Mbh Bank Plc. Class A · BET:MKBBANK
Mbh Bank Plc. Class A — Q4 2023 Earnings Presentation
39 slides from Mbh Bank Plc. Class A's earnings presentation, Mar 28, 2024
Slide 1: MBH Group 4Q 2023 results Investor Presentation
MBH Group 4Q 2023 results Investor Presentation 28th March 2024
Slide 2: Agenda
Executive summary 3 Business environment 6 Financial performance 9 We kindly draw your attention to that in this presentation MBH Bank’s underlying financial performance presented – if not stated otherwise – using adjusted preliminary Additional information 20 financial figures (alternative performa
Slide 3: Executive summary
Executive summary M3H BANK
Slide 4: 2023 – a successful year for MBH Group
2023 – a successful year for MBH Group Adjusted and accounting PAT (HUF bn) 72.0 107.4 183.2 +53.8% Outstanding profitability, robust (+84.9 bn) capital and liquidity positions 242.8 +89.3% (+74.5 bn) Increasing portfolio, stable market 157.8 shares Successful entry into international 83.4 bond mark
Slide 5: Robust profit growth with 2023 adjusted profits increasing more than 53% y/y
Robust profit growth with 2023 adjusted profits increasing more than 53% y/y Adjusted ROE, accounting ROE (%) ▪ Outstanding profitability in 2023, with adjusted return on equity 7.6% 40.8% 0.9% 14.6% 20.2% reaching 26.7% in FY 2023 (accounting ROE also very strong at 20.2%), driven by strong revenue
Slide 6: Business environment
Business environment M3H BANK
Slide 7: Inflation is expected to fall further, GDP gradually gather steam
Inflation is expected to fall further, GDP gradually gather steam ▪ Hungary’s GDP was unchanged (both annual and quarterly basis) in 4Q 2023. Due to weak performance in industry and GDP growth (y/y%) and employment Average inflation and wage growth* (y/y %) some services sectors, annual GDP in 2023
Slide 8: Hungarian base rate could fall to 6% by mid-summer
Hungarian base rate could fall to 6% by mid-summer HNB base MNB baserate rateand and3M 3MBUBOR BUBOR(%) (%) SWAP yield curves (%) ▪ By the end of 2023, most of the key external and internal factors monitored by the MNB showed further improvement or stabilization, maintaining Hungary's favorable ris
Slide 9: Financial performance
Financial performance M3H BANK
Slide 10: Accounting profits increased to HUF 183.2 bn; adjustments on PAT
Accounting profits increased to HUF 183.2 bn; extra profit tax and banking tax are the main adjustments on PAT in FY 2023 Accounting profit after tax*(HUF bn), ROE (%) FY 2023 adjusted Profit after tax breakdown (HUF bn) p/p and y/y changes 20.2% 14.6% 2.3 4.7 0.8 0.0 0.0 7.8 4Q 65.9 2.8 242.8 -4.8
Slide 11: Gross income grew by HUF 172.7 bn y/y, driven by net interest income
MBH Group’s gross income grew by HUF 172.7 bn y/y, driven by the growth in net interest income Gross Operating Income (HUF bn), TRM % Net interest income (HUF bn), NIM % 6.4% 6.1% 6.1% 6.0% 6.2% 5.7% 5.4% 5.2% 5.0% 5.3% 5.3% 5.2% 4.6% 655.3 4.1% 482.7 +172.7 569.6 +17.4% 421.8 +147.8 140.6 167.6 160
Slide 12: Stable customer loan portfolios in 2023
Stable customer loan portfolios in 2023 Customer gross loan portfolio (HUF bn) Corporate1 +2.8% 19.4% 19.0% 19.0% 18.6% 19.4% 5,028.3 4,927.4 4,956.8 5,018.9 5,170.6 +5.8% 2,690.4 2,664.1 2,693.4 2,684.6 2,840.5 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Retail1
Slide 13: Growth in personal loans in 2023
Growth in personal loans in 2023 Retail mortgage loans – Retail mortgage loans – Gross volume (HUF bn) and market share (%) New loan contracts (HUF bn) and market share (%) 16.3% 16.0% 15.8% 15.8% 15.7% Retail mortgage loans: 13.7% 12.4% ▪ Retail mortgage loan balances were at 919bn (- 10.6% 1.5%, H
Slide 14: Customer deposit portfolio increased in 4Q
Customer deposit portfolio increased in 4Q Customer deposit portfolio (HUF bn) Corporate1 +5.8% 19.3% 19.8% 19.9% 20.0% 18.8% 6,574.4 6,524.3 6,957.1 6,421.8 6,270.9 +9.4% 3,494.1 3,456.8 3,418.0 3,648.4 3,990.0 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Corporat
Slide 15: Increase in costs y/y was below inflation, C/I ratio improving
Increase in costs y/y was below inflation, C/I ratio improving to close to 40% Operating expenses (HUF bn) Personnel expenses (HUF bn) 280.6 +15.4% 141.6 243.2 119.1 +18.8% 17.6%1 35.9 44.2 30.4 31.7 35.2 79.6 87.7 60.4 64.4 68.0 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 FY 2022 FY 2023 4Q 2022 1Q 202
Slide 16: Improving portfolio quality and increasing coverage rates in 4Q
Improving portfolio quality and increasing coverage rates in 4Q Total risk cost (HUF bn) Coverage (%) 47.0% 54.9% 47.5% 48.5% 49.7% 87.4 80.0 62.2 +9.2% 51.4 4.24% 5.3% 5.1% 5.0% 4.6% 5.2% 2.05% 38.3 -0.01% 1.57% 1.21% 0% 1.03% 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 -0.6 -2% NPL Direct coverage% To
Slide 17: Stable capital position – 20.3% CET1 in 4Q 2023
Stable capital position – 20.3% CET1 in 4Q 2023 Shareholders’ Equity (HUF bn) Capital Adequacy (%) +214.6 +30.4 20.2% 21.7% 22.1% 1,023.4 21.2% 993.0 19.7% 19.7% 19.7% 22.1% 183.2 183.2 21.2% 180.9 19.1% 20.3% 808.7 57.8 -29.8 18.0% 17.4% 17.6% 3.5 36.5 8.4 107.4 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2
Slide 18: MREL requirements and adequacy
MREL requirements and adequacy Regulatory MREL requirements: TREA (%) and TEM (%) 2023 Dec – 2026 Jan Expected MREL new issuances (HUF bn) 22.6% ~300 22.6% 189 18.0% 14.6% ~120 10.2% 15.5% 135 29 5.9% 5.9% 5.9% 5.9% 25 FY 2023 2024 25-26 Dec - 23 Jan - 24 Jan - 25 Jan - 26 act MREL - TREA requiremen
Slide 19: Strong liquidity ratios
Strong liquidity ratios Customer deposits (HUF bn) LTD (%) 6,957.1 76.5% 76.7% 79.0% 76.9% 74.3% 6,574.4 6,421.8 6,270.9 6,524.3 3,697.6 4,097.6 4,630.2 3,871.4 3,890.4 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 2,550.4 2,380.5 2,826.7 2,859.5 1,944.2 LCR (%)* 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 14
Slide 20: Additional information
Additional information
Slide 21: Investment grade rating
Investment grade rating In 2023, MBH Bank received an investment grade Baa3 rating from Moody’s, with a stable outlook Rating category Rating achieved Long- and short-term deposit ratings Baa3/P-3 Long- and short-term Counterparty Risk Ratings (CRRs) Baa2/P-2 Adjusted / Baseline Credit Assessment (B
Slide 22: Successful international MREL bond issuance
Successful international MREL bond issuance EUR 350mn 4NC3 Senior Preferred Bond ▪ MBH Bank successfully closed its debut KEY TERMS DISTRIBUTION BY GEOGRAPHY international bond issue in mid-October. Issuer MBH Bank Nyrt. ▪ The transaction, initially planned for EUR Issue rating Ba2 (Moody’s) 3% 8% C
Slide 23: MBH Investment Bank launched
MBH Investment Bank launched • A new bank specialising in investment services enters the Hungarian market • Faster innovation, responsiveness, higher quality of service to customers - higher commission earning capacity • Already at the launch, the foundations are set: 200.000 transactions HUF 1,900
Slide 24: MBH Bank acquires a majority share in Fundamenta building society
MBH Bank acquires a majority share in Fundamenta building society MBH Bank Plc. entered into an agreement to acquire 76.35% share in the building society, Fundamenta-Lakáskassza Ltd. • The acquisition of Fundamenta will enable MBH Group to build a comprehensive savings and real estate lending ecosys
Slide 25: MBH’s Strategy
MBH’s Strategy MBH Bank builds its strategy on a 3 pillar vision Sustainable value creation managing banking market risks in line with ownership expectations Key Market Player Integrated bank serving all customer segments, while build to maximise synergies and reduce uncertainties maintaining local
Slide 26: Sustainable vision, strategic objectives and pillars
