Mbank Sa · GPW:MBK
Mbank Sa — Q1 2018 Earnings Presentation
52 slides from Mbank Sa's earnings presentation, May 10, 2018
Slide 1: Results of mBank Group Q1 2018
Results of mBank Group Q1 2018 Core income on the growth trajectory. Positive trends in volumes. Management Board of mBank S.A. Investor Presentation May 10, 2018
Slide 2: 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 first quarter of 2018, prepared under the International Financial Reporting Standards. For more detailed information on the Bank’s and Gr
Slide 3: Agenda
Agenda Summary of Main Trends in Q1/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 4: Key highlights of Q1 2018
Key highlights of Q1 2018 Net profit of PLN 411.0 M, up by 32% compared to Q4/17 Historically high core income of PLN 1,085.3 M despite a shorter quarter Net interest income at PLN 816.4 M (+9.0% YoY) accompanied by further margin improvement to 2.61% Net fee and commission income at PLN 268.9 M
Slide 5: Business Development of Retail Banking and Corporate Banking
Summary of Q1/18 in mBank Group Business Development of Retail Banking and Corporate Banking Retail Banking Number of Clients (thou.) Market shares +275 Implementation of an 6.5% +79 +79 6.5% 6.5% integrated and fully electronic 6.4% 6.3% process of opening a small 5,146 5,342 5,421 business compa
Slide 6: Key Financials: Profit and Loss Account
Summary of Q1/18 in mBank Group Key Financials: Profit and Loss Account PLN million Q1/17 Q4/17 Q1/18 change QoQ change YoY Net interest income 749.0 825.1 816.4 -1.1% +9.0% Net fee and commission income 249.6 233.5 268.9 +15.2% +7.7% 1 Total income 1,081.8 1,141.5 1,380.6 +20.9% +27.6% Total costs
Slide 7: Key Financials: Balance Sheet
Summary of Q1/18 in mBank Group Key Financials: Balance Sheet PLN million Q1/17 Q4/17 Q1/18 change QoQ change YoY Total assets 130,488 131,424 133,640 +1.7% +2.4% Gross loans to customers 84,538 87,388 88,528 +1.3% +4.7% Retail client loans 48,338 48,143 48,825 +1.4% +1.0% Corporate client loans 34,
Slide 8: Agenda
Agenda Summary of Main Trends in Q1/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 9: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Acceleration in both corporate and retail segment Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) +11.2% +4.7% +1.3% +11.8% +2.2% +6.5% 88,484 88,528 38,288 37,942 38,760 87,388 34,841 36,143 84,538 86,
Slide 10: Results of mBank Group: New lending business
Results of mBank Group: New lending business Record high non-mortgage lending, rising origination of housing loans Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +25% +11% +25% +25% +13% +13% 1,002 995 2,000 1,801 1,904 1,770 798 172 818 795 157 16% 1,649
Slide 11: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Growth of deposit base fuelled by strong inflows to retail current accounts Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +1.4% +6.3% +3.4% -1.6% +7.1% +3.1% -2.8% +2.6% 33,551 34,725 34,590 34,025 94,309 32,737 90,678 91,
Slide 12: Results of mBank Group: Total income
Results of mBank Group: Total income Core revenues at record high level despite a shorter quarter, strong fee income Development of mBank Group’s Total Income (PLN M) +X.X% Excluding one-off gain +27.6% +20.9% +7.3% +1.7% 1,380.6 QoQ YoY 219.7 1,149.4 1,141.5 1,081.8 1,080.9 4.3 18.6 18.5 84.5 4.5 1
Slide 13: Results of mBank Group: Total costs
Results of mBank Group: Total costs Continued good efficiency, costs inflated by contributions to the BFG Development of mBank Group’s Costs (PLN M) Annual contribution to the Resolution Fund: PLN 116.8 million in Q1/17 PLN 97.1 million in Q1/18 +4.0% +8.6% +21.5% +21.5% +1.0% +X.X% Excluding co
Slide 14: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Improvement of risk costs driven by lower provisioning in corporate segment Net Impairment Losses and Fair Value Change on Loans 1 mBank Group’s Cost of Risk by Segment (PLN M) (bps) 78 66 58 57 164.4 -13% 41 61 59 57 49 140.0 41 92 120.4 74.5 121.8 45.7 4.1 9.8
Slide 15: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Good quality of loan portfolio evidenced by resilient risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio IFRS 9 (PLN M) +3.4% 5.2% mBank Group applies 5.2% 5.2% 5.1% a conservative client- +0.8% +0.8% 5.0% oriented approach i
Slide 16: Results of mBank Group: Key regulatory ratios
Results of mBank Group: Key regulatory ratios Strong capital ratios well above regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR 21.59% 21.24% 168% 20.99% 20.93% 165% 20.47% 156% 156% 2.83% 2.77% 152% 2.68% 3.06% 2.64% 16.98% 116% 114% 116% 112% 110% Basel III requiremen
Slide 17: Agenda
