Mbank Sa · GPW:MBK
Mbank Sa — Debt Investor Presentation (September 2024)
61 slides from Mbank Sa's debt investor presentation, September 2024
Slide 1: Preferred Senior, Green Bond Issuance
mBank Group Preferred Senior, Green Bond Issuance Debt Investor Presentation, September 2024
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) This presentation has been prepared by mBank S.A. (the "Bank") solely for use at meetings regarding the offer and sale of the notes referred to herein (the “Notes”) and constitutes a summary of certain proposed terms of an offering of the Notes as currently contemplated and has been
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client,
Slide 4: Agenda
Agenda mBank Group in a snapshot 5 Macroeconomic outlook 7 Characteristics of main business lines 10 Overview of financial results 17 ESG strategy of mBank Group 31 mBank Group’s Green Bond Framework 38 Summary of proposed transaction 49 Appendix 50 mBank | Green Bond Presentation | 2024 4
Slide 5: mBank Group in a snapshot: key facts and figures
mBank Group in a snapshot: key facts and figures General description Financial performance ▪ Poland’s 5th largest universal banking group in terms PLN million 2021 2022 2023 H1 2024 of total assets, loans and deposits (30.06.2024) Total assets 198,373 209,892 226,981 230,296 Net loans 117,677 120,18
Slide 6: Summary of mBank Group's strategic and financial highlights
Summary of mBank Group’s strategic and financial highlights Balanced business model with a good position to capture focus on loan and deposit growth prospects in an attractive market margins, outstanding efficiency net interest margin: 4.4% Advanced banking platform anchored in leading digital and c
Slide 7: Macroeconomic outlook
Macroeconomic outlook mBank | Green Bond Presentation | 2024 7
Slide 8: Resilient economy with good growth prospects
Resilient economy with good growth prospects GDP path and forecast for Poland (% YoY) Development of inflation and reference rate in Poland 14 mBank’s 21% 12 12.3 Source: NBP, GUS mBank’s 8.6 9.2 forecast 18% forecast 10 6.6 6.6 8 5.9 6.1 6.1 5.7 5.2 5.2 15% 6 4.2 3.4 4.5 4.1 4.6 12% 2.7 2.8 3.1 4 2
Slide 9: Poland's growth story, high competitiveness compared to peers
Poland’s growth story, high competitiveness compared to peers Real GDP (Q1 2010 = 100) Hourly labour costs (in EUR) 170 50 Source: Eurostat Source: Eurostat 160 40 150 140 30 130 120 20 110 10 100 90 0 Jan.10 Jul.11 Jan.13 Jul.14 Jan.16 Jul.17 Jan.19 Jul.20 Jan.22 Jul.23 Bulgaria Romania Hungary Pol
Slide 10: Characteristics of main business lines
Characteristics of main business lines mBank | Green Bond Presentation | 2024 10
Slide 11: Poland's largest organically developed retail banking franchise
Poland’s largest organically developed retail banking franchise Number of mBank’s retail clients (thou.) Business volumes of Retail Banking segment without Kompakt Finanse CAGR Loans (PLN B) Deposits (PLN B) CAGR +1% A drop due to CAGR +7% 5,660 5,642 5,716 5,679 closing of inactive -5% 5,601 5,514
Slide 12: A leading mobile banking offer for individual clients
A leading mobile banking offer for individual clients Well-designed functionalities for client convenience Mobile application’s dashboard and basic features fully remote account opening with e-ID or a selfie and agreement approved via a text message easiest way to manage logging in and confirmation
Slide 13: mBank remains a leader in active usage of digital solutions
mBank remains a leader in active usage of digital solutions Number of active users of mBank’s mobile application 1 Number of unique users of mBank’s PFM functionalities thousand thousand, in Poland +84 by the share +686 +113 2,960 3,338 419 3,646 478 3,730 488 #1 of mobile users in total retail +228
Slide 14: Supportive demographic profile of mBank's retail client base
Supportive demographic profile of mBank’s retail client base Net revenue per active customer – individual clients at mBank in Poland, 2022 MAX Core banking products (35%) Peak earning point = 55 ▪ mBank’s current customer Savings (23%) demographic profile is a Investments (8%) consequence of our dig
Slide 15: Strong presence and leading expertise in corporate banking
Strong presence and leading expertise in corporate banking Number of mBank’s corporate clients Business volumes of Corporate & Investment Banking segment CAGR Corporate customers split: Loans (PLN B) Deposits (PLN B) +7% K1 CAGR CAGR 34,546 35,729 33,025 2,465 annual sales +3% +13% 31,315 2,379 over
