Slide 1: Results of mBank Group Q1 2017
Results of mBank Group Q1 2017 Promising start to the year with strong operating results Management Board of mBank S.A. Investor Presentation April 27, 2017
Slide 2: Key highlights of Q1 2017
Key highlights of Q1 2017 Core income of PLN 998.6 M close to historical heights Strong total revenues • NII at PLN 749.0 M (+10.7% YoY), exceeding PLN 1.08 B on improved margins • NFC at PLN 249.6 M (+17.9% YoY), Profit & Loss on rising customer business Selective volume growth • Gross loans at PLN
Slide 3: Agenda
Agenda Summary of Q1/17 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate new business Analysis of Q1/17 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidi
Slide 4: Key Financials: Profit and Loss Account
Summary of Q1/17 in mBank Group Key Financials: Profit and Loss Account PLN million Q1/16 Q4/16 Q1/17 change QoQ change YoY Net interest income 676.4 753.3 749.0 -0.6% +10.7% Net fee and commission income 211.7 250.6 249.6 -0.4% +17.9% Total income 1,008.9 1,044.7 1,081.8 +3.5% +7.2% Total costs (ex
Slide 5: Key Financials: Balance Sheet
Summary of Q1/17 in mBank Group Key Financials: Balance Sheet PLN million Q1/16 Q4/16 Q1/17 change QoQ change YoY Total assets 123,268 133,744 130,488 -2.4% +5.9% Gross loans to customers 80,925 84,581 84,538 -0.1% +4.5% Retail client loans 46,511 48,950 48,338 -1.2% +3.9% Core corporate client loan
Slide 6: Business Development: Client acquisition and Market shares
Summary of Q1/17 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +410 +1,243 +99 +295 5,447 19,992 20,220 20,695 20,940 21,235 5,037 5,146 5,250 5,348 296 2,152 2,138 2,149 2,123 2,103 216 234 250 275 866 877 893
Slide 7: Development of Retail and Corporate new business
Summary of Q1/17 in mBank Group Development of Retail and Corporate new business Sales of mortgage loans Sales of non-mortgage loans (PLN M, by quarter) (PLN M, by quarter) +12% +34% +14% +14% +19% +19% 759 798 1,725 1,801 713 691 702 111 14% 1,560 1,514 156 9% 1,344 133 110 121 9 71 1% 228 120 9% 1
Slide 8: Agenda
Agenda Summary of Q1/17 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate new business Analysis of Q1/17 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidi
Slide 9: Development of Loans to Customers
Analysis of Q1/17 in mBank Group Development of Loans to Customers Loan growth focused on higher-margin products Development of Gross Loans and Advances to Customers (PLN M) +6.2% +4.5% +6.0% +1.9% +4.3% -0.1% +2.0% 32,805 33,937 34,528 34,174 34,841 83,862 84,199 84,581 84,538 4 132 62 57 81 80,925
Slide 10: Development of Deposits
Analysis of Q1/17 in mBank Group Development of Deposits Intentional outflow of corporate term deposits, growth in current accounts Development of Amounts due to Customers (PLN M) +2.9% +9.4% +1.0% -10.3% +8.7% -2.9% -2.8% 35,119 37,383 91,418 32,618 33,829 33,551 1,287 1,600 540 88,744 847 2,011 1,
Slide 11: Income of mBank Group
Analysis of Q1/17 in mBank Group Income of mBank Group High core revenues despite a seasonally weaker quarter Development of mBank Group’s Income (PLN M) +7.2% 1,203.0 +3.5% QoQ YoY 2.0 1,038.7 1,044.7 1,081.8 1,008.9 244.8 10.8 3.1 1.6 4.5 2.4 8.5 0.3 26.6 0.2 76.9 3.4 33.2 0.4 74.4 84.1 59.5 0.0 2
Slide 12: Costs of mBank Group
Analysis of Q1/17 in mBank Group Costs of mBank Group Solid cost efficiency despite contributions to the BFG Development of mBank Group’s Costs Q4/16 costs include additional payment to the BFG related to the (PLN M) bankruptcy of Cooperative Bank in Nadarzyn of PLN 10.9 million. Q1/17 costs inc
Slide 13: Loan Loss Provisions and Risk Costs
Analysis of Q1/17 in mBank Group Loan Loss Provisions and Risk Costs Cost of risk driven by low provisions in the corporate segment Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 69 59 +21.0% 46 139.5 41 35 55 47 20 41 117.7 35 76 65.0 +109% 66 64 67
Slide 14: Loan Portfolio Quality
Analysis of Q1/17 in mBank Group Loan Portfolio Quality Resilient loan portfolio quality reflected in improving risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) 5.8% 5.8% 5.9% mBank Group applies -5.8% 5.4% a conservative client- -3.2% 5.2% oriented approach in
Slide 15: Funding Structure Details
Analysis of Q1/17 in mBank Group Funding Structure Details A well diversified funding profile and highly liquid balance sheet mBank Group’s funding structure mBank’s ratings Loan-to-Deposit Ratio as of 31.03.2017 Fitch 96.1% +2.6 pp Retail 95.1% Other 94.7% deposits Long-term Subordinated liabilitie
