Norm on Reforming Article 5 and Annexes 1, 6A1, 6A2 and Adding Annexes 6A3, 6A4, 6A5, and 7 of the Capital Adequacy Norm

Page 1 of 3 Resolution No. CD-SIBOIF-1360-2-FEB14-2023 Dated February 14, 2023

NORM ON REFORMING ARTICLE 5 AND ANNEXES 1, 6A1, AND 6A2 AND ADDING ANNEXES 6A3, 6A4, 6A5, AND 7 OF THE NORM ON CAPITAL ADEQUACY

The Board of Directors of the Superintendent of Banks and Other Financial Institutions,

CONSIDERING

I

That Article 20 of Law No. 561, General Law of Banks, Non-Bank Financial Institutions, and Financial Groups (LGB), contained in the Nicaraguan Legal Digest of the Subject of Banking and Finance, published in La Gaceta, Official Journal No. 164, of August 27, 2018, and its updates (Legal Digest), empowers the Board of Directors to establish, through norms of general application, additional deductions to those already established for the different classifications of capital.

II

That in accordance with the legal authority indicated in the previous consideration, it is appropriate to reform Article 5 of the Norm on Capital Adequacy, contained in Resolution No. CD-SIBOIF-651-1-OCTU27-2010, published in La Gaceta, Official Journal No. 18, of January 28, 2011, regarding the deductions of secondary capital components, adjusting the treatment of gains from the sale of non-financial assets with financing, gains from the transfer of assets received in credit recovery to property, plant, and equipment, and gains from business combinations recorded in results.

III

That in accordance with the considerations previously stated and based on the authority granted by Article 3, items 3) and 13), and Article 10, item 1), of Law No. 316, Law of the Superintendent of Banks and Other Financial Institutions, contained in the Legal Digest.

In exercise of its powers,

HAS ISSUED

The following:

CD-SIBOIF-1360-2-FEB14-2023

NORM ON REFORMING ARTICLE 5 AND ANNEXES 1, 6A1, AND 6A2 AND ADDING ANNEXES 6A3, 6A4, 6A5, AND 7 OF THE NORM ON CAPITAL ADEQUACY

FIRST: Article 5 of the Norm on Capital Adequacy, contained in Resolution No. CD-SIBOIF-651-1-OCTU27-2010, of October 27, 2010,

Page 2 of 3 published in La Gaceta, Official Journal No. 18, of January 28, 2011, shall be read as follows:

Art. 5 Deductions. The following items shall be deducted from the Capital Adequacy calculation:

a) The following shall be deducted from the sum of primary capital components:

1. The book value of goodwill acquired from a business combination, derived from mergers or acquisitions of institutions.

2. Accumulated results of previous periods in case of losses.

3. Non-capitalizable donations that have conditions for repayment.

4. Other Net Assets subject to Amortization: Taxes paid in advance, other expenses paid in advance, balance of the deferred income tax account less transition adjustment, improvements to properties received under lease, software, other intangible assets, and stationery, supplies, and other materials. These accounts shall not be counted within the risk-weighted assets either. All these assets are net of amortization, depreciation, and impairment.

b) The following shall be deducted from the sum of secondary capital components:

1. Current Period Results, in case of losses.

2. The negative balance of the Other Comprehensive Income account.

3. The amount of the gain from the sale of non-financial assets with financing (sale value minus cash premium minus book value), plus the amount for revaluations of those assets, recorded before the sale as a transition adjustment to January 1, 2018, and adjustment for revaluation of Other Comprehensive Income. Once the cost value of the non-financial asset has been fully recovered, the aforementioned gain from sale and revaluation shall cease to be deducted from secondary capital.

4. The balance of the subaccounts Undistributable Exercise Result and Undistributable Accumulated Results of Previous Exercises.

5. The amount of the gain (fair value minus book value) from the transfer of Assets Received in Credit Recovery to Property, Plant, and Equipment.

6. The amount of the gain from business combinations recorded in the current exercise results and in computable accumulated results.

c) The following shall be deducted from the Capital Calculation Base:

1. Any pending adjustments to be constituted;

Page 3 of 3

2. The book value of holdings in equity instruments issued by subsidiaries and associates. Similarly, holdings in joint ventures shall be deducted. These investments shall not be counted in the computation of risk assets contained in Article 6 of this norm.

