Slide 1: Results of mBank Group Q3 2022
Results of mBank Group Q3 2022 Public burdens and legal backdrop weigh on the results Presentation for Investors and Analysts, 08.11.2022
Slide 2: Agenda
Agenda Key highlights of Q3 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2022 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 3: Key highlights of Q3 2022 in mBank Group
Key highlights of Q3 2022 in mBank Group ✓ Core revenues at record high level, driven by surging net Net interest income Net fee income interest income (w/o “credit holidays”) and strong fee result +99.7% YoY +8.8% YoY ✓ Costs impacted by contribution to the Borrowers’ Support Total costs Cost/Incom
Slide 4: mBank's key achievements and new solutions in Q3 2022
mBank’s key achievements and new solutions in Q3 2022 New functionalities in mBank’s Pursuing its ESG strategy, mBank will finance a wind farm mobile application added for mBank joined the Science Based investment in Poland under the the convenience of the clients Targets initiative (SBTi) Power Pur
Slide 5: 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 9.1% current deposits 8.7% +166 7.5% term deposits 8.4% +59 8.2% 8.3% 8.3% 8.3% 8.0% 5,479 5,586 5,645 7.8% 8.3% 1,038 1,042 7.7% 8.1% 8.2%
Slide 6: 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 +165 3,125 customer base 2,960 mBank PL +398 2,577 399 372 2,128 303 1,670 234 by the number 1,329
Slide 7: 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 PLN M excluding impact excluding impact of "credit holidays" of "credit holidays" of "credit holidays" -6.1pp +50% +91% +15.2pp +20% 40.7%
Slide 8: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account adjusted PLN million Q3 2021 Q2 2022 Q3 2022 ∆ QoQ ∆ YoY Q3 2022 Net interest income 1,004.8 1,688.4 724.2 -57.1% -27.9% 2,006.5 Net fee and commission income 479.4 555.3 521.8 -6.0% +8.8% 521.8 Total income 1,509.0 2,154.8 1,074.7 -50.1% -28.8%
Slide 9: 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 9M 2022 – reported and adjusted for major burdens PLN M summary of regulatory interventions 3,528 -1,346 1 “Credit holidays” ▪ The law allows the borrower for a suspension of mortgage loan re
Slide 10: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q3 2021 Q2 2022 Q3 2022 ∆ QoQ ∆ YoY Total assets 208,152 204,397 207,581 +1.6% -0.3% Gross loans to customers 123,210 129,937 129,067 -0.7% +4.8% Individual client loans 73,124 75,822 73,560 -3.0% +0.6% Corporate client loans 49,883 53,976 55,3
Slide 11: Revised methodology reflecting growing severity of court verdicts
Revised methodology reflecting growing severity of court verdicts Number of individual court cases concerning indexation clauses Distribution of final rulings received by mBank Total value of claims: Share of negative court verdicts increased from 1,338 PLN 5,628 M as of 30.09.2022 +7% 59.5% at the
Slide 12: Strong protection against legal risks and new settlement program
Strong protection against legal risks and new settlement program CHF mortgage loans to individual customers (CHF M, net) Total value of provisions created for legal risk of FX loans (PLN M) portfolio deductions due to legal risks PLN 7,017 M as of 30.09.2022 The hypothetical cost of converting the a
Slide 13: Robust performance of the core business demonstrated in 9M 2022
Robust performance of the core business demonstrated in 9M 2022 Summary of financial results for mBank’s core activity and run-off portfolio in 9M 2022 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the genuine and undistorted performan
Slide 14: Agenda
Agenda Key highlights of Q3 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2022 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 15: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Decline of loan portfolio due to adjustments related to “credit holidays” and CHF provisions Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M +11.0% +4.8% +8.7% +2.6% +2.2% -0.7% +1.1% -2.1% 53,976 55,379 1
Slide 16: Results of mBank Group: New lending business
Results of mBank Group: New lending business A noticeable 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 -69% -19% 3,172 2,916 -13% 2,829 -54% -54% -13% 412 2,717 2,793 88 79 284 118
Slide 17: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Strong growth of deposit base thanks to rebounding inflows from retail clients Development of customer deposits Deposits from corporate customers PLN M PLN M -0.7% +5.6% -1.2% +3.6% +5.4% +5.7% +3.6% +5.7% 54,479 52,783 52,219 54,074 173,305 46,849 164,142 1
Slide 18: Results of mBank Group: Total income
Results of mBank Group: Total income Revenues, adjusted for “credit holidays”, at record high level, driven by rising core income Development of mBank Group’s total income Development of interest income PLN M Total negative impact of PLN M “credit holidays” on revenues amounted to PLN 1,345.8 M, +19
Slide 19: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Costs impacted by external burdens, while underlying efficiency remained excellent Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M Costs in Q3/22 were impacted 76.7% by additional contribution to +33.8
Slide 20: 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 amid persistent uncertainties Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 98 -6.5% 89 289.8 76 69 89 70 0.5 268.5 76 0.
Slide 21: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Good asset quality confirmed by risk indicators mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to +5.2% 4.0% 4.0% EBA definition, +4.6% 3.9% 3.9% 3.8% consolidated NPL ratio was: 4,947 4,755 4,899 4,976 5,205 3.6% < 5% 19
Slide 22: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Weaker capital position due to incurred loss, ample liquidity securing operational stability mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Group’s LCR: 201% 17.51% 260% 16.58% 16.39% +1.47 2.32% 15.92% 2.42% 2.46% 14.66% 2.45% 203
Slide 23: Agenda
Agenda Key highlights of Q3 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2022 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 24: Macroeconomic situation and outlook
Macroeconomic situation and outlook Upswing is over. Yet, inflationary pressures may persist for some time. If only moods = expenditures, we would be in recession 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 Ma
Slide 25: Macroeconomic situation and outlook
Macroeconomic situation and outlook Household volumes falling, corporate credit lost momentum (peak performance is now). Corporate loans and deposits (YoY, FX-adjusted) Household loans and deposits (YoY, FX-adjusted) 30% 14% Source: NBP Source: NBP 25% 12% 20% 10% 15% 8% 6% 10% 4% 5% 2% 0% 0% -5% -2
Slide 26: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks has continued being difficult and hardly predictable Key economic indicators for Poland Short-term prospects for mBank (4 quarters ahead) 2020 2021 2022F 2023F Net interest income & NIM neutral GDP growth (YoY) -2.0%
Slide 27: Agenda
Agenda Key highlights of Q3 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2022 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 28: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net interest income 1,004,845 1,190,766 1,499,335 1,688,372 724,227 Net fee and commission income 479,438 489,954 597,994 555,346 521,810 Dividend
Slide 29: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Cash and balances with Central Bank 18,015,638 12,202,266 17,971,383 12,522,901 20,488,126 Loans and advances to banks 14,398,589 7,229,681 6,829,976
Slide 30: Appendix: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net Interest Margin, quarterly 2.02% 2.39% 3.15% 3.54% 4.01% Net Interest Margin, YtD 2.05% 2.14% 3.15% 3.34% 3.58% Net Interest Margin, excl. CHF portfolio, Y
Slide 31: 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 +2,067.0 +1,065.4 +35% +35% +78% +78% +190% -20% 14.2x +72% 3,152.5 1,146.0 +820.4 credit holidays The increase in the “other” category +502.2 1,
Slide 32: 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 +6.7% +2.1% -2.8% +5.7% 792.9 767.4 233.7 67.5 745.9 224.1 723.7 63.8 219.5 698.9 60.2 8% 212.1 71.8 194.9 67.6 124.8 13
Slide 33: 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 208.2 204.9 204.4 207.6 208.2 204.9 204.4 207.6 199.5 199.5 11.5 6% 23.7 16.5 13.6 13.4 19.0 25.7 20.9 28.9 14% 13.7 8.8 4% 6.9 8.2 9.4 2.8
Slide 34: 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 30.09.2022 as of 30.09.2022 Real estate 5.5% Building industry 4.2% Financial activities 3.4% 0.1% 0.4% Food sector 2.8
Slide 35: 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 30.09.2022 as of 30.09.2022 Nominal Issue Maturity Currency Tenor Coupon Other value date date Subordinated liabilities 4.5% Issues under Euro Medium Term Not
Slide 36: Appendix: Selected Financial Data – Capital Requirements
Appendix: Selected Financial Data – Capital Requirements Regulatory capital requirements for mBank Group as of 30.09.2022 Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of +1.47 pp the countercyclical buffer rates that apply in the countries where the relevant credit exp
Slide 37: 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 38: 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 -4 mBank CZSK holidays“ and +72% mBank CZSK Poland +29% Borrowers’ 368 366 364 Support Fund 45 46 45 mFinanse1 670.6 40 40 40 81.2 mK
Slide 39: 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 +0.6% +8.8% -3.0% +7.9% 75,122 75,822 118,549 73,124 73,244 73,560 112,446 111,174 109,914 219 108,921 220 208 202 212 8,233 7,640 21,656 1
Slide 40: 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 +11% +8% +4% 14.4% +7% 14.7% 10,204 10,262 10,625 17,379 9,608 9,825 16,036 15,791 15,916 16,252 3,069 3,098 3,278 5,037 2,946 2,981
Slide 41: 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 Czech -4% +31% 0% Republic -2% +4% +5% physical network: light 6 branches 28,608 62,616 62,352 27,928 27,499 9,531 60,232 9,084 financial 7,256 7 centres 17 mKiosks 09/21 06/22 09
Slide 42: 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 43: 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 +204% +43% 2 Zachodnio- Warmińsko- Mazurskie Pomorskie 1 1 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomorskie 4 2 incl.
Slide 44: Appendix: Corporate & Investment Banking – business volumes
Appendix: Corporate & Investment Banking – business volumes Development of gross loans to corporate customers Development of deposits from corporate customers PLN M PLN M -0.7% +11.0% +2.6% +3.6% 55,379 54,479 54,074 53,976 52,783 52,219 51,480 3,882 4,235 49,883 9,173 3,682 2,701 47,836 9,623 46,84
Slide 45: 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 46: 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 47: 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 48: Appendix: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2017 2018 2019 2020 2021 ∆ YoY Net interest income 3,135.7 3,496.5 4,002.8 4,009.3 4,104.0 +2.4% Net fee and commission income 1,249.5 1,257.8 1,270.6 1,508.3 1,890.0 +25.3% Net trading and other income 68.4 325.3 251.0 349.2 117.1 -6
Slide 49: 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 30.09.2022 140 mBank’s share price WIG20 1.637% 30.09
Slide 50: 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 third quarter of 2022, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mB
Slide 51: 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 Paweł Lipiński +48 508 468 023 pawel.lipinski@mbank.pl Marta Polańska +48 508 468 016 mar