Slide 1: Results of mBank Group Q1 2014
Results of mBank Group Q1 2014 A promising start to the year Management Board of mBank S.A. Investor Presentation April 28, 2014
Slide 2: Key highlights of Q1 2014
Key highlights of Q1 2014 Core revenues of PLN 832.4 M at historical high Net Profit of PLN 337.8 M … • NII up 0.5% QoQ but 14.2% YoY amid rebounding volume growth • NFC up 5.5% QoQ and 29.9% YoY Profit & Loss despite a seasonally weaker quarter Acceleration in volumes Best-in-class efficiency • Gro
Slide 3: Agenda
Agenda Summary of Q1/14 in mBank Group Development of Loans and Deposits Funding Structure Details Business Development: Corporate and Retail Segments Analysis of Q1/14 Results Development of Income and Costs Loan Portfolio Quality Capital and Liquidity Ratios Macroeconomic Update Appendix Additiona
Slide 4: Summary of Q1/14 Results in mBank Group
Summary of Q1/14 Results in mBank Group mBank Analyzer Key Financials in PLN M Q1/14 Q4/13 Change Q1/Q4 Q1/13 Net interest income 591.0 588.1 +0.5% 517.5 Net Fee & Commission income 241.4 228.9 +5.5% 185.9 Total income 956.6 964.2 -0.8% 831.4 Total costs (430.6) (441.6) -2.5% (401.7) Loan Loss Provi
Slide 5: Development of Loans to Customers
Summary of Q1/14 in mBank Group mBank Analyzer Development of Loans to Customers Loan growth showing signs of acceleration Development of Gross Loans (PLN M) +6.3% +5.9% +4.0% +3.5% QoQ YoY 74,426 73,390 71,968 70,582 69,060 2,861 2,533 4% 2,901 2,799 3,017 4% -9.5% -16.1% 32,523 30,211 31,884 43% 2
Slide 6: Development of Deposits
Summary of Q1/14 in mBank Group mBank Analyzer Development of Deposits Solid growth in a seasonally weak quarter, strong annual dynamics Development of Deposits (PLN M) +8.7% +4.8% +3.1% +3.9% QoQ YoY 63,596 62,195 61,674 60,085 743 1% 58,532 1,155 718 854 794 1% +3.6% -6.3% 27,351 26,753 28,069 44%
Slide 7: Funding Structure Details
Summary of Q1/14 in mBank Group Funding Structure Details Strategic balance sheet re-positioning well on track mBank Group’s funding structure mBank’s ratings mBank Group’s funding strategy as of March 31, 2014 • Funding needs reduced by CHF loan book Fitch repayments (c. CHF 350-400 M per annum) Re
Slide 8: Business Development: Corporates & Financial Markets
Summary of Q1/14 in mBank Group Business Development: Corporates & Financial Markets Solid volume dynamics likely heralding a broader recovery Loans (PLN M) Deposits (PLN M) +14.2% +23.9% +8.2% +4.9% 31,884 28,069 27,922 29,475 26,753 1,928 Other 22,647 3,992 1,658 1,866 3,823 4,281 3,812 3,800 4,54
Slide 9: Business Development: Retail Banking
Summary of Q1/14 in mBank Group Business Development: Retail Banking Growing customer base reflected in volume development Loans (PLN M) Deposits (PLN M) +2.2% -0.9% +1.7% +1.7% 38,121 38,308 38,973 35,091 34,203 34,784 63 54 55 8,828 9,615 9,947 12,150 9,889 9,733 3,639 4,206 4,513 Other Non-mortga
Slide 10: Agenda
Agenda Summary of Q1/14 in mBank Group Development of Loans and Deposits Funding Structure Details Business Development: Corporate and Retail Segments Analysis of Q1/14 Results Development of Income and Costs Loan Portfolio Quality Capital and Liquidity Ratios Macroeconomic Update Appendix Additiona
Slide 11: Income of mBank Group
Analysis of Q1/14 Results mBank Analyzer Income of mBank Group Core revenues at a historical high Development of mBank Group’s Income (PLN M) +15.1% -0.8% QoQ YoY 945.0 964.2 956.6 932.9 33.7 9.9 22.2 32.5 46.9 25.3 831.4 36.2 16.3 92.1 78.4 86.3 9.8 0.0 51.4 102.5 0.8 14.8 2.3 75.8 241.4 +17.4% +21
Slide 12: Costs of mBank Group
Analysis of Q1/14 Results mBank Analyzer Costs of mBank Group Strong efficiency despite increased expenses in strategic investments Development of mBank Group’s Costs (PLN M) +7.2% -2.5% QoQ YoY 441.6 of which 430.6 BFG levy 417.9 416.8 25.2 401.7 29.5 (annual and 24.0 20.1 26.0 52.0 prudential): 45
Slide 13: Loan Loss Provisions & Risk Costs
Analysis of Q1/14 Results Loan Loss Provisions & Risk Costs Cost of risk reflecting an improving external environment Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment 2013 CoR (PLN M) (bps, quarterly) 70 bps 173.6 98 92 159.5 68 51 17 76.7 100 103 117.1 93 79.4 86 75
Slide 14: Loan Portfolio Quality
Analysis of Q1/14 Results Loan Portfolio Quality Stable risk indicators in both corporate and retail segment mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) 6.3% 6.1% The increase in the Q4/13 NPL ratio results from a methodology 4,424 4,512 5.3% 5.3% change towards a 3,832 4.
Slide 15: Key Regulatory Ratios
Analysis of Q1/14 Results Key Regulatory Ratios Capital and liquidity ahead of regulatory requirements mBank Group’s Capital Adequacy Ratio mBank’s NSFR and LCR 19.2% 19.4% 208% 18.9% 18.2% 18.1% 187% 16.3% 177% 173% 174% 5.2% 5.2% 5.4% 5.1% 2.7% 116% 112% 113% 111% 109% Basel III requirement ≥100%
Slide 16: Agenda
Agenda Summary of Q1/14 in mBank Group Development of Loans and Deposits Funding Structure Details Business Development: Corporate and Retail Segments Analysis of Q1/14 Results Development of Income and Costs Loan Portfolio Quality Capital and Liquidity Ratios Macroeconomic Update Appendix Additiona
Slide 17: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Recovery under way but new risks appeared. Inflation to come later. GDP forecast (% YoY) Estimated impact of UKR/RUS recession on the Polish economy mBank’s 8 forecast Slowdown of Ukrainian Imports (%) 6 4.7 4.5 4.3 4.4 4.9 4.3 3.7 4.2 3.7 5 10 15 20 25 30 40 50 100 2.7 2.
Slide 18: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Green shoots in bank credit, household deposits still sluggish Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 40% 70% 60% 30% 50% 20% 40% 10% 30% 20% 0% 10% -10% 0% -20% -10% Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 J
Slide 19: Agenda
Agenda Summary of Q1/14 in mBank Group Development of Loans and Deposits Funding Structure Details Business Development: Corporate and Retail Segments Analysis of Q1/14 Results Development of Income and Costs Loan Portfolio Quality Capital and Liquidity Ratios Macroeconomic Update Appendix Additiona
Slide 20: Appendix
Appendix Page Page Additional Information: Selected Financial Data No. Detailed Results of the Business Lines No. Consolidated Profit and Loss Account under IFRS 21 Retail Banking 36-40 Consolidated Statement of Financial Position 22 Summary of Q1/14: Financial Results 37 mBank Group’s Ratios 23 Sal
Slide 21: Consolidated Profit and Loss Account under IFRS
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account under IFRS Quarterly results (PLN thou.) Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Net interest income 517,483 550,232 570,
Slide 22: Consolidated Statement of Financial Position
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Cash and balances with Central Bank 2 493 404 2 039 84
Slide 23: 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 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Net Interest Margin (quarterly) 2.13% 2.15% 2.23% 2.31% 2.30% Net Interest Margin YtD 2.13% 2.1
Slide 24: mBank Group's historical performance (1/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (1/3) Business Lines Subsidiaries Net Interest Income & NIM Net Fee and Commission Income (PLN M) (PLN M) CAGR 2.3% 2.2% 2.5% 2.4% 2.2% 2.1% 2.3% +9% CAGR +8% 840 835 +30% +14% 746 787 2,
Slide 25: mBank Group's historical performance (2/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (2/3) Business Lines Subsidiaries Operating Costs Pre-provision Income & C/I ratio (PLN M) (PLN M) CAGR +2% 54.2% 51.8% 47.7% 46.5% 45.7% 48.3% 45.0% CAGR +11% 1,545 1,617 1,680 1,661 1,6
Slide 26: mBank Group's historical performance (3/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (3/3) Business Lines Subsidiaries Total Assets Equity & CAR (PLN B) (PLN M) CAGR +4% 11.50% 15.90% 14.96% 18.73% 19.38% 18.87% 16.26% +7% CAGR 0% +24% 98.9 102.1 104.3 103.1 107.1 81.0 90
Slide 27: Net Interest Income & Margin
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Net Interest Income & Margin Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 2.1 2.1 2.2 2.3 2.3 NIM 530.6 1,048.1 14.9 4.9 997
Slide 28: Fee and Commission Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Fee and Commission Income Fee and Commission Income Structure (PLN M) QoQ YoY 353.8 344.8 331.2 331.8 47.4 53.1 15% +12.0% +40.9% 296.1 41.2 42.5 25
Slide 29: Trading and Other Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer 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) +22% 102.5 +17% 36.2 92.1 28.0 86
Slide 30: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities (PLN B) (PLN B) 108.1 107.1 108.1 107.1 103.1 4.6 104.0 10
Slide 31: Balance Sheet Analysis: Currency Structure
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer 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 Customers*
Slide 32: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer 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 March 31, 2
Slide 33: 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 March 31, 2014 Households Real estate management 21.2% Constructio
Slide 34: Detailed Development of Core Tier 1 and CAR
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Detailed Development of Core Tier 1 and CAR mBank Group’s Core Tier 1 Ratio +0.15 14.21% -0.24 +0.26 14.02% -0.07 +0.11 -0.03 -0.63 +0.60 -
Slide 35: mBank's Euro Medium Term Note (EMTN) Programme
Summary Appendix Historical view Profit & Loss Balance Sheet mBank’s Euro Medium Term Note (EMTN) Programme Business Lines Subsidiaries Summary of third tranche: 5-year EUR 500 M, Senior Unsecured Transaction details Distribution by investor location Poland United Kingdom Issuer mFinance France S.A.
Slide 36: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q1/14 Retail Banking |36
Slide 37: Retail Banking: Summary of Q1/14 Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q1/14: Financial Results Profit before Tax of Retail Banking Segment* Number of Retail Outlets (PLN M, by quarter) +39% 258 258 260 260 258 +12% 35 35 35 35 35 23 23 24 24 24 268.9 301.
Slide 38: Sales of New Retail Loans
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Sales of New Retail Loans Quarterly Sales of Mortgage Loans Quarterly Sales of Non-Mortgage Loans (PLN M) (PLN M) +8% +11% -4% +68% 641.5 999.2 972.6 618.2 928.4 928.9 80.6 8% 583.7 49.0 901.2 41.
Slide 39: Mortgage and Non-mortgage Loans: Portfolio Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Mortgage and Non-mortgage Loans: Portfolio Structure and Key Parameters mBank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Loans to individuals of Retail
Slide 40: 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 +19% 0% +6% 5.8% 0% 14.0% 2,274 4,89
Slide 41: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q1/14 Corporates & Financial Markets |41
Slide 42: Corporates and Financial Markets: Summary of Q1/14
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q1/14: Financial Results Profit before Tax of the Segment Corporate Branch Network Offices (PLN M, by quarter) Branches -20% 47 47 47 47 47 +8% 18 18 18 18 18 179.6 13
Slide 43: 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 Services* mBank in the Market for Non-Treasury Debt for Q1/14# (PLN M) 41,090 15.5% 18.2% 24,325 17,375 7,608 5,405 2,36
Slide 44: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the mBank Group’s companies in Q1/14 Subsidiaries |44
Slide 45: Summary of Q1/14: Financial Results of Major Companies
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Summary of Q1/14: Financial Results of Major Companies Profit before Tax of Consolidated Subsidiaries (PLN M) -14% 15.2 -5% 13.0 12.2 +30% 11.6 9.9 +71% +46% 7.6 +37% +95% 6.2 6.1 4.8
Slide 46: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Loan Portfolio: Balance-sheet Exposure Profit before Tax (PLN M, net value) (PLN M) established in 1999 -2% +30% specialised mortgage bank and 0% the largest iss
Slide 47: Leasing and Factoring (Poland)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Leasing and Factoring (Poland) Leasing contracts Market share & position – Q1 2014 Profit before Tax (PLN M) (PLN M) +38% 6.0% -14% established 616.4 15.2 in 1991 13.0 445.7 Rank provi
Slide 48: Dom Maklerski mBanku (mDM)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Dom Maklerski mBanku (mDM) Market Shares in Q1/14, by volume Profit before Tax (PLN M) established in 1991 incl. block Session +71% transactions transactions providing a full range of
Slide 49: BRE Ubezpieczenia (BRE Insurance)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries BRE Ubezpieczenia (BRE Insurance) Bancassurance Retail Direct Insurance (Internet platform) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) -11% +2% 333.6 298.1 34.2 35.0
Slide 50: mBank Analyzer
mBank Analyzer mBank Analyzer Further enhancing our reporting standard Analyse, customise, export and print selected data on mBank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Comprehensive Summary of Data covering Details on each structure and report on key fin
Slide 51: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 E-mail: wojciech.chmielewski@mbank.pl Head of Investor Relations Paweł Lipiński Direct dial: +48 22 829 15 33 E-mail: pawel.lipinski@mbank.pl Deb