Slide 1: Results of mBank Group Q1-Q4 2022
Results of mBank Group Q1-Q4 2022 Exceptional operating performance of the core business in 2022, materially impacted by public burdens and costs of legal risk Presentation for Investors and Analysts, 09.02.2023
Slide 2: Agenda
Agenda Key highlights of 2022 in mBank Group 2 Overview of main trends in Q4 2022 17 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2022 21 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 3: Key highlights of 2022 in mBank Group
Key highlights of 2022 in mBank Group ▪ Record total income of PLN 7,842 million, +28.3% YoY, generated by growth across mBank’s client franchises Total revenues at the highest ▪ Soaring net interest income to PLN 5,909 million, +43.2% YoY, in part level in history despite driven by rate hikes, sign
Slide 4: Key highlights of 2022 in mBank Group
Key highlights of 2022 in mBank Group ▪ Gross loan portfolio of PLN 123.4 billion, +1.1% YoY excl. FX effect, driven by growing corporate segment, while retail exposure declined Dynamics of loans weakened ▪ New production of mortgage loans dropped to PLN 6.5 billion, while by slowdown in retail segm
Slide 5: Summary of key financial highlights for mBank Group
Summary of key financial highlights for mBank Group Total income Cost/Income ratio 1 Net profit of Core Business 2 ROE of Core Business 2 PLN M excluding impact normalized level PLN M excluding impact excluding impact of "credit holidays" of "credit holidays" of "credit holidays" -5.9pp +50% +125% +
Slide 6: Business development under mBank Group’s strategy for 2021-2025
Business development under mBank Group’s strategy for 2021-2025 mBank’s achievements in implementation of its strategy ▪ New personal financial management (PFM) ▪ mTFI, mBank's own ▪ Increasing cooperation with companies from functionalities for better monitoring and planning investment fund prospec
Slide 7: mBank’s actions in pursuing its ESG strategy in 2022
mBank’s actions in pursuing its ESG strategy in 2022 mBank adopts well-recognized methods to progress on its path to climate neutrality and financial inclusion ▪ mBank joined the Science Based Targets ▪ mBank was the first bank in Poland to join initiative (SBTi) and has committed to ESG risk rating
Slide 8: Client base and market position of retail and corporate banking
Client base and market position of retail and corporate banking Number of retail clients (thou.) Market shares - Households mBank only, without Kompakt Finanse closing of 9.1% current deposits 8.8% inactive 8.1% term deposits 8.7% accounts -146 +129 with arrears 8.3% 8.4% 5,660 5,642 8.2% 8.3% 8.3%
Slide 9: mBank remains a front-runner in mobile banking adoption
mBank remains a front-runner in mobile banking adoption Number of active users of mBank’s mobile application by the share thousand #1 of mobile users in total active mBank CZSK average growth per year +379 3,338 customer base mBank PL 2,960 +398 419 2,577 372 2,128 303 1,670 234 by the number 1,329
Slide 10: Financial results have been strongly impacted by external factors
Financial results have been strongly impacted by external factors mBank Group’s result before income tax for 2022 – reported and adjusted for major burdens PLN M summary of regulatory interventions 4,938 1 “Credit holidays” ▪ The law allows the borrower for a suspension of mortgage loan repayment, g
Slide 11: mBank Group’s financial results in 2022: Profit and Loss Account
mBank Group’s financial results in 2022: Profit and Loss Account reported adjusted PLN million 2020 2021 2022 ∆ YoY 2022 ∆ YoY Net interest income 4,009.3 4,126.3 5,909.2 +43.2% 7,231.6 +75.3% Net fee and commission income 1,508.3 1,867.8 2,120.1 +13.5% 2,120.1 +13.5% Net trading and other income 34
Slide 12: mBank Group’s financial results in 2022: Balance Sheet
mBank Group’s financial results in 2022: Balance Sheet PLN million 2020 2021 2022 ∆ YoY Total assets 178,861 198,373 209,892 +5.8% Gross loans to customers 111,912 120,856 123,437 +2.1% Individual client loans 65,655 72,871 71,122 -2.4% Corporate client loans 46,025 47,832 52,207 +9.1% Customer depo
Slide 13: Revenues on growth trajectory, further improvement of efficiency
Revenues on growth trajectory, further improvement of efficiency Development of mBank Group’s total income and NIM Development of mBank Group’s total costs and C/I ratio PLN M PLN M underlying normalized 2.33% 2.16% 3.70% Net Interest Margin 41.1% 40.2% 34.3% Cost/Income ratio 1 +50.2% change +35.1%
Slide 14: Strong protection against legal risks ensured by high provisions
Strong protection against legal risks ensured by high provisions CHF mortgage loans to individual customers (CHF M, net) Total value of provisions for legal risk of FX loans (PLN M) portfolio deductions due to legal risks PLN 6,142 M as of 31.12.2022 The hypothetical cost of converting the active CH
Slide 15: Unfavourable line of jurisprudence and ongoing settlement program
Unfavourable line of jurisprudence and ongoing settlement program Number of individual court cases concerning indexation clauses1 Details and statistics of mBank’s settlement program Total value of claims: ▪ The offers are going to be directed to all clients with an active Swiss franc PLN 6,355 M as
Slide 16: Robust performance of the core business demonstrated in 2022
Robust performance of the core business demonstrated in 2022 Summary of financial results for mBank’s core activity and run-off portfolio in 2022 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the genuine and undistorted performance of
Slide 17: Agenda
Agenda Key highlights of 2022 in mBank Group 2 Overview of main trends in Q4 2022 17 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2022 21 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 18: Key highlights of Q4 2022 in mBank Group
Key highlights of Q4 2022 in mBank Group ✓ Stable net interest income (w/o “credit holidays”), but high Net interest income Net fee income commission expense halted upward trend of core revenues +64.9% YoY -3.2% YoY ✓ Higher personnel costs partially offset by lower material Total costs Cost/Income
Slide 19: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account reported adjusted PLN million Q4 2021 Q3 2022 Q4 2022 ∆ YoY Q3 2022 Q4 2022 ∆ QoQ Net interest income 1,197.5 732.2 1,974.5 +64.9% 2,014.5 2,014.6 0.0% Net fee and commission income 483.2 513.8 467.8 -3.2% 513.8 467.8 -9.0% Total income 1,620.6 1
Slide 20: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q4 2021 Q3 2022 Q4 2022 ∆ QoQ ∆ YoY Total assets 198,373 205,676 209,892 +2.0% +5.8% Gross loans to customers 120,856 128,677 123,437 -4.1% +2.1% Individual client loans 72,871 73,173 71,122 -2.8% -2.4% Corporate client loans 47,832 55,375 52,2
Slide 21: Agenda
Agenda Key highlights of 2022 in mBank Group 2 Overview of main trends in Q4 2022 17 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2022 21 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 22: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Decline of loan portfolio due to slowdown observed in both business segments Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M +9.1% +2.1% +8.3% -5.7% +1.1% -4.1% -4.3% -2.9% 51,469 53,957 55,375 52,207 126,
Slide 23: Results of mBank Group: New lending business
Results of mBank Group: New lending business Further drop in new mortgage lending, accompanied by lower sales of consumer credit Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter -83% -24% 2,916 2,829 2,793 -15% 79 284 118 217 -15% 2,139 2,481 2,555 578 2,212 59
Slide 24: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Continued growth of deposit base anchored in rebounding inflows from retail clients Development of customer deposits Deposits from corporate customers PLN M PLN M +13.5% +10.9% +13.1% -2.1% +10.7% +2.3% -2.2% +2.3% 49,934 49,334 51,055 49,981 170,253 174,131
Slide 25: Results of mBank Group: Total income
Results of mBank Group: Total income Revenues, adjusted for “credit holidays”, kept at record level, with stable net interest income Development of mBank Group’s total income Development of interest income PLN M Total negative impact of PLN M “credit holidays” on revenues +159% +6% +6% amounted to P
Slide 26: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Higher personnel costs partially offset by lower material spending, excellent efficiency Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M +12.6% Costs in H2/22 were impacted 76.7% excluding "credit by a
Slide 27: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Provisioning level reflecting resilience of credit portfolio and prudent risk management Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 98 89 289.8 76 -35.1% 89 70 68 0.5 268.5 76 0.8
Slide 28: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Good asset quality confirmed by risk indicators, support from sale of non-performing loans mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to +3.1% 4.0% 4.0% EBA definition, -5.8% 3.9% 3.9% 3.8% consolidated NPL ratio was:
Slide 29: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Strong capital position safely surpassing regulatory requirements, ample liquidity mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Group’s LCR: 201% +3.50 203% 16.58% 16.39% 16.36% 15.92% 187% 184% 186% 2.42% 2.46% 14.66% 173% 2.45%
Slide 30: Agenda
Agenda Key highlights of 2022 in mBank Group 2 Overview of main trends in Q4 2022 17 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2022 21 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 31: Macroeconomic situation and outlook