Slide 16: Key Regulatory Ratios
Analysis of Q1/17 in mBank Group Key Regulatory Ratios Strong capital ratios well above regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR 199% 21.59% 20.29% 19.01% 2.83% 168% 18.33% 18.61% 2.97% 2.81% 17.02% 150% 151% 2.72% 2.73% 139% 112% 114% 114% 116% 109% Basel III r
Slide 17: Agenda
Agenda Summary of Q1/17 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate new business Analysis of Q1/17 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidi
Slide 18: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) The economy set to grow by 4% on average in 2017 The economy rebounded strongly in Q1/17 Tighter labour market across the board, supporting consumption 8% 20% 4 3 6% 10% 2 4% 0% 1 2% -10% 0 -1 0% -20% -2 -2% -30% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 19: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Loan-to-deposit ratio heading below 100% as credit growth remains tepid Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 30% 25% 20% 20% 15% 10% 10% 5% 0% 0% -10% -5% Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17 Jan-11 Sep-
Slide 20: 2017 in forecasts and the impact on mBank Group
2017 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Outlook for mBank 2015 2016 2017F Net interest income & NIM (Slightly positive) GDP growth (YoY) 3.8% 2.7% 4.0% Continued gradual increase of margin driven by cha
Slide 21: Agenda
Agenda Summary of Q1/17 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate new business Analysis of Q1/17 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidi
Slide 22: Appendix
Appendix Page Page Additional Information: Selected Financial Data No. Detailed Results of the Business Lines No. Consolidated Profit and Loss Account 23 Retail Banking 37-42 Consolidated Statement of Financial Position 24 Summary of Q1/17: Financial Results and Volumes 38-39 mBank Group’s Ratios 25
Slide 23: Consolidated Profit and Loss Account
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Net interest income 676,418 684,443 718,712 753,270 749,007 Net fe
Slide 24: Consolidated Statement of Financial Position
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Cash and balances with Central Bank 4 042 760 6 433 221 5 859 485 9 1
Slide 25: mBank Group's Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries mBank Group’s Ratios Financial Ratios Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Net Interest Margin (quarterly) 2.29% 2.25% 2.31% 2.35% 2.42% Net Interest Margin YtD 2.29% 2.2
Slide 26: mBank Group's historical performance (1/3)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance (1/3) Business Lines Subsidiaries Net Interest Income & NIM Net Fee and Commission Income (PLN M) (PLN M) CAGR 2.4% 2.2% 2.3% 2.1% 2.3% 2.3% 2.4% +4% CAGR +6% 835 902 897 906 +18% 2,833 +11% 787 2,280 2
Slide 27: mBank Group's historical performance (2/3)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance (2/3) Business Lines Subsidiaries Operating Costs Pre-provision Income & C/I ratio One-off regulatory costs (PLN M) CAGR (PLN M) +4% 46.5% 45.7% 44.9% 50.1% 45.7% 47.7% 53.4% 194 11 Contributions CAGR t
Slide 28: mBank Group's historical performance (3/3)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance (3/3) Business Lines Subsidiaries Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) CAGR +6% 18.73% 19.38% 14.66% 17.25% 20.29% 19.01% 21.59% +7% CAGR +6% +6% +8% 123.5 133.7 123.3 130.5 118.0 1
Slide 29: Net Interest Income & Margin
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Net Interest Income & Margin Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 2.29 2.25 2.31 2.35 2.42 NIM -6.6% [%] 269.1 -2.1% 262.6 258.3 2.
Slide 30: Fee and Commission Income
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Fee and Commission Income Fee and Commission Income Structure (PLN M) QoQ YoY 429.2 404.4 407.1 57.2 +7.4% +29.9% 365.3 60.0 61.5 15% 351.9 46.6 +2.3% +29.7% 54.0
Slide 31: Trading and Other Income
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Trading and Other Income Net Trading Income Structure Gains less Losses from Investment Securities (PLN M) (PLN M) -9% +189% 84.1 74.4 10.7 76.9 12.3 0.5 59.5 26.6
Slide 32: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities and Equity (PLN B) (PLN B) 133.7 133.7 128.7 129.8 130.5 128.7 129.8 130.
Slide 33: Balance Sheet Analysis: Currency Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Currency Structure Currency Structure of Loans to Customers (net) Currency Structure of Amounts due to Banks and Customers1 (PLN B) (PLN B)
Slide 34: Structure of Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Structure of Loans and Deposits Structure of mBank Group’s Gross Loans Structure of mBank Group’s Deposits as of 31.03.2017 as of 31.03.201
Slide 35: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 31.03.2017 Households Real estate management 11.6% Building indust
Slide 36: Detailed Development of Capital Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Detailed Development of Capital Ratios mBank Group’s Common Equity Tier 1 (CET 1) Ratio +1.17 +0.08 18.76% -0.05 +0.24 17.32% +0.31 -0.17 +
Slide 37: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q1/17 Retail Banking Investor Presentation – Q1 2017 |37
Slide 38: Retail Banking: Summary of Q1/17 Financial and Business Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q1/17: Financial and Business Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 316 322 +13% 304 303 304 37 37 36 36 36 392.2 0% 43 43 47 4
Slide 39: Retail Banking: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q1/17: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +3.9% +12.5% -1.2% +0.6% 48,272 48,119 48,950 48,338 53,495 53,829
Slide 40: Loan Portfolio Structure of mBank Group in Poland
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries 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 31.03.2017 7.6% 7.7% 7.6% 7.7% 7.6%
Slide 41: mBank in the Czech Republic and Slovakia
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries 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 +2% +20% -5% 8.5% 0% 14.8% 4,269 4,1
Slide 42: mBank in the Czech Republic and Slovakia
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries mBank in the Czech Republic and Slovakia Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) +4% +16% +21% Czech 0% +5% +4% Republic 16,184 16,921 16,884 3,286 34,395 35,91
Slide 43: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q1/17 Corporates & Financial Markets Investor Presentation – Q1 2017 |43
Slide 44: Corporates and Financial Markets: Financial and Business Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q1/17: Financial and Business Results Profit before Tax of the Segment Lower Q1/17 profit due to Number of Corporate Service Locations (PLN M, by quarter) one-off book
Slide 45: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q1/17: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +6.2% +2.9% +1.9% -10.3% 34,528 34,174 34,841 37,383 33,9
Slide 46: Corporates and Financial Markets: Market Shares
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Market Shares mBank’s Market Shares in Investment Banking Services1 mBank in the Market for Non-Treasury Debt2 as of 28.02.2017 (PLN M) 69,023 8.9% 15.9% 40,740 15,702 13,644 7,8
Slide 47: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of mBank Group’s companies in Q1/17 Subsidiaries Investor Presentation – Q1 2017 |47
Slide 48: Development of Profit before Tax of Consolidated Companies
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Development of Profit before Tax of Consolidated Companies PLN thou. Q1/16 Q1/17 Change YoY 2015 2016 Change YoY mBank Hipoteczny 11,819 11,148 -5.7% 26,797 30,180 +12.6% mLeasing 20,4
Slide 49: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Issuance of Covered Bonds Profit before Income Tax (PLN M, by year) 1,570 (PLN M) established in 1999 Private placement 30.2 of EUR 70 million specialised mortga
Slide 50: mBH: Issuance Activity on the Covered Bonds Market
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH): Issuance Activity on the Covered Bonds Market Summary of Mortgage Covered Bonds issued in 2014-2017 (public issues) Amount Currency Issue date Maturity date Ten
Slide 51: Leasing and Factoring
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Leasing and Factoring Leasing contracts Market share & position – Q1/17 Profit before Tax (PLN M) (PLN M) +12% 7.5% 72.6 established 1,129 in 1991 1,011 Rank provides -18% financial an
Slide 52: mBank Dom Maklerski (mDM)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Brokerage Services Business Lines Subsidiaries 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 53: mBank's share price performance in Q1/17
mBank’s share price performance in Q1/17 Polish banking stocks remain to be influenced by regulatory and legislative risks mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) 130 WIG-30 2.201% 125 WIG-20 2.406% WIG 1.552% 120 +17.1% WIG-Banks 5.770% +16.2
Slide 54: 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 Investor Relations and Group Strategy, Chief Economist Joanna Filipkowska Direct dial: +48 22 829 04 53 D