EU Taxonomy

To support disclosures on key performance indicators, the Bank and its subsidiaries have analysed their exposure to financial institutions and non-financial corporations to identify customers required to report non-financial information under the Non-Financial Reporting Directive (NFRD). As part of this process, the Bank calculated the gross carrying amount of loans, advances, debt securities, and equity instruments in the banking portfolio for each identified entity as of 31 December 2024.

For general-purpose financing, the Group determined the gross carrying amount of Taxonomy-eligible and Taxonomy-aligned exposures for customers subject to NFRD reporting, based on the key performance indicators published by these customers in their 2023 Taxonomy disclosures. The Group did not assess the exposures toward companies which were not subject to Article 19a or 29a of the Non-Financial Reporting Directive but remain subsidiaries of a mother company which is subject to the said directive.

In the case of exposures toward undertakings dependent on a parent entity falling within the scope of Article 19a of the Non-Financial Reporting Directive but exempted from sustainability reporting at an individual level, the key performance indicator of that undertaking disclosed by its parent undertaking was applied. Given limited access to relevant data and supporting documentation, the Group did not classify these financings as Taxonomy-aligned. Instead, they have been disclosed solely as Taxonomy-eligible exposures. Where sufficient data was unavailable to reliably assess compliance with the technical screening criteria, the Group only assessed the Taxonomy eligibility of the exposure.

For the Minimum Safeguards assessment, the Group relied on information disclosed by its customers in their Taxonomy disclosures.

The Group is working on integrating enhanced data collection processes into its credit assessment processes, ensuring that in future periods, eligibility and alignment with the EU Taxonomy can be assessed at the financing approval stage.

To calculate the Green Asset Ratio, the Group classified its residential mortgage portfolio (secured by residential properties and granted to households) as Taxonomy-eligible. It then assessed Taxonomy alignment by verifying compliance with the criteria outlined in section 7.7 (Acquisition and Ownership of Buildings) of the technical screening criteria for climate change mitigation, as set out in Annex I to Regulation 2021/2139.

This assessment was conducted in line with requirements set forth in sections 1.2.1.3  of Annex V to Commission delegated regulation (EU) 2021/2178 regarding retail clients. The assessment covered compliance with: substantial contribution criteria for climate change mitigation, and Do No Significant Harm (DNSH) criteria, however, it did not cover – as set forth in the afore-mentioned sections – minimum safeguards..

The Group disclosures regarding retail clients include mortgage-backed loans for residential real estate; loans financing purchase of goods and services e.g. electric vehicles or photovoltaic panels are not considered. Therefore, the Group did not obtain relevant documents confirming that producers of goods and services purchased by the Group’s retail clients adhere to specific technical qualification criteria and minimum safeguards.

For residential properties built before 31 December 2020, the Group examined whether the property fell within the top 15% most energy-efficient buildings in the country or region, based on primary energy demand (PED). This was assessed using a communication from the Ministry of Development and Technology[1], which defines eligible buildings as those with primary energy demand below the thresholds outlined in Table 1[2] of its communication. To determine primary energy demand, the Group used: Energy Performance Certificates, and data from the Central Register of Building Energy Performance, maintained by the Minister of Development and Technology.

For properties built after 31 December 2020, the Group assessed whether the building’s primary energy demand was at least 10% lower than the threshold set for nearly zero-energy buildings in accordance with the Regulation of the Minister of Infrastructure (12 April 2002) on building technical requirements and their locations. This regulation sets maximum primary energy demand limits separately for multi-family and single-family buildings, as well as specific energy use thresholds for heating, ventilation, domestic hot water, and cooling. Given this, the Group’s assessment was based on partial energy demand values stated in the Energy Performance Certificate. Exposures from agreements for which the Group did not hold certificates were disclosed as Taxonomy-eligible but not Taxonomy-aligned.

For properties classified as meeting the substantial contribution criteria, the Group conducted an additional DNSH assessment, evaluating exposure to physical risks such as floods and landslides. This assessment followed an internally developed methodology, considering factors such as: property location, year of construction, floor level, and building type. Properties were deemed DNSH-compliant if the analysis found no significant exposure to physical risks or if the risk level was deemed low based on the adopted methodology. As of 31 December 2024, the Group did not identify any financing in its credit portfolio granted to households for building renovation or the purchase of motor vehicles.

To support key performance indicator disclosures, the Group conducted a review of its exposure to local government units, identifying use-of-proceeds financing that contributes to the Green Asset Ratio.

Based on the purpose of financing, the Group identified Taxonomy-eligible loans for local governments and conducted an additional Taxonomy alignment assessment. This assessment considered compliance with substantial contribution criteria, and Do No Significant Harm (DNSH) criteria.

To ensure consistent and accurate evaluations, the Group developed internal assessment guidelines covering the most common types of financing provided to local government entities. Due to limited access to supporting data and documentation, the Group did not classify these financings as Taxonomy-aligned but instead disclosed them as Taxonomy-eligible exposures.

The Group is continuing its efforts to enhance credit processes, which will enable the collection of comprehensive data at the financing approval stage to better assess Taxonomy eligibility and alignment in the future.

As of 31 December 2024, the Group did not identify any financing in its credit portfolio related to public housing projects for local government entities.

Following Commission Notice C/2024/6691, the Group has changed its approach to the presentation of exposures to local governments for which the purpose of the proceeds is unknown. Such financing has been excluded from the numerator of key performance indicators and unlike the approach used in the Group’s disclosure for 2023, it has been included in the denominator of key performance indicators denominator of key performance indicators.

Below, the Group presents its key performance indicator disclosures in accordance with the mandatory disclosure framework for 2024, as outlined in Templates 1-5 of Annex VI to Regulation 2021/2178. Following section 1.1.1 of Annex V to Regulation 2021/2178, the disclosures are provided on a consolidated basis, reflecting the prudential consolidation scope of the Group. The total assets value reported in the disclosures is equal to the gross carrying amount of total assets as of 31 December 2024.