2022 Report and Financial Statements

2022 REPORT AND FINANCIAL STATEMENTS - BANCO REGIONAL LETTER FROM THE PRESIDENT ECONOMIC AND FINANCIAL PERFORMANCE 36 (*) By means of Resolution SB. SG. No. 00176/2018, the Central Bank of Paraguay authorized the issuance of Financial Bonds in foreign currency up to US$ 75,000,000.00, and the Entity has issued US$ 45,000,000.00 The financial bonds issued are not covered by Law 2334/03, therefore, they are not guaranteed by the Deposit Guarantee Fund. c.12 Limitations on the free availability of assets or equity and any other restrictions on the right of ownership As of December 31, 2022, and 2021, the following limitations exist: a) Legal and special reserves The Central Bank of Paraguay account as of December 31, 2022 and 2021 respectively, includes the sum of Gs. 1.523.720.747.789 and Gs. 1.619.278.084.158 respectively, which correspond to restricted availability accounts, held in the said institution as legal and special reserve requirements (see note c.3). b) Public securities As of December 31, 2022, and 2021, the Entity has delivered Treasury Bonds amounting to Gs. 20.000.000.000 as minimum guarantees required by the BCP under the general regulations of the Paraguayan Payment System. c) Legal reserve In accordance with Article 27 of Law No. 861/96 as amended by Law No. 5.787/2016, financial institutions must have a reserve of no less than the equivalent of one hundred percent (100%) of their capital, which shall be constituted by transferring annually no less than twenty percent (20%) of the net profits of each financial year. Article 28 of the Law establishes that the resources of the legal reserve shall be automatically applied to cover losses recorded in the financial year. In the following years, the total profits must be allocated to the legal reserve until the minimum amount is reached again, or the highest amount obtained in the process of its constitution. At any time, the amount of the reserve may be additionally increased by cash contributions. d) Price-level restatement of capital Under Article 11 of Law No. 861/96, as amended by Law No. 5787/2016, financial institutions must update their capital annually on the basis of the CPI (Consumer Price Index, known by its Spanish acronym IPC) calculated by the Central Bank of Paraguay. The present value of the minimum capital for financial year 2022 and 2021 is Gs. 60.514.000.000 and Gs. 56.647.000.000 respectively, in accordance with Circulars SB. SG. No. 1/2021 and 1/2020 respectively. The Entity's integrated capital (common and preferred shares) as of December 31, 2022 and 2021 respectively, amount to Gs. 1.084.664.800.000 and Gs. 1.081.242.800.000 respectively (see note b.5), which exceeds the minimum capital. e) Profit distribution According to the provisions of Law No. 861/96, modified by Law No. 5.787/2016, financial institutions may distribute their profits after approval by the Superintendence of Banks (SIB) of their respective annual audited financial statements, provided that such approval is issued within one hundred and twenty days of the closing of the financial year. Upon expiration of the aforementioned period and without a pronouncement by the SIB, the earnings may be distributed. The Ordinary Shareholders' meeting held on April 28, 2022, approved the capitalization of profits for the year 2021, which was carried out as follows:

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