Macroeconomic situation and outlook Economic slowdown meets inflation tops. Consumer moods becoming better Unemployment rate (still) at cyclical bottoms 20 12% 10 10% 0 8% -10 6% -20 4% -30 -40 2% Source: GUS Source: GUS -50 0% Jan.16 Sep.16 May.17 Jan.18 Sep.18 May.19 Jan.20 Sep.20 May.21 Jan.22 Se
Slide 32: Macroeconomic situation and outlook
Macroeconomic situation and outlook Great deleveraging. Rates and EUR/PLN toppish. Corporate loans and deposits (YoY, FX-adjusted) Household loans and deposits (YoY, FX-adjusted) 30% 14% Source: NBP 12% Source: NBP 25% 10% 20% 8% 15% 6% 10% 4% 5% 2% 0% 0% -2% -5% -4% -10% -6% Jan.13 Oct.13 Jul.14 Ap
Slide 33: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks has continued being unfavourable and hardly predictable Key economic indicators for Poland Short-term prospects for mBank (view based on Q4/22) 2021 2022 2023F 2024F Net interest income & NIM slightly negative 1 GDP
Slide 34: Agenda
Agenda Key highlights of 2022 in mBank Group 2 Overview of main trends in Q4 2022 17 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2022 21 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 35: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net interest income 1,197,483 1,506,592 1,695,946 732,219 1,974,482 Net fee and commission income 483,237 590,737 547,772 513,818 467,750 Dividend
Slide 36: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Cash and balances with Central Bank 12,202,266 17,971,383 12,522,901 20,488,126 16,014,318 Loans and advances to banks 7,229,681 6,829,976 8,547,677 9
Slide 37: Appendix: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net Interest Margin, quarterly 2.42% 3.17% 3.56% 4.02% 4.03% Net Interest Margin, YtD 2.16% 3.17% 3.37% 3.59% 3.70% Net Interest Margin, excl. CHF portfolio, Y
Slide 38: Appendix: Selected Financial Data – Net interest income
Appendix: Selected Financial Data – Net interest income Structure of mBank Group’s interest income Structure of mBank Group’s interest expense PLN M PLN M +6% +6% +18% +159% 13.4x 3,364.5 1% 1,349.9 3,160.5 40.1 198.4 6% 15.4 1% 450.3 13% The increase in the “other” category 1,146.0 is primarily dri
Slide 39: Appendix: Selected Financial Data – Net fees and commissions
Appendix: Selected Financial Data – Net fees and commissions Structure of mBank Group’s fee and commission income Structure of mBank Group’s fee and commission expense PLN M PLN M +3.6% +17.6% +0.7% +22.7% 785.7 759.8 742.7 275.0 67.5 737.9 717.0 63.8 60.2 56.3 8% 71.8 233.7 124.8 224.1 136.3 121.8
Slide 40: Appendix: Selected Financial Data – Balance sheet analysis
Appendix: Selected Financial Data – Balance sheet analysis Structure of mBank Group’s total assets Structure of mBank Group’s liabilities and equity PLN B PLN B 205.7 209.9 205.7 209.9 203.2 202.2 203.2 202.2 198.4 198.4 12.7 6% 23.1 11% 13.6 11.5 19.2 27.4 13.7 13.4 7.6 4% 18.2 24.5 7.9 2.7 1% 7.5
Slide 41: Appendix: Selected Financial Data – Structure of loans and deposits
Appendix: Selected Financial Data – Structure of loans and deposits Structure of mBank Group’s gross loans, by client segment and industry Structure of mBank Group’s deposits as of 31.12.2022 as of 31.12.2022 Real estate 5.4% Building industry 4.2% Food sector 3.0% 0.1% 0.7% Financial activities 2.6
Slide 42: Appendix: Selected Financial Data – Funding profile
Appendix: Selected Financial Data – Funding profile Structure of mBank Group’s funding Summary of mBank’s long-term funding instruments as of 31.12.2022 as of 31.12.2022 Nominal Issue Maturity Currency Tenor Coupon value date date Other Subordinated liabilities 3.8% Issues under Euro Medium Term Not
Slide 43: Appendix: Selected Financial Data – Capital requirements
Appendix: Selected Financial Data – Capital requirements Regulatory capital requirements for mBank Group as of 31.12.2022 Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of +3.50 pp the countercyclical buffer rates that apply in the countries where the relevant credit exp
Slide 44: Securitised Portfolio
Appendix: mBank’s 2nd synthetic securitisation transaction Description and structure of the transaction ▪ On 23.12.2022, mBank closed a synthetic securitization transaction based on a corporate loan portfolio with a total value of EUR 801 million. ▪ The securitized portfolio is based on a EUR-denomi
Slide 45: Appendix: A leading mobile banking offer for individual clients
Appendix: A leading mobile banking offer for individual clients easiest way to manage Well-designed functionalities for client convenience your finances pace of spending ✓ fully remote account opening with e-ID or a selfie and agreement approved via a text message ✓ logging in and confirmation of re
Slide 46: Appendix: Retail Banking – profit and network
Appendix: Retail Banking – profit and network Profit before income tax of the segment Number of Retail Service Locations PLN M, by quarter excluding impact of "credit -2 mBank CZSK holidays“ and +71% mBank CZSK Poland +26% +26% Borrowers’ 367 364 365 Support Fund 843.2 45 45 46 mFinanse1 45.0 40 40
Slide 47: Appendix: Retail Banking – business volumes
Appendix: Retail Banking – business volumes Development of gross loans to retail banking clients Development of deposits from retail banking clients PLN M PLN M -2.4% +9.3% -2.8% +3.7% 74,714 75,388 122,890 72,871 73,173 118,549 71,122 221 112,446 111,174 109,914 219 220 208 202 21,082 21,272 7% 8,2
Slide 48: Appendix: mBank in the Czech Republic and Slovakia
Appendix: mBank in the Czech Republic and Slovakia Gross loans and share in total mBank’s retail volume Deposits and share in total mBank’s retail volumes PLN M PLN M +5% +8% -3% 14.4% -2% 13.8% 10,204 10,262 10,625 10,268 17,379 16,977 9,825 15,791 15,916 16,252 3,069 3,098 3,278 3,154 5,037 4,929
Slide 49: Appendix: mBank in the Czech Republic and Slovakia
Appendix: mBank in the Czech Republic and Slovakia Mortgage loans Non-mortgage loans Customer deposits CZK M CZK M CZK M -5% +4% Czech +26% Republic -2% 0% +1% physical network: light 6 branches 28,503 27,499 26,975 62,352 62,053 9,531 9,663 59,569 financial 7,657 7 centres 18 mKiosks 12/21 09/22 12
Slide 50: Appendix: Best digital banking services for corporate clients
Appendix: Best digital banking services for corporate clients company's finances First-class digital banking offer for companies always at hand ✓ entirely digital onboarding process, with no in-person contact and printouts required ✓ advanced mBank CompanyNet transactional system, allowing for high
Slide 51: Appendix: Corporate & Investment Banking – profit and network
Appendix: Corporate & Investment Banking – profit and network Profit before income tax of the segment Number of corporate service locations PLN M, by quarter 2 2 Pomorskie 1 2 +195% -14% 2 Zachodnio- Warmińsko- Mazurskie Pomorskie 1 1 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomorskie 4 2 incl.
Slide 52: Appendix: Corporate & Investment Banking – business volumes
Appendix: Corporate & Investment Banking – business volumes Development of gross loans to corporates and public sector Development of deposits from corporates and public sector PLN M PLN M +9.0% +14.8% -5.7% -0.9% 55,504 50,689 51,182 51,704 51,241 54,095 51,640 52,315 1,588 1,664 1,865 1,229 47,985
Slide 53: Appendix: Complete solutions for e-commerce segment
Appendix: Complete solutions for e-commerce segment mBank’s unique payment gateway Comprehensive value proposition for e-merchants the 1st Polish payment integrator in the cloud Online payment processing solution (BLIK, pay-by-link, card) and a core of mBank’s offering We are strengthening mBank's p
Slide 54: Appendix: Performance of main subsidiaries of mBank
Appendix: Performance of main subsidiaries of mBank specialised mortgage bank offered financing in the form of offered services include and active issuer of covered leasing of cars, trucks, machinery domestic and export recourse bonds on both domestic and real estate as well as car and non-recourse
Slide 55: Appendix: ESG is well embedded in mBank Group's strategy
Appendix: ESG is well embedded in mBank Group's strategy ESG aspects play a crucial role in the way we manage our company Responsibility for financial health Responsibility for climate of our clients By 2030 we will reach climate neutrality in scope 1 and 2. We support customers in safe and convenie
Slide 56: Appendix: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2018 2019 2020 2021 2022 ∆ YoY Net interest income 3,496.5 4,002.8 4,009.3 4,126.3 5,909.2 +43.2% Net fee and commission income 1,257.8 1,270.6 1,508.3 1,867.8 2,120.1 +13.5% Net trading and other income 325.3 251.0 349.2 117.1 -187.2
Slide 57: Appendix: mBank’s share price performance
Appendix: mBank’s share price performance Banking stocks declined on worsened sentiment due to government interventions and war mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 31.12.2022 120 mBank’s share price WIG20 1.858% 115 3
Slide 58: Disclaimer
Disclaimer This presentation has been prepared by mBank S.A. for information purposes only and is based on selected non-audited consolidated financial information of mBank S.A. Group for the fourth quarter of 2022, prepared under the International Financial Reporting Standards. For more detailed inf
Slide 59: Contact details
Contact details Karol Prażmo Managing Director for Treasury and Investor Relations +48 607 424 464 karol.prazmo@mbank.pl Joanna Filipkowska Head of Investor Relations +48 510 029 766 joanna.filipkowska@mbank.pl Magdalena Hanuszewska +48 510 479 500 magdalena.hanuszewska@mbank.pl Paweł Lipiński +48 5