Slide 16: Best digital banking services for corporate clients
Best digital banking services for corporate clients First-class digital banking offer for companies Mobile application’s dashboard and basic features ▪ activating the app with a entirely digital onboarding process, QR code with no in-person contact and printouts required ▪ logging into the applicati
Slide 17: Overview of financial results
Overview of financial results mBank | Green Bond Presentation | 2024 17
Slide 18: Key highlights of H1 2024 in mBank Group
Key highlights of H1 2024 in mBank Group Net interest income at record level even with the impact of Net interest income Net fee income “credit holidays”, net fees under pressure due to expenses +13.6% YoY1 -1.4% YoY Best-in-class efficiency maintained, higher amortization Total costs w/o BFG Cost/I
Slide 19: Summary of key financial metrics for mBank Group in H1 2024
Summary of key financial metrics for mBank Group in H1 2024 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" -1.5pp +18% +32% +6.5pp 28.5
Slide 20: Segmentation reveals excellent performance of the core business
Segmentation reveals excellent performance of the core business Summary of financial results for mBank’s core activity and run-off portfolio in H1/24 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the accurate and undistorted performanc
Slide 21: Highly efficient platform underpinning solid financial results
Highly efficient platform underpinning solid financial results Total income (PLN M) & net interest margin (NIM) Total operating expenses (PLN M) & Cost/Income ratio (C/I) Net interest income Net fee income Net trading and other income Personnel costs Material and other costs compulsory contributions
Slide 22: Rebound of loans, constant growth of deposits, solid capital position
Rebound of loans, constant growth of deposits, solid capital position Total gross loans (PLN B) Total customer deposits (PLN B) Individual clients Corporate clients Public sector Individual clients Corporate clients Public sector CAGR: +1.6% +1.1% +6.6% CAGR: +11.5% 185.5 187.5 120.9 123.4 117.2 125
Slide 23: Protection against legal risks of CHF portfolio further strengthened
Protection against legal risks of CHF portfolio further strengthened Value of CHF mortgage loans to natural persons (PLN M, net) Breakdown of CHF loan contracts at mBank, as of 30.06.2024 23.6% 22.1% portfolio deductions due to legal risks -72.6% 17.1% 14.7% % of total loan portfolio 85,520 12.2% 11
Slide 24: Progress with settlements, declining number of new court cases
Progress with settlements, declining number of new court cases Number of settlements concluded by mBank (cumulative) Number of CHF loan contracts in court (pending cases) repaid contracts All active loan holders received 17,016 21,411 21,772 21,621 settlement proposals (~100%). 15,166 active contrac
Slide 25: Good loan portfolio quality confirmed by risk indicators
Good loan portfolio quality confirmed by risk indicators mBank Group’s impaired loans portfolio (PLN M) mBank Group’s NPL ratio at amortized cost at fair value through profit and loss NPL ratio 4.8% according to EBA 5,433 5,346 4.2% 4.3% definition has 4,905 4,974 3.9% 4.0% remained 424 4,755 130 co
Slide 26: Loan portfolio and deposit base with favourable product split
Loan portfolio and deposit base with favourable product split Structure of mBank Group’s gross loans, by client segment and industry Structure of mBank Group’s deposits as of 30.06.2024 as of 30.06.2024 Real estate 5.3% Financial activities 4.6% Building industry 4.5% 0.1% 0.5% Food sector 2.7% 17.6
Slide 27: Well-diversified funding profile with wholesale component
Well-diversified funding profile with wholesale component Structure of mBank Group’s funding Summary of mBank’s long-term funding instruments as of 30.06.2024 as of 30.06.2024 Nominal Issue Maturity Currency Tenor Coupon value date date Other Subordinated liabilities 5.5% Issues under Euro Medium Te
Slide 28: Capital ratios well exceeding the regulatory requirements
Capital ratios well exceeding the regulatory requirements Regulatory capital requirements for mBank Group as of 30.06.2024 Countercyclical Capital Buffer (CCyB), calculated as the weighted average of the CCyB +4.35 pp rates that apply in the countries where the relevant credit exposures are located.
Slide 29: MREL requirements to be fulfilled by bond issuances
MREL requirements to be fulfilled by bond issuances Fulfilment of MREL requirements by mBank Group ▪ Based on the joint decision of Resolution College, MREL (TREA) MREL (TREA) Subordinated the Multiple Point of Entry (MPE) approach was +4.27pp +5.09pp applied in case of Commerzbank AG Group (mBank c
Slide 30: Evaluation of strategic financial targets vs. reported results
Evaluation of strategic financial targets vs. reported results Current financial performance of mBank Group compared to the strategic targets Target level Current level – H1 2024 Measure announced in strategy reported execution and comment supported by high interest rates Efficiency [in 2025] Cost/I
Slide 31: ESG strategy of mBank Group
ESG strategy of mBank Group mBank | Green Bond Presentation | 2024 31
Slide 32: ESG strategy of mBank Group for 2021-2025
ESG strategy of mBank Group for 2021-2025 ESG aspects play a crucial role in the way we manage our organisation As a financial institution, we have a particular responsibility and a key role to play in supporting global and national efforts in dealing with the transformation towards sustainable deve
Slide 33: Expanding the offer with retail and corporate sustainable products
Expanding the offer with retail and corporate sustainable products Mortgage loan for Eco-loan for Financing of Renewable energy-efficient properties small companies Energy Sources ▪ mBank supports entrepreneurs in ▪ Since July 2024, mBank’s limit for ▪ No fee for granting a loan and eco-transformati
Slide 34: mBank is improving the disclosure on GHG emissions
mBank is improving the disclosure on GHG emissions GHG disclosure in the 2023 mBank Group’s ESG Report emission scope according to the GHG Emissions (tonnes of CO2e per year) Change YoY methodology 2022 2023 2023/2022 CO2e emissions - Scope 1 3,342 2,972 -11.1% CO2e emissions - Scope 2 (market-based
Slide 35: mBank is improving the disclosure on GHG emissions
mBank is improving the disclosure on GHG emissions GHG disclosure in the 2023 mBank Group’s ESG Report – extended disclosure of scope 3 emissions emission scope according Emissions (M tonnes of CO2e per year) Assets to the GHG methodology 2022 2023 mortgages (retail customers)* 0.50 0.41 motor vehic
Slide 36: Management of environmental and social risks for financed projects
Management of environmental and social risks for financed projects mBank plays a limited role in the development of the specific projects financed, but is exposed to risks associated with the companies and projects that it may finance. To manage or mitigate potential risks the following policies and
Slide 37: Sustainability standards at mBank
Sustainability standards at mBank We define our ESG standards in the following policies, procedures and codes of conduct Scope of statement / disclosure Click the link to view Scope of statement / disclosure Click the link to view Assessment of corporate clients’ ESG risk ESG factors in credit polic
Slide 38: mBank Group's Green Bond Framework
mBank Group’s Green Bond Framework mBank | Green Bond Presentation | 2024 38
Slide 39: mBank S.A. Group Green Bond Framework
mBank S.A. Group Green Bond Framework Summary Green bond Framework based on the ICMA Green Bond Principles 2021 Alignment with Climate Bonds Initiative (CBI) Standard v4 will be assured Second Party Opinion from Sustainalytics Proceeds will be used to (re)finance green residential buildings and rene
Slide 40: mBank S.A. Group Green Bond Framework
mBank S.A. Group Green Bond Framework ▪ To align our funding strategy with ESG goals set in our Strategy to support clients in green transition and sustainable growth Rationale ▪ To channel funds to projects that contribute to the achievement of the UN Sustainable Development Goals and mitigate clim
Slide 41: Use of Proceeds
Use of Proceeds ▪ The eligibility criteria take into account the EU Taxonomy Climate Delegated Act and comply with the Substantial Contribution Criteria. ▪ For Green Bonds that will be certified by Climate Bonds Initiative, the Eligibility Criteria used will be also aligned with the Climate Bonds Ta
Slide 42: Climate Bonds Initiative – Eligibility criteria for residential buildings in Poland
Climate Bonds Initiative – Eligibility criteria for residential buildings in Poland mBank | Green Bond Presentation | 2024 42
Slide 43: Climate Bonds Initiative's residential market proxy for Poland
Climate Bonds Initiative’s residential market proxy for Poland Residential buildings in Poland are automatically eligible for CBI certification if their Primary Energy Demand lies below the established Low Carbon Trajectory for the mid-point of the term of the bond Simplified eligibility proxy for r
Slide 44: EU Taxonomy Eligibility criteria – Top 15% approach
EU Taxonomy Eligibility criteria – Top 15% approach Polish residential buildings stock by year of construction Technical conditions in Poland per year of entry into force Year Reference Abbreviation 1957-1964 PN-57/B-02405 PN-57 1964-1974 PN-64/B-03404 PN-64 1974-1982 PN-74/B-034042 PN-74 1982-1991
Slide 45: Second Party Opinion
Second Party Opinion Sustainalytics has issued a positive SPO on Green Bond Framework ➢ Use of proceeds: The eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles 2021. Sustainalytics considers that investments in the eligible categories will lead
Slide 46: Management of Proceeds at H1 2024
Management of Proceeds at H1 2024 Eligible Assets Portfolio ▪ mBank intends to ensure allocation of an amount equivalent to the net proceeds into the Eligible Assets as of 30.06.2024 Portfolio to the extent matching or exceeding these proceeds Number of Outstanding Amount ICMA Eligible Asset Categor
Slide 47: Eligible Assets portfolio and Impacts at H1 2024
Eligible Assets portfolio and Impacts at H1 2024 Eligible Assets Portfolio Impact Reporting as of 30.06.2024 as of 30.06.2024 For calculation of impact metrics only completed Total Portfolio Size EUR M 3 211 projects (in working phase) are taken into account Total Est. Avoided Emissions (tCO2e/year)
Slide 48: Green Non-Preferred Senior Bonds - Landmark Transactions
Green Non-Preferred Senior Bonds - Landmark Transactions ▪ mBank’s inaugural transaction was the first EUR Non-Preferred MREL-eligible Notes issuance from a Polish bank ▪ 2nd Green Bond was the largest NPS in Polish market and largest ever bond executed by mBank Group (in terms of volume) ▪ Both dea
Slide 49: mBank's Green Bond proposed transaction
mBank’s Green Bond proposed transaction Summary of key terms and conditions Issuer mBank S.A. Issue type Green Bonds, preferred senior notes (MREL eligible) Expected issue rating Fitch: BBB- / S&P: BBB Issue amount Benchmark Maturity 6NC5 Coupon Fixed-to-floating format Min denomination EUR 100 k Do
Slide 50: Appendix
Appendix mBank | Green Bond Presentation | 2024 50
Slide 51: Macroeconomic situation in Poland: monetary aggregates
Macroeconomic situation in Poland: monetary aggregates Corporate loans and deposits (YoY, FX-adjusted) Household loans and deposits (YoY, FX-adjusted) 30% 14% 12% 25% 10% 20% 8% 15% 6% 10% 4% 2% 5% 0% 0% -2% -5% -4% -10% -6% Jan.13 Jan.14 Jan.15 Jan.16 Jan.17 Jan.18 Jan.19 Jan.20 Jan.21 Jan.22 Jan.2
Slide 52: Stable and operationally efficient banking sector
Stable and operationally efficient banking sector Loan penetration in Poland: key credit categories to GDP (%) Capital adequacy and funding: T1 capital and L/D ratios 2016 2019 2022 2023 Tier 1 capital ratio Loan-to-Deposit ratio 21.4 20.1% 79.2% 19.5 18.5% 18.6% 76.5% 75.1% 18.6 17.4% 70.2% 16.7 15
Slide 53: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million 2022 2023 ∆ YoY H1 2023 H1 2024 ∆ YoY Net interest income 5,924.0 8,873.5 +49.8%1 4,233.7 4,504.7 +6.4%1 Net fee and commission income 2,120.1 1,915.9 -9.6% 988.7 975.4 -1.4% Total income 7,856.9 10,802.3 +37.5% 5,197.1 5,812.6 +11.8%
Slide 54: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million 30.06.2023 31.12.2023 30.06.2024 ∆ vs. 12.2023 ∆ vs. 06.2023 Total assets 212,928 226,981 230,296 +1.5% +8.2% Gross loans to customers 121,727 117,229 124,960 +6.6% +2.7% Individual client loans 68,155 66,260 67,417 +1.7% -1.1% Corporate client
Slide 55: mBank Group's strategy for 2021-2025 is concentrated on 5 pillars
mBank Group’s strategy for 2021-2025 is concentrated on 5 pillars Overview of key strategic paradigms and initiatives Retail Banking area is organized Corporate and Investment Banking around demographic segments to area cooperates with companies develop the complete offer and value from prospective
Slide 56: ESG strategy of mBank Group for 2021-2025
ESG strategy of mBank Group for 2021-2025 Environmental pillar Our role Reducing greenhouse gases (GHG) emissions of our loan portfolio, steered by SBTi as the most prominent driver to become net-zero ▶ transform our loan portfolio to reach net-zero by 2050 ▶ make a decision regarding portfolios cov
Slide 57: ESG strategy of mBank Group for 2021-2025
ESG strategy of mBank Group for 2021-2025 Environmental pillar Our role Partnering with our clients by offering products and services to stimulate their sustainable and green activities ▶ provide PLN 10 billion of green financing (for renewable energy sources, decarbonization, circular economy, e-mo
Slide 58: ESG strategy of mBank Group for 2021-2025
ESG strategy of mBank Group for 2021-2025 Social pillar Our role Providing an attractive work environment that ensures diversity, equity and inclusion ▶ ensure gender balance in the succession program (at minimum 45% of a given gender) and reduce the pay gap (keeping it below 5%) Ensuring balanced g
Slide 59: ESG strategy of mBank Group for 2021-2025
ESG strategy of mBank Group for 2021-2025 Governance pillar Our role Enhancing our corporate governance by ESG aspects ▶ have all TOP 100 managers (at mBank and main subsidiaries) with goals related to ESG at a 10% weight in their Objective and Key Results Integrating environmental, social and gover
Slide 60: 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 Kamila Kałuża +48 501 533 050 kami
Slide 61: Disclaimer
Disclaimer The certification of the Preferred Senior Green Bonds series 13 as Climate Bonds by the Climate Bonds Initiative is based solely on the Climate Bond Standard and does not, and is not intended to, make any representation, warranty, undertaking, express or implied, or give any assurance wit