Sustainable vision, strategic objectives and pillars MBH’s vision is to become the leaders in establishing sustainable banking in Hungary. Two missions were identified to achieve this vision, which are supported by six pillars, with identified goals, KPIs and tools Vision MBH for a sustainable futur
Slide 27: Awards and Recognitions (1)
Awards and Recognitions (1) Association for Women’s Career Figyelő TOP200 ESG Awards Development in Hungary Financial Enterprise of the Year Employee Engagement Program of the Year Best Workplace for Women MBH Bank HRKOMM Awards 2023 EXIM Awards 2024 Visa Awards ▪ Open Minded Companies Award 2023 –
Slide 28: Awards and Recognitions (2)
Awards and Recognitions (2) Euromoney Private Banking Awards 2024 CSR Hungary Awards 2023 CSR Excellence Awards Best of BSE (Budapest Stock Exchange) 2023 ▪ Best for discretionary portfolio Corporate CSR activities ▪ Best CSR Program (Common Causes-Common management: MBH Bank Private Banking Respons
Slide 29: Annexes
Annexes M3H BANK
Slide 30: Key ratios overview (adjusted)
Key ratios overview (adjusted) ROE % TRM % LCR % 39.4% 6.1% 6.0% 6.2% 148.3% 152.5% 5.2% 136.8% 4.6% 26.7% 21.4% 10.4% 3.1% 4Q 2022 3Q 2023 4Q 2023 FY 2022 FY 2023 4Q 2022 3Q 2023 4Q 2023 FY 2022 FY 2023 4Q 2022 3Q 2023 4Q 2023 C/I % NPL % ▪ Distinguished ROE reaching 26.7% in FY 2023, 56.6% 4.5% 53
Slide 31: Adjusted P&L
Adjusted P&L ADJUSTED P&L 2021 2022 2023 ∆% Y/Y Q/Q (HUF bn) FY 4Q FY 3Q 4Q FY Y/Y (Y) Net operating income 138,5 61,0 239,4 94,4 77,3 374,7 56,5% 26,7% -18,2% Gross operating income 341,9 140,6 482,7 162,4 165,0 655,3 35,8% 17,4% 1,6% Net interest income 200,7 135,7 421,8 140,5 140,9 569,6 35,0% 3,
Slide 32: Balance sheet
Balance sheet STATEMENT OF BALANCE SHEET 2021 2022 Y/Y Q/Q (HUF bn) 4Q 4Q 3Q 4Q Financial assets 2,342.5 1,511.0 1,238.1 1,516.9 0.4% 22.5% Trading portfolio 193.9 489.0 336.7 274.6 -43.8% -18.4% Securities 2,689.1 3,403.4 3,814.2 3,907.2 14.8% 2.4% Loans and advances to customers (net) 4,260.7 4,76
Slide 33: Adjusted KPIs
Adjusted KPIs KPIs based on adjusted PAT and Balance Sheet 2021 2022 2023 ∆%-p ∆%-p ∆%-p (HUF bn) FY 4Q FY 3Q 4Q FY Y-Y (Y) Y-Y Q-Q Profitability TRM - Total Revenue Margin 3,75% 5,23% 4,65% 6,12% 6,04% 6,16% 1,52% 0,81% -0,08% NIM - Net Interest Margin 2,20% 5,05% 4,06% 5,30% 5,16% 5,36% 1,30% 0,11
Slide 34: Unadjusted KPIs
Unadjusted KPIs KPIs based on unadjusted PAT 2021 2022 2023 ∆%-p ∆%-p ∆%-p (HUF bn) FY 4Q FY 3Q 4Q FY Y-Y (Y) Y-Y Q-Q Profitability TRM - Total Revenue Margin 3.71% 5.05% 4.58% 6.12% 6.04% 6.21% 1.64% 0.99% -0.08% NIM - Net Interest Margin 2.20% 5.05% 4.06% 5.30% 5.16% 5.36% 1.30% 0.11% -0.13% NFM -
Slide 35: Unadjusted and adjusted P&L
Unadjusted and adjusted P&L P&L 4Q 2023 Unadjusted Adjusted (HUF bn) P&L P&L Net operating income 76.3 77.3 Gross operating income 165.0 165.0 Net interest income 140.9 140.9 Net fee and commission income 26.4 26.4 Other operating income -2.4 -2.4 FX and FV results 4.2 4.2 Other income -6.6 -6.6 Ope
Slide 36: Changes in the regulatory environment and post-closing events
Changes in the regulatory environment and post-closing events # Changes in 4Q CSOK Plus: from January 1, 2024, a subsidized loan with an interest rate of 3% can be used in urban areas with over 5,000 inhabitants. In the case of the birth of the second child and every 1 subsequent child, HUF 10 milli
Slide 37: Abbreviations
Abbreviations Secured loans Home Loans + Free-to-Use M ortgages Unsecured loans Personnel loans + Baby loans + Other consumer loans FVTOCI Fair value through OCI FVTPL Fair value through P&L FTE Full time equivalent NPL Non performing loans DPD90+ Days past due over 90 days ROE, ROAE Return on (aver
Slide 38: Disclaimer
Disclaimer BANK Me
Slide 39: Disclaimer
DISCLAIMER This presentation contains or may contain statements that are or may be deemed to be, “forward-looking statements” which are Investor relations prospective in nature. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. F