Slide 1: Results of mBank Group Q1-Q4 2015
Results of mBank Group Q1-Q4 2015 A turbulent year but profit targets achieved again Management Board of mBank S.A. Investor Presentation February 4, 2016
Slide 2: Key highlights of 2015
Key highlights of 2015 Core revenues of PLN 3,409 M at historical high Total revenues increased • NII at PLN 2,511 M (+0.8% YoY), to PLN 4,093 M as margin rebound commences • NFC at PLN 897 M (-0.5% YoY), Profit & Loss driven by business growth Sound volume development • Gross loans at PLN 81.4 B So
Slide 3: mBank's business position has never been stronger
mBank’s business position has never been stronger Expanding client base and rapid growth of transactionality Number of mBank’s Retail Clients (thou.) Cash management – number of transfers (Corporate Banking) Retail Banking PL mBank CZSK Orange Finance Domestic (million) Foreign & SEPA (thousands) +3
Slide 4: mBank's business position has never been stronger
mBank’s business position has never been stronger Excess liquidity and margin resilience Development of Gross Loans by Type (31.03.2010=100) Development of Balances on Retail Current Accounts 450 (PLN M) 7.3% 7.4% 7.3% 400 7.0% Market share 6.9% 350 300 +23% +21% 14,871 250 13,439 12,049 200 9,958 1
Slide 5: 2015 and 2016 bring unprecedented challenges for the sector and mBank
2015 and 2016 bring unprecedented challenges for the sector and mBank Summary of additional regulatory burdens for mBank Group (PLN M) As a % of 2015 recurrent pre-provision income 0.0366% 3.1% 6.7% 2.5% 12.3% monthly ∑=259.4 ~12 52.1 141.7 65.6 Higher annual Payment related Mortgage Total burdens H
Slide 6: Agenda
Agenda mBank Group in 2015 Summary of Q4/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q4/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Cap
Slide 7: mBank Group in 2015: Profit and Loss Account
mBank Group in 2015 mBank Analyzer Summary of Key Financials: Profit and Loss Account in PLN million 2013 2014 2015 Change ’15/’14 Net interest income 2,226 2,491 2,511 +0.8% Net Fee & Commission income 835 902 897 -0.5% Total income 3,674 3,939 4,093 +3.9% Total costs (1,678) (1,771) (1,860) +5.1%
Slide 8: Development of Revenues and Costs
mBank Group in 2015 mBank Analyzer Development of Revenues and Costs Development of Total Income Development of Total Costs (PLN million) (PLN million) 45.7% 44.9% 50.2% +3.9% +7.2% change change ‘15/‘14 +16.0% ‘15/‘14 4,093 +5.1% 3,939 +5.5% 2,054 3,674 6851 547 +25.2% 194 +92.7% 613 1,771 1,678 71
Slide 9: Summary of Key Financials: Balance Sheet
mBank Group in 2015 mBank Analyzer Summary of Key Financials: Balance Sheet in PLN million 2013 2014 2015 Change ’15/’14 Gross loans to customers 70,582 77,373 81,409 +5.2% Retail client loans 38,308 41,560 46,259 +11.3% 1 Core corporate client loans 26,188 29,002 32,416 +11.8% Amounts due to custom
Slide 10: Development of Loans and Deposits
mBank Group in 2015 mBank Analyzer Development of Loans and Deposits Development of Gross Loans Development of Deposits (PLN million) (PLN million) +6.3% +16.5% change change +7.1% +5.2% +12.0% ‘15/‘14 +20.4% ‘15/‘14 +9.6% 81,409 +17.4% 81,141 77,373 1,704 600 2,972 -42.7% 72,422 -33.4% 70,582 901 2
Slide 11: Agenda
Agenda mBank Group in 2015 Summary of Q4/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q4/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Cap
Slide 12: Summary of Q4/15 Results: Profit and Loss Account
Summary of Q4/15 Results in mBank Group mBank Analyzer Key Financials: Profit and Loss Account in PLN million Q4/15 Q4/14 Change YoY Q3/15 Net interest income 676.6 632.5 +7.0% 641.8 Net Fee & Commission income 237.4 200.4 +18.5% 235.6 Total income 1,110.5 939.9 +18.1% 979.9 Total costs (458.1) (443
Slide 13: Summary of Q4/15 Results: Balance Sheet
Summary of Q4/15 Results in mBank Group mBank Analyzer Key Financials: Balance Sheet in PLN million Q4/15 Q4/14 Change YoY Q3/15 Gross loans to customers 81,409 77,373 +5.2% 82,449 Retail client loans 46,259 41,560 +11.3% 45,381 1 Core corporate client loans 32,416 29,002 +11.8% 32,305 Amounts due t
