Slide 1: Results of mBank Group Q1-Q4 2018
Results of mBank Group Q1-Q4 2018 Good finish of the year. Strong business performance to persist. Management Board of mBank S.A. Investor Presentation February 7, 2019
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by mBank S.A. for information purposes only and is based on the non-audited financial data for mBank Group for the fourth quarter of 2018, prepared under the International Financial Reporting Standards. For more detailed information on the Bank’s and Gr
Slide 3: Agenda
Agenda Key Highlights of 2018 in mBank Group Summary of Main Trends in Q4/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 4: Key highlights of 2018 in mBank Group
Key highlights of 2018 in mBank Group Revenues Recurrent total income of PLN 4,839 million at record high level NII increased by 11.5% to PLN 3,496 million and NIM improved by 10 bps to 2.58% driven by changing asset mix and broadly stable funding costs Net interest income & margin Gradual uptrend
Slide 5: Key highlights of 2018 in mBank Group
Key highlights of 2018 in mBank Group Solid growth of loans to PLN 97.8 billion, focus on higher-margin products Loans Excluding FX effect, gross portfolio expanded by 10.0% YoY, driven by lending acceleration in corporate segment and record high sales of retail loans (at PLN 13.6 billion, +29% Yo
Slide 6: Key product and offer innovations in 2018
Key product and offer innovations in 2018 At mBank, we are constantly working to provide the best customer experience Mobile payments Following an introduction of Google Pay in 2017, mBank was one of the first institutions in Poland to have launched Apple Pay, which allows clients to pay easily with
Slide 7: Summary of 2018 in mBank Group: Profit and Loss Account
Summary of 2018 in mBank Group Key Financials: Profit and Loss Account PLN million 2016 2017 2018 change YoY Net interest income 2,832.8 3,135.7 3,496.5 +11.5% Net fee and commission income 906.4 992.2 975.9 -1.6% 1 Trading and other income 556.1 325.7 586.9 +80.2% Total income 4,295.4 4,453.6 5,059
Slide 8: Summary of 2018 in mBank Group: Balance Sheet
Summary of 2018 in mBank Group Key Financials: Balance Sheet PLN million 2016 2017 2018 change YoY Total assets 133,744 131,424 145,750 +10.9% Gross loans to customers 84,581 87,388 97,765 +11.9% Retail client loans 48,950 48,143 52,925 +9.9% Corporate client loans 34,174 37,942 44,190 +16.5% Custom
Slide 9: Core income kept on growth trajectory, improving efficiency
Summary of 2018 in mBank Group Core income kept on growth trajectory, continued improvement of underlying efficiency Development of mBank Group’s Total Income Development of mBank Group’s Total Costs (PLN M) (PLN M) Cost/Income ratio, 2.30% 2.48% 2.58% Net Interest Margin 48.2% 45.9% 44.7% excl. one
Slide 10: Agenda
Agenda Key Highlights of 2018 in mBank Group Summary of Main Trends in Q4/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 11: Key highlights of Q4 2018
Key highlights of Q4 2018 Net profit of PLN 332.7 M, the best recurrent quarterly result in the year Historically high core income of PLN 1,142.6 M fuelled by rising net interest income Net interest income at PLN 923.3 M (+11.9% YoY) on increasing volumes and changing asset mix Net fee and commi
Slide 12: Business Development of Retail Banking and Corporate Banking
Summary of Q4/18 in mBank Group Business Development of Retail Banking and Corporate Banking Retail Banking Number of Clients (thou.) Market shares +343 New functionality in upgraded 6.5% 6.5% 6.5% +82 6.4% mBank’s mobile app: users can +82 6.3% scan the data needed to fill the 5,342 5,603 5,685 6
Slide 13: Summary of Q4/18: Profit and Loss Account
Summary of Q4/18 in mBank Group Key Financials: Profit and Loss Account PLN million Q4/17 Q3/18 Q4/18 change QoQ change YoY Net interest income 825.1 902.4 923.3 +2.3% +11.9% Net fee and commission income 233.5 238.8 219.2 -8.2% -6.1% Total income 1,141.5 1,210.0 1,260.5 +4.2% +10.4% Total costs (ex
Slide 14: Summary of Q4/18: Balance Sheet
Summary of Q4/18 in mBank Group Key Financials: Balance Sheet PLN million Q4/17 Q3/18 Q4/18 change QoQ change YoY Total assets 131,424 146,656 145,750 -0.6% +10.9% Gross loans to customers 87,388 94,528 97,765 +3.4% +11.9% Retail client loans 48,143 51,821 52,925 +2.1% +9.9% Corporate client loans 3
Slide 15: Agenda
Agenda Key Highlights of 2018 in mBank Group Summary of Main Trends in Q4/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 16: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Surging corporate and retail loans, amid continuous change in asset mix Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) +16.5% +11.9% +15.2% +5.3% +10.0% +3.4% +5.0% +3.0% 41,972 44,190 97,765 38,760 40
Slide 17: Results of mBank Group: New lending business
Results of mBank Group: New lending business Rising loan origination across the board, boost of leasing driven by changing tax rules Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +61% +8% +28% +8% -2% -2% 1,281 2,332 2,329 2,272 1,153 1,190 178 212 16% 2
Slide 18: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Continued strong inflows to current accounts, intentional reduction of corporate term deposits Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +2.2% +11.5% +1.4% -8.5% +11.2% -0.4% -6.2% +0.6% 38,611 102,425 102,009 34,590 3
Slide 19: Results of mBank Group: Total income
Results of mBank Group: Total income Further dynamic growth of net interest income, weaker fees offset by strong trading line Development of mBank Group’s Total Income (PLN M) +10.4% 1,380.4 +4.2% QoQ YoY 1,260.5 219.7 1,208.1 1,210.1 13.3 1,141.5 1.6 15.5 2.2 105.9 4.2 72.3 18.5 84.5 84.7 0.2 0.2 7
Slide 20: Results of mBank Group: Total costs
Results of mBank Group: Total costs Best-in-class efficiency level supported by good cost control Development of mBank Group’s Costs (PLN M) Annual contribution to the Resolution Fund: PLN 116.8 million in Q1/17 PLN 97.1 million in Q1/18 +4.7% +5.7% -1.8% Excluding contributions to the BFG 601.0
Slide 21: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Lower cost of risk, no indication of deterioration related to specific sectors Net Impairment Losses and Fair Value Change on Loans 1 mBank Group’s Cost of Risk by Segment (PLN M) (bps) 99 82 78 217.0 66 2.0 57 78 80 -8% 73 61 57 185.3 5.8 113 170.5 108.8 101 53.
Slide 22: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Good quality of loan portfolio evidenced by resilient risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) 5.2% 5.1% 5.1% 5.2% +4.7% mBank Group applies a conservative client- IFRS 9 -3.8% 4.8% oriented approach in 4,53
Slide 23: Results of mBank Group: Key regulatory ratios
Results of mBank Group: Key regulatory ratios Strong capital and liquidity position allowing for business expansion mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Increase mostly driven 220% by funding activities, in 20.99% 20.93% 20.69% preparation for wholesale 20.06% 20.21% funding maturi
Slide 24: Agenda
Agenda Key Highlights of 2018 in mBank Group Summary of Main Trends in Q4/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 25: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) GDP growth set to drop below 4% YoY in 2019. Monthly measures of economic activity have decelerated recently Public investment peaked in 2018 10% 7% YoY, MA3 8% 6% 6% 5% 4% 4% 2% 3% 0% 2% -2% 1% -4% 0% Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17 Sep-17 May-18 2008 200
Slide 26: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Rebound in credit growth. PLN assets stable in 2018. 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-17
Slide 27: 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% 3.7% Continued gradual increase of margin driven by cha
Slide 28: Agenda
Agenda Key Highlights of 2018 in mBank Group Summary of Main Trends in Q4/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 29: Selected Financial Data: 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.) Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Net interest income 825,112 816,424 854,351 902,370 923,329 Net fee and commission income
Slide 30: Selected Financial Data: 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.) Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Cash and balances with Central Bank 7,384,869 5,354,319 5,514,886 9,643,274 9,199,264 Loans a
Slide 31: Selected Financial Data: mBank Group's Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view mBank Group’s Ratios Financial Ratios Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Net Interest Margin (quarterly) 2.57% 2.59% 2.56% 2.56% 2.60% Net Interest Margin YtD 2.48% 2.59% 2.57% 2.57% 2.58% Net
Slide 32: 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) +12.9% +2.1% +16.6% +1.3% 1,168.8 1,193.2 37.2 3% 266.5 269.8 1,102.6 35.
Slide 33: 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) -0.3% +7.1% -0.1% +10.9% +10.9% 429.5 423.1
Slide 34: 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) 146.7 145.8 146.7 145.8 140.0 140.0 6.5 7.5 5% 133.6 13.2 12.9 9% 133.
Slide 35: 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 31.12.2018 as of 31.12.2018 Public sector Corporat
Slide 36: 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 31.12.2018 Households Real estate management 12.4% Building industry 1.3% Financial activi
Slide 37: 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 31.12.2018 +3.7 pp Fitch Retail 92.9% 92.3% depo
Slide 38: 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 17.87% -0.70 +0.19 +0.02 17.47% +0.34 -0.22 +0.14 17.32% -0.02 -0.04 -0.19 17.10% -0.46 +
Slide 39: 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 starting from 01.01.2019 Countercyclical Capital Buffer is calculated as the weight
Slide 40: Detailed Results of the Business Lines in Q4/18: Retail Banking
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q4/18 Retail Banking Investor Presentation – Q1-Q4 2018 |40
Slide 41: Retail Banking Summary of Q4/18: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q4/18: Financial and Business Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 346 354 358 +9% 333 336 +4% 34 34 33 +4% 33 34 41 41 exclud
Slide 42: Retail Banking Summary of Q4/18: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q4/18: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +9.9% +18.4% +2.1% +6.9% 52,925 65,924 51,134 51,821 158 61,693 48,
Slide 43: 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 31.12.2018 7.5% 7.4% 7.2% 7.1% 6.9%
Slide 44: 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 +8% +14% +1% 9.1% +3% 15.3% 4,706 4,
Slide 45: 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) 0% +13% +10% Czech +1% +2% +2% Republic 17,634 17,508 17,632 4,595 4,672 42,114
Slide 46: Detailed Results of the Business Lines in Q4/18: Corporates & Financial Markets
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q4/18 Corporates & Financial Markets Investor Presentation – Q1-Q4 2018 |46
Slide 47: Corporates and Financial Markets Summary of Q4/18
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q4/18: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 +17% 29 mBank’s branches, Pomorskie
Slide 48: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q4/18: Loans and Deposits Gross Loans to Corporate Entities Resegmentation Deposits from Corporate Customers Resegmentation starting from 2018 starting from 2018 (PLN
Slide 49: Detailed Results of mBank Group's companies in Q4/18: Subsidiaries
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of mBank Group’s companies in Q4/18 Subsidiaries Investor Presentation – Q1-Q4 2018 |49
Slide 50: 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 +75% 700 specialised mortgage bank and 60
Slide 51: 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 2014-2018 (public issues) Amount Currency Issue date Maturity date Ten
Slide 52: 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 – 9M 2018 Profit before Tax (PLN M) [data for 2018FY not available] (PLN M) +22% +1% 7.3% established 6,090 64.8 65.1 in
Slide 53: mBank Group's Brokerage Services
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Brokerage Services Subsidiaries Historical view mBank Dom Maklerski (mDM) mDM Equities Trading on WSE and Market Share in Turnover mDM Futures Trading on WSE and Market Share in Turnover (PLN M, by quarter) (thou. of contracts
Slide 54: 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 55: 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 56: mBank's share price performance
mBank’s share price performance Higher volatility and no clear trends observed in share prices in 2H’18 mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) – YtD perspective 116 mBank’s share price WIG-30 2.487% 31.12.2017 465.0 112 MIN (31.10.2018) 374.0
Slide 57: 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 58: 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 59: mBank Group's Strategy for 2016-2020: Financial performance targets
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 three most efficient listed banks in Poland 2 Top3 in Poland, every year Owner’s capital profitability: Retu
Slide 60: 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