Slide 1: Results of mBank Group Q3 2021
Results of mBank Group Q3 2021 Strong operating performance of core business Presentation for Investors and Analysts, 03.11.2021 Investor Presentation – Q3 2021
Slide 2: Agenda
Agenda Key highlights of Q3 2021 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2021 16 ▪ 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 2021 in mBank Group
Key highlights of Q3 2021 in mBank Group ✓ Core revenues at record-high level, driven by rebounding Net interest income Net fee income net interest income and strongest fee result in history +4.6% YoY +28.5% YoY ✓ Best-in-class efficiency continued, quarterly increase in Total costs Cost/Income rati
Slide 4: New products and innovations in Q3 2021
New products and innovations in Q3 2021 convenient, Special loan for financing secure, fast… small RES projects ▪ The offer is for small renewable energy projects, mainly photovoltaic farms with a rated power of up to 5 MW, and RES installations for own needs Effective e-commerce? carried out by cus
Slide 5: mBank's Inaugural Non-Preferred Senior Green Bond Issuance
mBank’s Inaugural Non-Preferred Senior Green Bond Issuance Transaction details Distribution by investor location Format Green Senior Non-Preferred Notes United Kingdom + Ireland 1% Issue size EUR 500 M 4% France 5% 3% Switzerland Issue rating BBB- (S&P) /BBB- (Fitch) 8% 37% Germany Launch date 15.09
Slide 6: 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 closing of 9.0% current deposits 8.2% 8.3% -195 inactive 8.0% accounts 4.9% term deposits 7.8% +16 with arrears 7.7% 7.5% 5,675 7.3% 5,463 5
Slide 7: mBank as a front-runner in mobile banking adoption
mBank as a front-runner in mobile banking adoption Active users of mBank’s mobile application in Poland by the share Number in thousand #1 of mobile users in total active average growth per year +231 2,506 customer base 2,274 +342 1,895 1,484 by the number 1,181 854 #2 of mobile app users among 565
Slide 8: Development of leading mobile banking offer for individuals
Development of leading mobile banking offer for individuals easiest way to manage Well-designed functionalities for client convenience your finances ✓ fully remote account opening with a selfie and agreement approved via a text message pace of spending ✓ logging in with a PIN code, recent fingerprin
Slide 9: Development of best digital banking services for corporate clients
Development of 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
Slide 10: Development of complete solutions for e-commerce segment
Development of 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 mBan
Slide 11: Summary of key financial highlights
Summary of key financial highlights Total income Cost/Income ratio 1 Net profit of Core Business 2 ROE of Core Business 2 PLN M PLN M +4.1% -1.8pp +84% +5.3pp 4,491 42.5% 1,206.8 11.7% 4,314 40.7% 657.2 6.4% 9M 2020 9M 2021 9M 2020 9M 2021 9M 2020 9M 2021 9M 2020 9M 2021 Gross loans to customers NPL
Slide 12: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million Q3 2020 Q2 2021 Q3 2021 ∆ QoQ ∆ YoY Net interest income 960.3 961.5 1,004.8 +4.5% +4.6% Net fee and commission income 373.2 452.6 479.4 +5.9% +28.5% Total income 1,410.7 1,442.8 1,509.0 +4.6% +7.0% Total costs (excluding BFG) -533.0 -
Slide 13: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q3 2020 Q2 2021 Q3 2021 ∆ QoQ ∆ YoY Total assets 181,436 198,471 208,152 +4.9% +14.7% Gross loans to customers 112,684 119,949 123,210 +2.7% +9.3% Individual client loans 64,404 70,093 73,124 +4.3% +13.5% Corporate client loans 47,970 49,635 49
Slide 14: Summary of litigations and provisions related to CHF portfolio
Summary of litigations and provisions related to CHF portfolio CHF mortgage loans granted to individual customers Number of individual court cases concerning indexation clauses CHF M, carrying amount new court proceedings equivalent to PLN 10,950 M, +16% CAGR 8.9% of total loan portfolio initiated a
Slide 15: New segmentation to show genuine performance of core business
New segmentation to show genuine performance of core business Summary of financial results for mBank’s core activity and run-off portfolio in 9M 2021 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the genuine and undistorted performance
Slide 16: Agenda
Agenda Key highlights of Q3 2021 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2021 16 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 17: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Continuous loan portfolio expansion driven by strong momentum of retail exposures Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M +4.0% +9.3% +3.1% +0.5% +8.2% +2.7% -0.4% +1.8% 47,970 46,025 48,901 49,635
Slide 18: Results of mBank Group: New lending business
Results of mBank Group: New lending business Accelerated sales of housing loans, accompanied by further rebound of consumer lending Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter +49% +49% -7% +6% +6% 3,424 3,172 2,574 2,717 2,950 2,855 2,157 497 366 2,124 97
Slide 19: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Growth of deposit base fueled by constant inflows to current accounts in both segments Development of customer deposits Deposits from corporate customers PLN M PLN M +12.9% +16.3% +13.7% +11.0% +4.8% +16.6% +11.3% +4.9% 54,479 164,142 48,239 47,862 49,095 15
Slide 20: Results of mBank Group: Total income
Results of mBank Group: Total income Record-high core revenues driven by rising net interest income and strong fee result Development of mBank Group’s total income Development of interest income PLN M PLN M Sale of bonds: +0.5% Q4/20 Q1/21 +4.9% +4.9% +7.0% +4.6% 92.7 89.4 1,079.5 1,063.2 1,019.4 1,
Slide 21: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Best-in-class efficiency maintained, increase of costs only due to rewards for employees Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M 43.1% 43.2% 42.5% 43.0% +11.1% Excluding +X.X% +8.8% the BFG +6.
Slide 22: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Provisions for expected credit losses at lower level amid positive macroeconomic outlook Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 127 119 -27% 268.8 80 0.9 262.6 99 97 69 -14% 5
Slide 23: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust asset quality confirmed by resilient risk indicators, additional support from NPL sales mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to -9.4% 4.8% 4.8% 4.6% EBA definition, -6.2% 4.4% consolidated 4.0% NPL ratio
Slide 24: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Strong capital position and outstanding liquidity securing safety and operational stability mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Group’s LCR: 280% 19.53% 19.86% +3.64 260% 19.19% 2.87% 17.55% 230% 236% 2.79% 2.57% 17.51%
Slide 25: Agenda
Agenda Key highlights of Q3 2021 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2021 16 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 26: Macroeconomic situation and outlook
Macroeconomic situation and outlook Normalization of demand meets supply bottlenecks Consumer sentiment under the pressure of high inflation? Unemployment rate declined further 20 12% 10 10% 0 8% -10 6% -20 4% -30 2% Source: GUS Source: GUS -40 0% Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19 Jul
Slide 27: Macroeconomic situation and outlook
Macroeconomic situation and outlook Demand for credit picked up, as expected 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% 10% 6% 5% 0% 4% -5% 2% -10% 0% Jan.13 Oct.13 Jul.14 Apr.15 Jan.16 Oct.16
Slide 28: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks remains challenging due to low rates and high tax burdens Key economic indicators for Poland Short-term prospects for mBank (4 quarters ahead) 2019 2020 2021F 2022F Net interest income & NIM positive GDP growth (YoY)
Slide 29: Agenda
Agenda Key highlights of Q3 2021 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2021 16 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 30: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net interest income 960,295 976,930 946,895 961,537 1,004,845 Net fee and commission income 373,201 409,471 468,060 452,569 479,438 Dividend income
Slide 31: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Cash and balances with Central Bank 6,683,941 3,968,691 16,355,429 16,523,318 18,015,638 Loans and advances to banks 8,991,355 7,354,268 7,381,296 9,7
Slide 32: Appendix: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net Interest Margin, quarterly 2.16% 2.21% 2.10% 2.04% 2.02% Net Interest Margin, YtD 2.37% 2.33% 2.10% 2.07% 2.05% Net Interest Margin, excl. CHF portfolio, Y
Slide 33: 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 +0.5% +4.9% 1,085.4 119.2 -32.4% 1,079.5 1,063.2 1,019.4 1,035.2 7.2 74.3 78.0 89.1 8% 4.6 24.9 78.7 81.2 6.0 20.1 2% 2.9 26.9 3.7 19.1 1% 16.2 1
Slide 34: 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 +26.3% +8.1% +21.7% +13.3% 698.9 219.5 645.9 646.3 67.6 10% 611.1 201.7 55.9 62.8 193.8 553.5 62.4 108.3 15% 180.3 177.9
Slide 35: 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 208.2 208.2 198.5 198.5 194.2 194.2 16.5 8% 23.7 11% 181.4 22.0 181.4 16.7 6.9 3% 178.9 21.6 178.9 16.7 2.6 1% 11.0 8.8 6.2 6.8 15.5 8% 17.
Slide 36: 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 30.09.2021 as of 30.09.2021 Real estate 5.5% Building industry 3.9% Transport and logistics 2.6% 0.4% 0.2% Food sector
Slide 37: 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 30.09.2021 as of 30.09.2021 Nominal Issue Maturity Currency Tenor Coupon Other value date date Subordinated liabilities 3.6% Issues under Euro Medium Term Not
Slide 38: Appendix: Selected Financial Data – Capital Requirements
Appendix: Selected Financial Data – Capital Requirements Regulatory capital requirements for mBank Group as of 30.09.2021 +3.64 pp Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of the countercyclical buffer rates that apply in the countries where the relevant +4.03 pp c
Slide 39: Appendix: Retail Banking
Appendix: Retail Banking Profit before income tax of the segment Number of Retail Service Locations PLN M, by quarter mBank CZSK -26 +41% mBank CZSK Poland +12% 392 368 366 41 mFinanse1 390.1 42 43 43 324.3 347.6 28.0 40 40 mKiosks 277.3 16.8 273.5 17.7 13.4 29.3 165 149 149 Advisory centres 329.8 3
Slide 40: Appendix: Retail Banking
Appendix: Retail Banking Development of gross loans to retail banking clients Development of deposits from retail banking clients PLN M PLN M +13.5% +18.0% +4.3% +2.1% 73,124 108,921 70,093 106,700 67,785 103,583 212 65,952 97,976 201 8,675 8% 64,404 185 8,827 20,809 28% 92,303 114 9,358 19,946 116
Slide 41: 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 +54% 13.1% +29% +6% +3% 14.7% 9,031 9,608 15,153 15,502 16,036 8,219 13,819 7,311 2,946 12,470 4,541 4,667 2,738 4,511 6,242 2,445 4,
Slide 42: 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 +42% +19% +22% Republic +2% +10% +1% physical network: light 8 branches 28,080 28,608 6,613 7,256 61,834 62,616 6,093 51,183 20,119 23 mKiosks 09/20 06/21 09/21 09/20 06/21
Slide 43: Appendix: Corporate & Investment Banking
Appendix: Corporate & Investment Banking Profit before income tax of the segment Number of corporate service locations PLN M, by quarter 2 2 +27% Pomorskie 1 2 +8% 2 Zachodnio- Warmińsko- Mazurskie Pomorskie 1 1 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomorskie 4 2 incl. 13 advisory centres 2 L
Slide 44: Appendix: Corporate & Investment Banking
Appendix: Corporate & Investment Banking Development of gross loans to corporate customers Development of deposits from corporate customers PLN M PLN M +4.0% +12.9% +0.5% +11.0% 48,901 49,635 49,883 54,479 47,970 46,025 49,095 8,525 8,888 48,239 47,862 7,559 7,305 8,091 7,659 3,653 4,739 3,709 4,126
Slide 45: 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 46: Appendix: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2016 2017 2018 2019 2020 ∆ YoY Net interest income 2,832.8 3,135.7 3,496.5 4,002.8 4,009.3 +0.2% Net fee and commission income 906.4 1,249.5 1,257.8 1,270.6 1,508.3 +18.7% Net trading and other income 556.2 68.4 325.3 251.0 349.2 +39.
Slide 47: Appendix: mBank's share price performance
Appendix: mBank’s share price performance Banking stocks have gained significantly over recent months, mBank better than the index mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 15.10.2021 250 mBank’s share price +147% 240 WIG30
Slide 48: 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 2021, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mB
Slide 49: 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