Slide 14: Client acquisition and Market shares
Summary of Q4/15 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +8.7% +10.0% +1.7% +2.5% 4,864 4,947 18,654 19,086 19,562 4,551 4,665 4,743 17,787 18,133 159 193 1,867 1,931 1,983 33 76 121 820 1,838 1,839 762 76
Slide 15: Development of Retail and Corporate business
Summary of Q4/15 in mBank Group Development of Retail and Corporate business Sales of mortgage loans Sales of non-mortgage loans (PLN M, by quarter) (PLN M, by quarter) +57% +4% -2% +0.5% 1,334 1,305 1,204 1,255 1,201 1,207 272 1,164 1,031 309 24% 82 87 8% 99 7% 81 96 102 833 834 244 72 6% 18% 205 2
Slide 16: Agenda
Agenda mBank Group in 2015 Summary of Q4/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q4/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Cap
Slide 17: Development of Loans to Customers
Analysis of Q4/15 in mBank Group mBank Analyzer Development of Loans to Customers Core lending remains stable across segments Development of Gross Loans and Advances to Customers (PLN M) +1.8% +5.2% +11.8% -4.3% +2.3% -1.3% +0.3% -1.8% 32,841 35,340 32,227 34,959 33,447 81,883 82,449 81,409 5,612 84
Slide 18: Development of Deposits
Analysis of Q4/15 in mBank Group mBank Analyzer Development of Deposits Dynamic deposit growth in both retail and corporate segment Development of Amounts due to Customers (PLN M) +6.8% +12.0% +17.0% -1.4% +16.5% +3.3% +4.7% +6.1% 34,922 34,424 81,141 32,237 30,816 29,661 1,094 3,089 78,546 600 1% 3
Slide 19: Development of recurrent and reported results
Analysis of Q4/15 in mBank Group Development of recurrent and reported results Decomposition of mBank Group’s Pre-provision Income in Q4/15 1 (PLN M) Gain on the sale of shares of PZU through an Recurrent One-off items Reported accelerated bookbuilding process; the bank sold 985.5 4.711.700 shares,
Slide 20: Income of mBank Group
Analysis of Q4/15 in mBank Group mBank Analyzer Income of mBank Group Core revenues at historically high level Development of mBank Group’s Income (PLN M) +18.1% +13.3% 1,118.1 QoQ YoY 1,110.5 39.2 979.9 127.4 939.9 195.0 884.8 13.4 70.9 34.5 1.0 1.3 9.2 84.1 0.0 70.5 14.3 1.0 102.6 3.2 35.3 -15.7%
Slide 21: Costs of mBank Group
Analysis of Q4/15 in mBank Group mBank Analyzer Costs of mBank Group Stable cost base on a recurrent basis Development of mBank Group’s Costs In Q4/15 mBank Group paid a contribution to the Bank Guarantee (PLN M) Fund of PLN 141.7 million to cover the cost of payments to deposit holders of bankrupt
Slide 22: Loan Loss Provisions and Risk Costs
Analysis of Q4/15 in mBank Group Loan Loss Provisions and Risk Costs Stable cost of risk reflecting strong financial standing of clients Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) -7.5% 72 112.6 111.0 107.7 55 57 54 102.6 52 16.1 100.0 61 52 54 55
Slide 23: Loan Portfolio Quality
Analysis of Q4/15 in mBank Group Loan Portfolio Quality Improving coverage ratio and risk indicators mBank Group’s Impaired Loans Portfolio Sale of non-performing mBank Group’s NPL Ratio (PLN M) mortgage loan portfolio 6.4% -5.8% 6.1% 6.0% mBank Group applies 5.9% -4.6% 5.7% a conservative client- o
Slide 24: Funding Structure Details
Analysis of Q4/15 in mBank Group Funding Structure Details A well diversified funding profile and further improving liquidity levels mBank Group’s funding structure mBank’s ratings Loan-to-Deposit Ratio as of 31.12.2015 109.9% Fitch -4.4 pp Other Retail 105.7% 5% deposits Long-term 103.0% Subordinat
Slide 25: Key Regulatory Ratios
Analysis of Q4/15 in mBank Group Key Regulatory Ratios Strong capital position and liquidity above regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Ratios after OGM decisions but before dividend allocation 149% 19.02% 144% 138% 16.99% 17.25% 129% 16.38% 2.96% 16.26% 14.
Slide 26: Agenda
Agenda mBank Group in 2015 Summary of Q4/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q4/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Cap
Slide 27: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Economic growth set to remain solid Polish economy is regaining momentum, recent data showed GDP forecast (% YoY) 15% mBank’s 8 forecast 10% 6 3.4 3.4 3.3 3.3 3.7 3.3 3.5 3.8 3.6 3.8 3.8 3.9 5% 4 3.3 2.3 1.8 2.6 0.9 0% 2 0.1 0.0 0.5 -5% 0 -10% -2 YoY -15% -4 Jan-12 Jun-12
Slide 28: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Strong growth in corporate loans, cautious borrowing by households Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 30% 25% 20% 20% 15% 10% 10% 5% 0% 0% -10% -5% Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Ja
Slide 29: 2016 in forecasts and the impact on mBank Group
2016 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Impact on mBank 2014 2015 2016F Net interest income & NIM (Slightly positive) GDP growth (YoY) 3.3% 3.6% 3.8% MPC decision on reduction of interest rates less lik
Slide 30: Agenda
Agenda mBank Group in 2015 Summary of Q4/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q4/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Cap
Slide 31: Appendix
Appendix Page Page Additional Information: Selected Financial Data No. Detailed Results of the Business Lines No. Consolidated Profit and Loss Account 32 Retail Banking 47-52 Consolidated Statement of Financial Position 33 Summary of Q4/15: Financial Results and Volumes 48-49 mBank Group’s Ratios 34
Slide 32: Consolidated Profit and Loss Account
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Net interest income 632,532 587,439 605,548 641,753
Slide 33: Consolidated Statement of Financial Position
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Cash and balances with Central Bank 3 054 549 2 406 93
Slide 34: mBank Group's Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries mBank Group’s Ratios Financial Ratios Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Net Interest Margin (quarterly) 2.27% 2.06% 2.11% 2.12% 2.22% Net Interest Margin YtD 2.30% 2.0
Slide 35: mBank Group's historical performance (1/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (1/3) Business Lines Subsidiaries Net Interest Income & NIM Net Fee and Commission Income (PLN M) (PLN M) +4% 2.2% 2.5% 2.4% 2.2% 2.3% 2.1% -1% CAGR +7% CAGR +1% 840 835 902 897 746 787 2
Slide 36: mBank Group's historical performance (2/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (2/3) Business Lines Subsidiaries Dynamics excl. one-off regulatory costs (additional Operating Costs payment to the BFG and Mortgage Support Fund) Pre-provision Income & C/I ratio (PLN M
Slide 37: mBank Group's historical performance (3/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (3/3) Business Lines Subsidiaries Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) +7% +5% 15.90% 14.96% 18.73% 19.38% 14.66% 17.25% CAGR +12% +11% CAGR 118.0 123.5 98.9 102.1 10
Slide 38: Net Interest Income & Margin
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Net Interest Income & Margin Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 2.3 2.1 2.1 2.1 2.2 NIM 360.2 +4.5% 3.8 20.4 324.8
Slide 39: Fee and Commission Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Fee and Commission Income Fee and Commission Income Structure (PLN M) QoQ YoY 382.0 365.5 371.9 337.4 49.9 55.5 14% +11.4% +0.9% 51.4 314.5 55.0 40.
Slide 40: Trading and Other Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Trading and Other Income Net Trading Income Structure Gains less Losses from Investment Securities (PLN M) (PLN M) +1% 102.6 -16% 23.9 84.1 34.5 70.
