Additional disclosures according to Article 104 of the ZBan-3

Pursuant to the provisions of Article 104 of the ZBan-3 (Paragraph 3), the Bank shall explain on its public website how it meets the requirements set out in the regulations stated in the second paragraph of Article 9 of the ZBan-3 regarding:

1. the bank’s internal governance arrangements and organisational structure;
2. the policy for selecting members of the governing body set out in Article 35 of the ZBan-3; and
3. the Remuneration Policy from Articles 189 to 191 of the ZBan-3.

The NLB must follow the provisions of the Banking Act and the Regulation on Internal Management Arrangements, Management Body and Internal Capital Adequacy Assessment Process for Banks and Savings Banks and the EBA Guidelines on internal governance. Due to the above, the NLB has developed a steady and reliable corporate governance system encompassing the following:

• a well-defined organisation with clear-cut, transparent and consistent internal relations in the area of responsibility;
• efficient procedures to determine, measure or assess, control and monitor risks, including risk appetite, risk management strategy, ICAAP, ILAAP, and risk resolving and reporting plan, to which the Group is exposed or could be exposed in its operations;
• inclusion of the main guidelines in the area of strategic risks in the annual review of the business plan, budget preparation procedure and adoption of other important decisions;
• suitable internal control mechanisms that also include appropriate administrative and accounting procedures;
• appropriate remuneration practices and policies that are in line with prudent and effective risk management, and thus also promote risk management.

The appropriateness of the internal control mechanisms is defined based on the independence, quality and applicability of:

1. the rules and controls of performance of organisational, business and work processes of the Bank (internal controls), and
2. the internal control functions and departments (internal control functions).

The internal control system is detailed in the Corporate Governance Statement of NLB d.d. which is published on the Bank’s website and in the Business Report of the NLB Group Annual Report and on the website of the Ljubljana Stock Exchange (seonet.ljse.si).

The Amendments to the Policy on the selection of suitable candidates for members of the Management Board of NLB d.d. were adopted at the meeting of the Supervisory Board of NLB d.d. held on 08/03/2019. The existing criteria (adequately wide range of knowledge, skills and experience) based on which the Management Board of NLB d.d. must be composed were supplemented with the following criteria: reputation, management of any conflicts of interest, independence, available time and collective suitability of the Management Board of NLB d.d. as a whole.

When selecting members of the Management Board of NLB d.d., it is necessary to ensure collective suitability. The criterion of representation of both genders was added to the existing criteria. It is essential in the process of searching and selecting a Fit&Proper candidate to ensure a wide range of potential candidates with the aim of ensuring collective suitability and efficiency of the Management Board of NLB d.d. as a whole; the procedure of potential selection of external headhunting agencies is managed in accordance with the internal procurement rules.

The said policy is explained in further detail in the disclosures in accordance with Pillar 3 of the Basel standards for the NLB Group (in line with Article 435(2)(c) of the CRR), which is a separate document published annually by the Bank in addition to the NLB Group Annual Report on the Bank’s website.

The Amendments to the Policy on the selection of suitable candidates for members of the Supervisory Board of NLB d.d. were adopted at the General Meeting of NLB d.d. held on 10/06/2019. The existing criteria (adequately wide range of knowledge, skills and experience) based on which the Supervisory Board of NLB d.d. must be composed were supplemented with the following criteria: reputation, management of any conflicts of interest, independence, available time and collective suitability of the Supervisory Board of NLB d.d. as a whole.

When selecting members of the Supervisory Board of NLB d.d. it is necessary to ensure collective suitability. The criterion of representation of both genders was added to the existing criteria. It is essential in the process of searching and selecting a Fit&proper candidate to ensure a wide range of potential candidates with the aim of ensuring collective suitability and efficiency of the Supervisory Board of NLB d.d. as a whole; the procedure of potential selection of external headhunting agencies is managed in accordance with the internal procurement rules.

The said policy is explained in further detail in the disclosures in accordance with Pillar 3 of the Basel standards for the NLB Group (in line with Article 435(2)(c) of the CRR), which is a separate document published annually by the Bank in addition to the NLB Group Annual Report on the Bank’s website.

The Policy on the provision of diversity of the management body and senior management in NLB d.d. was adopted at the General Meeting of NLB d.d. on June 16, 2025. The Diversity Policy is a document that defines the Bank's commitments on diversity in relation to representation on the management body and senior management as regards certain aspects of this policy, which contains specific goals and the method of their implementation.

Through its Diversity Policy, the Bank strives to include elements of corporate sustainability and good corporate governance, which should contribute to greater efficiency in the operations of these bodies and a good understanding of current developments and long-term risks and opportunities related to the Bank's operations. 

The Diversity Policy was amended in the part relating to the description of the diversity policy implemented in relation to representation in the company's management and supervisory bodies, namely in the part stating the goals, method of implementation and achieved results of the diversity policy in the reporting period, taking into account the amendments to the Companies Act (hereinafter: ZGD-1), which entered into force on 18/12/2024. These amendments are based on harmonisation with European directives and include reporting of tax and sustainability data, promoting gender diversity in management and supervisory bodies, and easing the burden on certain economic entities.

In accordance with the legal requirements, NLB d.d. supplemented the Policy on the provision of diversity of the management body and senior management of NLB d.d., on the basis of which it determined the target diversity to be pursued in relation to representation on the supervisory board and, in addition, it also determined the target diversity in the Management Board and senior management. Moreover, the Policy more clearly states diversity aspects and criteria, defines the tasks of the Works Council in the appointment process, defines the duties of stakeholders in the process of adopting the Policy and in the process of appointing a candidate, updates the measures to achieve diversity, and amends the provisions regarding diversity reporting. 

The 4th version of the Policy on the provision of diversity of the management body and senior management of NLB d.d. contains the following major amendments compared to its 3rd version:

• it sets a gender diversity target of 40% for members of supervisory boards and sets a target for the underrepresented gender for members of the management board,
• it defines the diversity aspects and objectives more clearly,
• it sets out the duties of the Works Council in the process of appointing a new candidate,
• it sets out the duties of stakeholders to meet diversity aspects and objectives when appointing members of the management board and when appointing members of the supervisory board,
• it specifies more precisely the measures to achieve the objectives of the Diversity Policy,
• the provisions regarding reporting obligations related to achieving the goals set out in the Diversity Policy have also been supplemented.

For each aspect of diversity, the Diversity Policy sets goals by 2029. The Nomination Committee of the Supervisory Board reviews the diversity policy and its implementation annually, and prepares potential improvement proposals, which are approved by the Supervisory Board and on General Meeting. Similarly, the Management Board ensures diversity within senior leadership.

The specific goals of the Diversity policy and the level of their achievement are detailed in the Statement on Governance of NLB d.d. (published on this website), as well as in the Human Resources Management chapter (in the Annual Report of the NLB Group), and in the Disclosures under the 3rd Pillar of the Basel Standards for the NLB Group, which is a special document published annually by the bank alongside the Annual Report of the NLB Group.

Changes of Remuneration Policy were prepared based on the regulator's recommendations and additional proposals of the members of the management body. Based on these guidelines the significant changes of the fifth version of the Remuneration Policy are as follows:

• an Executive Summary of the Rmuneration Policy is presented
• the “Step-in” or “Gateway” Criteria (Regulatory and Performance-Related Step-in Criteria) for the awarding of STI and LTI were introduced.
• the process of setting the Bonus Pool for the Variable Remuneration of the Management Board members was determined.
• the roles of individual stakeholders in the processes related to Remuneration of the Management Board members were clearly defined

The Supervisory Board of NLB d.d. adopted the Fifth Version of the Remuneration Policy on 10/04/2025. The General Meeting of Shareholders of NLB d.d. on 16/06/2025 voted for the Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d., whereby the vote on this resolution is of a consultative nature.

Archive:

Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d. - Version 4

Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d. - Version 3

Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d. - Version 2

Remuneration Policy for the Members of the Supervisory Board of NLB d.d. and the Members of the Management Board of NLB d.d. - Version 1

The Employee Remuneration Policy of NLB d.d. and the NLB Group was adopted at the meeting of the Supervisory Board of the Bank on 26/11/2021. It has been aligned with the amended provisions of the ZGD-1, ZBan-3 and the Guidelines on sound remuneration policies.

In accordance with the provisions of the third paragraph of Article 104 of the ZBan-3, the Employee Remuneration Policy of NLB d.d. and the NLB Group is disclosed in more detail in the section on Human Resources Management (in the NLB Group Annual Report) as well as in the Disclosures under the third pillar of the Basel standards for the NLB Group (in accordance with Article 435(3)(c) of the CRR) which is a special document that the Bank publishes annually in addition to the Annual Report of the NLB Group.

In accordance with the Article 104, Para.4 of the Banking act (ZBan-3) the bank published the description of the legal and organizational structure of the banking group, the regulations regarding the relationship of close connection and the management of the NLB Group on the NLB Group's website.