Good morning, everyone, and welcome to Artea Bank investor webinar. Thank you for joining us today, and thank you for your continued interest in Artea Bank as we close out another transformational year for our company.

Today's call will be led by our Chief Executive Officer, Vytautas Sinius, and our Chief Financial Officer, Tomas Varenbergas. My name is Tautvydas Menčinskas, and I will be moderating the Q&A session after the presentation.

With that, I would like to hand it over to Vytautas to kick us off with some key financial and strategic highlights that showcase our incredibly strong performance in 2025. Over to you, Vytautas.

Thank you, Tautvydas, and hello, everyone, dear investors. Thank you for your interest to Artea Group results for the fourth quarter and also summarizing the whole 2025.

Let's kick off with key findings and strategic highlights. On on the right-hand side you see the major figures from our last year performance.

The year was intense, many activities, both internal, externally, and we're happy reaching level of net profit of €60.7 million. It's slightly lower our internal internal budgets, but close to that.

The year had some challenges, so that's why what was hard to hit the targets, but looking to the adjusted net profit, it stands at close to €73 million, and that would generate adjusted return on equity of 12.4%. Cost of risk stood below our expectations, it's good, at at 0.13 and with a strong CET1 ratio at 16.6%.

Talking about financial performance, worth mentioning that net fee and commission income grew solidly, approximately 6%, mainly was driven by asset management, renovation business, also strong performance in our capital market activities. Cost normalization happening, on one hand, we had in '25 quite substantial one-offs, mainly driven by the core banking activity and rebranding costs that were, fully executed during the last year, but we partly offset that with early savings in the fourth quarter utilizing our cost optimization program.

Also, we proud of our asset quality. The growth of loan portfolio was not high, but the quality of portfolio remains very strong, I would say.

That leads also to our strong capital base, already mentioned about one of the indicators, capital base remains solid, and therefore, we expect, record high distribution of of generated profit of 70%. I will be back on that shortly.

Talking about strategic milestones and innovations, we, as everybody probably already knows, that we completed our Artea rebranding, the new umbrella brand is for the whole group, and yes, clients and investors are already clearly familiar with that, and we're strengthening our brand in in our market. Core banking program is progressing forward, we already second year in in this program, an active phase.

We're moving to the final final year or coming to the completion. Many activities already resolved, we are doing a lot of testing, and we are expecting the launch in the second half of '26.

Continuing strong path in the modernization of the dwellings in Lithuania, we're proud to announce that EIB has selected us as a new provider of a new new program, which constitutes of €625 million of fund, and that strengthens continues to strengthen our position in this sector. On a debt capital markets, again strong year with €240 million of corporate bonds origination.

We're strengthening our position in this field as well. Also close to that, our investment products have been also successfully launched during the last quarter.

We launched the the new first quarterly coupon retail bond fund, and also another instrument on equity side, it's Global Equity Index Plus fund. Let's check some figures on on on the macro levels.

You'll have more information if you need in our annexes, but few parameters worth mentioning. It's GDP development, strong year in '25 with total level of GDP growth at 2.7%, strong last quarter that contributed well to the last year growth.

Also strong expectation on 20 for the year '26 standing at level 3.2%, and as we can see, Lithuania's economy, development both from the past and looking forward remains pretty strong compared to to the average of EU countries. Of inflation level as well, the last year was slightly higher inflation at 3.4%.

For '26 expectation is 3.1%, still remaining pretty high. We still expect that some of that would be driven by also second pillar reform, and previously the year of '25 was driven by the food pricing increases, higher services prices, also excise duties, so that's main drivers of of the inflation.

However, the wages growth faster, therefore the purchasing power remains strong, and that leads also to the higher sentiment. As you can see on on the right-hand graph, that consumer optimism still remains pretty strong compared both for the Baltics and with the rest of the Europe.

Summarizing, the last year was pretty strong for Lithuanian economy, so as well we see more or less similar situation continuing in the '26 and potentially in '27. Let's touch a bit on modernization fund.

We won the mandate of a third already and the largest fund, we already quite knowledgeable and experts how to to manage that. The fund size, as I mentioned, €625 million, and that could cover closely to 850 multi-apartment buildings.

Previous funds totaling amount was €475 million. This fund will be the largest and will take time to to deal with that.

We're expecting only in the end of this year to start practically using the funds, and it will take several years when we'll manage to to utilize all this capacity to the market. It's a good product both for for us and for investors, low risk since it's based on the like utility type of utility payment for the households.

It's well generating both interest income and recurring fees for for for Artea Bank. That's worth mentioning that this is also our contribution to the climate goals in Lithuania and Artea Bank as well with this continuous program.

Let's move to the one more topic, which is important for for investors. With already making some information at the previous slide, I would like to elaborate a bit more that our management intends to propose a record high of 70% capital distribution for for the last year's profit.

The split would be 50% proposition for the dividends, and the rest 20% goes for for buybacks. Again we will use actively both instruments of distributing profit, and the capacity of capital retreat is sufficient, and after repayment of such profit side, we see that we will be in compliance with with all requirements.

This is, of course, subject to AGM approval and and buybacks for also regulatory approval, but I think we have a good track record already of delivering those of those instruments. With that, we're happy to to compare with us with our peers, the larger Baltic issuers, and we see that our total shareholder return stands at really solid 26.9% level.

With that, I will be glad to pass the words to Tomas, who will continue with the financial results of Artea Group.

Good morning, everyone. I'm happy to take over our today's webinar and to continue to walk you through through our financial performance in 2025 and Q4.

Starting with the highlights that will be more deeply covered the most important topics will be covered in the following slides, but so in general, our net interest income in Q4 and in 2025 was highly influenced by the low base rate environment, and specifically in Q4, our increased funding base, the market funding that we have attracted, impacted slightly negative development. On fees, we do have very good performance.

In Q4, it increased by 8%, and looking on year-on-year basis, we have 6% increase. All key fee-generating segments are doing very well.

Operating expenses, I would say that recurring operating expenses are under control. We do have two quarters already with no cost increase.

Of course, we undergoing investment period, and our one-offs depends on our strategic initiatives, and and it lasted during the last year, and it will be in a case a case for this year as well. We have achieved €12.3 million of net profit in Q4.

Full year figure stands at 60.7, it's 7% below the target that we have set in the beginning of 2025. We are going and implementing the strategic initiatives, and we believe that we will be back on the track on profitability that we are set in our strategic objectives.

Looking on our balance sheet development, last year was a little bit different from the years that the bank had a couple years ago. The loan book growth was lower than than our funding side.

Loan book grew by 8%, while deposits by 17%, or the total funding base more than 20%. The case behind that is, well, strategically, we need to balance more our loan-to-deposit ratio.

It peaked almost at 105%, and in two quarters, we managed to bring it back to 94%, 95%, and we believe that at that level, we can further grow our assets and liabilities in parallel. Moving forward to the net interest income, in Q4, we arrived at 2.5% NIM.

The biggest influence of a decline came from our market funding. We took a chance to issue Eurobonds, and, well, we are fully funded from the wholesale market for for this year.

As the funding was invested in securities, in government bonds, the yield is lower, effectively that brought our NIM at 2.5%. We do see that the asset yield to remain at the current level.

The Euribor already started slightly to increase, all the repricing on the asset side already is in place, and with a proactive management of the cost of funding, we will be able to to come back to the above 2.5% of net interest margin. Going to the loan portfolio, it increased by 8%.

The main growth areas was corporate and mortgage segments, but as you see in the bottom right-hand side, all of our core segments was growing, and we do see as said good momentum in mortgages. We do we do see a good opportunities arising in a corporate financing, and we are entering, I would say, a new segments.

Could mention one example in Q4 that we have financed renewable energy project. It's on energy storage, a new a new a new projects that are being brought into Lithuanian market, and and, well, the size of of the potential of that segment, we do see pretty high for for the bank.

As I said, the growth lower growth was mainly impacted by our strategic focus to balance more our loan-to-deposit ratio. Moving to the net fee and commission income, performance good, key segments are growing, supported by asset management, capital markets, renovation.

Asset management was also supported by very very good performance on our financial on on financial markets. Yes, worth to mention that from the 1st of January, our clients can withdraw funds from the second pillar funds.

Looking to the January statistics, we do see that in the market, 20% of the clients chooses this option to withdraw. What is good that our client base withdrawals are slightly lower, but nevertheless, we do see high clients' activity, and, well, our net fee fee and commission income will be affected, but we are working closely with these clients, and, well, we do have a wide product offering, either it's third pillar funds, either our term deposit product or capital markets solutions.

We believe that the clients will stay with the bank, but in different products. Daily banking slightly decreased during 2025, but mainly that was attributable to the our rebranding and one-off one-off costs that we had to bear in order to to rebrand.

Let's move to the operating expenses. As said, already two quarters in a row that our recurring expenses are flat or even declining, as was the case in in Q4.

The overall operating expenses development is dependent on one-off expenses. It's increased looking year-on-year, but it depends on the pace of our our core banking platform change.

That's investment for the future. Currently, our cost of income, including the one-offs, is elevated, but but with strict recurring cost management, what was already the case in the second part of 2025, and what we're going to continue during this year, as an example, very strict hiring process, we are working on changing our organizational structure, we do look into our distribution channels and what can be done in order to make it more efficient.

Plenty of initiatives in a place to further to to optimize our recurring expenses that could bring us into our desired cost-to-income below 45% in the long term. Let's move to the asset quality.

We are very happy on developments in this field, given the strong macro situation, disciplined underwriting, good performance on on on our client base. Cost of risk stood at 13 13 basis points.

We do have some elevations in in particularly mortgage segments, but primarily it's due to that during the last year, many methodological changed changes was implemented, and and it shouldn't be expected such kind of a cost of risk for that segment going into 2026. According our budgeted level, mortgages cost of risk should stand close to one basis point for this year, again due to very good macro situation in in a country.

We do had slight increase of Stage 3 loans in Q4, but primarily it was of one exposure that that was classified into into into Stage 3, but in the beginning of the year, we came back to kind of a 2.5% or so level that was seen throughout 2025 year. On funding side, so that was, well, a high focus area for the bank, especially during the second half of 2025.

Our funding base increased by more than 20%, deposits grew by 17%. We do have a good inflows, either it's in demand deposits or in term deposits.

Cost of funding didn't decrease much in in Q4, primarily due to our additional issued bonds in Q4. Going forward, we do see a room on our cost funding to improve, especially given given the, I would say, liquidity event in a country with the second pillar funds withdrawals, and that that should lead to pretty sizable amounts of cash to settle into the current accounts in private clients segment.

On a capital, capital levels are very solid. Given the lower growth rate, which was not fully utilized as expected for the increase of of our loan portfolio, the ratios are very comfortable, and worth to emphasize that it's still without inclusion of the profit of the last year profit, that could lead another 100 basis points to 100 basis points higher level.

That's you know lower growth lead on proposition for the higher distribution to the shareholders. As as we look into the best ways how to utilize the capital which is locked in in the bank.

As a one year ended and another started, so as always, we provide updated guidance. We believe that our ambition to become a national champion in Lithuania remains unchanged, and we do commit to that.

Given the financial performance and some strategic corrections in terms of lower growth and bringing our loan-to-deposit ratio below 100%, we do see that financial projections should be updated, and that's the case. Nevertheless, we do see that the growth trajectory for the this year and the next three years in the area of 11% and 13% is is at good at a good rate, and a good rate to achieve profitable growth, what is the most important, and at that growth level, we can protect our margins.

Deposits growth growth, well, it will match our loan book growth. For this year, we expect a little bit lower growth, cuz we attracted and prefunded ourselves during the end of of of the last year.

Our revenue will get operational leverage with completion of our core banking change. The growth will come come come more at a higher pace starting from 2027, and especially fees growth could be could be influenced also by the second pillar funds, but but operational leverage should come up with the completion of our core banking replatforming.

On efficiency, well, we are undergoing investment phase, our costs are elevated, but with strict recurring cost management, and after the investment phase will end, we believe that in one on 1.5 year, our cost-to-income ratio will come back to below 45%. On profitability, well, our goal is unchanged.

Above 17% long-term return is what we are targeting. Again, current elevation is due to our investment phase that we do expect to end in 2026.

Some of the still investments could be in 2027, but as you see in the mid column, it's only the minor compared to what investments we have made in last year, during the last year, and what is expected during the 2026. Our commitment on distributions unchanged.

Minimum 50% of the payout, that could be supplemented by additional share buybacks, in the in the case that what what's it's planned to propose for annual shareholders meeting. A final thing is that total shareholders return, what was set in the beginning of 2024, but, well, we commit for at least 20% of of a return, after the two years, we do see that on average 25% was delivered to the our shareholders, and, well, we believe and we are committed that we can deliver that in upcoming years as well.

Thank you, Tomas. It truly has been another successful year for Artea Bank, continuing executing on our strategy, and most importantly, we're serving our clients with excellence and delivering strong returns for our shareholders.

I want to wrap up today's webinar with few key takeaways. Starting with the growth, our top line performance remains compelling.

Our loan book expanded by 8%. Yes, admittedly, pace a little bit slower compared to the last few years, but our deposits increased at 17% rate, which is exceptionally high, and that was intentional.

We're trying to expand our funding base, accelerating deposit inflows and reinforcing our balance sheet. Tomas mentioned that we're focusing on rebalancing our loan-to-deposit ratio.

Importantly, to note that this has been achieved while executing some of the most important strategic initiatives in our history. Rebranding, replatforming, revamping of distribution channels are all firmly on track.

Second thing is we're very excited and happy with the momentum in our fee-generating business. Our net fees and commissions increased significantly this year, primarily due to successful performance in asset management and renovation, and we're very happy about it.

We want to have more fees and commissions in our income profile. It makes our revenue stream more diversified, our business profile more resilient.

Moving on to credit, asset quality remains pristine. That's primarily due to strong macroeconomic environment in Lithuania and our prudent underwriting.

Rigorous risk management is part of our DNA and will remain one of our top priorities going forwards. On a capital, our balance sheet remains fortress.

Our Common Equity Tier 1 ratio stands at 16.6%, significantly above regulatory requirements. Very important to note that this does not include 2025 profit, which will take this ratio even to the higher level.

As a result, we're starting 2026 from the position of strength, and we're very excited to announce the record high distribution to our shareholders of 70%. 50% will come from dividends, and additional 20% will come from the buybacks.

We remain very optimistic about the future, and we remain confident about our ability to serve clients well and continue delivering superior returns for our shareholders. This concludes our presentation today.

We'll now switch to the Q&A session. I will ask everyone to limit themselves to key questions.

If you have additional questions or if any of your questions remain unanswered during this call, please feel free to email investor relations team, and we'll get back to you directly. With that, we'll switch to first few questions.

The first question is about core banking. What is the current status of this project?

What are the key milestones we should be looking at it? When are you planning the migration?

Yes, thank you for the question. I can take it.

The core banking program remains as a key project in Artea Bank. All the team who are participating in this project are very closely focused on that because it's important endeavor in the bank history, and changing core banking systems is a big exercise.

What is good as we are moved to the final phase when we already made most of the development, still of them remaining, we're producing a lot of different type of APIs to interconnect the systems. The work is going as planned.

We are now in an active testing phase, and so it's a lot of evaluation of end-to-end process evaluation and testing. Before the launching, we want to be sure that everything operates properly.

As I mentioned, the system migration is planned in the second half of this year. We still don't want to mention exact date because we want to make sure that the preparation and testing is completed and we have sufficient time to inform our clients and to be fully prepared.

As a good milestone to illustrate the development that we already have changed in February our card processor. We switched from one vendor to another one, who is provided more functionality needed for the future, and that went smoothly without any major impact to the client, it went as it planned.

This is a very good rehearsal of change that we're expecting, of course, will be on a bigger scale, but knowing that a card processing and card business is a kind of blood flowing in organism, the same with the cards, and making that successfully, it inspires us to continue firmly with the whole program and to complete it successfully.

Thank you, Vytautas. The next question is about a partnership with Žalgiris.

How is this partnership performing against your expectations? Are there any additional updates on that front?

Thank you. It's really emotional partnership with a strong brand of Žalgiris, and especially victories like yesterday against Olympiacos, it really inspires us to be in the same mood and in the same aspiration going for our targets.

The cooperation goes, obviously, rather really smooth, and we have multiple brand integrations with Žalgiris, including our co-branded cards and, as I mentioned, different type of other integrations. We will continue Žalgiris further, and we see very good synergies working with this brand.

The next few questions from Erste. Good morning, Tomas.

Maybe I'll read them together because they're similar. Question number one: What is your outlook for the net interest margin in the coming quarters?

Question number two: What is the interest rates and net interest margin embedded in your revised outlook for 2026 and '28? Yeah.

Thank you, Tomas, for a question. Good morning.

For the next couple of the quarters, we'd expect to be in close to the level that was in the end of the last year, it's at 2.5%, but gradually we'd expect with better cost of funding to go to 3% net interest margin. On the asset side, the repricing took place, and we do see already some pick up with the increasing Euribor, and on the cost of funding, we are undergoing kind of initiatives to improve conversion of our term deposits to the current accounts that could help us to more effectively manage our funding profile.

The next question comes from IPO Palma. Good morning, Vladimir.

Is there anything new on the regulatory front? Maybe I will take this question.

There's a couple of things. One is the ongoing Pillar 2 pension reform in Lithuania, which you might be aware of.

Customers are given a choice, and the window, to exit the system, which was compulsory before that, they're given clear window to exit the system and withdraw the funds. What's happening at the moment is that at industry level, around 20% of the customers left the system already.

The statistics at Artea Bank a little bit better than that, we're running below 20%. It's important to note that these things usually the largest activity is in the first few weeks, and then withdrawals moderate significantly.

We're converting a lot of these withdrawals into other products, such as deposits, current accounts, and Pillar 3 pension funds, we're mitigating the impact. The other thing worth mentioning is that the mortgage regulation is changing a little bit.

Starting from August this year in Lithuania, the down payment for the first-time buyers will go down from 15% to 10%, and that will spur the demand for mortgage even further. We feel good about this product, and the demand for it will continue increasing in our country.

The next question comes from Andre, Swedbank: Could you please provide more clarity on a slower loan book growth across all segments in Q4? Was it a competition or other factors affecting you?

Thank you for the question. Colleagues already slightly mentioned that during the presentation.

This is a complex impact. There were some competition elements where we're not too aggressive on a pricing, and we didn't want to go for the pricing wars on some tickets.

Therefore, some refinancing happened, but that was choice ours not to be too aggressive, as I mentioned. One of the reasons was balancing our loan-to-deposit ratio, what Tomas already mentioned in more details, I will not repeat.

I'm kind confident with that our growth in a loan book will continue, and also we gave our projections that I believe we will come back to the double-digit growth in '26 in all areas. We see rather positive all main areas of our financing, both corporate lending, mortgages, consumer lending.

Rather positive for this year. With this strong capital and liquidity base, I see that we will continue growing in line with the market.

Thank you, Vytautas. The second question from Andre, it's about loan book growth in 2026: What are the preconditions to achieve targeted 11% loan book growth in the next year?

Yes,

I will take that question. Hi, Andre.

Our deposits portfolio growth for this year is set at lower rate than the loan book because we prefunded ourselves during the last year. To growth at 11% 11%, we do not see any risk, and we are confident to achieve that.

We do see that high demand for the credit in the country, either it's mortgages or corporates. Of course, some seasonality between the quarters could be, but in overall 11% and loan book growth together with a lower growth of deposits, it's what we are confident we can achieve.

The next question comes from Signet. Good morning, Walters: Assuming no reversals, how cost of risk is expected to develop in 2026?

Yeah. Hi, Walters, I will take that question.

Actually, our budgeted cost of risk level for 2026 is more or less similar what we have achieved during the last year. Given the macro situation in the country, we do believe and we are confident that we can end up at that level.

Thank you. The next question is from David: Why did you feel the need to strategically improve your loan-to-deposit ratio and strengthen the balance sheet resilience last year?

Yes, hi, David. Again, I will take that question.

We hit the levels of the ratio itself as high. To be at 105% on loan-to-deposit ratio, we believe it's a high level, so that's why we, well, decided to bring that to 90 90s, mid-90s, and, well, we always said that to be at 95% or 90% in loan-to-deposit ratio is what our long-term target level is.

The next question comes from Dalius: How come you're so cautious about 2026 guidance, but very bullish on 2027 and '28 with big net profit growth in those two years?

Yes, hi, Dalius. Actually the profit line development depends on the one-offs.

It's the one thing. If we look into the adjusted ratios, the growth is not as significant as with line with the one-offs.

We do believe with the end of the investment phase, and that is expected to be end of this year or beginning of next year, our operational leverage will increase, and the investments that we are making now is the reason in order to bring the bank growing and to the level of the profitability that we committed to achieve for the shareholders, and it's above 17%.

Don't see any additional questions at this given moment. If you have any additional questions after this call, please feel free to email investor relations team, and we'll get back to you shortly after.

We'll conclude our Q&A session. Thank you for dialing in today, and thank you for your continued interest in our story.

We'll see you next quarter.