Slide 41: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities and Equity (PLN B) (PLN B) 125.8 123.5 125.8 123.5 123.3 1
Slide 42: Balance Sheet Analysis: Currency Structure
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Currency Structure Currency Structure of Loans to Customers (net) Currency Structure of Amounts due to Banks and Customers1
Slide 43: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Structure of Loans and Deposits Structure of mBank Group’s Gross Loans Structure of mBank Group’s Deposits as of 31.12.2015
Slide 44: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 31.12.2015 Households Real estate management 1.3% 10.9% Building i
Slide 45: Detailed Development of Capital Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Detailed Development of Capital Ratios mBank Group’s Common Equity Tier 1 (CET 1) Ratio +0.41 -0.05 -0.16 14.29% +0.17 14.09% +0.62 +1.42 -
Slide 46: Issuance Activity on the Covered Bonds Market
Summary Appendix Historical view Profit & Loss Balance Sheet Issuance Activity on the Covered Bonds Market Business Lines Subsidiaries Residential mortgage loans are rising in cover pool Covered Bonds Issuance Summary of Mortgage Covered Bonds issued in 2014 and 2015 (PLN M) Target 2015: Amount Curr
Slide 47: Detailed Results of the Business Lines: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q4/15 Retail Banking Investor Presentation – Q1-Q4 2015 |47
Slide 48: Retail Banking: Summary of Q4/15 Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q4/15: Financial Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 278 262 268 274 +17% 258 35 36 36 35 35 23 414.1 23 23 23 -6% 23 67 70 7
Slide 49: Retail Banking: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q4/15: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +11.3% +17.4% +1.9% +8.6% 45,329 45,381 46,259 46,117 43,788 44 41,
Slide 50: Loan Portfolio Structure of mBank Group in Poland
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Loan Portfolio Structure of mBank Group in Poland Market Shares in Household Loans in Poland Product Structure of Retail Banking Loan Portfolio in Poland as of 31.12.2015 7.5% 7.6% 7.7% 7.6% 7.7%
Slide 51: mBank in the Czech Republic and Slovakia
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries mBank in the Czech Republic and Slovakia Gross Loans (PLN M) and Share in Total mBank’s retail volume Deposits (PLN M) and Share in Total mBank’s retail volume +31% +13% +8% +8% 8.3% +4% 13.8% 3,8
Slide 52: mBank in the Czech Republic and Slovakia
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries mBank in the Czech Republic and Slovakia Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) +25% +15% +29% +6% +3% Czech +5% Republic 14,663 15,507 27,527 28,459 2,593 2,7
Slide 53: Detailed Results of the Business Lines: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q4/15 Corporates & Financial Markets Investor Presentation – Q1-Q4 2015 |53
Slide 54: Corporates and Financial Markets: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q4/15: Financial Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 -12% Pomorskie 12 2 Warmińsko- 29 mBank’s branch
Slide 55: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q4/15: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +1.8% +3.8% -4.3% -4.2% 35,340 34,959 34,922 1,947 33,447
Slide 56: Corporates and Financial Markets: Market Shares
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Market Shares mBank’s Market Shares in Investment Banking Services1 mBank in the Market for Non-Treasury Debt2 as of 30.11.2015 (PLN M) 63,085 12.6% 16.1% 30,899 12,980 10,917 7,
Slide 57: Detailed Results of the mBank Group's companies: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the mBank Group’s companies in Q4/15 Subsidiaries Investor Presentation – Q1-Q4 2015 |57
Slide 58: mBank Group's Subsidiaries: Profit before Tax
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Development of Profit before Tax of Consolidated Companies PLN thou. Q4/14 Q4/15 Change YoY 2014 2015 Change YoY mBank Hipoteczny 4,831 9,416 +94.9% 29,475 26,797 -9.1% mLeasing 9,021
Slide 59: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Gross loans and advances to customers Profit before Tax (PLN M) (PLN M) established in 1999 +38% +3% -9% specialised mortgage bank and 7,268 7,475 29.5 the large
Slide 60: Leasing and Factoring
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Leasing and Factoring Leasing contracts Market share & position – 2015 Profit before Tax (PLN M) (PLN M) +20% +25% 7.6% established 3,785 57.2 in 1991 3,157 Rank 45.9 11.9 1,105 provid
Slide 61: Dom Maklerski mBanku (mDM)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Dom Maklerski mBanku (mDM) Market Shares in Q4/15, by volume Profit before Tax (PLN M) established in 1991 incl. block Session +45% transactions transactions providing a full range of
Slide 62: mBank's share price performance in 2015
mBank’s share price performance in 2015 Negative sentiment towards banking stocks due to increasing regulatory burdens mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) 110 WIG-30 2.378% WIG-20 2.586% 100 WIG 1.678% 90 WIG-Banks 6.082% 80 WIG-Poland 1.7
Slide 63: mBank Analyzer
mBank Analyzer mBank Analyzer Further enhancing our reporting standard Analyse, customise, export and print selected data on mBank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Comprehensive Summary of Data covering Details on each structure and report on key fin
Slide 64: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 E-mail: wojciech.chmielewski@mbank.pl Head of Investor Relations and Group Strategy Paweł Lipiński Direct dial: +48 22 829 15 33 E-mail: pawel.li