Slide 1: Results of mBank Group Q2 2019
Results of mBank Group Q2 2019 Business volumes on growth trajectory Management Board of mBank S.A. Investor Presentation August 1, 2019
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by mBank S.A. for information purposes only and is based on the Condensed Consolidated Financial Statements for the first half of 2019, prepared under the International Financial Reporting Standards. For more detailed information on the Bank’s and Group
Slide 3: Agenda
Agenda Summary of Main Trends in Q2/19 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2/19 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 4: Key highlights of Q2 2019
Key highlights of Q2 2019 Operating profit up by 16% YoY, based on historically high core income, rising margin and efficient management evidenced by normalized Cost/Income ratio of 44.1%1 Net interest income at PLN 997.8 M (+16.8% YoY) on increasing volumes and changing asset mix Net fee and co
Slide 5: Business Development of Retail Banking and Corporate Banking
Summary of Q2/19 in mBank Group Business Development of Retail Banking and Corporate Banking Number of Retail Clients (thou.) Market shares - Households Innovations and new products +44 6.7% Continuing cooperation with Retail Banking 1 -216 -216 6.5% 6.5% 6.3% 6.4% AXA, mBank added life and 5,768
Slide 6: Key Financials: Profit and Loss Account
Summary of Q2/19 in mBank Group Key Financials: Profit and Loss Account PLN million Q2/18 Q1/19 Q2/19 change QoQ change YoY Net interest income 854.4 930.3 997.8 +7.3% +16.8% Net fee and commission income 249.0 228.8 225.8 -1.3% -9.3% Total income 1,215.3 1,261.4 1,329.2 +5.4% +9.4% Total costs (exc
Slide 7: Key Financials: Balance Sheet
Summary of Q2/19 in mBank Group Key Financials: Balance Sheet PLN million Q2/18 Q1/19 Q2/19 change QoQ change YoY Total assets 140,018 150,819 152,433 +1.1% +8.9% Gross loans to customers 92,655 100,855 103,651 +2.8% +11.9% Retail client loans 51,108 54,076 56,049 +3.6% +9.7% Corporate client loans
Slide 8: Agenda
Agenda Summary of Main Trends in Q2/19 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2/19 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 9: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Upward trend in both corporate and retail loans boosted by good economic situation Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) +15.4% +11.9% +16.3% +1.9% +12.1% +2.8% +2.3% +3.1% 44,233 46,182 47,04
Slide 10: Results of mBank Group: New lending business
Results of mBank Group: New lending business Accelerating origination of housing loans, record high non-mortgage lending Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +93% +49% +49% +12% +2% +2% 2,221 2,575 2,621 221 10% 2,332 2,329 159 7% 2,272 178 189
Slide 11: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Increase of deposit base driven by strong inflows to current accounts in both segments Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +7.1% +12.8% +7.1% +1.2% +12.9% +2.5% +1.0% +2.4% 38,611 37,664 38,127 110,341 35,592 35,
Slide 12: Results of mBank Group: Total income
Results of mBank Group: Total income Core revenues at record high level thanks to surging net interest income Development of mBank Group’s Total Income (PLN M) +9.4% +5.4% 1,329.2 1,261.4 17.8 QoQ YoY 1,215.3 1,217.3 1,244.2 27.7 103.5 9.4 102.9 3.4 8.9 15.5 72.3 105.9 84.7 0.2 0.2 0.2 2.9 225.8 238
Slide 13: Results of mBank Group: Total costs
Results of mBank Group: Total costs Good underlying efficiency, cost base reflects business development Development of mBank Group’s Costs Annual contribution to the Resolution Fund: (PLN M) PLN 116.8 million in Q1/17 PLN 97.1 million in Q1/18 +5.6% PLN 197.3 million in Q1/19 +7.1% -25.0% +3.7
Slide 14: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Higher cost of risk due to provisions for a couple of large corporate exposures Net Impairment Losses and Fair Value Change on Loans 1 mBank Group’s Cost of Risk by Segment (PLN M) (bps) +54% 99 90 223.9 82 78 217.0 2.1 61 78 80 76 73 185.3 61 5.8 96.8 113 170.5
Slide 15: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust quality of loan portfolio evidenced by resilient risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) According to 5.2% Supported by the sale of EBA definition, +4.0% 5.1% retail NPL receivables consolidated +2.5
Slide 16: Results of mBank Group: Key regulatory ratios
Results of mBank Group: Key regulatory ratios Strong capital and liquidity position allowing for further business expansion mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Increase mostly due to funding activities, in preparation for wholesale funding 220% maturities in late 2018 / early 2019
Slide 17: Agenda
Agenda Summary of Main Trends in Q2/19 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2/19 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 18: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Polish economy will remain resilient to global factors in 2019 Mixed signals from monthly data Household consumption holds the key to H2/19 10% 10% 10 YoY MA3 8% 8% 5 6% 6% 0 4% 4% -5 2% 2% -10 0% 0% -15 -2% -2% -20 -4% Q3/05 Q4/06 Q1/08 Q2/09 Q3/10 Q4/11 Q1/13 Q2/14 Q3/15
Slide 19: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Robust credit growth, massive acceleration in deposits Corporate loans and deposits (% YoY, FX-adjusted) Household loans and deposits (% YoY, FX-adjusted) 25% 14% 20% 12% 15% 10% 10% 8% 5% 6% 0% 4% -5% 2% -10% 0% Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15 Jan-16 Sep-16 May-
Slide 20: 2019 in forecasts and the impact on mBank Group
2019 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Outlook for mBank 2017 2018 2019F Net interest income & NIM (Slightly positive) GDP growth (YoY) 4.8% 5.1% 4.9% Continued gradual increase of margin driven by cha
Slide 21: Agenda
Agenda Summary of Main Trends in Q2/19 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2/19 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 22: Consolidated Profit and Loss Account
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Net interest income 854,351 902,370 923,329 930,253 997,780 Net fee and commission income
Slide 23: Consolidated Statement of Financial Position
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Consolidated Statement of Financial Position Assets (PLN thou.) Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Cash and balances with Central Bank 5,514,886 9,643,274 9,199,264 5,553,368 6,689,767 Loans a
Slide 24: mBank Group's Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view mBank Group’s Ratios Financial Ratios Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Net Interest Margin (quarterly) 2.56% 2.56% 2.60% 2.60% 2.75% Net Interest Margin YtD 2.57% 2.57% 2.58% 2.60% 2.68% Net
Slide 25: Profit and Loss Account: Net Interest Income
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Profit and Loss Account: Net Interest Income Interest Income Structure Interest Expense Structure (PLN M) (PLN M) +14.6% +5.2% +7.1% -1.8% 1,263.6 1,193.2 1,200.8 28.9 3% 266.5 269.8 270.
Slide 26: Profit and Loss Account: Net Fee and Commission Income
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Profit and Loss Account: Net Fee and Commission Income Fee and Commission Income Structure Fee and Commission Expense Structure (PLN M) (PLN M) +0.6% +2.9% +16.0% +8.6% 409.9 412.4 401.4
Slide 27: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities and Equity (PLN B) (PLN B) 150.8 152.4 150.8 152.4 146.7 145.8 146.7 145.8 6.9 5% 140.0 9.9 11.0
Slide 28: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Structure of Loans and Deposits Structure of mBank Group’s Gross Loans Structure of mBank Group’s Deposits as of 30.06.2019 as of 30.06.2019 Public sector Corporat
Slide 29: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 30.06.2019 Households Real estate management 13.0% Building industry 1.3% 1.1% Transport a
Slide 30: Balance Sheet Analysis: Funding Structure and Liquidity Levels
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Funding Structure and Liquidity Levels mBank Group’s Funding Structure mBank’s ratings Loan-to-Deposit Ratio as of 30.06.2019 Fitch +0.2 pp Retail 92.9% deposits L
Slide 31: Balance Sheet Analysis: Detailed Development of Capital Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Detailed Development of Capital Ratios mBank Group’s Tier 1 Capital Ratio +1.04 -0.25 -0.69 17.55% -0.63 +0.19 +0.02 17.47% 17.32% -0.02 -0.04 +0.04 0.00 -0.28 -0.
Slide 32: Balance Sheet Analysis: Details of Capital Requirements
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Details of Capital Requirements Regulatory capital requirements for mBank Group as of 30.06.2019 Countercyclical Capital Buffer is calculated as the weighted avera
Slide 33: Detailed Results of the Business Lines: Retail Banking
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q2/19 Retail Banking Investor Presentation – Q2 2019 |33
Slide 34: Retail Banking Summary of Q2/19: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q2/19: Financial and Business Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 0% 354 358 361 371 346 +35% +35% 34 33 33 33 34 42 41 41 41
Slide 35: Retail Banking Summary of Q2/19: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q2/19: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +9.7% +17.3% +3.6% +3.0% 56,049 70,241 54,076 68,221 75 52,925 65,9
Slide 36: Loan Portfolio Structure of mBank Group in Poland
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view 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 30.06.2019 7.2% 7.1% 7.1% 6.9% 6.9%
Slide 37: mBank in the Czech Republic and Slovakia
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view 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 +1% +7% +2% 8.7% +2% 14.9% 4,822 4,7
Slide 38: mBank in the Czech Republic and Slovakia
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view mBank in the Czech Republic and Slovakia Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) -1% +10% +5% Czech 0% +3% +2% Republic 17,435 17,347 17,333 4,868 43,028 43,769
Slide 39: Detailed Results of the Business Lines: Corporates & Financial Markets
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q2/19 Corporates & Financial Markets Investor Presentation – Q2 2019 |39
Slide 40: Corporates and Financial Markets Summary of Q2/19
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q2/19: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 12 +40% 2 Pomorskie 30 mBank’s bran
Slide 41: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q2/19: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +15.4% +7.1% +1.9% +1.2% 46,182 47,047 38,611 38,127 37,6
Slide 42: Subsidiaries
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of mBank Group’s major companies in Q2/19 Subsidiaries Investor Presentation – Q2 2019 |42
Slide 43: mBank Hipoteczny (mBH)
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Subsidiaries Subsidiaries Historical view mBank Hipoteczny (mBH) Issuance of Covered Bonds Profit before Income Tax (PLN M, by year) 2,732 (PLN M) established in 1999 Private placement +15% 700 specialised mortgage bank and ac
Slide 44: mBH: Issuance Activity on the Covered Bonds Market
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Subsidiaries Subsidiaries Historical view mBank Hipoteczny (mBH): Issuance Activity on the Covered Bonds Market Summary of Mortgage Covered Bonds issued in 2014-2019 (public issues) Amount Currency Issue date Maturity date Ten
Slide 45: Leasing and Factoring
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Subsidiaries Subsidiaries Historical view Leasing and Factoring Leasing contracts Market share & position – 2018 Profit before Tax (PLN M) [the latest available data] (PLN M) -11% +154% 7.4% established 2,953 49.4 in 1991 2,61
Slide 46: Historical performance: Profit and Loss Account
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries mBank Group’s historical performance: Profit and Loss Account Historical view Total Income & Margin NII NFC Trading and other Total Costs & C/I ratio Personnel Material and other BFG (PLN M) (PLN M) 2.2% 2.3% 2.1% 2.3% 2.5% 2.6
Slide 47: Historical performance: Balance Sheet
Summary Appendix Historical Profit & Loss Balance view Profit & Sheet Loss Balance Sheet Business Lines Business Lines Subsidiaries mBank Group’s historical performance: Balance Sheet Subsidiaries Historical view Total Assets Equity & Total Capital Ratio (PLN B) CAGR (PLN M) +7% +11% 19.38% 14.66% 1
Slide 48: mBank's share price performance
mBank’s share price performance After massive drop recorded in May, stock prices on WSE regained in June mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) – last 12 months 120 WIG-30 2.388% 118 116 WIG-20 2.550% 114 112 WIG 1.862% 110 +9.5% +9.0% WIG-Ba
Slide 49: mBank's Mobile Banking
mBank’s Mobile Banking Focus on client convenience through well-designed functionalities mBank launched a new mobile application in April 2017 Key functionalities of the app, inspired by users’ opinions and habits, include: Android Pay and Apple Pay (for Visa and MasterCard Mobile authorisation
Slide 50: mBank Group's Strategy for 2016-2020
mBank Group’s Strategy for 2016-2020 Specific business actions will be based on three strategy pillars 1 2 3 Empathy Mobility Efficiency Be the point of reference in Grow while keeping the FTE Offer the best customer terms of mobile banking base at current level experience i.e. give clients wh
Slide 51: Financial performance targets – 5 key measures
mBank Group’s Strategy for 2016-2020 Financial performance targets – 5 key measures Financial measure Target point 1 Cost efficiency: Top3 in Poland, every year Cost/Income ratio to be one of the three most efficient listed banks in Poland 2 Top3 in Poland, every year Owner’s capital profitability:
Slide 52: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Ernest Pytlarczyk Direct dial: +48 22 829 14 34 E-mail: ernest.pytlarczyk@mbank.pl Head of Analysis and Investor Relations, Chief Economist Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy