 27.58 +45.34%
Scope 3 - Category 7 (tCO
2
e) 651.93 671.18 19.25 +2.95%
Scope 3 - Category 15 (tCO
2
e) 795,976.59 957,947.47 161,970.88 +20.35%
Scope 3 Total (tCO
2
e) 799,565.75 961,564.10 161,998.35 +20.26%
Scope 3 Emissions Overview
The calculation of Category 15 emissions (Investments) is particularly significant for HPB Group, as it reflects GHG emissions
from its core financial activities—namely, investments and financing.
The following segments were included in the calculation:
• Listed equity and corporate bonds
• Corporate and project financing
• Mortgage portfolio
• Sovereign debt – loans
• Sovereign debt – bonds.
By applying the Platform for Carbon Accounting Financials (PCAF) methodology, HPB Group has quantified the GHG expo-
sure of its investment portfolio, which accounts for approximately 99% of its total direct and indirect emissions.
ENVIRONMENT
145
◄
2023 2024
% Change
(2024 vs. 2023)
Electricity consumption (kWh) 2,299,452.00 2,636,646.00 +14.67%
Energy Efficiency and Sustainable
Resource Management
ESRS E1-2, E1-3, E1-5
HPB Group, as a responsible financial institution, is committed
to minimizing its environmental footprint while maintaining the
highest service standards for its clients. Our focus remains on
enhancing energy efficiency, reducing energy consumption,
and continuously optimizing business processes to support a
more sustainable future.
Recognizing that employee habits and behaviors are
essential to energy efficiency, we actively promote awareness
and engagement through our internal Guidelines for Efficient
Energy Consumption in the Workplace. These guidelines,
approved by the Bank’s governing body, outline best prac-
tices for reducing electricity, water, and gas consumption, as
well as optimizing transportation energy use, and apply to all
HPB Group employees.
For years, we have fostered a culture of environmental
responsibility through our internal initiative "My Green
Decision", designed to increase ecological awareness across
the organization. In the past year, the initiative placed a strong
emphasis on responsible water consumption and soil conser-
vation, highlighting waste reduction, sustainable purchasing,
recycling, and volunteer activities. Employees stay informed
and engaged through the Green Board, an internal platform
providing practical energy-saving tips, insights into environ-
mentally responsible behaviors, and strategies for making
small, meaningful changes that benefit both our workplace
and the planet.
Total Energy Consumption (E1-5)
Source of Emissions Baseline Year 2023 Reporting Year 2024
Listed equity and corporate bonds 74,226.21 71,011.24
Corporate loans and project financing 338,036.33 379,418.84
Mortgages 13,988.63 14,868.97
Sovereign debt 369,725.42 492,648.42
Scope 3 – Category 15 Total (tCO
2
e) 795,976.59 957,947.47
Total GHG emissions (tCO
2
e) Net revenue (Mln €) GHG Intensity (tCO
2
e/Mln €)
963,032.77 222.52 4,32 7.85
Scope 3 – Category 15
Greenhouse Gas Intensity in 2024
Financed emissions in Category 15 increased by 20% in 2024 compared to 2023. This growth is primarily attributed to the
increase in outstanding principal amounts of newly issued financial instruments during the year.
In 2024, electricity consumption increased compared to 2023. As with Scope 1 and Scope 2 emissions, this rise is primarily
attributed to the higher number of working hours spent at HPB Group locations following the reorganization of the remote work
model. Additionally, the improved quality and scope of data collected from suppliers contributed to more precise reporting.
The composition of electricity consumption is not explicitly detailed in the monthly invoices provided by Hrvatska elektro-
privreda (HEP). However, an analysis conducted by HEP in 2023 on the sources of electricity supply in Croatia showed that
78% of electricity was generated from fossil fuels, 16% from renewable sources, and 6% from nuclear energy.
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Baseline Year
(2023)
Reporting
Year (2024)
Target Year
(2030)
Reduction Target (vs.
Baseline Year)
Scope 1 (tCO
2
e) i Scope 2 (tCO
2
e) 1,246.46 1,468.67 722.95 -42%
Scope 3, Category 15 (tCO
2
e) 795,976.59 957,947.47 596,982.44 -25%
Carbon Reduction Targets and
Emission Control Measures
ESRS E1-3, E1-4
PRB Principle 2
HPB Group sets its greenhouse gas (GHG) emission reduc-
tion targets at the Group level using an absolute emissions
reduction approach, ensuring a linear decrease in total emis-
sions over time.
As data availability improves and calculation method-
ologies are refined, these targets will be supplemented by
monitoring emission reduction intensitymeasuring reductions
relative to other operational metrics such as the number of
employees or revenue. To maintain alignment with the latest
climate science and best practices, targets will be reviewed
and adjusted at least every five years as needed.
To establish science-based targets, HPB Group has
applied the International Energy Agency (IEA) scenarios and
pathways. Based on the IEA absolute emissions reduction
approach, Scope 1 and Scope 2 emissions require a 42%
reduction by 2030 compared to the 2023 baseline year.
Similarly, for Scope 3, Category 15, the target is set at a
minimum 25% reduction by 2030.
We recognize that immediate reductions may not be evident in the initial phase due to business expansion and portfolio
growth, which could even lead to temporary increases in emissions.
However, achieving emission reductions requires a long-term perspective, realistic expectations, and well-defined goals
supported by operational measures.
To align HPB Group’s business growth with environmental objectives and achieve our emission reduction targets, our focus
in the coming period will be on:
Expanding low-carbon economic activities within our portfolio by implementing sectoral policies, industry and client
assessment methodologies, thresholds, and exclusion policies to ensure sustainable credit allocation
Increasing financing for sustainable projects and developing sustainable financial products by establishing clear criteria for
sustainable products and creating a monitoring model for green financing purposes
Continuously improving the quality and scope of GHG emissions data from clients, ensuring a more accurate representa-
tion of financed emissions
Enhancing energy efficiency across HPB Group’s business premises through ongoing employee education, raising aware-
ness about energy conservation, conducting energy efficiency assessments of individual office spaces, implementing
relevant energy-saving measures, and transitioning to renewable energy sources wherever possible.
GHG Emission Reduction Targets
ENVIRONMENT
147
◄
Driving
Meaningful
Social
Impact
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Our employees are our greatest asset, the driving force
behind every success we achieve. We are committed to
continuously strengthening organizational resilience by
investing in the growth and skills of our people while fostering
a culture of transparency, collaboration, openness to change,
and adaptability to new circumstances. Sustainability and
social responsibility are deeply embedded in our business
model, not only in how we engage with the community and
the environment but also in how we support our employees.
That is why we place great emphasis on sustainable human
resource management.
Flexibility, work-life balance, fair and supportive work-
ing conditions, opportunities for growth and development,
equality, and open communication at all levels have become
essential factors in choosing an employer and staying within
an organization. We remain dedicated to these areas, striving
to meet the evolving expectations and needs of our employ-
ees and maintaining our position as a desirable and respon-
sible employer.
Through our double materiality assessment, we have iden-
tified both actual and potential positive and negative impacts,
risks, and opportunities within key social sustainability topics
related to our workforce. This enables us to prioritize mini-
mizing negative impacts while reinforcing positive outcomes.
Given that industry data indicates women in banking, on aver-
age, earn less than men and are underrepresented in senior
leadership roles, we place particular emphasis on addressing
gender equality and ensuring equal pay for equal work with a
high level of commitment and accountability.
Fair and competitive compensation has also been recog-
nized as a critical material topic, particularly from a financial
materiality perspective. Inflation can have a significant
impact on salary adequacy, potentially leading to employee
dissatisfaction, decreased productivity, and, ultimately, higher
turnover rates. Insufficient compensation can also drive up
costs related to recruitment, onboarding, and training while
posing challenges in workforce stability. Additionally, the
inability to offer competitive salaries may result in operational
inefficiencies, talent shortages, and difficulties in attracting
and retaining skilled professionals, directly influencing long-
term business performance and resilience.
A more detailed overview of our material topics, policies,
objectives, and measures aimed at addressing these chal-
lenges is provided in the following chapters.
SOCIAL SUSTAINABILITY:
Driving Meaningful Social Impact
Our People and Organizational Culture
ESRS S1, ESRS 2 (SBM-3)
SOCIAL
149
◄
The composition of our workforce reflects our core values
and corporate culture, one that embraces diversity, inclusion,
and the principle that every employee should have the oppor-
tunity to reach their full potential. We believe that a diverse
workforce, encompassing individuals of different age groups,
genders, backgrounds, and perspectives, fosters creativity
and strengthens decision-making processes. At the same
time, an inclusive and equitable work environment ensures
that employees feel valued, engaged, and motivated to thrive,
regardless of their personal characteristics or circumstances.
HPB Group is committed to a fair, transparent, and
merit-based recruitment process, ensuring equal opportu-
nities for all candidates. The hiring process is governed by
the Recruitment Procedure, which mandates that all deci-
sion-makers involved in candidate selection must base their
choices on objective and professional criteria. Any form of
discrimination, whether direct or indirect, is strictly prohibited,
in full compliance with the HPB Group Code of Ethics and
applicable anti-discrimination laws. HPB Group upholds the
highest standards of fairness, ensuring that all employment
decisions are based on merit and objective criteria. We cate-
gorically reject any form of favoritism or discrimination based
on gender, race, skin color, ethnic or social origin, genetic
characteristics, language, religion or belief, political or other
opinions, national minority status, property, birth, disability,
age, or sexual orientation.
To attract and select top talent, we employ a diverse range
of recruitment channels, fostering a broad and inclusive hiring
process. Our internal psychologists play an integral role in
candidate evaluation, ensuring that selection procedures
align with the HPB Group Code of Ethics and the Law on
Psychological Practice, reinforcing our commitment to ethical
and unbiased decision-making.
HPB Group’s dedication to compliance is reflected in its
Work Regulations, which are fully aligned with both national
and international labor laws, safeguarding employee rights
and maintaining the highest employment standards.
HPB Beyond traditional employment, we actively engage
students and external associates through student contracts
and service agreements. In the past year, 57 students were
employed, primarily in administrative and data processing
roles, while 11 external associates contributed to project-
based work, training programs, digitalization efforts, and data
management initiatives.
HPB Group’s Workforce Structure (S1-6):
Total Employees
(End of Year)
Average Number of
Employees
Employees Who
Left HPB Group in
the Reporting Year
Turnover Rate
(Based on End-of-
Year Headcount)
(%)
Turnover Rate
(Based on Average
Headcount) (%)
Men 467 473.50 49 10.49 10.35
Women 1,253 1,259.00 128 10.22 10.17
Total 1,720 1,732.50 177 10.29 10.22
Total Number of Temporary and External
Associates
Men 33
Women 38
Total 71
Workforce Composition – Temporary and External
Associates (S1-7)
*Ukupan broj radnika kroz godinu (ne na 31, 12, niti prosjek)
* Due to variations in reporting methodology and data structure in the 2023 Sustainability Report, direct year-on-year comparability is not
available for 2024 figures
HPB Group Workforce Structure
ESRS S1-1, S1-6, S1-7
The following tables provide key insights into HPB Group’s workforce structure and statistical data for 2024.
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We believe that the success of an organization lies in recog-
nizing and valuing diverse perspectives, experiences, and
talents that each individual brings. Diversity is a fundamental
value of modern society and a cornerstone for fostering a
positive workplace culture, one that prioritizes hiring based
on skills, competencies, and qualifications, free from discrim-
ination or harassment. For years, we have actively embraced
our role in cultivating an organizational culture that respects
and promotes diversity, ensuring that it remains at the heart
of everything we do.
As a signatory of the Diversity Charter, which encour-
ages the implementation of diversity policies in the corpo-
rate sector, we are committed to building a fairer and more
equitable society every day. In our workplace, individual
differences are not only respected but embraced. We uphold
equal access to professional training, career advancement,
reskilling, employment conditions, workplace rights, social
security, healthcare, and participation in employee associa-
tions or other organizations.
Guided by the principles of diversity and non-discrimina-
tion, we have embedded Diversity and Inclusion Principles
into our Environmental, Social, and Governance (ESG)
Management Policy, ensuring that these values are fully inte-
grated into our business operations.
For us, fostering a diverse and inclusive workplace is not
just a moral responsibility, it is a strategic advantage that fuels
innovation, productivity, sustainable growth, and long-term
success.
Women represent 62% of leadership positions, and our
workforce spans a wide range of age groups, reinforcing HPB
Group’s commitment to leveraging the strengths and contri-
butions of employees across generations.
Workforce Composition by Working HoursWorkforce Composition by Contract Type
Diversity, Equity, and Inclusion for Stronger Decision-Making
ESRS S1-1, S1-4, S1-9, S1-12
Gender Distribution in Executive Leadership
Diversity Indicators (S1-9)
Age Distribution of Employees
* Gender Representation at Executive Level
Permanent
employees
Temporary
employees
5%
95%
Full-time
employees
Part-time
employees
2%
98%
Male
Female
38%
62%
Over 50 years
30 to 50 years
Under 30 years
10%22%
68%
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Additionally, 3.2% of our workforce comprises employees with disabilities, and we actively participate in initiatives and
events that support this vulnerable group. We continuously work to make our business premises as accessible as possible,
adapting them to meet the specific needs of employees and clients with disabilities wherever feasible.
Employment of People with Disabilities (S1-12)
Total Employees (End of Year) Total Employees with Disabilities
Percentage of Persons
with Disabilities (%)
1,720 55 3.20
Fair Compensation and Equitable
Pay Practices
ESRS S1-1, S1-4, S1-10, S1-16
Fair pay is more than just financial compensation, it encom-
passes broader social, environmental, and human factors
that ensure fairness, equality, and long-term sustainability.
At HPB Group, we uphold transparency in our pay policies,
adhere to legal and international standards, and actively
work to reduce pay disparities while aligning with our broader
sustainability commitments.
Our approach to compensation is rooted in respect for
human rights, reducing inequalities, and ensuring that salaries
remain competitive and grounded in transparent principles.
HPB Group guarantees that employee remuneration reflects
their qualifications, experience, and job responsibilities while
remaining in line with market conditions and legal standards.
Employee rights, including salary structures, allowances,
cost reimbursements, bonuses, solidarity support, rewards,
and additional benefits, are clearly outlined in the Work
Regulations and Collective Agreement. These internal poli-
cies also define working conditions, employee obligations,
and other entitlements arising from employment relationships.
Our Key Objectives in Compensation Management:
• Ensuring long-term employee satisfaction,
particularly in the fairness of the reward system
• Reducing turnover rates and fostering retention
• Strengthening a corporate culture where employ-
ees serve as brand ambassadors
• Enhancing employee loyalty through competitive
compensation and benefits.
HPB Group continuously monitors market conditions and has
steadily expanded employee benefits. In 2024, we placed a
strong focus on strategic investments in salaries, financial
benefits, and professional development opportunities.
Acknowledging inflationary pressures, evolving market
conditions, and the Bank’s strong financial performance, we
introduced a salary adjustment model designed to ensure fair
and competitive compensation. The primary focus was on
increasing salaries for employees most affected by inflation,
as well as enhancing compensation in sales-related roles,
recognizing their responsibility and strategic importance to
the Bank’s success. As part of these efforts, an amendment
to the Collective Agreement in 2024 resulted in a 32%–37%
increase in base gross salaries for entry-level positions, along
with an increase in meal allowances and special bonuses.
Additionally, all employees earning €2,500 or less (gross)
received a 5% salary increase, reflecting the Bank’s commit-
ment to equitable pay distribution and employee well-being.
For 2024, the Bank’s average salary (excluding the
Management Board, B-1 level managers, and their deputies)
increased by 13% compared to 2023. For professional and
administrative roles alone, the increase was even higher, 14%
year-over-year.
Through these actions, HPB Group has actively mitigated
the financial impact of inflation on its employees and remains
committed to further enhancing financial well-being across
the organization.
In line with our Remuneration Policy, HPB Group has
committed to eliminating any gender-based pay disparities
and to monitoring and reporting on gender pay gaps within
the organization. The Bank’s job classification system is
structured around uniform criteria for all employees, regard-
less of gender, ensuring a fair and equitable compensation
framework.
Key Operational Objectives in the Area of Gender Pay
Equality:
• Maintaining a remuneration system based on
consistent and transparent criteria, ensuring
equal pay for equal work or work of equal value,
regardless of gender, race or ethnicity, language,
religion, political or other beliefs, national or
social origin, or any other discriminatory factors
• Fostering gender diversity across all levels of the
organization and cultivating a workplace culture
where employees have equal access to opportu-
nities, irrespective of gender
• Reducing gender pay disparities at all levels
whenever they are identified.
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Compensation Indicators (S1-16)
* Identified employees, beyond Management Board and Supervisory
Board members, include all employees whose professional activi-
ties significantly impact the risk profile on an individual or consolida-
ted level within HPB Group. This classification follows the criteria
outlined in Article 27 of the Decision on Employee Remuneration
and Commission Delegated Regulation (EU) 2021/923. It encompa-
sses senior management (B-1 directors and deputy executive dire-
ctors), management board members or directors of HPB Group
subsidiaries (HPB Invest and HPB Nekretnine), as well as employees
at lower organizational levels whose authorizations exceed 2% of
the internal capital requirement. Additionally, this category includes
the officer responsible for anti-money laundering and counter-terro-
rism financing.
A detailed analysis indicates that the most significant
factor influencing the hourly gross pay gap between women
and men is organizational affiliation, specifically, the higher
concentration of male employees in the " IT Development,
Maintenance, and Security Audit (IT DMSA) job family. Market
conditions and the associated internal salary ranges result
in higher average salaries within this job family compared to
other organizational units.
Among managerial positions (excluding identified employ-
ees), men generally have higher hourly gross salaries than
women, with differences ranging from 1% to 12%. These
disparities are more pronounced in managerial roles where
male employees are disproportionately represented in the IT
Development, Maintenance, and Security Audit (IT DMSA)
job family, particularly at Level 4 managerial positions.
In the "Other Employees (Managers)" category, the most
significant pay gap in favor of men is observed at the Level 4
Management position. This disparity can be further attributed
to the fact that male managers in these roles, on average,
oversee significantly larger teams than their female counter-
parts. As a result, they assume greater responsibilities, which
is reflected in their compensation.
In the “Other Employees (Operational Staff)" category,
the pay gap is largely driven by organizational affiliation and
job family classification. Additionally, educational attainment
plays a role in determining hourly wage differences. At
specialist-level positions, men generally earn 4–9% more per
hour than women. This gap is particularly evident at Specialist
Levels 1, 2, and 3, where a higher proportion of men hold roles
in the IT DMSA job family. However, at Specialist Level 4, a
7% gender pay gap in favor of men remains unexplained by
job family classification or other previously identified factors.
In conclusion, while the analysis suggests that organiza-
tional affiliation, managerial responsibilities, and educational
attainment significantly influence gender pay differences,
certain discrepancies remain unexplained, particularly at
Specialist Level 4 positions.
Recognizing the fundamental principles outlined in the
Bank’s Remuneration Policy, ensuring equal pay for equal
work or work of equal value, alongside regulatory obligations
and internal policies, as well as the transposition of Directive
(EU) 2023/970 on strengthening the enforcement of the princi-
ple of equal pay for men and women through pay transparency
and enforcement mechanisms into national legislation by June
2026, the Bank has set an annual target to reduce the gender
pay gap at Specialist Level 4 positions by at least 2%
Total Annual Compensation Ratio
Employee Learning, Training, and
Development
ESRS S1-1, S1-13
Professional training and continuous skill development are
essential for empowering our employees, strengthening
their expertise, and preparing them for the challenges of an
evolving business environment. By investing in education
and professional growth, we not only support individual
career advancement but also drive organizational growth and
contribute to a more sustainable society.
Our employees’ knowledge and skills are the driving force
behind innovation and productivity. That’s why we provide a
diverse range of educational programs that extend beyond
technical and professional competencies to include commu-
nication skills, leadership, and adaptability. We are committed
to ensuring equal learning opportunities for all employees,
enabling them to grow, advance, and contribute to HPB
Group’s development, regardless of their position or experi-
ence level. Our goal is to build strong, skilled, and motivated
teams that play a key role in achieving HPB Group’s strategic
objectives.
Employee
Category
Number of
Employees
(as of
31 Dec 2024)
Gender Pay Gap
(Male vs. Female
Salaries)
M F
Management
Board (HPB)
5 0 -
Identified
Employees*
(excluding HPB
Management
Board)
26 25 -4.60%
Other
Employees
(Managers)
70 136 11.90%
Other
Employees
(Operational
Staff)
366 1,092 17. 40%
2024
Total Annual Compensation Ratio 7.12
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The Employee Professional Development Policy estab-
lishes a framework for continuous professional growth, cover-
ing training, skill enhancement, and career progression within
the organization. It also highlights employees’ opportunities
to develop and acquire the skills necessary to navigate future
challenges. The Training Management Procedure further
defines the detailed steps and responsibilities within the
learning and development process.
As employee development remains a central pillar of HPB
Group’s human resources strategy, the training budget for
2024 was increased by 64%, providing ambitious employees
with even more opportunities for professional growth and
skill-building. Over the course of the year, numerous internal
and external training sessions were conducted across vari-
ous business areas, accessible to all employees. Additionally,
employees had access to digital learning platforms for
self-paced education. Through the eClassroom platform
alone, 78 training programs were delivered, covering topics
such as investment funds, mortgage and consumer lending,
GDPR, SPNFT, regulatory compliance, information security,
applications, operational procedures and products, ESG,
fraud prevention, workplace safety, and human resources
management.
Training and Skill Development Indicators (S1-13)
Average Training Hours
To ensure the highest quality execution of our responsi-
bilities and full alignment with regulatory requirements, HPB
Group has implemented policies that establish structured
procedures for identifying key business areas requiring
ongoing professional development and training for the
Management Board and Supervisory Board. In 2024, a
total of 15 training sessions were conducted across various
domains, including organizational culture, corporate govern-
ance, strategic management, ESG, information security,
SPNFT, GDPR, and risk management.
To further enhance data-driven analytical competencies
among HPB Group employees, we continued the Data
Incubator Program, with 123 participants actively engaged
throughout the year. Additionally, we launched a new initia-
tive in 2024, Data Saplings, where employees meet virtually
several times a month to exchange data-driven best prac-
tices. Over the past year, 22 sessions were held, featuring
presentations from 59 employees.
For the second consecutive year, newly appointed
managers (a total of 26 employees) participated in the First-
Time Manager Program, designed to prepare them for
leadership responsibilities and strengthen their long-term
management competencies. This comprehensive program
covered project management, data management, financial
reporting, employee development and recruitment, labor law,
performance management and rewards, situational leader-
ship, and peer coaching.
In line with our Onboarding Procedure, we continued
the HPB Start Program, a structured and ongoing initiative
for integrating new employees and supporting their profes-
sional development over their first six months. In 2024, the
HPB Start Program was conducted six times, welcoming
114 new employees into the organization.
As part of our commitment to women’s leadership
development, 12 female employees at the B-2 management
level participated in The Lady’s Realm Leadership Academy,
an external program focused on psychological safety in
teams, self-care as a critical leadership element, change
management, goal-setting, strategic planning, and fostering
a supportive and adaptable work environment. Over two
intensive days, participants explored their leadership styles,
addressed unique workplace challenges, and collaborated
on real-life case studies with peer support.
HPB Group continues to support employees in pursuing
higher education and professional certifications, providing full
or partial funding for degree programs, retraining, certifica-
tion courses, and professional exams that align with business
needs and individual career development plans. In 2024,
education funding was approved for 25 employees.
To maintain service excellence and equip employees
with the skills to handle difficult conversations, whether with
clients or colleagues, our Service Quality Management Office
runs "Quality Wednesdays", an internal workshop series
covering various aspects of service excellence. In 2024, five
workshops were held as part of this initiative.
HPB Group is also continuously refining its perfor-
mance management process, ensuring transparency in
goal-setting at both the organizational and individual levels.
Leadership teams receive ongoing training on defining and
aligning performance objectives, emphasizing one-on-one
goal-setting discussions between managers and employees.
This structured approach strengthens HPB Group’s strategic
direction, enhances individual and team performance, and
fosters long-term sustainable business growth. By clearly
communicating expectations, we empower employees to
improve their performance, contribute to team success,
and align their professional development with our corporate
values.
Work-Life Balance: Supporting
Well-Being and Productivity
ESRS S1-15
Maintaining a healthy balance between work and personal
life is essential for employee well-being, productivity, and
overall organizational success. In today’s dynamic work
environment, where professional and personal boundaries
often overlap, HPB Group is committed to fostering policies
Men
Women Per Employee
26,262.86 54,429.61 23.46
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and practices that support a sustainable balance, allowing
employees to reach their full potential without compromising
their personal needs and values.
To enhance work-life balance, HPB Group offers a range
of benefits designed to provide flexibility and support employ-
ees at different life stages:
• Remote work – most roles offer the option of work-
ing remotely for up to three days per week, allowing
employees to better balance their professional and
family responsibilities
• Shortened Friday – for several years, HPB Group has
applied a working time model of 8.5-hour shifts from
Monday to Thursday and 6-hour shifts on Fridays,
giving employees an earlier start to their weekends
• Flexible working hours – employees have the option
of a one-hour sliding window to adjust their schedules
according to personal needs
• Preferential financial services – employees benefit
from reduced fees, lower loan interest rates, and other
banking services, including favorable mortgage terms
for those looking to purchase or renovate their homes
• Support for growing families – financial assistance is
provided to employees for the birth or adoption of a
child, supporting parents and adoptive families
• Kindergarten subsidies – financial relief for parents of
young children through subsidized kindergarten costs,
reducing the financial burden
• Holiday gifts – each year, employees' children up to
the age of 15 receive a St. Nicholas gift, bringing joy
during the festive season
• Additional annual leave days – employees are entitled
to one extra day of annual leave per child under the
age of 15
• Special leave – extra time off is granted for significant
life events, including marriage or civil partnership,
childbirth or adoption, a child’s first day of school or
kindergarten, moving house, preventive health check-
ups, volunteering, blood donation, and other key
occasions.
In 2024, 100% of female employees and 15.57% of male
employees exercised their right to family leave, demonstrat-
ing our commitment to promoting a workplace that supports
both career growth and personal well-being.
0 300 600 900 1200 1500
Employees entitled
to family-related
leave
Employees who used
their family-related
leave
Total
employees
Female
Male
Graph: Work-Life Balance Indicators (S1-15)
Health, Safety, and Employee
Well-being
ESRS S1-11; S1-14
The health and safety of our employees are among our top
priorities. Every workplace must be safe, supportive, and
focused on preserving both the physical and mental well-be-
ing of all employees. Our commitment to fostering a healthy
and secure work environment reflects our responsibility to the
people who form the foundation of our success.
Through proactive measures, educational initiatives, and
the implementation of best practices, we ensure that our
employees work in conditions that minimize risks and support
their overall well-being.
Health and safety measures, including preventive actions
and risk reduction strategies to prevent work-related inju-
ries and illnesses, are outlined in our Workplace Safety
Regulations, Physical Security Measures Regulations, and
Security Protection Measures Regulations.
Our dedication to creating a safe and healthy workplace
is reflected in the numerous benefits and activities we offer to
employees:
• Supplementary and additional health insurance for all
HPB Group employees, including an annual medical
check-up to encourage participation, employees
receive a paid day off for their check-up
• Health Week at the workplace, featuring education and
guidance on developing healthy habits
• Webinar series "Life is Meant to Be Easier" held during
Psychology Week 2024, aimed at raising awareness
about mental health care
• Membership in HPB Sport, which offers various
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Commitment to Human Rights and
Ethical Standards
ESRS S1-1, S1-17
HPB Group is firmly committed to promoting, respecting, and
protecting human and children's rights across all areas of
its operations, in full alignment with international standards,
national legislation, and internal policies and principles. We
recognize human rights as the cornerstone of a fair, inclu-
sive, and sustainable society and believe that responsible
management of these issues is essential in fostering long-
term trust among our employees, clients, business partners,
and the wider community.
Our approach to human rights protection is built on trans-
parency and accountability, ensuring equal opportunities,
embracing diversity, and actively preventing discrimination
and unethical behavior.
We integrate human rights considerations into our daily
operations through internal policies and principles, includ-
ing the Principles on Human and Children's Rights and the
Principles on Diversity and Non-Discrimination, which form
part of our ESG Management Policy. By implementing regular
employee training and systematic risk assessments, we go
beyond mere compliance, our goal is to actively contribute to
an improved quality of life for all our stakeholders.
At the core of our commitment is the HPB Group Code
of Ethics, which establishes clear and unequivocal principles,
guidelines, and requirements for lawful, ethical, and profes-
sional conduct. This Code reinforces our dedication to human
rights protection, ensuring that all interactions, whether with
employees, clients, or external partners, are conducted with
the highest ethical standards.
As part of our core mission, we are committed to ensuring a
safe and healthy future for every child, which means adhering
to the highest standards in employment, working conditions,
and child protection. HPB Group strictly complies with mini-
mum employment age regulations, fully aligning with interna-
tional standards and legal requirements to protect children
Reported Cases and Complaints on Human Rights Violations (S1-17)
Total number of complaints and
discrimination cases
Serious human rights violations related to the workforce 0
Reported cases of discrimination 5
Complaints filed through employee reporting channels 0
Percentage of
employees
covered by the
health and
safety
management
system
Number of
workplace
fatalities
Number of
recorded
workplace
injuries
Workplace
injury rate (per
million hours
worked)
Number of
recorded
work-related
illnesses
Number of lost
workdays due
to injuries and
fatalities
100.00 0 11 3.37 0 772
Health and Safety Indicators – HPB Group Workforce (S1-14)
sports activities, and interactive workshops on stress
management held throughout the year
• Blood donation drives organized in partnership with
the City Red Cross Society of Zagreb, hosted at the
Bank’s premises
• Employer-sponsored psychological counseling to
provide employees with easier access to mental health
support resources
• Evacuation and rescue drills conducted regularly
across all HPB Group locations, in compliance with
workplace safety laws held every two years for all
employees
• Ongoing e-learning modules through eClassroom,
covering topics such as cybersecurity, appropriate use
of the Bank’s IT systems, and workplace safety training.
In 2024, HPB Group successfully renewed its "Health-
Friendly Company" certification for another five years. This
recognition, awarded by the Croatian Institute of Public Health
under the "Living Healthy" initiative, highlights the Bank’s
commitment to promoting the well-being of both employees
and clients, as well as encouraging a healthier lifestyle.
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HPB Group fully supports the right to freedom of association,
ensuring that all employees have a voice in shaping their
working conditions. The HPB Union plays a crucial role in
advocating for improved working conditions, material bene-
fits, and social protections, fostering a fair and supportive
workplace. Through collective bargaining, employees benefit
from a range of rights and entitlements, including financial
provisions upon retirement, reinforcing our commitment to
their long-term well-being.
In 2024, an Amendment to the Collective Agreement
was signed, introducing enhancements to compensation
structures, special payments, and salary regulations, further
strengthening our dedication to fairness, transparency, and
employee rights.
Collective Bargaining Indicators (S1-8)
Total number of
employees
(reporting year)
Employees covered by
collective agreements
Percentage covered by
collective agreements (%)
Percentage covered by
employee representatives
(%)
1,720 1,720* 100* 24.77
Collective Bargaining and Employee Representation
ESRS S1-8
As part of our ongoing efforts to foster a positive organiza-
tional climate, strong corporate culture, and high employee
engagement, we regularly conduct organizational vitality
surveys. These surveys provide every employee with the
opportunity to share their views on key aspects of workplace
experience, including:
• Employee perception of their work environment
• Satisfaction with management, performance evalua-
tion, and reward systems
• Effectiveness of internal communication
• Personal sense of commitment and engagement
• Opinions on HPB Group as an employer.
The survey results are shared with all employees, and
management teams actively collaborate with their teams
to develop targeted action plans for improvement. The
Management Board, in close cooperation with the Human
Resources Division, oversees their implementation, ensuring
that employee feedback directly informs key initiatives that
further strengthen HPB Group as an employer of choice.
Our 2024 pulse check survey focused on job satisfaction,
compensation, career development, burnout, and employee
advocacy, with an outstanding 91.4% participation rate
across HPB Group. The positive trends we observed reaffirm
the effectiveness of our ongoing improvements, while also
highlighting the importance of continuous engagement to
drive long-term progress.
To streamline HR-related communication, we introduced
"Ask HR", a fast and efficient query resolution channel within
the HRnet application. This new tool provides employees
with direct access to information on payroll, performance
management, and other employment-related matters, rein-
forcing transparency, accessibility, and support across the
organization.
HPB Group is committed to ensuring that all employees
work in an environment free from discrimination, harassment,
segregation, or unfair treatment. In line with the Labor Act,
the Anti-Discrimination Act, and the Gender Equality Act, we
have implemented an Internal Rulebook on Dignity at Work,
outlining the rights and responsibilities of both employees
and the employer. This policy also enables employees to
report violations of dignity through a structured complaints
procedure.
To uphold high ethical and professional standards,
Strengthening Employee Engagement and Workplace Dialogue
ESRS S1-2, S1-3
* All Bank employees are covered by the Collective Agreement, with certain provisions applicable to Management Board members. However,
material entitlements that conflict with the Law on the Prevention of Conflicts of Interest are excluded.
from potential risks. Furthermore, we uphold all children's
rights as outlined in the United Nations Convention on the
Rights of the Child, ensuring that every child, regardless of
background, status, or circumstances, has the right to life,
survival, development, and participation in society.
In partnership with UNICEF Croatia, HPB Group actively
contributes to improving conditions for children worldwide.
Through participation in UNICEF programs "Guardians
of Childhood" and "Partnerships with Small and Medium
Enterprises", we work alongside our clients, providing regular
monthly donations to support initiatives that assist children in
socially vulnerable situations, helping create a better future
for them and society as a whole.
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Recognizing that trust and customer satisfaction are the
foundation of long-term success, HPB Group is committed
to continuously improving its products, services, and busi-
ness processes to ensure security, clarity, and fairness in all
consumer interactions.
We place particular emphasis on transparent communica-
tion, ensuring that our products and services are accessible,
clearly presented, and tailored to the diverse needs and finan-
cial capabilities of our customers. Through our double mate-
riality assessment, we have identified two key impact areas,
customer information and communication, focusing on the
clarity and reliability of financial product and service disclo-
sures, and social inclusion of consumers, ensuring equitable
access to financial services for all customer segments. These
topics are explored in more detail in the following chapters.
Safeguarding Data Privacy and
Information Security
ESRS S4-1, S4-4, S4-5
Data privacy and security represent key areas where we have
identified potential negative impacts on consumers, particu-
larly in light of the increasing frequency of cyberattacks aimed
at compromising the confidentiality, integrity, and availability
of the Bank’s information and IT systems. Additionally, there
is a rising risk of fraudulent impersonation, where attackers
attempt to deceive clients into disclosing login credentials or
making unauthorized payments for illicit financial gain.
To mitigate cyber threats and prevent potential conse-
quences, HPB Group has established a comprehensive
information security management system through a range of
organizational and technical measures. A dedicated unit has
been formed to oversee information security, protect against
cyber threats, monitor for fraud, and implement preventive
measures. A set of internal policies, regulations, and proce-
dures defines the principles, guidelines, and rules governing
information security in compliance with legal requirements,
regulatory standards, recommendations from national cyber-
security authorities, internationally recognized norms, and
industry best practices.
To minimize cyberattack risks and protect clients from
social engineering tactics, we implement the following
measures as part of our regular activities in line with internal
policies:
• Enhancing technical controls to enable early
detection and prevention of incidents that could
compromise the confidentiality, integrity, and
availability of information and IT systems, as well
as to prevent fraud across digital channels
• Conducting educational programs and awareness
campaigns for both employees and clients
Customer-Centric Approach
ESRS S4
PRB Principle 3
HPB Group has established a comprehensive system for
reporting violations of the Code of Ethics. This mechanism
allows both employees and external stakeholders to report
concerns through confidential and secure channels, ensuring
accountability and transparency.
To ensure compliance with legal and regulatory require-
ments, as well as the highest ethical and professional stand-
ards set out in HPB Group’s Code of Ethics and internal poli-
cies, HPB Group has established a robust reporting system.
This framework also aligns with the Anti-Corruption Program
of the Government of the Republic of Croatia for state-owned
enterprises. The system enables employees, clients, and
third parties to report potential violations of the Code of Ethics
or suspected irregularities in the Bank’s operations.
Reports of ethical breaches by employees or third
parties can be submitted through secure reporting channels
and are handled by the appointed Ethics Commissioner
and Deputy Ethics Commissioner.
Similarly, reports of irregularities submitted by clients
or external stakeholders, who do not operate within
HPB Group’s work environment, are processed by the desig-
nated Irregularities Officer and Deputy Irregularities
Officer.
Comprehensive guidelines on reporting procedures are
publicly available on the websites of HPB Group entities.
HPB Group has also implemented an internal whis-
tleblowing system, fully aligned with the Whistleblower
Protection Act, allowing individuals within HPB Group’s
work environment to confidentially report suspected miscon-
duct or illegal activities in good faith, without fear of retalia-
tion or negative consequences for their employment status.
HPB Invest d.o.o., as an HPB Group entity, has established
its own whistleblowing and whistleblower protection system,
ensuring compliance with HPB Group’s internal reporting
framework while adapting to the specific requirements of its
size and business model.
Detailed instructions and reporting forms are available on
the Bank’s website.
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• Strengthening business processes to combat
money laundering
• Improving fraud detection and prevention mech-
anisms within the Bank’s operational framework.
Additionally, HPB Group has implemented a robust data
protection management system and ensures full compliance
with the General Data Protection Regulation (GDPR). We
invest in employee training, promote transparency in client
communications, and maintain close collaboration with regu-
latory authorities.
The Personal Data Protection Policy is the Group’s funda-
mental internal document outlining the framework for data
privacy, ensuring compliance with legal requirements, secu-
rity protocols, best practices, and internationally recognized
standards.
The Bank has appointed an independent Data Protection
Officer, responsible for safeguarding the rights of clients,
employees, and business partners regarding their personal
data.
Comprehensive information on the processing of personal
data for clients, employees, business partners, and other
stakeholders is publicly available on the Bank’s website.
Inclusive Banking: Accessibility and
Service Availability
ESRS S4-4
Accessibility and ease of access to products and services
consistently rank among the top priorities for clients when
choosing a bank. This includes an extensive branch and ATM
network, digitalization and online services, accessibility for
people with disabilities, as well as financial literacy programs
and client education. Through our double materiality assess-
ment, we have identified our impact in the sub-topic Social
Inclusion of Consumers, specifically in Access to Products
and Services, as significantly positive.
Since its founding, HPB Group has made substantial
efforts to enhance accessibility for clients. Thanks to our stra-
tegic partnership with HP, we are now the most accessible
bank in Croatia, reaching even the smallest and most remote
locations across the country.
Detailed information on our branch network can be found
in Chapter Overview of Business Segment Operations, of the
Annual Report.
We are continuously improving our digital services to
provide clients with faster, more convenient, and more acces-
sible financial solutions. HPB has been at the forefront of
banking innovation and digitalization in Croatia, being the first
to introduce access to the e-Citizens portal, biometric login
for mobile banking, online account opening, cash withdrawals
via mobile phone, the most comprehensive range of services
through eBranch (accessible via mobile), and one of the first
three banks to implement instant payments. As digital trans-
formation remains a strategic priority, HPB Group continues
to see steady growth in mobile banking users.
Further details on our digital services are available in
Chapter Overview of Business Segment Operations, of the
Annual Report.
Recognizing that knowledge drives social progress, HPB,
as a financial institution, takes responsibility for promoting
financial literacy across all generations. To help individuals
and entrepreneurs develop essential money management
skills, we have been running the "HPB for Financial Literacy"
program for several years, offering free educational sessions
on key banking topics. We remain particularly committed to
financial education for young people, ensuring that future
generations are equipped to make responsible financial
decisions. As part of this effort, we actively participated in
European Money Week last year, reinforcing our dedication
to youth financial literacy. Additionally, in collaboration with
the Croatian Banking Association (HUB), we took part in
the "Finance for New Generations" project aimed at young
entrepreneurs, further strengthening our relationship with the
business community and supporting their ambitions through
specialized financial solutions.
Consumer Protection and Ethical
Business Practices
ESRS S4-1, S4-3, S4-4
HPB Group has adopted a Consumer and Non-Consumer
Protection Policy, which establishes a framework for effectively
combating unfair business practices, unfair contract terms,
misleading advertising, unsafe products, and substandard
services. This policy defines a set of measures and activities
aimed at safeguarding both consumers and non-consumers
throughout the offering, contracting, and use of the Bank’s
financial products and services. Our commitment is to ensure
the highest service quality and transparency in our business
relationships, fostering consumer trust and delivering excel-
lence in every interaction. We provide high-quality, competi-
tively structured products and services, including an expand-
ing portfolio of digital solutions that simplify and accelerate
financial transactions.
When developing new products, we pay special attention
to consumer protection regulations and best practices. We
assess the impact of products on data privacy, technical and
technological requirements, and identify potential risks for
clients, considering the complexity of financial products and
clients' financial literacy. Additionally, we evaluate security
requirements, including physical and technical safeguards
and information security measures.
The principles of the Consumer and Non-Consumer
Protection Policy are embedded in our performance meas-
urement and employee remuneration system, which is incor-
porated into HPB Group’s Remuneration Policy and oper-
ational guidelines. At the Bank, team, and individual levels,
performance criteria are set to uphold consumer rights and
SOCIAL
159
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interests, focusing on service quality, employee expertise,
and ethical product sales that align with client needs, avoiding
any unfair practices that prioritize the Bank’s or employees’
interests at the expense of consumers.
Despite employing the latest technology and a highly
skilled, dedicated workforce, there may be instances where
the services provided do not meet expected quality stand-
ards. If consumers or end users wish to submit a complaint or
express dissatisfaction, they can do so in person at any HPB
center or entrepreneurial center, by email at kvalitetausluge@
hpb.hr and/or hpb@hpb.hr, by completing the complaint form
available on the Bank’s website, or by sending a written
complaint by post to Hrvatska poštanska banka, d.d., Office
for Service Quality Management, Jurišićeva 4, 10 000 Zagreb.
In compliance with legal provisions, HPB clearly states in all
General Terms and Conditions that clients who are unable to
resolve disputes directly with the Bank can seek mediation
through consumer dispute resolution centers or alternative
dispute resolution bodies. By endorsing alternative consumer
dispute resolution mechanisms, the Bank aims to resolve
conflicts amicably, avoiding lengthy and costly litigation for
both clients and the Bank.
The complaint management process is governed by
the Complaints and Requests Management Policy, which
outlines:
• Receipt, recording, and resolution of complaints by
relevant Bank departments
• Monitoring and analysis of complaints to identify
root causes, issue recommendations for business
improvements, and provide both internal and external
reporting.
Through a structured service quality management system,
the Bank consistently strives to reduce the number of justified
complaints year over year. In 2024, the number of justified
complaints decreased by 33% compared to the previous
year, an impressive achievement, particularly given portfolio
growth following the merger with Nova hrvatska banka.
We take great pride in the fact that HPB ranks highly in
consumer satisfaction surveys, with strong client recom-
mendations. Moving forward, we remain committed to
further enhancing service quality and refining our complaint
management system to uphold the trust of our valued clients.
Enhancing Consumer Experience
and Engagement
ESRS S4-1, S4-2, S4-3, S4-4
One of the core principles of sustainability is transparency,
and HPB Group is fully committed to ensuring the timely,
accurate, and reliable disclosure of information about its prod-
ucts, services, and any changes in its operations. We believe
that effective communication with consumers is fundamental
to building long-term trust and loyalty and that through clear
and proactive engagement, we can better understand their
needs, expectations, and challenges. Our goal is to create an
environment where every consumer feels heard, valued, and
fully informed.
Our approach is based on accessibility, clarity, and adapt-
ability across all communication channels, whether through
personal interactions, digital platforms, or contact centers.
HPB Group employees across our business network are
readily available to address any inquiries from individuals
and businesses, providing accurate and relevant information
to ensure that every customer has the support needed to
make informed decisions. Alongside our branch colleagues,
the dedicated team at the HPB Contact Center continuously
responds to inquiries received via phone or email.
To engage with clients, stakeholders, and the wider public,
the Bank utilizes its website, www.hpb.hr, as well as social
media platforms including LinkedIn, Facebook, Instagram,
and YouTube. In 2024, HPB’s LinkedIn community surpassed
10,000 followers, placing us among the top four banks in
Croatia and affirming the trust we have diligently built over
the years on the largest professional social network.
To gather customer feedback, we have been systematically
conducting service quality, satisfaction, and loyalty surveys in
collaboration with market research agencies for several years.
Since the inception of these measurements, a clear upward
trend in service quality and customer satisfaction has been
observed. Each survey provides valuable insights that help
us identify areas for improvement and continuously enhance
the service we provide.
As outlined in the section on Employee Engagement
and Communication, HPB Group has established an effec-
tive system for reporting violations of the Code of Ethics by
employees and third parties, as well as for reporting concerns
or suspected irregularities in the Bank’s operations by clients
and other external stakeholders.
Complaints regarding breaches of the Code of Ethics by
employees and third parties can be submitted through secure
reporting channels and are handled by the designated Ethics
Officer and their deputy. Similarly, reports of suspected irreg-
ularities in the Bank’s operations from clients and external
stakeholders are processed through secure channels and fall
under the responsibility of the appointed Compliance Officer
and their deputy.
160
Upholding
the Highest
Standards
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CORPORATE GOVERNANCE:
Upholding the Highest Standards
PRB Principle 5, 6
HPB Group is dedicated to upholding the highest standards
of transparency, ethical business practices, and regulatory
compliance, ensuring that its operations create positive and
sustainable impacts on stakeholders, society, and the envi-
ronment. Our corporate governance framework is founded
on the principles of integrity, accountability, and inclusivity,
fostering responsible decision-making and long-term value
creation.
While governance-related topics were not identified as
priorities in our double materiality assessment, we recognize
our role and responsibility as a financial institution and there-
fore report transparently in accordance with the requirements
and guidelines of the ESRS G1 thematic standard. As HPB
Group does not engage in political activities or any form of
lobbying, disclosure under G1-5 is not included.
Ethical Business Conduct
and Compliance
ESRS G1, ESRS 2 (SBM-3)
Through our business strategy, corporate policies, and key
internal regulations, we strive to foster transparency, efficiency,
and strong relationships within our business environment.
HPB Group’s core governance framework mandates
lawful, ethical, and professional conduct from all Management
Board members, Supervisory Board members, and employ-
ees. This commitment aligns with all applicable laws and
regulations, internal policies, corporate values, and the
professional standards of the financial sector.
We conduct business and continuously enhance our corpo-
rate governance practices in accordance with the following
principles:
Business transparency
Sustainable value creation with a focus on stakeholder
interests
An effective internal control system
A robust accountability framework
Avoidance of conflicts of interest
Ethical, responsible, and principled behavior.
GOVERNANCE
Corporate Governance Policies and
Code of Conduct
ESRS G1-1
HPB Group, as an issuer of shares listed on the regulated
market of the Zagreb Stock Exchange, adheres to the
Corporate Governance Code jointly developed by the
Croatian Financial Services Supervisory Agency (HANFA)
and the Zagreb Stock Exchange (ZSE), as well as the
Corporate Governance Code for companies in which the
Republic of Croatia holds shares or stakes, adopted by the
Government of the Republic of Croatia. In alignment with best
corporate governance practices and the recommendations
of both Codes, HPB continuously enhances its corporate
governance framework and transparency, ensuring robust
protection of shareholders, investors, clients, employees, and
other stakeholders. The Bank's governance approach consid-
ers its structure, strategy, and business objectives while
maintaining effective oversight by the Management Board
and Supervisory Board, with a particular focus on risk identi-
fication, measurement, monitoring, and reporting, alongside
the establishment of strong internal control mechanisms.
As outlined in the Sustainability Governance section, the
Bank’s Management Board has adopted the HPB Group
Remuneration Policy, which has also received the approval
of the Supervisory Board. This overarching policy establishes
an objective, transparent, and fair remuneration system
across HPB Group, aligning with the strategic sustainability
framework, corporate values, and long-term interests of the
Group. The policy is based on equal pay for equal work or
work of equal value, irrespective of gender, race, ethnicity,
language, religion, political or other beliefs, national or social
origin, or any other discriminatory criteria. These principles
also underpin the Remuneration Policy for Members of
the Management Board and Supervisory Board, which is
publicly available on the Bank’s website.
HPB Group has adopted a Code of Ethics, which sets
out clear and unequivocal principles, guidelines, and require-
ments for lawful, ethical, and professional conduct in all inter-
actions with clients, employees, the community, sharehold-
ers, regulatory bodies, business partners, and competitors.
Rooted in the Group’s vision, mission, and core corporate
values, support, responsibility, trust, innovation, and value
creation, the Code is continuously updated to reflect evolving
standards. Emphasis is placed on ensuring that all employees
are familiar with and uphold ethical principles through regular
education and awareness initiatives.
163
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As part of its commitment to professional development and compliance, the Compliance Function at HPB Group contin-
uously conducts mandatory anti-corruption training for all employees, including Management Board and Supervisory Board
members.
Compliance Violations Related to Anti-Corruption and Bribery (G1-4)
Total Confirmed
Cases of Corruption
or Bribery
Number
of Convictions
Number of
Employees Dismissed/
Sanctioned for
Corruption
or Bribery
Number of
Contracts
Terminated Due
to Corruption
or Bribery
Total
Monetary
Fines (EUR)
0 0 0 0 0
The Anti-Corruption Policy defines mechanisms for
identifying, preventing, and combatting corruption, reinforc-
ing HPB Group’s commitment to ethical business practices.
In addition, in compliance with the Credit Institutions Act,
the Act on the Prevention of Conflicts of Interest, the Capital
Market Act, the Companies Act, and the Decision on the
Governance System, HPB has implemented a Conflict of
Interest Management Policy. This policy establishes funda-
mental principles for identifying, mitigating, or preventing
actual or potential conflicts of interest, including those arising
from the provision of investment services and financial instru-
ment-related activities.
HPB Group is dedicated to ensuring full transparency by
disclosing accurate, timely, and reliable information on its envi-
ronmental and social impacts while continuously enhancing
its reporting practices in accordance with evolving regulatory
requirements. Committed to fostering trust and accountabil-
ity, the Group provides shareholders and stakeholders with
clear and equitable access to comprehensive insights into its
ownership structure, corporate governance framework, and
financial and operational performance. Through its reporting,
HPB Group offers a transparent and detailed overview of its
progress in sustainable business practices and corporate
social responsibility, reinforcing its commitment to responsi-
ble and ethical business conduct.
Internal Control and Audit
ESRS G1-1
At HPB Group, internal audit and robust risk management
are fundamental to maintaining sound corporate governance.
Their key responsibility is to implement measures that safe-
guard independence and objectivity while ensuring clearly
defined authority, accountability, and oversight. This includes
continuous monitoring of professional qualifications, exper-
tise, and experience among internal audit professionals. By
taking a systematic and disciplined approach, internal audit
supports organizational units in strengthening risk manage-
ment, internal controls, and governance effectiveness.
The Internal Audit Office is mandated to inform the
Management Board and the Supervisory Board of any identi-
fied legal violations or breaches of risk management policies
that could compromise the Bank’s liquidity, solvency, or oper-
ational stability. Furthermore, the Audit Committee conducts
an annual assessment of the effectiveness of internal audit
processes and reports its findings to the Supervisory Board,
reinforcing transparency and accountability in HPB Group’s
operations.
Anti-Corruption and Anti-Bribery
Measures
ESRS G1-1, G1-3, G1-4
HPB Group enforces a zero-tolerance policy on bribery and
corruption, promoting a lawful, ethical, professional, and fair
approach across all business activities. The Group is commit-
ted to ensuring that its employees operate in full compliance
with national and international anti-corruption regulations and
standards, fostering a culture of integrity and accountability.
To proactively identify, prevent, and combat corruption,
HPB Group has implemented a comprehensive Anti-
Corruption Policy. This policy outlines the responsibilities
of the Group’s organizational units and members, pinpoints
high-risk areas, and establishes clear anti-corruption princi-
ples aligned with Croatia’s regulatory framework.
Applicable across all HPB Group business processes,
the Anti-Corruption Policy provides a structured approach for
effective risk management, reinforcing transparency, integ-
rity, and trust among stakeholders. The implementation and
oversight of anti-corruption measures are conducted through
Action Plans, which define specific initiatives and projects
aimed at strengthening compliance within the designated
strategic period.
In 2024, there were no reported or suspected cases of
bribery or corruption involving HPB Group or its employees.
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Management
Board
Managerial
Function
Assistant
Managerial
Function
Specialist
Function
Administrative
Function
Number of Trainees
Total 8 220 29 1,445 18
Duration of Training by Delivery Method
Classroom Training
(Hours)
1.5 1,260.5 282 11,136 124
Computer-Based Training
(Hours)
10 66 2 105.7 0
Voluntary Computer-
Based Training (Hours)
0 20 5 25 0
As outlined in previous sections on Strengthening Employee
Engagement and Workplace Dialogue as well as Enhancing
Consumer Experience and Engagement, HPB Group has
established an effective internal reporting system for employ-
ees and other individuals within its work environment to report
irregularities.
Additionally, the Group has implemented a robust mech-
anism for reporting violations of the Code of Ethics by
employees and third parties, as well as a system for
reporting suspected or identified irregularities in the
Bank’s operations by clients and external stakeholders
who are not part of the HPB Group's work environment.
In accordance with adopted internal policies governing
the reporting of irregularities and violations of the Code of
Ethics, confidentiality is ensured at all times, providing maxi-
mum protection for all parties involved in the process.
All reports from employees and third parties can be
submitted through secure reporting channels. Detailed infor-
mation on the reporting mechanisms for irregularities and
ethical breaches is publicly available on the Bank’s website.
Reporting Irregularities/ Whistle-Blowing
ESRS G1-1
GOVERNANCE
Anti-Corruption and Bribery Prevention Training Activities (G1-3)
HPB Group is committed to the highest ethical business
standards, ensuring full compliance with the laws and regu-
lations of the Republic of Croatia and the European Union,
as well as financial market standards and internal policies.
The Group actively seeks to engage with business partners
and suppliers who uphold principles of environmental, social,
and corporate responsibility, aligning their values with those
embraced by HPB Group.
Suppliers are expected to adhere to HPB Group’s ethi-
cal standards and objectives as outlined in the Supplier
Principles, which are an integral part of the ESG Management
Policy. These principles define the expectations for suppliers
aiming to establish and maintain long-term partnerships with
HPB Group, with their acceptance serving as a prerequisite
for collaboration. To strengthen oversight and assessment of
supplier sustainability practices and impact, HPB Group is in
the process of implementing a supplier questionnaire.
We partner with suppliers we trust, fully aware that our
business relationships shape our reputation and public
perception. Supplier selection follows a transparent and
well-documented process based on clear criteria, ensuring
fairness and preventing any conflicts of interest, whether
actual or potential. HPB Group does not engage in business
with entities owned or majority-owned by employees or their
immediate family members.
Payment Performance (G1-6)
Percentage of
payments made within
standard terms
Number of unresolved
legal disputes due to
late payments
93.97% 0
Responsible Supplier Engagement
ESRS G1-2; G1-6
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Kontakt:
Ured za održivo poslovanje
Email: uop@hpb.hr
Independent Auditor's Report
on Limited Assurance
on the Consolidated
Sustainability Report
of the HPB Group
166
BDO Croatia d.o.o.
2
Management's and Those Charged with Governance Responsibility for Sustainability Reporting
Management is responsible for the design and implementation of the process for identifying information
disclosed in the consolidated Sustainability Report in accordance with ESRS, and for disclosing this
Process in the section Double Materiality Assessment in the consolidated Sustainability Report. This
responsibility includes:
• Understanding the context in which the Group's activities and business relationships take place
and understanding the affected stakeholders;
• Identifying actual and potential impacts (both negative and positive) related to sustainability
issues, as well as risks and opportunities that affect or could reasonably be expected to affect
the Group's financial position, financial performance, cash flows, access to financing, or cost of
capital in the short, medium, or long term;
• Assessing the significance of identified impacts, risks, and opportunities related to sustainability
issues by selecting and applying appropriate materiality thresholds; and
• Making assumptions that are reasonable in the given circumstances.
Furthermore, Management is responsible for preparing the consolidated Sustainability Report in
accordance with the provisions of Articles 32 and 36 of the Accounting Act, including:
• Compliance with ESRS;
• Preparing disclosures in the section Sustainable and Responsible Banking / Sustainable Financing
/ Taxonomy Indicators of the consolidated Sustainability Report in accordance with the reporting
requirements of Article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation);
• Designing, implementing, and maintaining internal control systems that Management determines
are necessary to enable the preparation of the consolidated Sustainability Report without
material misstatements due to fraud or error; and
• Selecting and applying appropriate sustainability reporting methods and forming appropriate
estimates and judgments about individual sustainability disclosures that are reasonable in the
given circumstances.
Those charged with governance are responsible for overseeing the Group's sustainability reporting process
established by the Company.
Auditor's Responsibility
We conducted an engagement with limited assurance in accordance with the International Standard on
Assurance Engagements, Assurance Engagements Other than Audits or Reviews of Historical Financial
Information (ISAE) 3000 (revised), as prescribed by the provision of Article 37 of the Accounting Act and
the provisions of the contract for this engagement concluded with Hrvatska poštanska banka d.d. on 17
October 2024. These standards require planning and performing the engagement to express a conclusion
on whether we are aware of any significant changes that need to be made to the Subject of Examination
to be in accordance with the Criteria, and to issue a report. The nature, timing, and extent of selected
procedures depend on our professional judgment, including the assessment of the risk of material
misstatement, whether due to fraud or error.
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BDO Croatia d.o.o.
3
Auditor's Responsibility (continued)
Our responsibility is to express a conclusion on the presentation of the Subject of Examination based on
the evidence we have obtained. Our responsibilities regarding the Subject of Examination, in relation to
the Process, include:
• Gaining an understanding of the Process but not for the purpose of expressing a conclusion on
the effectiveness of the Process, including the outcome of the Process;
• Considering whether the identified information meets the applicable ESRS disclosure
requirements; and
• Designing and performing procedures to assess the compliance of the Process with the description
of the Group's Process, as disclosed in the section Double Materiality Assessment.
Our other responsibilities regarding the Subject of Examination include:
• Identifying disclosures where significant misstatements are likely to occur, whether due to fraud
or error;
• Designing and performing procedures aimed at disclosures in the consolidated Sustainability
Report where significant misstatements are likely to occur. The risk of not detecting a significant
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
controls.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our conclusion
with limited assurance.
Our Independence and Quality Management
We comply with the independence and other ethical requirements established by the International Code
of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants
(IESBA), which sets out fundamental principles of integrity, objectivity, professional competence and
due care, confidentiality, and professional behavior. We possess the necessary knowledge and experience
to conduct this assurance engagement.
We also apply the International Standard on Quality Management 1, Quality Management for Firms that
Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements,
and accordingly, maintain a comprehensive quality control system, including documented policies and
procedures regarding compliance with ethical requirements, professional standards, and applicable legal
and regulatory requirements.
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BDO Croatia d.o.o.
4
Description of Procedures Performed
Procedures performed in a limited assurance engagement differ in nature and timing from, and are less
extensive than, those performed in a reasonable assurance engagement. Consequently, the level of
assurance obtained in a limited assurance engagement is significantly lower than that which would have
been obtained had a reasonable assurance engagement been performed. Our procedures are designed to
obtain a limited level of assurance on which we can base our conclusion and do not provide all the
evidence that would be required to provide a reasonable level of assurance.
Although we considered the effectiveness of internal controls established by Management in determining
the nature and extent of our procedures, our assurance engagement was not designed to provide a
conclusion on internal controls. Our procedures did not include testing controls or performing procedures
relating to checking the aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making inquiries, primarily to persons responsible for
preparing the consolidated Sustainability Report and related information, and applying analytical and
other appropriate procedures.
A limited assurance engagement includes performing procedures to obtain evidence about the
consolidated Sustainability Report.
The nature, timing, and extent of selected procedures depend on professional judgment, including
identifying disclosures where significant misstatements are likely to occur, whether due to fraud or error,
in the consolidated Sustainability Report.
In conducting our limited assurance engagement, we performed the following procedures regarding the
Process:
• Gaining an understanding of the Process:
• Making inquiries to understand the sources of information used by Management (e.g.,
stakeholder engagement, business plans, and strategic documents);
• Reviewing the Group's internal documentation on the Process; and
• Assessing the compliance of evidence obtained from our procedures on the Process
conducted by the Group with the description of the Process stated in the section Double
Materiality Assessment.
In conducting our limited assurance engagement on the consolidated Sustainability Report, we performed
the following procedures:
• Gaining an understanding of the Group's reporting process relevant to the preparation of the
consolidated Sustainability Report, including the consolidation process by gaining an
understanding of the Group's control environment, processes, and information systems relevant
to the preparation of the consolidated Sustainability Report, but not assessing the design of
specific control activities, obtaining evidence of their implementation, or testing their
operational effectiveness;
• Assessing whether significant information identified by the Process for identifying information
for disclosure in the consolidated Sustainability Report is included in the consolidated
Sustainability Report;
• Assessing the compliance of the structure and presentation of the consolidated Sustainability
Report in accordance with ESRS;
• Making inquiries of relevant employees and performing analytical procedures on selected
information from the consolidated Sustainability Report;
• Assessment of methods, assumptions, and data for developing significant estimates and future
information, and how these methods were applied.
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BDO Croatia d.o.o.
4
Description of Procedures Performed
Procedures performed in a limited assurance engagement differ in nature and timing from, and are less
extensive than, those performed in a reasonable assurance engagement. Consequently, the level of
assurance obtained in a limited assurance engagement is significantly lower than that which would have
been obtained had a reasonable assurance engagement been performed. Our procedures are designed to
obtain a limited level of assurance on which we can base our conclusion and do not provide all the
evidence that would be required to provide a reasonable level of assurance.
Although we considered the effectiveness of internal controls established by Management in determining
the nature and extent of our procedures, our assurance engagement was not designed to provide a
conclusion on internal controls. Our procedures did not include testing controls or performing procedures
relating to checking the aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making inquiries, primarily to persons responsible for
preparing the consolidated Sustainability Report and related information, and applying analytical and
other appropriate procedures.
A limited assurance engagement includes performing procedures to obtain evidence about the
consolidated Sustainability Report.
The nature, timing, and extent of selected procedures depend on professional judgment, including
identifying disclosures where significant misstatements are likely to occur, whether due to fraud or error,
in the consolidated Sustainability Report.
In conducting our limited assurance engagement, we performed the following procedures regarding the
Process:
• Gaining an understanding of the Process:
• Making inquiries to understand the sources of information used by Management (e.g.,
stakeholder engagement, business plans, and strategic documents);
• Reviewing the Group's internal documentation on the Process; and
• Assessing the compliance of evidence obtained from our procedures on the Process
conducted by the Group with the description of the Process stated in the section Double
Materiality Assessment.
In conducting our limited assurance engagement on the consolidated Sustainability Report, we performed
the following procedures:
• Gaining an understanding of the Group's reporting process relevant to the preparation of the
consolidated Sustainability Report, including the consolidation process by gaining an
understanding of the Group's control environment, processes, and information systems relevant
to the preparation of the consolidated Sustainability Report, but not assessing the design of
specific control activities, obtaining evidence of their implementation, or testing their
operational effectiveness;
• Assessing whether significant information identified by the Process for identifying information
for disclosure in the consolidated Sustainability Report is included in the consolidated
Sustainability Report;
• Assessing the compliance of the structure and presentation of the consolidated Sustainability
Report in accordance with ESRS;
• Making inquiries of relevant employees and performing analytical procedures on selected
information from the consolidated Sustainability Report;
• Assessment of methods, assumptions, and data for developing significant estimates and future
information, and how these methods were applied.
BDO Croatia d.o.o.
5
Description of Procedures Performed (continued)
• Understanding the process for calculating the Group's Green Asset Ratio and the corresponding
disclosures in the consolidated Sustainability Report;
• Assessment of the alignment process, methods, and data for covered activities, evaluating
compliance with minimum safeguards through inquiries with personnel and evidentiary and
analytical procedures related to disclosures aligned with the EU taxonomy;
• Assessment of the presentation and use of EU taxonomy templates in accordance with relevant
requirements; and
• Evaluation of whether taxonomy disclosures, where relevant, are aligned with the consolidated
financial data of the Group.
Conclusion on Limited Assurance
Based on the procedures performed and the evidence obtained, nothing has come to our attention that
causes us to believe that the consolidated Sustainability Report of the Group is not prepared, in all
material respects, in accordance with the provisions of Articles 32 and 36 of the Accounting Act,
including:
• Compliance with the European Sustainability Reporting Standards (ESRS), including the
compliance of the process conducted by the Group for identifying information disclosed in the
consolidated Sustainability Report ("Process") with the description provided in the section Double
Materiality Assessment; and
• Compliance of disclosures in the section Sustainable and Responsible Banking / Sustainable
Financing / Taxonomy Indicators in the consolidated Sustainability Report with the reporting
requirements of Article 8 of Regulation (EU) 2020/85 (EU Taxonomy Regulation).
Other Matters
Comparative information included in the consolidated Sustainability Report of the Group for the financial
year from 1 January to 31 December 2023, was not subject to the assurance engagement. Our conclusion
is not modified with respect to this matter.
Zagreb, 28 March 2025
171
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172172
Annual Report of HPB Group
Responsibilities of the Management Board
for the preparation and approval of the
annual report
The Management Board is responsible for preparation of consolidated and uncosolidated annual financial statements of
Hrvatska poštanska banka, public limited company (hereinafter referred to as the "Bank") for each financial year which give a
true and fair view of the financial position of the Group and the Bank and of the results of their operations and cash flows, in
accordance with applicable accounting standards, and is responsible for maintaining proper accounting records to enable the
preparation of such financial statements at any time.
The Management Board is also responsible for the preparation and content of the Annual Report and the Statement of
the Management Board on the condition of the Bank and the Group in accordance with the Accounting Act (Official Gazette
85/24 and 145/24), the Statement on the application of the Corporate Governance Code and other information in accordance
with the Accounting Act, as well as the report formats prepared in accordance with the Decision of the Croatian National Bank
on the structure and content of annual financial statements of credit institutions (Official Gazette 42/18, 122/20, 119/21 and
108/22), presented in the appendix. The Management Board holds a general responsibility for taking all available measures to
safeguard the assets of the Bank and the Group and to prevent and detect fraud and other irregularities. Management Board
is responsible for selecting suitable accounting policies to conform with applicable accounting standards and then apply them
consistently; making reasonable and prudent judgments and estimates; and preparing the Annual report on a going concern
basis unless it is inappropriate to presume that the Bank will continue in business.
In accordance with the Articles 32 and 36 of the Accounting Act (Official Gazette 85/24 and 145/24), which implement
Article 29(a) of EU Directive 2013/34/EU, the Management Board is responsible for preparing the consolidated Sustainability
Report in accordance with the European Sustainability Standards. The Management Board is responsible to include, in the
Sustainability Report on a consolidated basis, which forms an integral part of the HPB Group's Annual Report, all material
information necessary for understanding the HPB Group's performance on sustainability issues and information necessary
for understanding how sustainability issues affect the development, business results and position of the HPB Group. The
presentation of the aforementioned information is based on the regulatory framework that prescribes disclosure requirements
and guidelines regarding corporate sustainability reporting, and the applied sustainability reporting guidelines are set out in the
Sustainability Report in the chapter 'About this Report'.
The Management Board is obliged to submit the Annual Report, which includes the annual unconsolidated and consoli-
dated financial statements and the Sustainability Report, to the Supervisory Board for acceptance. If the Supervisory Board
approves the Annual Report, they are deemed confirmed by the Management Board and Supervisory Board.
The accompanying consolidated and uncosolidated financial statements, alongside the Forms prepared in accordance with
the Decision of the Croatian National Bank on the structure and content of annual financial statements of credit institutions
(Official Gazette 42/18, 122/20, 119/21 and 108/22), were approved by the Management Board on March 28, 2025. and deliv-
ered to the Supervisory Board for its acceptance. As a formal acknowledgment, the financial statements have been officially
signed by designated signatories, as outlined below.
Signed on behalf of Hrvatska poštanska banka plc.:
Marko Badurina
President of the Management Board
Tadija Vrdoljak
Member of the Management Board
Ivan Soldo
Member of the Management Board
Anto Mihaljević
Member of the Management Board
Josip Majher
Member of the Management Board
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Independent Auditor's Report on the
Audit of the Unconsolidated and
Consolidated Annual Financial
Statements
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BDO Croatia d.o.o.
2
Key audit matters (continued)
Impairment of loans and advances to customers
As at 31 December 2024, in the consolidated financial statements gross loans and advances to customers
amounted to EUR 3,059 million, related impairment provision of EUR 190 million and impairment loss
recognized in the income statement of EUR 13.6 million (31 December 2023: gross loans and advances:
EUR 3,151 million, impairment provision: EUR 241 million, impairment loss recognized in the income
statement: EUR 5 million).
As at 31 December 2024, in the separate financial statements, gross loans and advances to customers
amounted to EUR 3,059 million, impairment provision of EUR 190 million and impairment loss recognized
in the income statement of EUR 13.6 million (31 December 2023: gross loans and advances: EUR 3,151
million, impairment provision: EUR 241 million, impairment loss recognized in the income statement:
EUR 1.6 million).
Key audit matter How we addressed the key audit matter
We focused on this area due to the significance of
the amounts involved in the separate and
consolidated financial statements and also
because of the nature of the judgements and
assumptions that the management is required to
make.
Impairment provision rep
resents management's
best estimate of risk of default and the expected
credit losses within the loans and advances at the
reporting date.
Management makes judgments about the future
and various items in the separate and consolidated
financial statements a
re subject to estimation
uncertainty. The estimates required for credit loss
allowances for loans and advances to customer
represent significant estimates.
The key areas of judgement associated with credit
loss adjustments for loans and advances to
customers are the identification of loans that are
deteriorating, the assessment of significant
increase in credit risk, forecasts of future cash
flows as well as expected proceeds from the
realization of collateral and the determination of
the expected credit losses of loans and advances
to customer which are all inherently uncertain.
The impairment provision is measured as either
12-
month expected credit loss or lifetime
expected credit loss, depending on whether there
has been a significant increase in credit risk since
initial recognition.
In order to address the risks associated with
impairment provision for expected credit losses on
loans and receivables from customers, identified as
key audit matter, we have designed audit
procedures that allowed us to obt
ain sufficient
appropriate audit evidence for our opinion.
Our audit procedures in this area included, among
others:
• reviewing the methodology of the Bank and the
Group for the calculation of the expected
credit loss and assessing its compliance with
the
requirements of International Financial
Reporting Standards 9: Financial Instruments
(“IFRS 9”),
• obtaining an understanding of the provisioning
process, IT applications used therein, as well as
key data sources and assumptions for data used
in the expected credit loss model,
•
evaluating the design, implementation and
operational effectiveness of controls in credit
risk management and lending processes, and
tested key controls related to the approval,
recording and monitoring of loans and
advances,
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Annual Report of HPB Group
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3
Key audit matter How we addressed the key audit matter
For individually significant loans or exposures
that are exceeding EUR 150 thousand
individually and for which there has been a
default (non-
revenue exposures), the
impairment assessment is based on the
knowledge of each individual borrower and
often on estimation of the fair value of the
related collateral.
Related impairment provisions are determined
on an individual basis by means of a discounted
cash flows analysis.
Impairment provision for performing exposures
and non-performing retail exposures as well as
non-
performing corporate exposures below
EUR 150 thousand individually (together
“collective value adjustment”) are determined
by modelling techniques.
Historical experience, identification of
exposures with a significant deterioration in
credit quality, forward-
looking information
and management judgment are incorporated
into the model assumptions. The Bank is
continuously recalibrating the model
parameters which also requires our increased
attention in the audit.
Related disclosures accompanying the annual
financial statements
For additional information see notes: 2.1.
(Credit risk), 3. (Accounting estimates and
judgements in applying accounting policies)
and note 10. (Loans and advances to
customers)
• testing the design, implementatio
n and
operational effectiveness of selected key
controls in the areas of customer rating, as well
as the controls relating to the identification of
loss events and default, appropriateness of
classification of exposures between performing
and non-performin
g and their segmentation
into homogenous groups, calculation of days
past due, collateral valuations and calculation
of the value adjustments,
•
testing, on a sample basis, whether the
definition of default and the staging criteria
were consistently applied in accordance with
relevant policies,
•
evaluating the overall modelling approach of
calculation of expected credit losses (ECLs),
including the calculation of main risk
parameters and macroeconomic factors
(probability of default (PD), loss given default
(LGD) and exposure at default (EAD)),
• testing the adequacy of individual impairment
provisions, on a sample basis, with focus on
those with the greatest potential impact on the
financial statements due to their magnitude
and risk characteristics, as well as lower value
items, which we independently assessed as
high-risk,
•
conducting a test of details of the selected
sample to assess the correctness of the loan
classification,
• in certain cases, we used our own judgment to
determine the parameters for calculating
impairment losses on loans and compared our
calculations with the impairment of the value
calculated by the Bank,
• evaluating the accuracy and completeness of
the financial statement disclosures.
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BDO Croatia d.o.o.
4
Key audit matters (continued)
Litigation provisions
As at 31 December 2024, in the consolidated financial statements litigation provisions amount to EUR
26.7 million (31 December 2023: EUR 29 million).
As at 31 December 2024, in the separate financial statements litigation provisions amount to EUR
26.7 million (31 December 2023: EUR 29 million).
Key audit matter
How we addressed the key audit matter
On 3 July 2023 the Bank, due to the merger of
Nova Hrvatska banka d.d., recognized provisions
for litigation provisions for loans initially
approved or indexed in Swiss francs (“CHF”).
Litigation provisions refer to loans which are
denominated in “CHF”, including claims for the
declaration of invalidity of the loan agreement,
as a whole, and claims for invalidation of
specific clauses of the loan agreement and the
default interest on the loans that were
converted from “CHF” to “EUR” according to the
Law on consumer lending.
Litigation provisions represent the Management
Board’s best estimate considering the moment
and the volume of potential outflow of economic
r
esources required for the settlement of
liabilities on the reporting date.
We focused on this area due to significance of
the judgements and estimates in use of
International accounting standard 37 that it
includes when estimating potential outflow of
the
economic resources required for the
settlement of the Bank’s liabilities that came
out of these court disputes, considering their
inherent uncertainty.
Related disclosures accompanying the annual
financial statements
For additional information see notes: 3.
(Accounting estimates and judgements in
applying accounting policies) and note 22.
(Provisions for commitments and contingencies)
Our audit procedures in this area included, among
others:
• obtaining an understanding of the estimation of
litigation provisions regarding the loans initially
approved in “CHF” and methodology used
therein
•
detailed review of court disputes against the
Bank regarding the loans denominated in “CHF”
as well as the analytics of provisions recognized
by these court disputes. We w
ill agree this
information with the information presented in
the financial statements and the information
that we will receive from the Bank’s external
legal representatives
•
as a part of our testing the estimate of the
Management Board we requested independent
review and the opinion on the court disputes
against the Bank from the Bank’s external legal
representatives and we will verify the adequacy
of the provisions by comparing the Bank’s
provisions with the opinion of the external legal
representatives an
d publicly available
information in order to reconsider Management
Board’s key judgements
•
estimate of the arithmetic accuracy of the
calculation of provisions by reperforming the
calculation of expected provisions for liabilities
and expenses
• evaluation of the accuracy and completeness of
the disclosures in the financial statements
regarding litigation provisions by criteria od
adequacy and compliance with the
International accounting standard 37
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Annual Report of HPB Group
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5
Other information in the Annual Report
The Management Board is responsible for the other information. The other information includes the
Management Report, the Sustainability Report and the Statement on the Application of the Corporate
Governance Code, but does not include the unconsolidated and consolidated annual financial statements
and our Independent Auditor's Report on them.
Our opinion on the separate and consolidated annual financial statements does not include other
information.
In relation with our audit of the separate and consolidated annual financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the separate and consolidated annual financial statements or with our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
With regard to the Management Report and the Statement on the Application of the Corporate
Governance Code, we have completed procedures prescribed by the Accounting Act. These procedures
include checking whether The management report prepared in accordance with Article 24 of the
Accounting Act and whether it contains the Statement of application of the corporate governance code
data from Article 25 of the Accounting Act.
Based on the procedures performed, to the extent we are able to assess, we report that:
1. the information in the attached Management Report and Statement on the Application of the
Corporate Governance Code is consistent, in all material respects, with the attached annual
consolidated and unconsolidated financial statements;
2. attached Management Report is prepared in accordance with Article 24 of the Accounting Law;
3. The attached Statement on the Application of the Corporate Governance Code includes the
information defined in Article 25 of the Accounting Act; and
4. In relation to the Sustainability Report, which is included as part of the other information and
forms a separate part of the Management Report, we have performed limited procedures to issue
a limited assurance report, the results of which are presented as a separate limited assurance
report with an unmodified conclusion.
Based on our knowledge and understanding of the Bank's and the Group's operations and their
environment obtained in the course of our audit of the annual consolidated and unconsolidated financial
statements, we are required to report if we have identified any material misstatements in the
accompanying Management Report, Sustainability Report and Corporate Governance Statement. We have
nothing to report on in this regard.
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BDO Croatia d.o.o.
6
Responsibilities of Management and those charged with Governance for the Annual Financial
Statements
The Management Board is responsible for the preparation of annual financial statements that give a true
and fair view in accordance with IFRS, and for such internal controls that the Management Board
determines necessary to enable the preparation of separate and consolidated annual financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the separate and consolidated annual financial statements, the Management Board is
responsible for assessing the Bank’s and the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going-concern basis of accounting unless
Management Board either intends to liquidate the Bank or the Group or to cease operations, or has no
realistic alternative but to do so. Those charged with governance are responsible for overseeing the
Bank’s and the Group’s financial reporting process.
Auditor’s Responsibility for the Audit of the Annual Financial Statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated annual
financial statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a higher level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users made based on these annual financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the separate and consolidated annual
financial statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Bank’s and the Group’s internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management of the Bank.
• make conclusion on the appropriateness of Management Board’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Bank’s and the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the separate and consolidated
annual financial statements or if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Bank to cease to continue as a going concern.
180180
Annual Report of HPB Group
BDO Croatia d.o.o.
7
Auditor’s Responsibility for the Audit of the Annual Financial Statements (continued)
• evaluate the overall presentation, structure and content of the separate and consolidated annual
financial statements, including the disclosures, and whether the separate and consolidated annual
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also give a statement to those charged with governance that we have acted in accordance with
relevant ethical requirements regarding independence and that we will communicate with them on all
relationships and other issues that can reasonably be considered to affect our independence as well as,
where applicable, about related protections.
Among the matters we are communicating with those charged with governance, we determine those
matters that are of utmost importance in auditing the annual financial statements for the current period
and are therefore key audit matters. We describe these matters in our independent auditor’s report
unless the law or regulations prevents public disclosure or when, in exceptionally rare circumstances,
we decide that the matter should not be reported in our independent auditor’s report as it can reasonably
be expected that the negative effects of the announcement will surpass the welfare of public interest in
such disclosure.
Report on other legal requirements
On 23 July 2024, the General Assembly of the Bank appointed us to conduct an audit of the Bank’s
separate and consolidated annual financial statements for the year 2024.
At the date of this Independent Auditor's Report, we have been continuosly engaged in performing the
statutory audit of the Bank's annual financial statements from 2023 which in total amounts to 2 years.
In the audit of the Bank's separate and consolidated annual financial statements for 2024, we have
determined the following materiality levels for the financial statements as a whole:
• for the separate annual financial statements: EUR 11 million
• for the consolidated annual financial statements: EUR 11 million
which represents approximately 2% of the of the Bank's or Group's net assets for the year 2024.
We chose net assets as the benchmark because, in our view, it is the benchmark against which the
performance of the Bank and the Group is commonly measured by users and is a generally acceptable
benchmark. Our audit opinion is consistent with the additional report for the Bank's auditing board,
prepared in accordance with the provisions of Article 11 of Regulation (EU) No. 537/2014.
During the period between the initial date of the audited separate and consolidated annual financial
statements of the Bank for the year 2024 and the date of this Report, we did not provide the Bank and
the Group with prohibited non-assurance services and we did not provide internal control or risk
management procedure design and implementation services in the business year prior to the
aforementioned period related to the preparation and/or control of financial information or the design
and implementation of financial information technological systems and we have maintained
independence in relation to the Bank during the performance of the audit.
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BDO Croatia d.o.o.
8
Report on other legal requirements (continued)
Pursuant to the Decision on the structure and contents of annual financial statements published by
Croatian National Bank (OG 42/18, 122/20, 119/21 and 108/22), the Bank’s Management prepared forms
presented on in the section "
Regulatory financial statements for the Croatian National Bank" (hereinafter
„the Forms“). The financial information in the Forms is derived from the separate and consolidated
financial statements on which we expressed our opinion as stated in the section Opinion above.
Report based on the requirements of the ESEF Regulation
Auditor's assurance report on the compliance of annual separate and consolidated financial statements
(hereinafter: financial statements), prepared pursuant to the provision of Article 462, paragraph 5 of the
Capital Market Act (Official Gazette, nos. 65/18, 17/20 and 83/21) by applying the Delegated Regulation
(EU) 2018/815 establishing a single electronic reporting format for issuers (hereinafter: the ESEF
Regulation).
We conducted the engagement with expressing reasonable assurance as to whether the financial
statements prepared for the purposes of public disclosure pursuant to Article 462, paragraph 5 of
the Capital Market Act, which are contained in the electronic file
hrvatskapostanska-2024-12-31-0-en
in all material aspects prepared in accordance with the requirements of the ESEF Regulation.
Responsibilities of Management and those charged with governance
The Bank's Management is responsible for the preparation and content of the financial statements in
accordance with the ESEF Regulation. In addition, the Bank's Management is responsible for maintaining
a system of internal controls that reasonably assures the preparation of financial statements without
material non-compliance with the reporting requirements of the ESEF Regulation, whether due to fraud
or error.
The Management of the Bank is also responsible for:
- public disclosure of the financial statements contained in the annual report in a valid XBRL format,
and
- selection and use of XBRL codes in accordance with the requirements of the ESEF Regulation.
Those in charge of governance are responsible for overseeing the preparation of financial statements in
the ESEF format as part of the financial reporting process.
Auditor's responsibilities
It is our responsibility to express a conclusion, based on the audit evidence gathered, as to whether
the financial statements are free from material non-compliance with the requirements of the
ESEF Regulation. We conducted
this reasonable assurance engagement in accordance with
International Standard on Assurance Engagements (ISAE) 3000 (revised) - Assurance engagements other
than audits or reviews of historical financial information.
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Annual Report of HPB Group
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9
Report based on the requirements of the ESEF Regulation
Procedures performed
The nature, timing and extent of the procedures selected depend on the auditor's judgment.
Reasonable assurance is a high level of assurance. However, it does not assure that the scope of
testing will reveal all significant (material) non-compliance with the ESEF Regulation.
As part of the selected procedures, we have performed the following activities:
- we have read the requirements of the ESEF Regulation,
- we have gained an understanding of the Bank's internal controls relevant to the application of the
requirements of the ESEF Regulation,
- we have identified and assessed the risks of material non-compliance with the ESEF Regulation due
to fraud or errors; and
- based on that, we have planned and designed procedures for responding to assessed risks and for
obtaining reasonable assurance for the purpose of expressing our conclusion.
The aim of our procedures was to assess whether:
- the financial statements, which are included in the separate and consolidated annual report, are
prepared in the valid XHTML format,
- the information contained in the separate and consolidated financial statements required by
ESEF Regulation, are labelled and all labels meet the following requirements:
- XBRL markup language was used,
- the elements of the basic taxonomy listed in the ESEF Regulation with the closest accounting
meaning were used, unless an additional element of taxonomy has been created in accordance with
Annex IV ESEF Regulations,
- the labels comply with the common labelling rules under the ESEF Regulation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Conclusion
In our opinion, based on the procedures performed and the evidence obtained, the financial
statements presented in ESEF format, contained in the above-mentioned electronic file and based on
the provision of Article 462, paragraph 5 of the Capital Market Act prepared for the purposes of public
disclosure, in all material respects are in line with the requirements of the ESEF Regulation for the
year ended 31 December 2024. Our conclusion is not an opinion on the truthfulness and fair
presentation of the financial statements presented in electronic form. In addition, we do not express
our assurance in other information published with documents in ESEF format.
The partner engaged in the audit of the Bank's and Group's annual financial statements for the year
2024 resulting in this Independent auditor's report is Ivan Čajko, certified auditor.
Zagreb, 28 March 2024
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184
Content of Financial Reports
Unconsolidated and Consolidated Statement
of Financial Position ......................................................... 187
Unconsolidated and Consolidated Statement
of Profit or Loss ................................................................ 188
Unconsolidated and Consolidated Statement
of Other Comprehensive Income .....................................189
Consolidated Statement of Changes in Equity ................190
Unconsolidated Statement of Changes in Equity ............ 191
Consolidated Cash Flow Statement ................................192
Unconsolidated Cash Flow Statement ............................193
Notes to the Financial statements ....................................194
186
Financial Reports
Unconsolidated and Consolidated Statement of Financial Position
for the year ended December 31, 2024
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
EUR '000 GROUP BANK
Notes | 31/12/2024 | 31/12/2023 | 31/12/2024 | 31/12/2023 | |
| ASSETS | |||||
Cash and Cash Equivalents | 5 | ||||
Loans and Receivables from Banks | 6 | ||||
| Financial Assets at Fair Value through Profit | 7 | ||||
| and Loss | |||||
Financial Assets at Fair Value through Other Comprehensive Income | 8 | ||||
Financial Assets at Amortized Cost | 9 | ||||
Loans and Receivables from Customers | 10 | ||||
Investment in subsidiaries | 12 | ||||
Deferred tax assets, net | 16 | ||||
Tax Prepayment | |||||
Other Assets | 17 | ||||
Property, Equipment and asset with right of use | 13 | ||||
Investment Property | 14 | ||||
Intangible Assets | 15 | ||||
TOTAL ASSETS | |||||
| LIABILITIES | |||||
Financial Liabilities at Fair Value through Profit and Loss | 18 | ||||
Deposits from Banks | 19 | ||||
Customer Deposits | 20 | ||||
Borrowings | 21 | ||||
Provisions for commitments and contingencies | 22 | ||||
Income tax liability | |||||
Other Liabilities | 23 | ||||
TOTAL LIABILITIES | |||||
| EQUITY | |||||
Share Capital | 24 | ||||
Reserves for treasury shares | 24 | ||||
Statutory Reserve | 24 | ||||
Other Reserves | 24 | ||||
Fair Value Reserve | 24 | ||||
Revaluation Reserve | 24 | ||||
Retained Earnings | 24 | ||||
TOTAL EQUITY | |||||
TOTAL LIABILITIES AND EQUITY |
187
▲◄
EUR '000 GROUP BANK
Notes | 31/12/2024 | 31/12/2023 | 31/12/2024 | 31/12/2023 | |
Interests Income using the effective interest | 26 | ||||
method | |||||
Other interest income | |||||
Interests Expense | 27 | ( | ( | ( | ( |
Other similar expense | ( | ( | ( | ( | |
Net Interest Income | |||||
Fees and Commissions Income | 28 | ||||
Fees and Commissions Expense | 29 | ( | ( | ( | ( |
Net Fees and Commissions Income | |||||
Net Gains from Financial Instruments at Fair Value through Profit and Loss | 30 | ||||
Realized Gains on Disposal of Debt | |||||
Securities at Fair Value through Other Comprehensive Income | 31 | ||||
Other Operating Income | 32 | ||||
Trading and Other Income | |||||
General and Administrative Expenses | 33 | ( | ( | ( | ( |
Depreciation and Amortization | 13,15 | ( | ( | ( | ( |
Gains/(losses) from loan impairment and receivables from customers and other assets | 34 | ( | ( | ( | ( |
Provisions for Liabilities and Expenses | 22 | ( | ( | ||
Operating expenses | ( | ( | ( | ( | |
PROFIT BEFORE TAX | |||||
Income Tax expense | 35 | ( | ( | ( | ( |
PROFIT FOR THE YEAR |
Unconsolidated and Consolidated Statement of Profit or Loss
for the year ended December 31, 2024
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
188
Financial Reports
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
EUR '000 GROUP BANK
2024 | 2023 | 2024 | 2023 | |
Profit for the Year | ||||
| Other Comprehensive Income | ||||
Items that will not be reclassified subsequently | ||||
to profit or loss | ||||
Equity instruments in assets carried at other comprehensive income - net change in fair value | ||||
Income Tax Relating to Items That Will Not Be Reclassified Subsequently | ( | ( | ( | ( |
Net Other Comprehensive Loss for the Year, net of tax | ||||
Total Comprehensive Income for the Year | ||||
EUR ‘000 | GROUP | BANK | ||
2024 | 2023 | 2024 | 2023 | |
Profit for the Year | ||||
Earnings per share – Basic and Diluted |
Unconsolidated and Consolidated Statement of Other Comprehensive Income
for the year ended December 31, 2024
189
▲◄
Consolidated Statement of Changes in Equity
for the year ended December 31, 2024
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
GROUP
Share
Capital
Own
Shares
Reserve
for Own
Shares
Other
and legal
reserves
Fair Value
Reserve
Revaluation
Reserve
Retained
Earnings Total
| EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | |
Balance at 1 January 2023 | ||||||||
Equity instruments in assets | ||||||||
carried at other comprehensive income - net change in fair value | ||||||||
Deferred Tax | ( | ( | ||||||
Total comprehensive income | ||||||||
Net profit for the period | ||||||||
Total Comprehensive Income | ||||||||
for 2023 | ||||||||
Change based on the Conversion Law of HRK to EUR | ( | |||||||
Purchase of treasury ahares | ( | ( | ||||||
Share based payment | ||||||||
Other changes | ( | ( | ||||||
Dividend payment | ( | ( | ||||||
Transfer to Statutory Reserves | ( | |||||||
and other reserves | ||||||||
Balance as at 31 December | ||||||||
2023 | ||||||||
Balance at 1 January 2024 | ||||||||
Equity instruments in assets | ||||||||
carried at other comprehensive income - net change in fair value | ||||||||
Deferred Tax | ( | ( | ||||||
Total comprehensive income | ||||||||
Net profit for the period | ||||||||
Total Comprehensive Income | ||||||||
for 2024 | ||||||||
Purchase of treasury shares | ||||||||
Share based payment | ( | ( | ||||||
Dividend payment | ( | ( | ||||||
Transfer to Statutory Reserves | ( | |||||||
and other reserves | ||||||||
Balance as at 31 December | ||||||||
2024 |
190
Financial Reports
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
Unconsolidated Statement of Changes in Equity
for the year ended December 31, 2024
BANK
Share
Capital
Own
Shares
Reserve
for Own
Shares
Other
and legal
reserves
Fair Value
Reserve
Revaluation
Reserve
Retained
Earnings Total
EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | EUR '000 | |
Balance at 1 January 2023 | ||||||||
Equity instruments in assets | ||||||||
carried at other comprehensive income - net change in fair value | ||||||||
Deferred Tax | ( | ( | ||||||
Total comprehensive income | ||||||||
Net profit for the period | ||||||||
Total Comprehensive Income | ||||||||
for 2023 | ||||||||
Promjena temeljem Zakona o | ( | |||||||
konverziji kuna u EUR | ||||||||
Povećanje kapitala kroz | ||||||||
poslovna spajanja | ||||||||
Purchase of treasury ahares | ( | ( | ||||||
Share based payment | ||||||||
Isplata dividende | ( | ( | ||||||
Transfer to Statutory Reserves | ( | |||||||
and other reserves | ||||||||
Balance as at 31 December | ||||||||
2023 | ||||||||
Balance at 1 January 2024 | ||||||||
Equity instruments in assets | ||||||||
carried at other comprehensive income - net change in fair value | ||||||||
Deferred Tax | ( | ( | ||||||
Total comprehensive income | ||||||||
Net profit for the period | ||||||||
Total Comprehensive Income | ||||||||
for 2024 | ||||||||
Purchase of treasury shares | ||||||||
Share based payment | ( | ( | ||||||
Dividend payment | ( | ( | ||||||
Transfer to Statutory Reserves | ( | |||||||
and other reserves | ||||||||
Balance as at 31 December | ||||||||
2024 |
191
▲◄
Consolidated Cash Flow Statement
for the year ended December 31, 2024
GROUP
EUR '000 | Notes | 1.1. – 31.12.2024 | 1.1. – 31.12.2023 |
| Cash Flows from Operating Activities | |||
Profit Before Taxation | |||
Adjusted by: | |||
- Depreciation and Amortization | 13, 15 | ||
-Net (profit) / loss on exchange rate differences | ( | ||
- Net Impairment Losses on Loans and Receivables from Customers | |||
and Other assets | |||
- (gains) / losses on provisions for liabilities and charges | 22 | ( | |
- Net change on Financial Assets at Fair Value | 30 | ( | ( |
- Net interest income | ( | ( | |
- Dividend income | ( | ||
| Changes in Operating Assets and Liabilities | |||
Loans and Receivables from Banks | |||
Financial Assets at Fair Value through Profit and Loss | ( | ||
Financial Assets at amortized cost | ( | ( | |
Financial Assets at fair value through other comprehensive income | ( | ( | |
Loans and Receivables from Customers | |||
Other assets | ( | ||
Deposits from Banks | |||
Customer Deposits | |||
Other Liabilities | ( | ||
Interest received | |||
Interest paid | ( | ( | |
Net cash flow from operating activities before taxes | |||
Income Tax Paid | ( | ||
Net cash flow from operating activities | |||
| Cash Flows from Investing Activities | |||
Net purchase of Property, Equipment and Intangible Assets | ( | ( | |
Dividends Received | |||
Net Cash flow from Investing Activities | ( | ( | |
| Cash Flows from Financing Activities | |||
Dividend Paid | ( | ||
Increase in Borrowings | |||
Repayments of Borrowings | ( | ( | |
Other income form financing activities | ( | ( | |
Net Cash flow from Financing Activities | ( | ||
FX changes on cash and cash equivalents | ( | ||
Net Increase in Cash and Cash Equivalents | |||
Cash and Cash Equivalents at the Beginning of the Year | 37 | ||
Cash and Cash Equivalents at the End of the Year | 37 |
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
192
Financial Reports
BANK
EUR '000 | Notes | 1.1. – 31.12.2024 | 1.1. – 31.12.2023 |
Cash Flows from Operating Activities | |||
Profit Before Taxation | |||
Adjusted by: | |||
- Depreciation and Amortization | 13, 15 | ||
-Net (profit) / loss on exchange rate differences | ( | ||
- Net Impairment Losses on Loans and Receivables from Customers | |||
and Other assets | |||
- (gains) / losses on provisions for liabilities and charges | 22 | ( | |
- Net change on Financial Assets at Fair Value | 30 | ( | ( |
- Net interest income | ( | ( | |
- Dividend income | ( | ( | |
Changes in Operating Assets and Liabilities | |||
Loans and Receivables from Banks | |||
Financial Assets at Fair Value through Profit and Loss | ( | ||
Financial Assets at amortized cost | ( | ( | |
Financial Assets at fair value through other comprehensive income | ( | ||
Loans and Receivables from Customers | |||
Other assets | ( | ( | |
Deposits from Banks | ( | ||
Customer Deposits | |||
Other Liabilities | ( | ( | |
Interest received | |||
Interest paid | ( | ( | |
Net cash flow from operating activities before taxes | |||
Income Tax Paid | ( | ||
Net cash flow from operating activities | |||
| Cash Flows from Investing Activities | |||
Investment in subsidiaries | ( | ||
Net purchase of Property, Equipment and Intangible Assets | ( | ( | |
Dividends Received | |||
Net Cash flow from Investing Activities | ( | ||
| Cash Flows from Financing Activities | |||
Dividend Paid | ( | ||
Increase in Borrowings | |||
Repayments of Borrowings | ( | ( | |
Lease repayments under IFRS 16 | ( | ( | |
Net Cash flow from Financing Activities | ( | ||
FX changes on cash and cash equivalents | ( | ||
Net Increase in Cash and Cash Equivalents | |||
Cash and Cash Equivalents at the Beginning of the Year | 37 | ||
Cash and Cash Equivalents at the End of the Year | 37 |
Unconsolidated Cash Flow Statement
for the year ended December 31, 2024
The significant accounting policies and other notes on pages that follow form an integral part of these financial statements.
193
▲◄
Industry State
Ownership as of
31 December 2024
Ownership as of
31 December 2023
HPB Invest Ltd.
Investment Funds
Management
HPB-nekretnine Ltd.
Real Estate Agency and
Construction
Croatia 100% 100%
1. BASIS FOR THE PREPARATION OF FINANCIAL STATEMENTS
Bank is the parent company of the Hrvatska poštanska banka Group ("Group", "HPB Group"), which includes the following
subsidiaries consolidated according International Financial Reporting Standards (IFRS) adopted in European Union:
In the financial statements for the year ended December 31, 2023, the Bank and the Group changed the framework of
financial reporting from reporting in accordance with the legal accounting regulations applicable to banks in the Republic of
Croatia to reporting in accordance with IFRS.
The Bank and the Group did not publish the third balance sheet in its financial statements for the year ended December 31,
2023, in accordance with International Accounting Standard 8 (IAS) Accounting Policies, Changes in Accounting Estimates
and Errors, as it determined that the change in the financial reporting framework does not have a significant impact on the
Bank's and Group’s financial statements.
Significant accounting policies applied in preparation of these financial statements are set out hereafter.
Notes to the Financial statements
for the year ended December 31, 2024
194
Financial Reports
1. BASIS FOR THE PREPARATION OF FINANCIAL STATEMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
195
▲◄
1. BASIS FOR THE PREPARATION OF FINANCIAL STATEMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
196
Financial Reports
2. RISK MANAGEMENT
This note details the Bank's and Group risk exposures as well as the methods applied by the management to identify, measure
and manage those risks for the purpose of preserving capital. The most important types of financial risk to which the Bank is
exposed are credit risk, liquidity risk, interest rate risk in the Bank’s non-trading book, market risk and operational risk.
An integrated system of risk management is established at the Bank and Group level by introducing a set of policies,
procedures, and manuals, determining the limits of risk levels acceptable to the Bank and monitoring their implementation.
The responsibility for determining the framework of the Bank’s and Group risk management lies with the Bank’s Management
Board which has delegated the risk management tasks to the Assets and Liabilities Management Committee, Credit Committee
and Operational Risk Management Committee.
Notes to the Financial statements
for the year ended December 31, 2024
197
▲◄
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
2.1. Credit risk (continued)
2.1.3. Credit Risk Concentration by Industry (continued)
214
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
215
▲ ◄
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
2.2. Liquidity Risk (continued)
2.2.1. Maturity Analysis (continued)
220
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
221
▲ ◄
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
2.5. Foreign Exchange Risk (continued)
228
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
229
▲◄
Notes to the Financial statements
for the year ended December 31, 2024
2. RISK MANAGEMENT (continued)
2.7. Capital Management (continued)
230
Financial Reports
231
▲◄
3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
232
Financial Reports
4. SEGMENT REPORTING
Notes to the Financial statements
for the year ended December 31, 2024
233
▲◄
Financial Reports
4. SEGMENT REPORTING (continued)
Notes to the Financial statements
for the year ended December 31, 2024
237
▲◄
5. CASH AND RECEIVABLES FROM BANKS
Notes to the Financial statements
for the year ended December 31, 2024
238
Financial Reports
6. LOANS TO AND RECEIVABLES FROM BANKS
Notes to the Financial statements
for the year ended December 31, 2024
239
▲◄
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10)
ACCOUNTING POLICY
Notes to the Financial statements
for the year ended December 31, 2024
240
Financial Reports
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10) (continued)
Notes to the Financial statements
for the year ended December 31, 2024
241
▲◄
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10) (continued)
Notes to the Financial statements
for the year ended December 31, 2024
242
Financial Reports
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10) (continued)
Notes to the Financial statements
for the year ended December 31, 2024
243
▲◄
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10) (continued)
Notes to the Financial statements
for the year ended December 31, 2024
244
Financial Reports
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10) (continued)
Notes to the Financial statements
for the year ended December 31, 2024
245
▲◄
FINANCIAL INSTRUMENTS (NOTE 7, 8, 9, 10) (continued)
Notes to the Financial statements
for the year ended December 31, 2024
246
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
247
▲◄
Financial Reports
9. FINANCIAL ASSETS AT AMORTIZED COST (continued)
Notes to the Financial statements
for the year ended December 31, 2024
251
▲◄
10. LOANS TO AND RECEIVABLES FROM CUSTOMERS
Notes to the Financial statements
for the year ended December 31, 2024
252
Financial Reports
10. LOANS TO AND RECEIVABLES FROM CUSTOMERS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
257
▲◄
On December 31, 2024, the Bank and the Group did not have assets held for sale.
Notes to the Financial statements
for the year ended December 31, 2024
12. INVESTMENTS IN SUBSIDIARIES
11. ASSETS HELD FOR SALE
258
Financial Reports
12. INVESTMENTS IN SUBSIDIARIES (continued)
Notes to the Financial statements
for the year ended December 31, 2024
259
▲◄
13. PROPERTY, EQUIPMENT AND ASSETS WITH THE RIGHT TO USE
Notes to the Financial statements
for the year ended December 31, 2024
260
Financial Reports
13. PROPERTY, EQUIPMENT AND ASSETS WITH THE RIGHT TO USE (continued)
Notes to the Financial statements
for the year ended December 31, 2024
261
▲◄
13. PROPERTY, EQUIPMENT AND ASSETS WITH THE RIGHT TO USE (continued)
Notes to the Financial statements
for the year ended December 31, 2024
264
Financial Reports
14. INVESTMENT PROPERTY
Notes to the Financial statements
for the year ended December 31, 2024
265
▲◄
14. INVESTMENT PROPERTY (continued)
Notes to the Financial statements
for the year ended December 31, 2024
15. INTANGIBLE ASSETS
266
Financial Reports
15. INTANGIBLE ASSETS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
267
▲◄
15. INTANGIBLE ASSETS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
270
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
271
▲◄
Financial Reports
16. NET DEFERRED TAX ASSETS/LIABILITIES (continued)
BANK
'000 kn 2024
Recognized
in the P&L
Statement
Recognized
in Equity
and
Reserves
Recognized in
Other
Comprehensive
Income 2023
Deferred Tax Assets
Loans and Advances to Customers 543 (58)
-
- 601
Other Provisions
1,675
(149)
-
-
1,824
Financial Assets
1,717
(592)
-
-
2,309
Deferred tax assets - impairment of land
630
-
-
-
630
Deferred tax assets - revaluation of own
assets
18 -
-
- 18
Deferred tax assets - impairment of tangible
and intangible assets
1,672 (3)
-
- 1,675
Deferred tax assets - IFRS 16 325 123
-
- 202
Deferred Tax Liabilities
Borrowings
(75)
23
-
-
(98)
Actuarial profit / loss - IAS 19 33 -
-
- 33
Revaluation reserve
(1,098)
-
-
-
(1,098)
Fair Value reserve (1,017) -
-
(238) (779)
Deferred Tax Assets, Net
4,423
(656)
-
(238)
5,317
Notes to the Financial statements
for the year ended December 31, 2024
273
▲◄
Notes to the Financial statements
for the year ended December 31, 2024
274
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
275
▲◄
21. BORROWINGS
Borrowings
Leases
Notes to the Financial statements
for the year ended December 31, 2024
276
Financial Reports
21. BORROWINGS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
277
▲◄
21. BORROWINGS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
278
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
279
▲◄
22. PROVISIONS FOR COMMITMENTS AND CONTINGENCIES
Notes to the Financial statements
for the year ended December 31, 2024
280
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
281
▲◄
24. EQUITY AND RESERVES
Retained Earnings/ Accumulated Losses
Profit for the year, retained after appropriations, is transferred to reserves, in accordance with the decision of the
General Assembly.
Loss for the period is charged on the accumulated retained earnings. Any remaining loss is allocated in accordance
with the regulations applicable to trading companies in the Republic of Croatia.
Notes to the Financial statements
for the year ended December 31, 2024
282
Financial Reports
24. EQUITY AND RESERVES (continued)
Notes to the Financial statements
for the year ended December 31, 2024
283
▲◄
24. EQUITY AND RESERVES (continued)
Notes to the Financial statements
for the year ended December 31, 2024
284
Financial Reports
24. EQUITY AND RESERVES (continued)
Notes to the Financial statements
for the year ended December 31, 2024
285
▲◄
INTEREST AND SIMILAR INCOME AND EXPENSE (NOTE 26 AND 27)
25. EARNINGS PER SHARE
Notes to the Financial statements
for the year ended December 31, 2024
286
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
INTEREST AND SIMILAR INCOME AND EXPENSE (NOTE 26 AND 27) (continued)
287
▲◄
Notes to the Financial statements
for the year ended December 31, 2024
288
Financial Reports
FEES AND COMMISSIONS INCOME AND EXPENSE (NOTE 28 AND 29)
Notes to the Financial statements
for the year ended December 31, 2024
289
▲◄
30. NET (LOSESS) / GAINS FROM FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Notes to the Financial statements
for the year ended December 31, 2024
290
Financial Reports
31. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Notes to the Financial statements
for the year ended December 31, 2024
291
▲◄
32. OTHER OPERATING INCOME
33. GENERAL AND ADMINISTRATIVE EXPENSES
Notes to the Financial statements
for the year ended December 31, 2024
292
Financial Reports
33. GENERAL AND ADMINISTRATIVE EXPENSES (continued)
Notes to the Financial statements
for the year ended December 31, 2024
293
▲◄
Notes to the Financial statements
for the year ended December 31, 2024
294
Financial Reports
35. INCOME TAX
Notes to the Financial statements
for the year ended December 31, 2024
295
▲◄
35. INCOME TAX (continued)
Notes to the Financial statements
for the year ended December 31, 2024
296
Financial Reports
Notes to the Financial statements
for the year ended December 31, 2024
297
▲◄
38. CONTINGENT LIABILITIES
Na dan 31, prosinca 2023, godine BANK i GROUP priznale su rezervacije na osnovu portfelja po izvanbilaničnim rizicima
nastale izdavanjem garancija, akreditiva i neiskorištenih odobrenih kredita, u iznosu od 6,329 tisuća eura (2022,: BANK
7,688 tisuća eura, GROUP 8,352 tisuća eura) koji su uključeni u Rezervacije za potencijalne i preuzete obveze (bilješka
22),
In the ordinary course of business, the Bank and Group enters into credit related commitments which are recorded in
off-balance sheet accounts and primarily include guarantees, letters of credit and undrawn loan commitments. S uch
Notes to the Financial statements
for the year ended December 31, 2024
37. CASH AND CASH EQUIVALENTS
298
Financial Reports
39. DERIVATIVE INSTRUMENTS AND DEALINGS IN FOREIGN CURRENCIES
Notes to the Financial statements
for the year ended December 31, 2024
299
▲◄
41. REPURCHASE AND RESALE AGREEMENTS
Notes to the Financial statements
for the year ended December 31, 2024
40 RELATED PARTY TRANSACTIONS (continued)
302
Financial Reports
42. FUNDS MANAGED FOR AND ON BEHALF OF CORPORATE AND RETAIL CUSTOMERS
The Bank and Group manages funds for and on behalf of corporate and retail customers. These amounts do not repre-
sent the Bank's and Group's assets and are excluded from the report of financial position. For the services rendered,
the Bank and Group charges a fee which is recognized in the P&L report on an accrued basis
Subsidiaries
The Bank’s subsidiary also manages six open-end funds with public offering:
HPB Shares fund, HPB Global fund, HPB Short-term bond fund, HPB bond fund, HPB Focus 2026 fund, HPB Bond
plus fund.
Investment funds assets that are managed by the Bank is not part of consolidated reports of the Group.
The investment of the parent company in the investment funds of the parent company are stated at fair value through
profit and loss.
Investment company
The fund has multiple unrelated investors and owns multiple investments. Ownership shares in the Fund are in the form
of shares with limited liability that are classified as liabilities in accordance with IFRS 9 provisions. It is considered that
the Fund meets the definition of an investment company according to IFRS 10, given that the following conditions exist:
1. The Fund acquired funds for the purpose of providing professional investment management services to its
investors,
2. The business purpose of the Fund, which was transferred directly to investors, is investment for capital
appreciation and investment income, and
3. Investments are measured and evaluated on the basis of fair value.
Investments held as part of investment portfolios are reported in funds assets at fair value. This treatment is allowed
under IFRS 10, "Consolidation", which allows funds not to prepare consolidated financial statements but to recognize
and measure the investments held in their portfolios at fair value through the profit and loss account and report them in
accordance with IFRS 9, whereby changes in fair value are recognized in the statement of comprehensive income in
the period of the change.
Although the Bank has a significant share in one of the funds, the key definition of control is not met. The manage-
ment fee is in line with the average of similar funds on the market, i.e. it does not differ significantly or at all compared
to the competition and mainly changes depending on market trends (there is no correlation of the increase in the fee
in relation to the amount of shares) and there is no variable fee that the Group would realized based on the results of
the Fund. The investment structure does not depend entirely on the fund manager or the Bank/Group, as it is mainly
defined by law, and thus through the fund's prospectus itself. Over the years, the structure of the fund has not changed
significantly and is in line with the structure of the main competitors' funds.
Notes to the Financial statements
for the year ended December 31, 2024
303
▲◄
42. FUNDS MANAGED FOR AND ON BEHALF OF CORPORATE AND RETAIL CUSTOMERS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
304
Financial Reports
44. FAIR VALUE OF FINANCIAL INSTRUMENTS
BANK
43. AVERAGE INTEREST RATES (continued)
Notes to the Financial statements
for the year ended December 31, 2024
305
▲◄
44. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
306
Financial Reports
307
▲◄
44. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
308
Financial Reports
44. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
309
▲◄
44. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
310
Financial Reports
44. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Notes to the Financial statements
for the year ended December 31, 2024
311
▲◄
Notes to the Financial statements
for the year ended December 31, 2024
312
314
Statement of Financial Position as at 31 December 2024
Item
ADP
code
Last day of the
preceding
business year
Current
period
1
2
Assets
Cash, cash balances at central banks and other demand deposits
(from 2 to 4)
001 3,103,793,849 3,798,721,069
Cash in hand
002
136,782,367
133,826,421
Cash balances at central banks
003
2,957,462,257
3,654,552,643
Other demand deposits
004
9,549,225 10,342,005
Financial assets held for trading (from 6 to 9)
005
54,809,698
66,015,020
Derivatives
006
612,632 -
Equity instruments 007 14,348,314 27,486,73 3
Debt securities 008 39,848,752 38,528,287
Loans and advances
009
-
-
Non-trading financial assets mandatorily at fair value through profit
or loss (from 11 to 13)
010 490,500 498,236
Equity instruments 011 - -
Debt securities 012 - -
Loans and advances
013
490,500
498,236
Financial assets at fair value through profit or loss (15 + 16) 014 - -
Debt securities
015
- -
Loans and advances 016 - -
Financial assets at fair value through other comprehensive income
(from 18 to 20)
017 4,394,287 5,462,269
Equity instruments
018
4,394,287 5,462,269
Debt securities
019
- -
Loans and advances 020 - -
Financial assets at amortised cost (22 + 23) 021 3,786,154,629 3,918,998,979
Debt securities
022
855,856,956
1,032,259,212
Loans and advances
023
2,930,297,673
2,886,739,767
Derivatives - hedge accounting
024
- -
Fair value changes of the hedged items in portfolio hedge of interest
rate risk
025 - -
Investments in subsidiaries, joint ventures and associates
026
1,295,487
1,495,487
Tangible assets
027
60,791,774
55,596,992
Intangible assets
028
14,601,447
14,910,720
Tax assets 029 5,316,953 4,422,971
Other assets 030 14,404,364 16,477,617
Fixed assets and disposal groups classified as held for sale 031 - -
Total assets (1 + 5 + 10 + 14 + 17 + 21 + from 24 to 31) 032 7,046,052,988 7,882,599,360
Regulatory financial statements for the Croatian National Bank
316
Statement of Financial Position as at 31 December 2024 (continued)
Item
ADP
code
Last day of the
preceding
business year
Current
period
1
2
3
4
Liabilities
Financial liabilities held for trading (from 34 to 38)
033
16,165
541,807
Derivatives
034
16,165
541,807
Short positions
035
-
-
Deposits
036
-
-
Debt securities issued
037
-
-
Other financial liabilities
038
-
-
Financial liabilities at fair value through profit or loss (from 40 to 42) 039 - -
Deposits
040
-
-
Debt securities issued
041
-
-
Other financial liabilities
042
-
-
Financial liabilities measured at amortised cost (from 44 to 46) 043 6,418,350,046 7,243,897,851
Deposits
044
6,3 97, 218 ,638
7,182,370,233
Debt securities issued
045
-
-
Other financial liabilities
046
21,131,408
61,527,618
Derivatives - hedge accounting
047
-
-
Fair value changes of the hedged items in portfolio hedge of interest
rate risk
048 - -
Provisions
049
41,571,561
41,400,648
Tax liabilities
050
7,508,138
6,048,067
Share capital repayable on demand
051
-
-
Other liabilities
052
44,870,183
30,893,121
Liabilities included in disposal groups classified as held for sale 053 - -
Total liabilities (33 + 39 + 43 + from 47 to 53)
054
6,512,316,093
7,322,781,494
Equity
Capital
055
161,970,000
161,970,000
Share premium
056
-
-
Equity instruments issued other than capital
057
-
-
Other equity
058
-
-
Accumulated other comprehensive income
059
8,645,102
9,482,965
Retained profit
060
194,508,595
225,426,381
Revaluation reserves
061
-
-
Other reserves
062
87, 9 9 8 ,143
89,306,875
( – ) Treasury shares
063
-
-
Profit or loss attributable to owners of the parent
064
80,615,055 73,631,645
(-–) Interim dividends
065
-
-
Minority interests [non-controlling interests]
066
-
-
Total equity (from 55 to 66)
067
533,736,895
559,817,866
Total equity and liabilities (54 + 67)
068
7,046,052,988
7,882,599,360
Regulatory financial statements for the Croatian National Bank
317
▲◄
Statement of Profit or Loss for 2024
Item
ADP
code
Same period of
the previous year
Current
period
1
2
3
4
Interest income
001 172,024,623 261,111,178
(Interest expenses)
002
26,248,803 8 3 , 3 87,0 6 5
(Expenses on share capital repayable on demand)
003
-
-
Dividend income
004
983,998 224,832
Fees and commissions income
005 71,14 4, 260 76,788,658
(Fees and commissions expenses)
006 41,786,385 41,416,559
Gains or (-) losses on derecognition of financial assets and liabilities not measured at
fair value through profit or loss, net
007 48,460
-
Gains or (-) losses on financial assets and liabilities held for trading, net
008 6,45 8,10 0 5,348,492
Gains or losses on non-trading financial assets mandatorily at fair value through
profit or loss, net
009 202,518 56,309
Gains or (-) losses on derecognition of financial assets and liabilities at fair value
through profit or loss, net
010
-
-
Gains or (-) losses from hedge accounting, net
011
-
-
Exchange rate differences [gain or (-) loss], net
012 (1,044,303) 606,745
Gains or (-) losses on derecognition of investments in subsidiaries, joint ventures and
associates, net
013
-
-
Gains or (-) losses on derecognition of non-financial assets, net
014 18,970 1,394,753
Other operating income
015
7,671, 3 45 3 ,127,217
(Other operating expenses)
016 4,441,421 2,711,646
Total operating income, net (1 – 2 – 3 + 4 + 5 – 6 + from 7 to 15 – 16)
017 185,031,362 221,142,914
(Administrative expenses)
018 77,899,213 95,583,659
(Cash contributions to resolution boards and deposit guarantee schemes)
019 1,614,947
-
(Depreciation)
020
11,838,680 13,289,523
Modification gains or (-) losses, net
021 (423,864) (557,819)
(Provisions or (-) reversal of provisions)
022
(5,364,485) 7,759,334
(Impairment or (-) reversal of impairment on financial assets not measured at fair
value through profit or loss)
023 1,926,399 13,806,018
(Impairment or (-) reversal of impairment of investments in subsidiaries, joint ventures
and associates)
024
-
-
(Impairment or (-) reversal of impairment on non-financial assets)
025 2,664,464
-
Negative goodwill recognised in profit or loss
026
-
-
Share of the profit or (-) losses of investments in subsidiaries, joint ventures and
associates accounted for using the equity method
027
-
-
Profit or (-) loss from fixed assets and disposal groups classified as held for sale not
qualifying as discontinued operations
028
-
-
Profit or (-) loss before tax from continuing operations (17 – 18 to 20 + 21 - from 22
to 25 + from 26 to 28)
029 94,028,280 90,146,561
(Tax expense or (-) income related to profit or loss from continuing operations)
030 13,413,225 16,514,916
Profit or (-) loss after tax from continuing operations (29 – 30)
031 80,615,055 73,631,645
Profit or (-) loss after tax from discontinued operations (33 – 34)
032 -
-
Profit or (-) loss before tax from discontinued operations
033
-
-
(Tax expense or (-) income related to discontinued operations)
034
-
-
Profit or ( – ) loss for the year (31 + 32; 36 + 37)
035
80,615,055
73,631,645
Attributable to minority interest [non-controlling interests]
036
-
-
Attributable to owners of the parent
037 80,615,055 73,631,645
Regulatory financial statements for the Croatian National Bank
318
Statement of Other Comprehensive income for 2024
Item
ADP
code
Same period of
the previous year
Current
period
1
2
3
4
STATEMENT OF OTHER COMPREHENSIVE INCOME
Income or (-) loss for the current year
038
80,615,055
73,631,645
Other comprehensive income (40+ 52)
039 624,407 837,863
Items that will not be reclassified to profit or loss (from 41 to 47 + 50 + 51)
040 624,407 837,863
Tangible assets
041 - -
Intangible assets
042
- -
Actuarial gains or (-) losses on defined benefit pension plans
043 - -
Fixed assets and disposal groups classified as held for sale
044
- -
Share of other recognised income and expense of entities accounted for using the
equity method
045 - -
Fair value changes of equity instruments measured at fair value through other
comprehensive income
046 707,640 1,075,616
Gains or (-) losses from hedge accounting of equity instruments at fair value
through other comprehensive income, net
047 - -
Fair value changes of equity instruments measured at fair value through other
comprehensive income [hedged item]
048 - -
Fair value changes of equity instruments measured at fair value through other
comprehensive income [hedging instrument]
049 - -
Fair value changes of financial liabilities measured at fair value through profit or
loss attributable to changes in their credit risk
050 - -
Income tax relating to items that will not be reclassified
051 (83,233) (237,753)
Items that may be reclassified to profit or loss (from 53 to 60)
052 - -
Hedge of net investments in foreign operations [effective portion]
053 - -
Foreign currency translation
054 - -
Cash flow hedges [effective portion]
055
- -
Hedging instruments [not designated elements]
056 - -
Debt instruments at fair value through other comprehensive income
057
- -
Fixed assets and disposal groups classified as held for sale
058 - -
Share of other recognised income and expense of investments in subsidiaries, joint
ventures and associates
059 - -
Income tax relating to items that may be reclassified to profit or (-) loss
060 - -
Total comprehensive income for the current year (38 + 39; 62 + 63)
061 81,239,462 74,469,508
Attributable to minority interest [non-controlling interest]
062
-
-
Attributable to owners of the parent
063 81,239,462 74,469,508
Regulatory financial statements for the Croatian National Bank
319
▲◄
Sources of
equity
changes
ADP
code
Attributable to owners of the parent
Non-
controlling
interest
Total
Equity
Share premium
Equity instruments
issued other than
capital
Other equity
Accumulated other
comprehensive income
Retained profit
Revaluation reserves
Other reserves
( ) Treasury shares
Profit or ( - ) loss
attributable to owners
of the parent
(-) Interim dividends
Accumulated other
comprehensive income
Other items
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Opening balance
[before restatement]
001 161,970,000 - - - 8,645,102 194,508,594 - 87,998,14 4 - 80,615,055 - - - 533,736,895
Effects of error
corrections
002 - - - - - 1 - - - - - - - 1
Effects of changes in
accounting policies
003 - - - - - - - - - - - - - -
Opening balance
[current period]
(1 + 2 + 3)
004 161,970,00 - - - 8,645,10 2 194,508,595 - 87,998,144 - 80,615,055 - - - 533,736,896
Ordinary shares issue 005 - - - - - - - - - - - - - -
Preference shares
issue
006 - - - - - - - - - - - - - -
Issue of other equity
instruments
007 - - - - - - - - - - - - - -
Exercise or expiration
of other equity
instruments issued
008 - - - - - - - - - - - - - -
Conversion of
receviables to equity
instruments
009 - - - - - - - - - - - - - -
Capital reduction 010 - - - - - - - - - - - - - -
Dividends 011 - - - - - (48,388,538) - - - - - - - (48,388,538)
Purchase of treasury
shares
012 - - - - - - - - (3,920) - - - - (3,920)
Sale or cancellation of
treasury shares
013 - - - - - - - - 3,920 - - - - 3,920
Reclassification of
financial instruments
from equity to liability
014 - - - - - - - - - - - - - -
Reclassification of
financial instruments
from liability to equity
015 - - - - - - - - - - - - - -
Transfers among
components of equity
016 - - - - - 79,306,324 - - - (79,306,324) - - - -
Equity increase or (
- ) decrease resulting
from business
combinations
017 - - - - - - - - - - - - - -
Share based
payments
018 - - - - - - - - - - - - - -
Other increase or (-)
decrease in equity
019 - - - - - - - 1,308,731 - (1,308,731) - - - -
Total comprehensive
income for the
current year
020 - - - - 837,863 - - - - 73,631,645 - - - 74,469,508
Closing balance
[current period] (from
4 to 20)
021 161,970,000 - - - 9,482,965 225,426,381 - 89,306,875 - 73,631,645 - - - 559,817,866
Statement of Changes in Equity for 2024
Regulatory financial statements for the Croatian National Bank
320
2023 2024
Operating activities - indirect method
Profit/(loss) before tax
94,028,280
90,146 ,561
Adjustments:
-
-
Impairment and provisions
(349,758)
22,12 3,171
Depreciation
11,838,680
13,289,523
Net unrealised (gains)/losses on financial assets and liabilities at fair value
through statement of profit or loss
(4,433,078) (5,404,801)
(Profit)/loss from the sale of tangible assets
-
(1,394,753)
Other non-cash items
(145,715,515)
(178,555,690)
Changes in assets and liabilities from operating activities
Deposits with the Croatian National Bank
-
-
Deposits with financial institutions and loans to financial institutions
-
-
Loans and advances to other clients
425,370,983
43,557,906
Securities and other financial instruments at fair value through other
comprehensive income
- (1,0 67,982)
Securities and other financial instruments held for trading
(95,420)
(11,205,322)
Securities and other financial instruments at fair value through statement of
profit or loss, not traded
- -
Securities and other financial instruments mandatorily at fair value through
statement of profit or loss
417, 6 93 (7,736)
Securities and other financial instruments at amortised cost
(57,295,990)
(176,402,256)
Other assets from operating activities
(1,460,850)
(2,073,253)
Deposits from financial institutions
60,383,971
209,716,508
Transaction accounts of other clients
894,102,619
399,294,389
Savings deposits of other clients
(385,324,934)
(18,777,473)
Time deposits of other clients
469,743,840
219,561,983
Derivative financial liabilities and other liabilities held for trading
(70,801)
525,642
Other liabilities from operating activities
(10,216,511)
(28,033,263)
Interest received from operating activities [indirect method]
172,024,623
261,111,178
Dividends received from operating activities [indirect method]
983,998
224,832
Interest paid from operating activities [indirect method]
(26,248,803)
(83,387,065)
(Income tax paid)
-
(17,081,005)
Net cash flow from operating activities (from 1 to 33)
1,497,683,027
736,161,094
Investing activities
Cash receipts from the sale / payments for the purchase of tangible and
intangible assets
(9,359,869) (11,112,070)
Cash receipts from the sale / payments for the purchase of investments in
branches, associates and joint ventures
- (200,000)
Cash receipts from the sale / payments for the purchase of securities and
other financial instruments held to maturity
- -
Dividends received from investing activities
-
-
Other receipts/payments from investing activities
147,986,942
-
Net cash flow from investing activities (from 35 to 39)
138,627,073
(11,312,070)
Financing activities
Net increase/(decrease) in loans received from financing activities
151,100,976
(24,643,812)
Net increase/(decrease) in debt securities issued
-
-
Net increase/(decrease) in Tier 2 capital instruments
-
-
Increase in share capital
-
-
(Dividends paid)
-
(5,284,271)
Other receipts/(payments) from financing activities
-
-
Net cash flow from financing activities (from 41 to 46)
151,100,976
(29,928,083)
Net increase/(decrease) of cash and cash equivalents (34 + 40 + 47)
1,787,411,076
694,920,941
Cash and cash equivalents at the beginning of period
1,316,506,298
3,103,793,849
Effect of exchange rate fluctuations on cash and cash equivalents
(123,525)
6,279
Cash and cash equivalents at the end of period (48 + 49 + 50)
3,103,793,849
3,798,721,069
Cash Flow Statement for 2024
Regulatory financial statements for the Croatian National Bank
321
▲◄
Differences in reporting treatment of different items of assets in the Statement of Financial Position for the year 2024, between the regulatory financial reports and statutory financial reports
are presented in table above. Amount of total assets is the same.
Statement of Financial Position Reconciliation as of December 31, 2024
ASSETS
Statutory reporting
Regulatory reporting
EUR '000
Regulatory
reporting
Cash
and amounts
due from
banks
Loans and
receivables
from banks
Financial
assets
at fair value
through
profit and loss
Financial
assets
at fair value
through
other compre-
hensive
income
Financial
assets
at amortized
cost
Loans and
receivables
from
customers
Assets
held for
sale
Investments
in
subsidiaries
Property,
plant and
equipment
Investment
property
Intangible
assets
Net deferred
tax assets/
liabilities
Tax
prepayment
Other
assets
Reconciliation
between
statutory
and
regulatory
reporting
Cash in register
133,826 (133,826) - - - - - - - - - - - - - -
Deposits with the central
banks
3,654,553 (3,654,553) - - - - - - - - - - - - - -
Other a vista deposits 10,342 (10,342) - - - - - - - - - - - - - -
Financial assets held for
trading
66,015 - - (66,015) - - - - - - - - - - - -
Financial assets non for
trading, mandatory
measured at fair value
through profit and loss
498 - - (498) - - - - - - - - - - - -
Financial assets at fair value
through other
comprehensive income
5,462 - - - (5,462) - - - - - - - - - - -
Financial assets measured
at amortized cost - debt
securities
1,032,259 - - - - (1,032,259) - - - - - - - - - -
Financial assets measured
at amortized cost - loans
2,886,740 - (2,284) - - - (2,884,456) - - - - - - - - -
Investments in subsidiaries,
joint ventures and
associates
1,495 - - - - - - - (1,495) - - - - - - -
Tangible assets (less
depreciation
55,597 - - - - - - - - (51,211) (4,386) - - - - -
Intangible assets 14,911 - - - - - - - - - - (14,911) - - - -
Tax assets 4,423 - - - - - - - - - - - (4,423) - - -
Other assets 16,478 (19) - - - - 15,755 - - - - - - - (32,214) -
Non current assets and
disposable groups classified
as held for sale
- - - - - - - - - - - - - - - -
TOTAL ASSETS 7,882,599 (3,798,740) (2,284) (66,513) (5,462) (1,032,259) (2,868,701) - (1,495) (51,211) (4,386) (14,911) (4,423) - (32,214) -
Regulatory financial statements for the Croatian National Bank
322
Regulatory reporting
Statutory reporting
EUR '000
Regulatory
reporting
Financial
liabilities at
fair value
through
profit and
loss
Deposits
from banks
Customer
deposits Borrowing
Provision for
liabilities and
expenses
Current tax
liability
Other
liabilities
Reconciliation
between
statutory
and
regulatory
reporting
Financial
liabilities held
for trading
542 (542) - - - - - - -
Financial
liabilities at
amortized
cost
7, 243,89 8 - (76,798) (6,656,828) (456,928) - - (53,344) -
Provisions 41,401 - - - - (41,401) - - -
Tax liabilities 6,048 - - - - - (6,048) -
Other
liabilities
30,893 - - - - - - (30,893) -
TOTAL
LIABILITIES
7,322,782 (542) (76,798) (6,656,828) (456,928) (41,401) (6,048) (84,237) -
Statement of Financial Position Reconciliation as of December 31, 2024 (continued)
LIABILITIES
Regulatory financial statements for the Croatian National Bank
323
▲◄
Statement of Changes in Equity reconciliation for 2024
Except for differences in terminology between regulatory and statutory financial reports, the reconciliation refers to:
• Other reserves in regulatory financial report are contained in the item’s treasury shares reserves, statutory reserves and
other reserves the statutory financial reports,
• Accumulated other comprehensive income in the regulatory financial reports is within items fair value reserve and
revaluation reserve in the statutory financial reports,
• Profit / loss attributable to the owners of the parent company in regulatory financial reports is within the item retained
earnings / (uncovered loss) in the statutory financial reports
Statutory reporting
Regulatory reporting
EUR '000
Regulatory
reporting
Share
Capital
Capital
gain
Treasury
shares
Reserves
for treasuty
shares
Statutory
reserves
Other
reserves
Fair value
reserve
Revaluation
reserve
Retained
earning/
(recovered
loss)
Reconci-
liation
between
statutory
and
regulatory
reporting
Distributable to capital owners
Share capital 161,970 (161,970) - - - - - - - - -
Premium on
equity
- - - - - - - - - - -
Issued equity
instruments
- - - - - - - - - - -
Other equity
instruments
- - - - - - - - - - -
Accumulated
other
comprehensive
income
9,483 - - - - - - (4,479) (5,004) - -
Retained
earnings
225,426 - - - - - - - - (225,426) -
Revaluation
reserves
- - - - - - - - - - -
Other reserves 89,307 - - - (594) (8,099) (80,614) - - - -
Treasury
equities
- - - - - - - - - - -
Profit or loss
belonging to
mother
company
owners
73,632 - - - - - - - - (73,632) -
Dividends
during business
year
- - - - - - - - - - -
Minority
instruments
Accumulated
other
comprehensive
income
- - - - - - - - - - -
Other - - - - - - - - - - -
TOTAL
CAPITAL
559,818 - - - (594) (8,099) (80,614) (4,479) (5,004) (299,058) -
Statement of Financial Position Reconciliation as of December 31, 2024 (continued)
EQUITY
Regulatory financial statements for the Croatian National Bank
324
Statement of Profit or Loss reconciliation for 2024
Statutory reporting
Regulatory reporting
'EUR '000
Total
regulatory
reporting
Interests
and similar
income
Interests
and similar
expense
Fees and
commission
income
Rashod od
naknada i
provizija
Gains less
losses
arising from
financial
instruments
at fair value
through
profit and
loss
Gains less
losses
arising from
financial
instruments
available
from sale
Gains less
losses
arising from
dealing
in foreign
currencies
Other
operating
income
General
administrative
expenses
Depreciation
and
amortization
Impairment
losses on
loans and
receivables
from
customers
and other
assets
Provisions
for liabilities
and
expenses
Profit before
tax
Deferred
income tax
(expense)/
income
Profit for the
year
Total
statutory
reporting
Reconciliation
between
statutory and
regulatory
reporting
Interest income
261,111
261,111
-
-
-
-
-
-
-
-
-
-
-
-
-
-
261,111
-
Interest expense
(83,387)
-
(83,387)
-
-
-
-
-
-
-
-
-
-
-
-
-
(83,387)
-
Expenses from share capital that is returned on demand
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend income
225
-
-
-
-
197
28
-
-
-
-
-
-
-
-
-
225
-
Fee and commission income
76,789
-
-
76,789
-
-
-
-
-
-
-
-
-
-
-
-
76,789
-
Fee and commission expense
(41,417)
-
-
-
(41,417)
-
-
-
-
-
-
-
-
-
-
-
(41,417)
-
Gains of losses from recognition of financial assets and
liabilities not measured at fair value through profit and loss
account, net
- - - - - - - - - - - - - - - - - -
Gains or losses from financial assets and liabilities held for
trading, net
5,348 - - - - 5,348 - - - - - - - - - - 5,348 -
Gains or losses on non-trading financial assets measured at
fair value through profit or loss, net
56 - - - - 56 - - - - - - - - - - 56 -
Gains or losses on financial assets and financial liabilities at
fair value through profit or loss, net
- - - - - - - - - - - - - - - - - -
Gains or losses from hedge accounting, net
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Exchange rate differences (gain or loss), net
607
-
-
-
-
-
-
-
607
-
-
-
-
-
-
-
607
-
Gains or (–) losses on derecognition of investments in
subsidiaries, joint ventures and associates, net
- - - - - - - - - - - - - - - - - -
Gains or (–) losses on derecognition of non-financial assets,
net
1,395 - - - - - - - 1,395 - - - - - - - 1,395 -
Other operating income
3,127
-
-
-
-
-
-
-
3,127
-
-
-
-
-
-
-
3,127
-
Other operating expense
(2,712)
-
-
-
-
-
-
-
-
(2,712)
-
-
-
-
-
-
(2,712)
-
Administrative expense
(95,584)
-
-
-
-
-
-
-
-
(95,584)
-
-
-
-
-
-
(95,584)
-
Cash contributions to resolution committees and deposit
insurance system
- - - - - - - - - - - - - - - - - -
Depreciation
(13,290)
-
-
-
-
-
-
-
-
-
(13,290)
-
-
-
-
-
(13,290)
-
Gains or losses from changes, net
(558)
-
-
-
-
-
-
-
-
-
-
(558)
-
-
-
-
(558)
-
Provisions or reversal of provisions
(7,759)
-
-
-
-
-
-
-
-
-
-
(7,759)
-
-
-
(7,759)
-
Impairment or reversal of an impairment loss on a financial
asset not measured at fair value through profit or loss
(13,806) - - - - - - - - - - (13,806) - - - - (13,806) -
Impairment or reversal of impairment of investments in
subsidiaries, joint ventures and associates
- - - - - - - - - - - - - - - - - -
Impairment or reversal of impairment of non-financial assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Negative goodwill recognized in profit or loss
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Part of profits or (–) losses from investments in subsidiaries,
joint ventures and associated companies calculated using the
equity method
- - - - - - - - - - - - - - - - - -
Gain or (–) loss on non-current assets and disposal groups
classified as held for sale that do not qualify as continuing
operations
- - - - - - - - - - - - - - - - - -
PROFIT OR LOSS BEFORE TAX FROM CONTINUING
BUSINESS (AOP 084 - 085 - 086 + 087 - 088 to 091+ 092 to
094)
90,147 - - - - - - - - - - - - 9 0,147 - - 90 ,147 -
Tax expense or income related to operating profit or loss from
continuing business
(16,515) - - - - - - - - - - - - - (16,515) - (16,515) -
PROFIT OR LOSS AFTER TAX FROM CONTINUING
BUSINESS (AOP 095 - 096)
73,632 - - - - - - - - - - - - - - 73,632 73,632 -
Profit or loss after tax from continuing operations (AOP 099
- 100)
- - - - - - - - - - - - - - - - - -
- Profit or loss before tax from non-continuing business
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- Tax expenses or income related to non-continuing business
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
PROFIT OR LOSS FOR THE CURRENT YEAR (AOP 097 +
098; 102 + 103)
73,632 - - - - - - - - - - - - - - 73,632 73,632 -
Differences in reporting treatment of different items of profit or loss in the Statement of Profit or Loss for the year 2024, between the regulatory financial reports and statutory
financial reports are presented in table above and there is no mismatch between the profit and loss account for 2024, between the regulatory financial reports and statutory
financial reports.
Regulatory financial statements for the Croatian National Bank
325
▲◄
Cash Flow Statement reconciliation for 2024
EUR '000
Regulatory
Financial
Reports
Statutory
reporting
Difference
Operating activities and adjustments
Profit/ (Loss) Before Tax 90,147 9 0,147 -
Adjustments:
Impairment Losses and Provisions 22,123 2 2,123 -
Depreciation and Amortization 13,290 13,290 -
Net Unrealized (Gains)/Losses on Financial Assets
and Liabilities at Fair Value through P&L
(5,405) (5,405) -
(Gains)/Losses on Sale of Tangible Assets (1,395) - (1,395)
Other Non-monetary Items (178,556) (178,556) -
Changes in Operating Assets and Liabilities
Loans and Advances to Other Customers 43,558 41,235 2,323
Securities and Other Financial Instruments at Fair Value
through OCI
(1,068) (1,068) -
Securities and Other Financial Instruments Held for Trading (11,205) (11,213) 8
Securities and Other Financial Instruments Mandatory at Fair
Value through P&L
(8) - (8)
Securities and Other Financial Instruments Measured at
Amortized Cost
(176,402) (176,402) -
Other Operating Assets (2,073) (902) (1,171)
Deposits from Financial Institutions 209,717 - 209,717
Deposits from banks - 25,413 (25,413)
Transaction Accounts of Other Customers 399,294 - 399,294
Saving Deposits of Other Customers (18,777) - (18,777)
Term Deposits of Other Customers 219,562 - 219,562
Deposits from clients - 784,332 (784,332)
Derivative Financial Liabilities and Other Liabilities Not for
Trading
526 - 526
Other Liabilities from Operating Activities (28,035) (24,800) (3,235)
Collected Interest from Operating Activities [indirect method] 261,111 261,111 -
Received Dividend from Operating Activities [indirect method] 225 225 -
Paid Interest from Operating Activities [indirect method] (83,387) (83,387) -
(Income Tax Paid) (17,081) (17,081) -
A) Net Cash Flows from Operating Activities 736,161 739,062
Regulatory financial statements for the Croatian National Bank
326
EUR '000
Regulatory
Financial
Reports
Statutory
reporting
Difference
Investing Activities
Proceeds from Sale/ (Payments for Purchases) of Tangible and
Intangible Assets
(11,112) (10,352) (760)
Proceeds from Sale of/ Payments for Investments in
Subsidiaries, Associates and Joint Ventures
(200) (200) -
B) Net Cash Flows from Investing Activities (11,312) (10,552)
Financing Activities
Net Increase/ (Decrease) in Borrowings from Financing
Activities
(24,644) (28,252) 3,608
(Dividend Paid) (5,284) (5,284) -
C) Net Cash Flows from Financing Activities (29,928) (33,536)
Net Increase in Cash and Cash Equivalents 694,921 694,974 (53)
Cash and Cash Equivalents at the Beginning of the Year 3,103,794 3,115,363 (11,569)
Effect of Changes in Foreign Exchange Rates on Cash and Cash
equivalents
6 6 -
Cash and Cash Equivalents at the End of the Year 3,798,721 3,810,343 (11,622)
Cash Flow Statement reconciliation for 2024 (continued)
1. The amount of EUR (1,395) thousand difference on the item (Gains)/Losses on sale of Tangible Assets arises due to the
fact that same effect in opposite direction is presented on position Other Operating Assets and Proceeds from Sale /
(Payment for Purchases) of Tangible and intangible assets
2. The amount of EUR 2,323 thousand differences on the item Loans and advances to other customers is due to the different
treatment of receivables from banks up to 90 days and other receivables in the Regulatory Financial Statements and in
the Statutory Financial Statements.
3. The amount of EUR 8 thousands of differences on the item Securities and other financial instruments held for trading
arises because the corresponding effect in the opposite direction is shown on the item Securities and other financial
instruments at fair value through profit and loss account
4. The amount of EUR (1,171) thousand differences on the item Other assets from operating activities arises due to the
different treatment of other receivables in the Regulatory Financial Statements and in the Statutory Financial Statements
5. The amount of EUR 209,717 thousand of differences on Deposits from financial institutions and EUR 399,294 thousand
of differences on the Transaction Accounts of other customers and EUR (18,777) thousand of differences on the position
Savings deposits of other customers, EUR 219,562 thousand on the position Term deposits of other customers and EUR
(3,235) thousands in the position Other liabilities from operating activities arise due to the different treatment of the relevant
liability items in the Regulatory Financial Statements and in the Statutory Financial Statements
6. The amount of EUR 526 thousand difference in the position Derivative financial liabilities and other liavbilities not for
trading arises due to different treatment of relevant liability in the Regulatory Financial Statements and in the Statutory
Financial Statements.
7. The amount of EUR 3,608 thousands of differences in the position Net increase/(decrease) in borrowings from financing
activities arises due to a different treatment of IFRS 16 liabilities in the Regulatory Financial Statements and in the
Statutory Financial Statements.
Regulatory financial statements for the Croatian National Bank
327
▲◄
Other legal and regulatory requirements
In accordance with the requirements of Article 164 of the Credit Institutions Act, the Bank discloses the following information:
The Bank provides the following banking and financial services:
• Acceptance of deposits or other repayable funds from the public and granting loans from those funds on its own account
• Acceptance of deposits or other repayable funds
• Granting of loans and credits, including consumer and mortgage loans where permitted by specific legislation, as well
as financing commercial transactions, including export financing through the purchase of receivables with or without
recourse (forfeiting)
• Purchase of receivables with or without recourse (factoring)
• Financial leasing
• Issuance of guarantees or other commitments
• Trading for its own account or on behalf of clients in money market instruments, transferable securities, foreign currencies
including foreign exchange transactions, financial futures and options, as well as currency and interest rate instruments
• Payment services in accordance with specific laws
• Services related to lending, such as data collection, credit analysis, and creditworthiness assessments of legal entities
and self-employed individuals
• Issuance and management of other payment instruments if such services are not considered payment services under
specific laws
• Safe deposit box rentals
• Mediation in money market transactions
• Advisory services for legal entities regarding capital structure, business strategy, and related matters, as well as merg-
ers and acquisitions*
• Issuance of electronic money
• Investment and ancillary services and activities as prescribed by capital markets regulations, including: - Reception and
transmission of orders in relation to one or more financial instruments, - Execution of orders on behalf of clients, - Trading
on own account, - Portfolio management, - Investment advice, - Underwriting and placing of financial instruments with
or without a firm commitment, - Custody and administration of financial instruments for clients, including safekeeping
services and related cash and collateral management services, - Granting credit or loans to investors for the execution
of transactions involving one or more financial instruments, where the institution granting the credit or loan is involved
in the transaction,
• Advisory services regarding capital structure, business strategies, and related matters, as well as services related to
mergers and acquisitions, - Foreign exchange services where they are related to the provision of investment services,
- Investment research and financial analysis, along with other recommendations related to financial instrument trans-
actions , - Services related to underwriting and placing of financial instruments with a firm commitment , - Investment
services, activities, and ancillary services relating to the underlying assets of derivatives as defined in Article 3,
Paragraph 1, Point 2, Subpoint (d), Indents 2, 3, 4, and 7 of the Capital Markets Act, where these investment services
and activities are linked to investment or ancillary services,
• Conducting activities related to the sale of insurance policies in accordance with insurance regulations
The Bank provides these services within the Republic of Croatia and in 2024 achieved:
Net operating income: EUR 221.1 million
Number of employees (full-time equivalent): 1,713
Profit before tax: EUR 90.1 million
Tax expense: EUR 16.5 million
Amount of public subsidies received: Not applicable
Regulatory financial statements for the Croatian National Bank
328
Branch Network
and Contacts
330330
Annual Report of HPB Group
OFFICE JURIŠIĆEVA
Adress: Jurišićeva ulica 4
10 000 Zagreb
phone: 01 4888 356 / 4804 550
fax: 01 4804 522
OFFICE VARŠAVSKA
Adress: Varšavska ulica 9
10 000 Zagreb
phone: 01 6393 416 / 435
OFFICE RAČKI
Adress: Ulica Franje Račkoga 9
10 000 Zagreb
phone: 01 4695 510 / 520
OFFICE BRITANSKI TRG
Adress: Ilica 81
10 000 Zagreb
phone: 01 4686 001
fax: 01 4686 007
OFFICE ILICA
Adress: Ilica 304
10 000 Zagreb
phone: 01 3909 003
OFFICE SAVSKA
Adress: Savska cesta 58
10 000 Zagreb
phone: 01 5553 501
fax: 01 5553 506
OFFICE DUBRAVA
Adress: Avenija Dubrava 47
10 040 Zagreb
phone: 01 2908 973
fax: 01 2908 978
OFFICE SESVETE
Adress: Trg D. Domjanića 8
10 360 Zagreb
phone: 01 2019 270
fax: 01 2019 280
OFFICE MAKSIMIR
Adress: Maksimirska cesta 105
10 000 Zagreb
phone: 01 2383 782
fax: 01 2383 790
OFFICE VMD
Adress: Strojarska cesta 16
10 000 Zagreb
phone: 01 6323 550
fax: 01 6323 613
OFFICE SREDIŠĆE
Adress: Ulica Ivana Šibla 15
10 000 Zagreb
phone: 01 5550 975
fax: 01 5550 979
OFFICE ŠPANSKO
Adress: Trg Ivana Kukuljevića 5
10 000 Zagreb
phone: 01 5551 962
fax: 01 5551 967
OFFICE NOVI ZAGREB
Adress: Resselova b.b.
10 000 Zagreb
phone: 01 6393 490 / 493
OFFICE GAJNICE
Adress: Argetinska ulica 4
10 090 Zagreb
phone: 01 3466 930
fax: 01 3466 939
OFFICE VRBANI
Adress: Horvaćanska cesta 75
10 000 Zagreb
phone: 01 6406 146
OFFICE DUGO SELO
Adress: Ulica Josipa Zorića 28
10 370 Dugo Selo
phone: 01 2781 300 / 306
OFFICE HOTO
Adress: Hoto trg 1
10 434 Strmec
phone: 01 3369 650
fax: 01 3369 660
OFFICE ZAPREŠIĆ
Adress: Trg žrtava fašizma 8
10 290 Zaprešić
phone: 01 3340 270 / 271
fax: 01 3340 278
OFFICE VELIKA GORICA
Adress: Trg kralja Petra
Krešimira IV br. 1
10 410 Velika Gorica
phone: 01 6238 600 / 602
fax: 01 6238 613
OFFICE KARLOVAC
Adress: Ulica dr, Vladka Mačeka 1
47 000 Karlovac
phone: 047 555 040 / 042
fax: 047 555 049
Hrvatska poštanska banka, p.l.c.
HEADQUARTER
Adress: Jurišićeva ulica 4
10 000 Zagreb
phone: 072 472 472
0800 472 472
01 4805 057
fax: 01 4810 773
e-mail: hpb@hpb,hr
SWIFT: HPBZHR2X
web site: www.hpb,hr
RCS Središnja Hrvatska
331331
▲
OFFICE BJELOVAR
Adress: Trg Eugena Kvaternika 1
43 000 Bjelovar
phone: 043 555 090 / 095
fax: 043 555 099
OFFICE KOPRIVNICA
Adress: Florijanski trg 13
48 000 Koprivnica
phone: 048 555 090
fax: 048 555 099
OFFICE ČAKOVEC
Adress: Otokara Keršovanija 1
40 000 Čakovec
phone: 040 555 010
OFFICE VARAŽDIN
Adress: Ivana Kukuljevića 9a
42 000 Varaždin
phone: 042 215 320
fax: 042 215 330
CENTAR ZABOK
Adress: Zivtov trg 11
49 210 Zabok
phone.: 049 658 903
RCS Sjeverna Hrvatska
OFFICE SISAK
Adress:: Ulica Stjepana
i Antuna Radića 34
44 000 Sisak
phone: 044 556 010 / 013
fax: 044 556 019
E-OFFICE
Adress: Strojarska cesta 20
10 000 Zagreb
phone: 01 4888 389
fax: 01 4888 374
RCS Slavonija
OFFICE ĐAKOVO
Adress: Bana J. Jelačića 8
31 400 Đakovo
phone: 031 815 156
fax: 031 815 158
OFFICE OSIJEK
Adress: Ulica Hrvatske Republike 21
31 000 Osijek
phone: 031 229781
OFFICE OSIJEK 2
Adress: Prolaz J. Benešića 2
31 000 Osijek
phone: 031 555 260
fax: 031 701 414
OFFICE VUKOVAR
Adress: J.J. Strossmayerova 16
32 000 Vukovar
phone: 032 451 000
fax: 032 451 019
OFFICE VIROVITICA
Adress: Trg kralja Zvonimira 3
33 000 Virovitica
phone: 033 740 060
fax: 033 740 068
OFFICE POŽEGA
Adress: Cehovska 8
34 000 Požega
phone: 034 410 130
fax: 034 410 139
OFFICE SLAVONSKI BROD
Adress: Kralja Petra Krešimira IV br,3
35 000 Slavonski Brod
phone: 035 212 530
fax: 035 212 540
OFFICE VALPOVO
Adress: Trg Kralja Tomislava 17
31 550 Valpovo
phone: 031 654 041
fax: 031 654 086
OFFICE VINKOVCI
Adress: Trg dr, Franje Tuđmana 2
32 100 Vinkovci
phone: 032 455 502
fax: 032 455 508
BRANCH BELI MANASTIR
Adress: Trg Slobode 38
31 300 Beli Manastir
phone: 031 701 412
fax: 031 701 414
BRANCH NAŠICE
Adress: J.J. Strossmayera 2
31 500 Našice
phone: 031 615 172
fax: 031 615 173
BRANCH DONJI MIHOLJAC
Adress: Vukovarska 4
31 540 Donji Miholjac
phone: 031 620 041
fax: 031 620 099
332332
Annual Report of HPB Group
RCS Dalmacija – sjever
RCS Istra i Kvarner
OFFICE ZADAR
Adress: Put Murvice 12 D
23 000 Zadar
phone: 023 350 000
fax: 023 350 018
OFFICE ZADAR 2
Adress: Ulica Andrije Hebranga 2
23 000 Zadar
phone: 023 411 906
fax: 023 350 018
OFFICE ZADAR 3
Adress: 112. brigade 1
23 000 Zadar
phone: 023 301 414 / 416
OFFICE GOSPIĆ
Adress: Trg S. Radića bb
53 000 Gospić
phone: 053 617 101
fax: 053 617 108
OFFICE ŠIBENIK
Adress: Ante Starčevića 4
22 000 Šibenik
phone: 022 556 012
fax: 022 556 019
OFFICE VIDICI
Adress: Stjepana Radića 137
22 000 Šibenik
phone: 022 209 412
fax:: 022 209 415
OFFICE DALMARE
Adress: Velimira Škorpika 23
22 000 Šibenik
phone: 022 242 253
fax: 022 242 253
OFFICE VODICE
Adress: Herfordska ulica b.b.
2 2 111 Vodic e
phone: 022 442 678
fax:: 022 442 333
OFFICE KNIN
Adress: Ulica Gospe Velikog
Hrvatskog Krsnog Zavjeta 9
22 300 Knin
phone: 022 556 002
fax:: 022 556 009
OFFICE PULA
Adress: Anticova 7
52 000 Pula
phone: 052 300 602
fax: 052 300 609
OFFICE POREČ
Adress: Trg slobode 14
52 440 Poreč
phone: 052 703 222
fax: 052 703 229
OFFICE RIJEKA 2
Adress: Uljarska 4A
51 000 Rijeka
phone: 051 555 570 / 571
fax: 051 555 589
333333
▲
RCS Dalmacija – jug
OFFICE DUBROVNIK
Adress: Dr, Ante Starčevića 24
20 000 Dubrovnik
phone: 020 362 045
fax: 020 362 040
OFFICE KONAVLE
Adress: Gruda 43
20 215 Gruda
phone: 020 450 800/801
fax: 020 450 802
OFFICE IMOTSKI
Adress::Šetalište S. Radića 19
21 260 Imotski
phone: 021 555 280
fax: 021 555 289
OFFICE SOLIN
Adress:: Kralja Zvonimira 87a
21 210 Solin
phone: 021 555 752
fax: 021 555 756
OFFICE KAŠTEL STARI
Adress: Ivana Danila 12
21 216 Kaštel Stari
phone: 021 246 182
fax: 021 246 183
OFFICE SPLIT 1
Adress: Domovinskog rata 49
21 000 Split
phone: 021 340 626
fax: 021 340 631
OFFICE SPLIT 3
Adress: Ruđera Boškovića 18a
21 000 Split
phone: 021 555 854
fax: 021 555 873
OFFICE SPLIT 4
Adress: Poljička cesta 12
21 000 Split
phone: 021 687 660
OFFICE TROGIR
Adress: Kardinala Alojzija
Stepinca 42
21 220 Trogir
phone: 021 555 725
fax: 021 555 743
OFFICE MAKARSKA
Adress: Trg 4, svibnja 533 br. 1
21 300 Makarska
phone: 021 695 765
fax: 021 695 768
OFFICE METKOVIĆ
Adress: Splitska ulica 3/3
20350 Metković
phone: 020 640 492 / 496
OFFICE SINJ
Adress: Trg kralja Tomislava 1
21 230 Sinj
phone: 021 708 080
fax: 021 830 427
OFFICE TRILJ
Adress: Bana Josipa Jelačića 8
21 240 Trilj
phone: 021 830 410
fax: 021 830 427
BRANCH CAVTAT
Adress: Trumbićev put 10
20 210 Cavtat
phone: 020 450 810 / 812
fax: 020 450 811
Members of HPB Group
HPB Invest Ltd.
Adress: Jurišićeva ulica 4
10 000 Zagreb
phone: 01 4804 516
0800 472 472
fax: 01 4804 599
e-mail: hpb.invest@hpb.hr
web site: www.hpb-invest.hr
HPB-nekretnine Ltd.
Adress: Jurišićeva ulica 4
10 000 Zagreb
phone: 01 5553 920
fax: 01 4839 235
e-mail: hpb.nekretnine@hpb.hr
web site: www.hpb-nekretnine.hr
334334
Hrvatska poštanska banka, p.l.c.
10000 Zagreb, Jurišićeva ulica 4
SUPERVISORY BOARD
Zagreb, March 28, 2025
In accordance with the provision of article 21 of the Articles of Association of HPB p.l.c. (hereinafter:
Bank), and in line with Articles 300.c and 300.d of the Companies Act, Supervisory Board of the
Bank has on 42. meeting held on March 28, 2025, made the following:
RESOLUTION
on giving consent
to Annual report of Hrvatska poštanska banka p.l.c.
and HPB Group for year 2024
I.
Consent is given to Annual report of Hrvatska poštanska banka p.l.c. and HPB Group for the
business year ended December 31, 2024, comprising of:
• Unconsolidated financial statements of Hrvatska poštanska banka p.l.c. and consolidated
financial statements of HPB Group for the year ended 31 December 2024
• Statement of the Management Board on the Condition of Hrvatska poštanska banka p.l.c.
and its subsidiaries for the business year 2024
• Audit report of the separate and consolidated financial statements by the independent
auditor BDO Croatia d.o.o.
• Sustainability report of Hrvatska poštanska banka p.l.c. and HPB Group for the year ended
31 December 2024
• Independent auditor's report on limited assurance on the consolidated Sustainability Report
of the Hrvatska poštanska banka Group by the independent auditor BDO Croatia d.o.o.
II.
By giving consent to statements outlined in paragraph I of this Resolution, Annual report of the
Bank and HPB Group for the year ended December 31, 2024, are considered to be confirmed by
the Supervisory Board and the Management Board.
III.
This resolution comes into force on the day of its adoption.
President of the Supervisory Board
Marijana Miličević
HRVATSKA POŠTANSKA BANKA, p.l.c.
Zagreb, Jurišićeva ulica 4
Management Board
Classification level:
HPB-PUBLIC
Zagreb, March 28, 2025
Number: UB-250328-2
Pursuant to the provision of Article 13 of the Articles of Association of HPB p.l.c. (hereinafter: Bank),
and in line with Article 300.b, paragraph 2 and Article 275, paragraph 1, point 2 of the Companies
Act, Management Board proposes to the Supervisory Board and the General Assembly of the Bank
on March 28, 2025, made the following:
RESOLUTION
on allocation of profit earned in 2024
I.
It is determined that Hrvatska poštanska banka, p.l.c. made a net profit of EUR 73,631,644.58 in
the business year ended December 31, 2024.
II.
Pursuant to Article 220 paragraph 3 of the Companies Act and Article 33 of the Bank's Articles of
Association, amount of EUR 370,825.20 is allocated to other reserves, whereby the level of other
reserves reached the maximum amount regulated by Companies Act.
III.
The remaining amount of determined net profit in the amount of EUR 73,260,819.38 after its
distribution to other reserves, is allocated to retained earnings.
IV.
This resolution comes into force on the day of its adoption.
Explanation:
The proposed distribution of net profit is in accordance with Articles 220, paragraph 3 and 300 b of
the Companies Act and the Articles of Association of Hrvatska poštanska banka, p.l.c.
In accordance with strategic guidelines, the Bank will continue to distribute part of the realized net
profit of the period to retained earnings so that the successful operation of the Bank, profitability,
and growth within the limits of possibilities can be continued. Considering that the amount of the
binding MREL requirement is prescribed for the Bank from January 1, 2024, the Bank must
additionally strengthen its regulatory capital in the following periods.
Based on the above, it is considered appropriate:
1) allocation of EUR 370,825.20 to other reserves is determined by the Companies Act. After
mentioned allocation other reserves of the Bank will reach maximum amount of half of the
share capital according to Article 220, paragraph 3 of the Companies Act, and will no longer
be obliged to allocate the realized profit to other reserves with a given level of share capital
in future periods,
2) remaining amount of realized net profit earned in 2024 in the amount of EUR 73,260,819.38
is allocated to retained earnings. At the same time, it is emphasized:
1. that the amount of EUR 44,197,563.75 will not be included in the calculation of the
common equity tier 1 capital, taking into consideration Article 61 of the Act on the
Execution of the State Budget of the Republic of Croatia for the year 2025, that - if it is
determined by a special decision of the Government of the Republic of Croatia and a
decision of the General Assembly - is available for the dividend payment without
restrictions from Article 312a of the Credit Institutions Act.
2. that the remaining amount of retained earnings in the amount of EUR 29,063,255.63
will be included in the calculation of the Common equity tier 1 capital, whereby in
the case of a decision to pay a dividend in the above amount or its parts, it is subject to
the restrictions from Article 312a of the Credit Institutions Act.
President of the Management Board
Marko Badurina
Distribute to:
1. Finance Management Department
2. Management Board
3. Supervisory Board
4. Archive of the Management Office
Hrvatska poštanska banka, p.l.c.
10000 Zagreb, Jurišićeva ulica 4
SUPERVISORY BOARD
Zagreb, March 28, 2025
Pursuant to the provision of Article 21 of the Articles of Association of HPB p.l.c. (hereinafter:
Bank), and in line with Articles 220, paragraph 3, 300.b and Article 275, paragraph 1, point 2
of the Companies Act, Supervisory Board of the Bank has on 42. meeting held on March 28,
2025, made the following:
RESOLUTION
on allocation of Bank's profit earned in 2024
I.
Bank's Supervisory Board gives its consent and accepts Management Board's proposal on
allocation of profit earned in 2024, which is a consistent part of this resolution.
II.
By providing its consent outlined in paragraph I of this Resolution, Management Board's
proposal on allocation of profit earned in 2024 is considered to be confirmed.
III.
Supervisory Board proposes to General Assembly to vote in favor of allocation of profit earned
in 2024 as outlined in Management Board's proposal.
IV.
This resolution comes into force on the day of its adoption and is submitted to General
Assembly for adoption.
President of the Supervisory Board
Marijana Miličević
Classification level:
HPB-PUBLIC