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Diamars, 29 April 2025 AWEMainta LOCAL 7

Explanatory notes to the Consolidated Financial Highlights as at December 31, 2024

A. ACCOUNTING POLICIES B. SPECIFICATION OF ACCOUNTS

(All amounts are expressed in thousands of Antillean Guilders) 2024 2023 www.mcb-bank.com
1. GENERAL - Progress N.V.
The principal accounting policies adopted in - MCB Holding International VBA and I ASSETS
the preparation of the Consolidated Financial subsidiaries Investment securities
Highlights of Maduro & Curiel’s Bank N.V. Debt securities at amortized cost 1,968,663 1,614,706
and its subsidiaries (the ‘Group’) are set 5. CLASSIFICATION AND SUBSEQUENT
out below. These explanatory notes are an MEASUREMENT OF FINANCIAL ASSETS Financial assets at fair value through profit or loss 4,956 4,909
extract of the detailed notes included in the Classification and subsequent measurement Total investment securities 1,973,619 1,619,615
consolidated financial statements and are of the financial assets depend on: Accrued interest receivables on debt securities 15,207 13,579
consistent in all material respects with those (i) the Group’s business model for
from which they have been derived. managing the asset; and Less: allowance for expected credit loss (768) (679)
(ii) the cash flow characteristics of the
2. BASIS OF PREPARATION asset. 1,988,058 1,632,515
The consolidated financial statements, NET INVESTMENTS
from which the Consolidated Financial Based on these factors, the Group classifies
Highlights have been derived, are prepared its debt instruments into one of the following Loans and advances to customers
in accordance with International Financial two measurement categories:
Reporting Standards (‘IFRS’). Retail customers 2,151,752 2,077,533
- Amortized cost: Corporate customers 3,009,019 2,676,263
The figures presented in these highlights are Assets that are held for collection of Public sector 8,260 53,666
stated in thousands of Antillean Guilders and contractual cash flows where those cash
are rounded to the nearest thousand. flows represent solely payments of principal Other 21,196 33,400
and interest (‘SPPI’), and that are not Total loans and advances to customers 5,190,227 4,840,862
The accounting policies used have been designated at Fair Value Trough Profit or loss Accrued interest receivable on loans and advances 12,159 12,427
consistently applied by the Group and are (FVTPL), are measured at amortized cost. The
consistent, in all material respects, with carrying amount of these assets is adjusted Less: allowance for expected credit loss (159,752) (156,094)
those used in the previous year. by any expected credit loss allowance as
further described below. Interest income NET LOANS AND ADVANCES TO CUSTOMERS 5,042,634 4,697,195
The statements have been prepared on the from these financial assets is included in
historical cost basis except for financial ‘Interest income’ using the effective interest
assets at fair value through profit or loss, rate method. II LIABILITIES
and financial assets that are measured at Customers' deposits
amortized cost. Historical cost is generally - Fair value through profit or loss (‘FVTPL’):
based on the fair value of the consideration Assets that do not meet the criteria for Retail customers 3,267,172 3,086,592
given in exchange for goods and services. amortized cost are measured at fair value Corporate customers 3,645,071 3,430,907
through profit or loss. These assets are
For credit facilities that include both a loan unquoted equity securities that are not Other 1,980,167 1,835,740
and an undrawn commitment, the ECL is held for trading purposes. A gain or loss on 8,892,410 8,353,239
calculated and presented together with the such an equity investment is subsequently
loan. measured at fair value through profit or loss.
Interest income from these financial assets Accrued interest payable on customers' deposits 3,683 2,328
3. CHANGES IN ACCOUNTING POLICIES is included in ‘Interest income’ using the
In the current year, the Group has applied effective interest rate method.
the new or revised IFRS issued by the
International Accounting Standards Board Business model assessment
(IASB) that are mandatorily effective for an The business model reflects how the Group TOTAL CUSTOMERS' DEPOSITS 8,896,093 8,355,567
accounting period that begins on or after manages the assets in order to generate cash
January 1, 2024. flows. That is, whether the Group’s objective
is solely to collect the contractual cash
The following amendments became effective flows from the assets. If this condition is not
as at January 1, 2024: Classification of applicable (unlisted equity securities), then the for the asset. - The Probability of Default (PD) is an
Liabilities as Current or Non-current and financial assets are classified as part of ‘other’ Financial assets are derecognized when estimate of the likelihood of default of a
Non-current Liabilities with Covenants (IAS business model and measured at FVTPL. the rights to receive cash flows from the given period of time.
1), Lease Liability in a Sale and Leaseback investments have expired. - The Exposure at Default (EAD) is an
(IFRS 16) and Disclosures Supplier Finance SPPI estimate of the exposure at a future default
Arrangements (IAS 7 and IFRS 7). Where the business model is to hold assets Expected credit loss principles date, taking into account expected changes
to collect contractual cash flows, the Group Based on IFRS 9 the financials assets and loan in the exposure after the reporting date,
None of these amendments will have an assesses whether the financial instruments’ commitments (‘financial assets’) are grouped including repayments of principal and
impact on the Group’s consolidated financial cash flows represent solely payments of into Stage 1, Stage 2 and Stage 3 as described interest, whether scheduled by contract
statements at December 31, 2024. principal and interest (the ‘SPPI test’). below: or otherwise, expected drawdowns on
In making this assessment, the Group - Stage 1: When financial assets are first committed facilities, and accrued interest
4. BASIS OF CONSOLIDATION considers whether the contractual cash recognized and continue to perform in from missed payments.
Subsidiaries are all entities over which flows are consistent with a basic lending accordance with the contractual terms - The Loss Given Default (LGD) is an estimate
the Group has the power to govern the arrangement i.e. interest includes only and conditions after initial recognition, of the loss arising in the case where a
financial and operating policies, generally consideration for the time value of money, the Group recognizes an allowance based default occurs at a given time. It is based
accompanying a shareholding of more than credit risk, other basic lending risks and a on twelve months’ ECLs. Stage 1 financial on the difference between the contractual
one half of the voting rights. Subsidiaries are profit margin that is consistent with a basic assets also include facilities where the cash flows due and those that the lender
fully consolidated from the date on which lending arrangement. Where the contractual credit risk has improved and the financial would expect to receive, including from
control is transferred to the Group until the terms introduce exposure to risk or volatility asset has been reclassified from Stage 2. the realization of any collateral. It is usually
date that control ceases. that are inconsistent with a basic lending - Stage 2: When a financial asset has shown expressed as a percentage of the EAD.
arrangement, the related financial asset is a significant increase in credit risk since
The following subsidiaries have been classified and measured at FVTPL. origination, the Group records an allowance In its ECL models, the Group relies on a
consolidated as of December 31, 2024: for these Lifetime ECLs. Stage 2 financial broad range of forward looking information
- Caribbean Mercantile Bank N.V. and Derecognition of financial assets assets also include facilities, where the as economic inputs such as GDP growth,
subsidiary The Group sometimes renegotiates or credit risk has improved and the financial Unemployment rates and the Consumer
- Maduro & Curiel’s Bank (Bonaire) N.V. and otherwise modifies the contractual cash flows asset has been reclassified from Stage 3. Price Index. The inputs and models used for
subsidiary of loans to customers. When this happens, - Stage 3: Financial assets considered calculating ECLs may not always capture
- Maduro & Curiel’s Bank International N.V. the Group assesses whether or not the credit-impaired and the Group records an all characteristics of the market at the date
- Maduro & Curiel’s Insurance Services N.V. new terms are substantially different to the allowance for these Lifetime ECLs. of the financial statements. To reflect this,
- MCB Risk Insurance N.V. original terms. If the terms are substantially qualitative adjustments or overlays are
- MCB Group Insurance N.V. different, the Group derecognizes the original Calculation of Expected credit losses occasionally made as temporary adjustments
- MCB Securities Holding B.V. financial asset and recognizes a ‘new’ asset The key elements of the ECL calculations are when such differences are significantly
- MCB Securities Administration N.V. and recalculates a new effective interest rate as follows: material.