Slide 1: Results of mBank Group Q2 2015
Results of mBank Group Q2 2015 Core revenues rebounding on strong business flows Management Board of mBank S.A. Investor Presentation July 30, 2015
Slide 2: Key highlights of Q2 2015
Key highlights of Q2 2015 Core revenues up QoQ despite continued market pressure Total revenues decreased • NII at PLN 605.5 M (+3.1% QoQ), to PLN 884.9 M amid record low interest rates • NFC at PLN 230.3 M (+18.8% QoQ), Profit & Loss despite reduced interchange fees Sound volume development Strateg
Slide 3: Agenda
Agenda Summary of Q2/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q2/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 4: Key Financials: Profit and Loss Account
Summary of Q2/15 Results in mBank Group mBank Analyzer Key Financials: Profit and Loss Account in PLN M Q2/15 Q2/14 Change YoY Q1/15 Net interest income 605.5 617.2 -1.9% 587.4 Net Fee & Commission income 230.3 243.7 -5.5% 193.9 1 Total income 884.9 1,023.8 -13.6% 1,118.1 Total costs (485.3) (455.3)
Slide 5: Key Financials: Balance Sheet
Summary of Q2/15 Results in mBank Group mBank Analyzer Key Financials: Balance Sheet in PLN M Q2/15 Q2/14 Change YoY Q1/15 Gross loans to customers 80,261 72,732 +10.4% 81,883 Retail client loans 45,329 39,664 +14.3% 43,788 1 Core corporate client loans 31,384 27,912 +12.4% 29,728 Amounts due to cus
Slide 6: Business Development: Client acquisition and Market shares
Summary of Q2/15 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +9.7% +9.7% +2.5% +2.9% 4,803 4,924 17,787 18,133 18,654 4,689 17,006 17,390 4,490 4,565 147 1,838 1,839 1,867 94 1,794 704 725 762 41 767 775 1,778
Slide 7: Development of Retail and Corporate business
Summary of Q2/15 in mBank Group Development of Retail and Corporate business Sales of mortgage loans Sales of non-mortgage loans (PLN M, by quarter) (PLN M, by quarter) +25% +7% +24% +24% +4% 1,031 909 1,204 1,249 825 833 834 244 24% 1,171 1,164 1,077 82 87 7% 247 9% 102 81 24% 198 272 234 108 10% 9
Slide 8: Rapid growth of client transactionality, interchange revenues bottoming out
Summary of Q2/15 in mBank Group Rapid growth of client transactionality, interchange revenues bottoming out Development of value and number of non-cash transactions with mBank’s payment cards Value of transactions (PLN M) 5,325 XX.X Average value of transaction (PLN) 4,697 4,864 Number of transactio
Slide 9: Agenda
Agenda Summary of Q2/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q2/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 10: Development of Loans to Customers
Analysis of Q2/15 in mBank Group mBank Analyzer Development of Loans to Customers Strong loan growth in both retail and corporate segment Development of Gross Loans and Advances to Customers (PLN M) +5.4% +12.4% -8.8% +10.4% +5.3% -2.0% +5.6% -3.3% 32,841 35,340 32,227 30,564 31,535 81,883 80,261 3,
Slide 11: Development of Deposits
Analysis of Q2/15 in mBank Group mBank Analyzer Development of Deposits Accelerating balances on current and saving accounts Development of Amounts due to Customers (PLN M) +11.5% +23.5% -3.7% +15.4% +20.3% +1.7% +11.3% 31,576 32,237 30,816 29,661 +7.9% 72,422 73,058 26,595 4,367 3,738 5,074 998 71,
Slide 12: Income of mBank Group
Analysis of Q2/15 in mBank Group mBank Analyzer Income of mBank Group Solid core revenues despite continued market pressure Development of mBank Group’s Income (PLN M) -13.6% QoQ YoY 1,118.1 -4.2% QoQ 39.2 1,023.8 1,018.9 excl. one-off gain 4.1 45.8 36.7 3.5 939.9 195.0 884.9 110.2 96.3 34.5 1.0 16.
