Dear participants of the OTP Pension and FreeFlight pension funds,

We invite you to review the performance of OTP Capital’s non-state pension funds and the key developments in the financial markets during July 2026.

General economic situation

At the end of July 2026, the National Bank of Ukraine unexpectedly increased the key policy rate by 0.5 percentage points, bringing it to 15.5%. The decision came as a surprise to the financial market, as previous expectations had pointed to the rate remaining at 15% through the end of the year.

At the same time, annual inflation slowed to 7.8% in June, down from 8.2% a month earlier, supporting more optimistic macroeconomic expectations. However, the NBU explained the rate hike as a measure aimed at containing underlying inflationary pressure and preventing inflation from accelerating during the second half of the year.

According to the regulator, tighter monetary policy is intended to preserve the attractiveness of hryvnia-denominated assets, support foreign exchange market stability, and keep inflation expectations under control over the medium term.

Hryvnia and foreign currency instruments

In July, yields on hryvnia-denominated domestic government bonds (OVDPs) continued their gradual decline amid consistently strong investor demand:

• 1-year OVDPs: 15.13% (unchanged)
• 2-year OVDPs: decreased from 15.73% to 15.46%
• 3-year OVDPs: decreased from 16.15% to 15.98%
• 3.5-year OVDPs: decreased from 16.50% to 16.44%

Interest rates on hryvnia time deposits remained within the 9–14% range, while U.S. dollar deposit rates stayed at up to 2%, depending on the deposit term.

In July, the Ministry of Finance of Ukraine placed euro-denominated OVDPs with a yield of 3.08%. In the secondary market, yields on foreign currency-denominated government bonds remained at up to 2.25% in U.S. dollars and 0.75% in euros.

Foreign exchange market

Demand for foreign currency remained strong throughout July, resulting in a slight depreciation of the hryvnia from UAH 44.59/USD to UAH 44.68/USD.

To smooth exchange rate fluctuations, the National Bank of Ukraine continued its active foreign exchange interventions. Their total volume reached USD 4.8 billion, only slightly below the record USD 5.0 billion recorded in June.

The exchange rate is expected to remain within the UAH 44.5–45.0/USD range during the third quarter of 2026. At the same time, a gradual depreciation of the hryvnia toward UAH 46/USD by the end of the year cannot be ruled out.

External markets and Eurobonds

In July, the Ukrainian Eurobond market entered a period of stabilization following the sharp gains recorded in previous months. A balance between supply and demand resulted in a moderate correction, with prices of Ukrainian Eurobonds declining by 2–4%, depending on maturity.

Performance of the non-state pension funds

OTP Pension

Portfolio

During July, the fund sold UAH 122.1 million of OVDPs and purchased UAH 114.4 million of OVDPs, as well as corporate bonds issued by NovaPay Credit LLC, offering higher yields.

Within the deposit portfolio, UAH 11.7 million was placed with PUMB Bank.

Financial results

• Net Asset Value (NAV): UAH 947.5 million
• Fund assets increased by: UAH 16.0 million (1.7%)
• Contributions received: UAH 10.6 million
• Pension benefits paid: UAH 0.7 million

Performance

The fund generated a return of 0.01% in July and 14.07% over the last 12 months

FreeFlight

Portfolio

During the reporting month, the fund purchased UAH 1.1 million of OVDPs.

Within the deposit portfolio, USD 18 thousand was placed with SENS Bank.

Financial results

• Net Asset Value (NAV): UAH 95.6 million
• Fund assets increased by: UAH 1.3 million (1.4%)
• Contributions received: more than UAH 1.8 million
• Pension benefits paid: more than UAH 200 thousand

Performance

The fund generated a return of 0.53% for the month and 3.65% over the last 365 days (in U.S. dollars).