Equity instruments, for the purposes of applying this item, are understood to be any of the following: common or ordinary shares, preferred shares, other titles of participation in the capital of the issuing entity, and subordinated debt instruments.

SECOND: Annexes 1, 6A1, and 6A2 are modified and Annexes 6A3, 6A4, 6A5, and 7 are added to the Norm on Capital Adequacy, in order to adjust them to these provisions, which are attached to this resolution. This is without prejudice to the authority conferred upon the Superintendent in Article 9 of said Norm.

THIRD: Financial institutions shall have 60 days counted from the entry into force of this norm to adapt their accounting, control, computer, and other necessary systems to apply prospectively the gain from the sale of non-financial assets with financing, the gain from the transfer of assets received in credit recovery to property, plant, and equipment, and the gain from business combinations. Therefore, the capital adequacy as of the last day of the month in which the aforementioned period ends must consider the changes contained in this norm.

FOURTH: This norm shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Journal.

(S) Legible Magaly María Sáenz Ulloa (S) Illegible (Luis Ángel Montenegro E) (S) Illegible Fausto Reyes (S) Illegible (Silvio Moisés Casco Marenco) (S) Illegible (Ervin Antonio Vargas Pérez).

SAÚL CASTELLÓN TÓRREZ Ad Hoc Secretary, Board of Directors SIBOIF

Annex 1 INSTITUTION: XXXXXXXX CAPITAL ADEQUACY CALCULATION (In thousands of córdobas) 0.00 I. TOTAL RISK ASSETS (A+B-C-D) 0.00 A. Risk-Weighted Assets (Annex 2) 0.00 110 Cash and Cash Equivalents 0.00 116 Investments at Fair Value with Changes in Results 0.00 125 Investments at Fair Value with Changes in Other Comprehensive Income 0.00 138 Investments at Amortized Cost, Net 0.00 141 Credit Portfolio, Net 0.00 150 Accounts Receivable, Net 0.00 156 Non-current Assets Held for Sale, Net 0.00 159 Assets received in credit recovery 0.00 162 Holdings, Net 0.00 167 Tangible Assets 0.00 178 Intangible Assets 0.00 182 Fiscal Assets 0.00 186 Other Assets 0.00 800 Contingent Liability Accounts, Net 0.00 B. Notional Assets for Exchange Rate Risk (Annex 3) 0.00 C. Less: Pending Adjustments to be Constituted 0.00 D. Less: Holdings in Equity Instruments 0.00 II. REQUIRED MINIMUM CAPITAL 0.00 (10% of Total Risk Assets) 1/ III. CAPITAL ADEQUACY BASE (A+B-C-D-E) 0.00 A. Primary Capital 0.00

1. Ordinary Paid-in Capital 0.00
2. Preferred Paid-in Capital 0.00
3. Capitalizable Donations 0.00
4. Share Premiums 0.00
5. Contributions for Capital Increases 0.00
6. Minority Interests 0.00
7. Legal Reserve 0.00
8. Accumulated Results 0.00
9. Other Irrevocable Character Reserves 0.00
10. Less: Goodwill (Goodwill Fund, Net) 0.00
11. Less: Other Net Assets subject to amortization. 0.00 B. Secondary Capital 0.00
12. Non-capitalizable Donations 0.00
13. Other Comprehensive Income Net (negative balance) 0.00
14. Other Equity Reserves (Statutory Reserves) 2/ 0.00
15. Computable Accumulated Results 0.00 Accumulated Results 0.00 Less: Transition adjustments affecting accumulated results (Annex 5) 0.00 Less: Undistributable Accumulated Result of Previous Exercises 0.00 Less: Gains from Business Combinations (Annex 7) 4/ 0.00
16. Computable Exercise Results 0.00 Exercise Results 0.00 Less: Undistributable Exercise Result 0.00 Less: Gains from Business Combinations (Annex 7) 4/ 0.00
17. Cumulative Preferred Capital and Other Hybrid Instruments 0.00
18. Subordinated Obligations and Redeemable Preferred Capital 0.00
19. Voluntary Generic Provisions 0.00
20. Countercyclical Provision Fund 3/ 0.00
21. Less: Revaluation and gain from sale of non-financial assets with financing (Annexes 6A1 to 6A4) 4/ 0.00
22. Less: Gains from transfer of assets received in credit recovery to Property, Plant, and Equipment (Annex 6 A5) 4/ 0.00 C. Less Excess (Primary Capital - Secondary Capital) 0.00 D. Less: Pending Adjustments to be Constituted 0.00

1. Provisions 0.00
2. Other adjustments 0.00 E. Less: Holdings in Equity Instruments 0.00
3. 0.00
4. 0.00 IV. CAPITAL ADEQUACY (III / I) #DIV/0! 1/ As established by the General Banking Law in its Article 19.

CONCEPTS 3/ Reformed on September 19, 2017 - Resolution CD-SIBOIF-1016-3-SEP19-2017. 2/ Comprises only Statutory Reserves. Reformed in accordance with the Norm for the Granting of Temporary Credit Conditions, Resolution CD-SIBOIF-1181-1-JUN19-2020. 4/ Reformed on February 14, 2023 - Resolution CD-SIBOIF-1360-2-FEB14-2023.

Annex 6 A1 INSTITUTION: XXXX MONTH: January 1900 Gains from sales of adjudicated assets with financing (previously registered according to prudential norms) (This form must be used for financing of adjudicated assets carried out until April 20, 2023) (Amounts in thousands of córdobas) (1) (2) (3) (4) (5) =(3)-(4) (6) (7) (8) (9) (10)=(3)-(9) (11)=(4)-(10) No. ID Asset Name of Debtor Sale Value Acquisition Cost Gain from Sale Credit No. Credit Amount Initial Date of Credit Balance of Credit Amount Paid of the Asset Cost Pending 1 - - - 2 - 3 - Total - (1) ID of Asset: corresponds to the number of the specific asset reported by the financial institution. (2) Name of debtor: corresponds to the name of the natural or legal person to whom financing is granted for the purchase of the non-financial asset. (3) Sale value: corresponds to the amount at which the non-financial asset is sold. (5) Gain from sale: is equal to sale value minus acquisition cost. (6) Credit No.: Identification number of the credit granted for the purchase of the non-financial asset. (7) Credit Amount: Amount of financing granted for the purchase of the non-financial asset. (8) Initial Date of Credit: Date on which financing was granted for the purchase of the non-financial asset. (9) Balance of credit: amount owed to the financial institution as of the date of the report month. (10) Amount paid of the asset: is equal to sale value minus balance of credit. (11) Pending cost: is equal to book value minus amount paid of the asset. (4) Acquisition cost: corresponds to the initial registration value of the adjudicated asset according to prudential norms.

Annex 6 A2 INSTITUTION: XXXX MONTH: January 1900 Revaluation and Gains from sales of non-financial assets with financing (previously registered according to IFRS 5 and IAS 16) (This form must be used for financing of adjudicated assets carried out until April 20, 2023) (Amounts in thousands of córdobas) (1) (2) (4) (5) (6) (7)= (5) - (6) (8) (9) (10) (11) (12)=(5)-(11) (13)=(6)-(12) No. IFRS ID Asset Transition Adjustment (to 1/01/18) Adjustments for Revaluation (OCI) Name of Debtor Sale Value Book Value Gain from Sale Credit No. Credit Amount Initial Date of Credit Balance of Credit Amount Paid of the Asset Pending Cost 1 - - - 2 - - - 3 - - - Total - - - (1) IFRS: corresponds to the IFRS (IAS 16 or IFRS 5) under which the non-financial asset sold with financing was registered. (2) ID of Asset: corresponds to the code of the specific asset reported by the financial institution. (4) Name of debtor: corresponds to the name of the natural or legal person to whom financing is granted for the purchase of the non-financial asset. (5) Sale value: corresponds to the amount at which the non-financial asset is sold. (6) Book Value: is the amount by which an asset is recognized as established in IAS 16 or IFRS 5, as applicable. (7) Gain from sale: is equal to sale value minus book value. (8) Credit No.: Identification number of the credit granted for the purchase of the non-financial asset. (9) Credit Amount: Amount of financing granted for the purchase of the non-financial asset. (10) Initial Date of Credit: Date on which financing was granted for the purchase of the non-financial asset. (11) Balance of credit: amount owed to the financial institution as of the date of the report month. (12) Amount paid of the asset: is equal to sale value minus balance of credit. (13) Pending cost: is equal to book value minus amount paid of the asset. (3) ADJUSTMENTS FOR REVALUATION APPLIED BEFORE THE SALE (3) Adjustments for revaluation applied before the Sale: corresponds to valuation adjustments registered in the opening statement of financial position on January 1, 2018, and subsequent revaluation adjustments according to IAS 16 (OCI).

Annex 6 A3 INSTITUTION: XXXX MONTH: January 1900 Gain from sale of assets received in credit recovery with financing (previously registered according to prudential norms) (This form must be used for financing of adjudicated assets carried out from April 21, 2023) (Amounts in thousands of córdobas) (1) (2) (3) (4) (5) = (3) - (4) (6) (7) (8) = (6) - (7) (9) = (3) - (4) - (8) (10) (11) (12) (13) = (3) - (12) (14) = (6) - (13) No. ID Asset Name of Debtor Sale Value Cash Premium Financed Amount Acquisition Cost Provision Book Value Gain from sale deductible from secondary capital Credit No. Initial Date of Credit Balance of credit at month-end Amount paid of the sold asset Pending Cost 1 - - - - - 2 - - - - - Total - (1) ID of Asset: corresponds to the number of the specific asset reported by the financial institution. (2) Name of debtor: corresponds to the name of the natural or legal person to whom financing is granted for the purchase of the non-financial asset. (3) Sale value: corresponds to the amount at which the non-financial asset is sold. (4) Cash Premium: initial contribution of the debtor according to the financial institution's policy. (5) Financed Amount: sale value minus cash premium contributed by the debtor. (7) Provision: corresponds to the provision of assets received in credit recovery according to prudential norms. (8) Book Value: acquisition cost minus the provision of assets received in credit recovery. (10) Credit No.: identification number of the credit granted for the purchase of the non-financial asset. (11) Initial Date of Credit: date on which financing was granted for the purchase of the non-financial asset. (12) Balance of credit: amount owed to the financial institution as of the date of the report month. (13) Amount paid of the sold asset: is equal to sale value minus balance of credit. (14) Pending Cost: is equal to acquisition cost minus amount paid of the sold asset. (6) Acquisition Cost: initial registration value of the asset received in credit recovery according to prudential norms. In case the adjudicated asset is registered in off-balance sheet accounts at the time of sale, both the acquisition cost and the provision will be equal to zero, such that the Book Value will also be zero. (9) Gain from sale deductible from secondary capital: sale value minus cash premium paid minus book value. In the case where the financed amount (sale value minus cash premium paid) is less than the book value, the result should not affect secondary capital.

Annex 6 A4 INSTITUTION: XXXX MONTH: January 1900 Revaluation and Gains from sale of non-financial assets with financing (previously registered according to IFRS 5 and IAS 16) (This form must be used for financing of non-financial assets carried out from April 21, 2023) (Amounts in thousands of córdobas) (1) (2) (4) (5) (6) (7)= (5) - (6) (8) (9)= (5) - (6) - (8) (10) (11) (12) (13)=(5)-(12) (14)=(8)-(13) No. IFRS ID of Asset Transition Adjustment (to 1/01/18) Adjustments for Revaluation (OCI) Name of Debtor Sale Value Cash Premium Financed Amount Book Value Gain from sale deductible from secondary capital Credit No. Initial Date of Credit Balance of Credit Amount paid of the sold asset Pending Cost 1 - - - - 2 - - - - 3 Total - - - (1) IFRS: corresponds to the IFRS (IAS 16 or IFRS 5) under which the non-financial asset sold with financing was registered. (2) ID of Asset: corresponds to the code of the specific asset reported by the financial institution. (4) Name of debtor: corresponds to the name of the natural or legal person to whom financing is granted for the purchase of the non-financial asset. (5) Sale value: corresponds to the amount at which the non-financial asset is sold. (6) Cash Premium: initial contribution of the debtor according to the financial institution's policy. (7) Financed Amount: sale value minus cash premium contributed by the debtor. (8) Book Value: is the net amount by which an asset is recognized as established in IAS 16 or IFRS 5, as applicable. (9) Gain from sale deductible from secondary capital: is equal to sale value minus cash premium paid minus book value. (10) Credit No.: identification number of the credit granted for the purchase of the non-financial asset. (11) Initial Date of Credit: date on which financing was granted for the purchase of the non-financial asset. (12) Balance of credit: amount owed to the financial institution as of the date of the report month. (13) Amount paid of the sold asset: is equal to sale value minus balance of credit. (14) Pending Cost: is equal to book value minus amount paid of the sold asset. (3) ADJUSTMENTS FOR REVALUATION APPLIED BEFORE THE SALE (3) Adjustments for revaluation applied before the sale: corresponds to valuation adjustments registered in the opening statement of financial position on January 1, 2018, and subsequent revaluation adjustments according to

Annex 6 A5 INSTITUTION: XXXX MONTH: January 1900 Gain from transfer of assets received in credit recovery to Property, Plant, and Equipment (Amounts in thousands of córdobas) (1) (2) (3) (4) (5) = (3) - (4) (6) (7) = (6) - (5) (8) (9) (10) (11) = (9) x (10) (12) = (7) - (11) No. ID Asset Description of Asset Acquisition Cost Provision Book Value Fair Value Gain from transfer of assets adjudicated to Property, Plant, and Equipment Useful Life (In Months) Monthly Deferral Accumulated Months Accumulated Deferral Amount to deduct from Capital Adequacy Base in Secondary Capital 1 - - - - 2 - - - - 3 - - - - - 4 - - - - - Total - (1) ID of Asset: corresponds to the number of the specific asset reported by the financial institution. (2) Description of Asset: corresponds to the type of asset adjudicated. (4) Provision: corresponds to the provision of assets received in credit recovery according to prudential norms. (10) Accumulated Months: corresponds to the number of months elapsed since the month in which the operation originated, inclusive. (11) Accumulated Deferral: corresponds to multiplying the monthly deferral by the accumulated months. Note: (This form must be used for Gains from transfers of Assets Received in Credit Recovery to Property, Plant, and Equipment carried out from April 21, 2023) (12) Amount to deduct from Capital Adequacy Base in Secondary Capital: Corresponds to subtracting the accumulated deferral from the amount of the Gain from transfer of assets adjudicated to Property, Plant, and Equipment. (8) Useful Life (In Months): useful life of the asset estimated based on IFRS, with the exception of land. (9) Monthly deferral: corresponds to dividing the Gain from transfer of assets adjudicated to Property, Plant, and Equipment according to the following table: Deferral Criteria If Useful Life is greater than 5 years (3) Acquisition Cost: initial registration value of the asset received in credit recovery according to prudential norms. In case the adjudicated asset is registered in off-balance sheet accounts, both the acquisition cost and the provision will be equal to zero, such that the Book Value will also be zero. If Useful Life is less than 5 years Land Deferral in years 5 Useful Life 5 (7) Gain from transfer of assets adjudicated to Property, Plant, and Equipment: fair value minus book value. In the case where the fair value is less than the book value, the result should not affect secondary capital. (6) Fair Value: Technical appraisals based on IFRS 13 "Fair Value". (5) Book Value: acquisition cost minus the provision of assets received in credit recovery. Except for assets adjudicated in off-balance sheet accounts. (See concept of Acquisition Cost). In the case of Non-current Assets Held for Sale based on IFRS 5 that require transfer to Property, Plant, and Equipment, they must previously be reclassified to assets received in credit recovery considering the prudential criteria established in the Norm on credit risk management.

Annex 7 INSTITUTION: XXXX MONTH: January 1900 Gains from Business Combinations (Amounts in thousands of córdobas) This form must be used in the exercise period in which the business combination is carried out. Table 7-1 (1) (2)= (1) / 60 (3) (4) = (2) x (3) (5) = (1) - (4) No. Gains from Business Combinations Monthly Deferral Accumulated Months Accumulated Deferral Amount to deduct from Capital Adequacy Base in Results of Computable Exercise 1 - - - Table 7-2 (1) (2)= (1) / 60 (3) (4) = (2) x (3) (5) = (1) - (4) No. Gains from Business Combinations Monthly Deferral Accumulated Months Accumulated Deferral Amount to deduct from Capital Adequacy Base in Results of Computable Accumulated Results 1 - - - (5) Amount to deduct from Capital Adequacy Base: Corresponds to the subtraction of the amount of the Gain from business combination minus the accumulated deferral. Clarifying Note: The gain from business combination will initially be deducted from secondary capital in results of computable exercise for which Table 7-1 must be used, after the closing of the period the amount to deduct will be transferred to the results to