Slide 13: Costs of mBank Group
Analysis of Q2/15 in mBank Group mBank Analyzer Costs of mBank Group Cost base reflecting strategic investments Development of mBank Group’s Costs (PLN M) +6.6% +3.1% +7.2% QoQ YoY 485.3 455.3 443.5 452.8 34.1 441.2 17.7 17.7 34.1 17.7 49.2 48.6 47.9 47.7 47.1 12.6 +4.3% +1.1% 12.3 7.3 6.6 11.6 152.
Slide 14: Loan Loss Provisions and Risk Costs
Analysis of Q2/15 in mBank Group Loan Loss Provisions and Risk Costs Stable cost of risk Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 88 89 155.9 157.9 72 76 55 70 52 +7.7% 61 76.2 52 54 79.0 112.6 107.7 97 98 94 16.1 100.0 85 81 36.8 54.4 62 62 50
Slide 15: Loan Portfolio Quality
Analysis of Q2/15 in mBank Group Loan Portfolio Quality Improving coverage ratio and risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) +4.6% 6.4% 6.3% 6.4% mBank Group applies -2.3% 6.1% 6.0% a conservative client- oriented approach in 4,636 4,717 4,915 4,964 4,8
Slide 16: Funding Structure Details
Analysis of Q2/15 in mBank Group Funding Structure Details A well diversified funding profile mBank Group’s funding structure mBank’s ratings Loan to Deposit Ratio as of 30.06.2015 Fitch 110.8% Other Retail 109.9% 5% 38% deposits Long-term Subordinated liabilities rating BBB- 4% Short-term EMTN 7% r
Slide 17: Key Regulatory Ratios
Analysis of Q2/15 in mBank Group Key Regulatory Ratios Strong capital and liquidity ratios well above regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR 16.3% 16.4% 149% 15.8% 15.6% 138% 14.7% 2.9% 2.6% 3.4% 127% 129% 2.5% 122% 2.5% 111% 108% 109% 105% 107% Basel III requ
Slide 18: Agenda
Agenda Summary of Q2/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q2/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 19: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Robust economic growth to continue amid very low inflation Some loss of momentum in Q2 but ann. figures should remain robust GDP forecast (% YoY) mBank’s 15% 4% 8 forecast 6 4.6 4.5 4.8 5.1 10% 3% 3.7 3.6 3.3 3.3 3.6 3.7 3.9 4.1 3.0 3.5 5% 2% 4 2.2 2.4 1.3 0.8 0% 1% 2 0.2
Slide 20: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Strong growth in corporate loans, cautious borrowing by households Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 30% 25% 20% 20% 15% 10% 10% 5% 0% 0% -10% -5% Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jan-10 Ju
Slide 21: Agenda
Agenda Summary of Q2/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q2/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
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 38-43 Consolidated Statement of Financial Position 24 Summary of Q2/15: Financial Results and Volumes 39-40 mBank Group’s Ratios 25
Slide 23: Consolidated Profit and Loss Account
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Net interest income 617,232 649,880 632,532 587,439
Slide 24: 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.) Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Cash and balances with Central Bank 1 418 016 4 176 98
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 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Net Interest Margin (quarterly) 2.30% 2.32% 2.27% 2.06% 2.11% Net Interest Margin YtD 2.30% 2.3
Slide 26: 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 2.2% 2.5% 2.4% 2.2% 2.3% 2.3% 2.1% +5% CAGR +8% -13% -1% 840 902 787 835 2,4
Slide 27: 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% 51.8% 47.7% 46.5% 45.7% 44.9% 44.7% 46.8% Increase due to higher BFG charge CAG
Slide 28: 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 +8% 15.90% 14.96% 18.73% 19.38% 14.66% 15.79% 16.38% +7% +12% CAGR +12% 118.0 111.9 120.6 98.9 102.1 104.3
Slide 29: 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) 2.3 2.3 2.3 2.1 2.1 NIM 385.2 1,035.1 353.5 360.2
Slide 30: 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 369.2 365.5 339.3 337.4 51.4 51.4 14% +21.4% 0.0% 39.1 314.5 55.0 33.1
Slide 31: 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) -68% 34.5 -66% 110.2 102.6 96.3 4
Slide 32: 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) 123.3 123.3 120.6 120.6 117.3 118.0 5.0 11
Slide 33: 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 Customers1
Slide 34: 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 30.06.2015
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 30.06.2015 Households Real estate management 11.3% 1.5% Building i
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 +1.42 -0.30 13.45% 13.05% -0.38 +1.03 12.88% -0.46
Slide 37: Issuance Activity on the Covered Bonds Market
Summary Appendix Historical view Profit & Loss Balance Sheet Issuance Activity on the Covered Bonds Market Business Lines Subsidiaries Residential mortgage loans to rise in cover pool Covered Bonds Issuance Summary of Mortgage Covered Bonds issued in 2014 and 2015 (PLN M) Target 2015: Amount Currenc
Slide 38: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q2/15 Retail Banking Investor Presentation – Q2 2015 |38
Slide 39: Retail Banking Summary of Q2/15: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q2/15: Financial Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 258 257 258 262 268 -28% 35 35 35 35 35 414.1 24 23 23 23 23 -5.6% QoQ 2
Slide 40: Retail Banking Summary of Q2/15: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q2/15: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +14.3% +15.9% +3.5% +4.3% 45,329 41,411 43,788 39,693 39,285 240 1%
Slide 41: Mortgage and Non-mortgage Loans: Portfolio Structure and Key Parameters
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 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 Gross Loans (PLN M) and Share in Total mBank’s retail volume Deposits (PLN M) and Share in Total mBank’s retail volume +36% +14% +10% +10% 7.3% +7% 14.4% 3
Slide 43: 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) +29% +20% +42% +6% +5% Czech +7% Republic 13,172 13,905 26,924 2,375 2,543 25,5
Slide 44: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q2/15 Corporates & Financial Markets Investor Presentation – Q2 2015 |44
Slide 45: Corporates and Financial Markets Summary of Q2/15: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q2/15: Financial Results Profit before Tax of the Segment Corporate Branch Network (PLN M, by quarter) 47 47 47 47 47 -40% -46% 18 18 18 18 18 214.6 164.1 50.7 155.4 1
Slide 46: Corporates and Financial Markets Summary of Q2/15: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q2/15: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +5.4% -8.8% +11.5% -3.7% 35,340 31,576 32,237 1,947 30,81
Slide 47: 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 30.06.2015 (PLN M) 55,423 11.7% 15.8% 31,290 16,208 11,211 6,
Slide 48: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the mBank Group’s companies in Q2/15 Subsidiaries Investor Presentation – Q2 2015 |48
Slide 49: 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. Q2/14 Q2/15 Change YoY H1/14 H1/15 Change YoY mBank Hipoteczny 6,173 -8,395 +/- 18,589 8,305 -55.3% mLeasing 9,957
Slide 50: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Gross loans and advances to customers Profit before Tax (PLN M) (PLN M) established in 1999 +50% +10% -55% specialised mortgage bank and 6,314 18.6 the largest i
Slide 51: 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 – H1/15 Profit before Tax (PLN M) (PLN M) +27% +21% 7.9% established 1,887 27.8 in 1991 23.0 1,490 Rank 12.1 pr
Slide 52: 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 Q2/15, by volume Profit before Tax (PLN M) established in 1991 incl. block Session +68% transactions transactions providing a full range of
Slide 53: 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 54: 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 and Group Strategy Paweł Lipiński Direct dial: +48 22 829 15 33 E-mail: pawel.li