Agenda Summary of Main Trends in Q1/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 18: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Brisk (4.6%) GDP growth to be maintained in 2018 Investment is perking up, finally. More to come. Record-high consumer sentiment is supporting consumption 24% 10% 10 16% 8% 5 8% 6% 0 4% -5 0% 2% -10 -8% 0% -15 -16% YoY -2% -20 -24% Q3/05 Q4/06 Q1/08 Q2/09 Q3/10 Q4/11 Q1/13
Slide 19: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Rebound in credit growth. Low market interest rates. Corporate loans and deposits (% YoY, FX-adjusted) Household loans and deposits (% YoY, FX-adjusted) 25% 14% 20% 12% 15% 10% 10% 8% 5% 6% 0% 4% -5% 2% -10% 0% Jan-12 Oct-12 Jul-13 Apr-14 Jan-15 Oct-15 Jul-16 Apr-17 Jan-18
Slide 20: 2018 in forecasts and the impact on mBank Group
2018 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Outlook for mBank 2016 2017 2018F Net interest income & NIM (Slightly positive) GDP growth (YoY) 3.0% 4.6% 4.6% Continued gradual increase of margin driven by cha
Slide 21: Agenda
Agenda Summary of Main Trends in Q1/18 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1/18 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratios Ma
Slide 22: Consolidated Profit and Loss Account
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Net interest income 749,007 764,779 796,762 825,112 816,424 Net fee and commission income
Slide 23: Consolidated Statement of Financial Position
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Consolidated Statement of Financial Position Assets (PLN thou.) Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Cash and balances with Central Bank 7,139,929 5,855,425 6,028,470 7,384,869 5,354,319 Loans a
Slide 24: mBank Group's Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view mBank Group’s Ratios Financial Ratios Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Net Interest Margin (quarterly) 2.42% 2.43% 2.50% 2.57% 2.61% Net Interest Margin YtD 2.42% 2.42% 2.45% 2.48% 2.61% Net
Slide 25: Profit and Loss Account: Net Interest Income
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Profit and Loss Account: Net Interest Income Interest Income Structure Interest Expense Structure (PLN M) (PLN M) +7.2% +1.6% -0.3% +2.5% 1,056.5 1,053.6 1,022.7 237.2 982.5 990.3 24.7 27
Slide 26: Profit and Loss Account: Net Fee and Commission Income
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Profit and Loss Account: Net Fee and Commission Income Fee and Commission Income Structure Fee and Commission Expense Structure (PLN M) (PLN M) +5.5% +1.9% +3.7% -11.2% 423.0 429.5 407.1
Slide 27: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities and Equity (PLN B) (PLN B) 132.5 131.4 133.6 133.6 130.5 129.4 130.5 132.5 131.4 129.4 8.8 8.2 6%
Slide 28: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Structure of Loans and Deposits Structure of mBank Group’s Gross Loans Structure of mBank Group’s Deposits as of 31.03.2018 as of 31.03.2018 Public sector Corporat
Slide 29: Balance Sheet Analysis: Funding Structure and Liquidity Levels
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Funding Structure and Liquidity Levels mBank Group’s Funding Structure mBank’s ratings Loan-to-Deposit Ratio as of 31.03.2018 Fitch -1.5 pp Retail 94.6% 94.3% Long
Slide 30: Balance Sheet Analysis: Detailed Development of Capital Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Detailed Development of Capital Ratios mBank Group’s Tier 1 Capital Ratio 18.47% -0.57 +0.21 -0.05 18.31% -0.50 +0.18 +0.19 -0.23 +0.33 -0.24 +0.14 -0.03 17.87% 17
Slide 31: Balance Sheet Analysis: Details of Capital Requirements
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Details of Capital Requirements Regulatory capital requirements for mBank Group as of 31.03.2018 Countercyclical Capital Buffer is calculated as the weighted avera
Slide 32: Retail Banking
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q1/18 Retail Banking Investor Presentation – Q1 2018 |32
Slide 33: Retail Banking Summary of Q1/18: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q1/18: Financial and Business Results Profit before Tax of the Segment Number of Retail Service Locations excluding (PLN M, by quarter) one-off gain 322 326 332 333 336 -1% 34 33 34 37
Slide 34: Retail Banking Summary of Q1/18: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q1/18: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +1.0% +7.2% +1.4% +3.6% 48,758 48,949 48,825 57,720 48,338 48,143 5
Slide 35: Loan Portfolio Structure of mBank Group in Poland
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view 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 31.03.2018 7.6% 7.6% 7.5% 7.5% 7.4%
Slide 36: mBank in the Czech Republic and Slovakia
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view 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 +15% +16% +6% 9.6% +4% 16.0% 4,470 4
Slide 37: mBank in the Czech Republic and Slovakia
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view mBank in the Czech Republic and Slovakia Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) +4% +29% +11% Czech -1% +2% +3% Republic 16,884 17,634 17,520 4,230 39,920 4,13
Slide 38: Corporates & Financial Markets
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q1/18 Corporates & Financial Markets Investor Presentation – Q1 2018 |38
Slide 39: Corporates and Financial Markets Summary of Q1/18
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q1/18: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 +5% 29 mBank’s branches, Pomorskie
Slide 40: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q1/18: Loans and Deposits Gross Loans to Corporate Entities Resegmentation Deposits from Corporate Customers Resegmentation starting from 2018 starting from 2018 (PLN
Slide 41: Subsidiaries
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of mBank Group’s companies in Q1/18 Subsidiaries Investor Presentation – Q1 2018 |41
Slide 42: mBank Hipoteczny (mBH)
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Subsidiaries Subsidiaries Historical view mBank Hipoteczny (mBH) Issuance of Covered Bonds Profit before Income Tax (PLN M, by year) 2,732 (PLN M) established in 1999 Private placement +113% 700 specialised mortgage bank and +
Slide 43: mBH: Issuance Activity on the Covered Bonds Market
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Subsidiaries Subsidiaries Historical view mBank Hipoteczny (mBH): Issuance Activity on the Covered Bonds Market Summary of Mortgage Covered Bonds issued in 2014-2018 (public issues) Amount Currency Issue date Maturity date Ten
Slide 44: Leasing and Factoring
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Subsidiaries Subsidiaries Historical view Leasing and Factoring Leasing contracts Market share & position – Q1 2018 Profit before Tax (PLN M) (PLN M) +15% 7.0% -39% established 1,302 -43% in 1991 1,129 Rank provides financial
Slide 45: mBank Group's Brokerage Services
Summary Appendix Profit & Loss Balance Sheet Business Lines mBank Group’s Brokerage Services Subsidiaries Historical view 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 46: Historical performance: Profit and Loss Account
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries mBank Group’s historical performance: Profit and Loss Account Historical view Total Income & Margin NII NFC Trading and other Total Costs & C/I ratio Personnel Material and other BFG (PLN M) (PLN M) 2.4% 2.2% 2.3% 2.1% 2.3% 2.5
Slide 47: Historical performance: Balance Sheet
Summary Appendix Historical Profit & Loss Balance view Profit & Sheet Loss Balance Sheet Business Lines Business Lines Subsidiaries mBank Group’s historical performance: Balance Sheet Subsidiaries Historical view Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) +5% -2% 18.73% 19.38% 14.66%
Slide 48: mBank's share price performance
mBank’s share price performance Banking stocks declined in 1Q’18 due to delaying interest rate hikes mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) – last 12 months 145 mBank’s share price WIG-30 2.411% 140 31.03.2017 373.50 MIN (11.04.2017) 369.65 W
Slide 49: mBank's Mobile Banking
mBank’s Mobile Banking Focus on client convenience through well-designed functionalities mBank launched a new mobile application in April 2017 Key functionalities of the app, inspired by users’ opinions and habits, include: Android Pay (for both Visa and MasterCard holders) Mobile authorisation
Slide 50: mBank Group's Strategy for 2016-2020
mBank Group’s Strategy for 2016-2020 Specific business actions will be based on three strategy pillars 1 2 3 Empathy Mobility Efficiency Be the point of reference in Grow while keeping the FTE Offer the best customer terms of mobile banking base at current level experience i.e. give clients wh
Slide 51: Financial performance targets – 5 key measures
mBank Group’s Strategy for 2016-2020 Financial performance targets – 5 key measures Financial measure Target point 1 Cost efficiency: Top3 in Poland, every year Cost/Income ratio to be one of three most efficient listed banks in Poland 2 Top3 in Poland, every year Owner’s capital profitability: Retu
Slide 52: 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 Analysis and Investor Relations, Chief Economist Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy