Slide 1: Results of mBank Group Q1 2020
Results of mBank Group Q1 2020 Still strong business performance. Conservative approach to provisioning. Management Board of mBank S.A. Investor Presentation April 30, 2020
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 2020, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mB
Slide 3: Agenda
Agenda Summary of Main Trends in Q1 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratio
Slide 4: Key highlights of Q1 2020
Key highlights of Q1 2020 Historically high core income of PLN 1,428 M, fuelled by strong business momentum Net interest income at PLN 1,065.5 M (+14.5% YoY) on increasing volumes and changing asset mix Net fee and commission income at PLN 362.7 M (+23.5% YoY), a rebound anchored in client trans
Slide 5: Business Development of Retail Banking and Corporate Banking
Summary of Q1 2020 in mBank Group Business Development of Retail Banking and Corporate Banking Number of Retail Clients (thou.) Market shares - Households Innovations and new products 1 7.3% -119 Loan repayment moratorium for Retail Banking +45 +45 6.9% 7.2% mBank’s individual and business 5,768 5
Slide 6: Key Financials: Profit and Loss Account
Summary of Q1 2020 in mBank Group Key Financials: Profit and Loss Account PLN million Q1/19 Q4/19 Q1/20 change QoQ change YoY Net interest income 930.3 1,010.5 1,065.5 +5.4% +14.5% Net fee and commission income 293.6 344.7 362.7 +5.2% +23.5% Total income 1,265.9 1,409.3 1,434.3 +1.8% +13.3% Total co
Slide 7: Key Financials: Balance Sheet
Summary of Q1 2020 in mBank Group Key Financials: Balance Sheet PLN million Q1/19 Q4/19 Q1/20 change QoQ change YoY Total assets 150,819 158,721 173,823 +9.5% +15.3% Gross loans to customers 100,855 108,538 114,245 +5.3% +13.3% Retail client loans 54,076 60,361 63,362 +5.0% +17.2% Corporate client l
Slide 8: Agenda
Agenda Summary of Main Trends in Q1 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratio
Slide 9: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Growth of loan portfolio continued, dynamics boosted by PLN depreciation Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) +9.3% +13.3% +7.3% +5.7% +10.6% +5.3% +3.4% +2.8% 47,047 48,647 47,786 50,494 114
Slide 10: Results of mBank Group: New lending business
Results of mBank Group: New lending business High origination of housing loans, lower non-mortgage lending and leasing due to pandemic Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +49% -8% +2% -11% -11% 2,221 2,292 2,174 2,227 2,575 2,621 2,666 221 186
Slide 11: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Surging deposit base, particularly strong inflows observed in corporate segment Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +20.4% +19.8% +21.2% +18.9% +18.9% +10.5% +10.5% +20.1% +16.6% +9.8% 45,333 128,960 42,313 37,66
Slide 12: Results of mBank Group: Total income
Results of mBank Group: Total income Rebound of net interest income after corrections related to CJEU verdict, strong net fees Development of mBank Group’s Total Income Q3/19 was positively impacted by: (PLN M) valuation adjustment of PSP (operator of BLIK) due to transaction with Mastercard Inc.
Slide 13: Results of mBank Group: Total costs
Results of mBank Group: Total costs Best-in-class underlying efficiency, total costs inflated by contributions to the BFG Development of mBank Group’s Costs Annual contribution to the Resolution Fund: (PLN M) PLN 97.1 million in Q1/18 +2.9% PLN 197.3 million in Q1/19 PLN 167.0 million in Q1/20
Slide 14: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Elevated cost of risk, proactive provisioning amid the outbreak of COVID-19 pandemic Net Impairment Losses and Fair Value Change on Loans 1 mBank Group’s Cost of Risk by Segment (PLN M) (bps) +134% 151 409.3 1.2 151 90 97 79 61 76 83 61 67 157 186.6 147 249.4 124
Slide 15: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust quality of loan portfolio evidenced by resilient risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) According to 4.8% 4.8% EBA definition, +6.4% 4.7% consolidated +6.0% NPL ratio was: 4.5% 4.5% 3.9% < 5% 4,842
Slide 16: Results of mBank Group: Key regulatory ratios
Results of mBank Group: Key regulatory ratios Strong capital position and outstanding liquidity securing safety and operational stability mBank Group’s Total Capital Ratio mBank’s NSFR and LCR 221% 20.65% 19.66% 19.79% 19.46% 19.38% 3.10% 183% 2.98% 2.97% 2.95% 2.87% 171% 173% 169% 14.42% 127% 126%
Slide 17: Agenda
Agenda Summary of Main Trends in Q1 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratio
Slide 18: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) COVID-19 pandemic caused first recession in Poland ever Household consumption tanked (no, the graph is not broken) Despite government measures, unemployment is poised to increase 20 14% 10 12% 0 10% 8% -10 6% -20 4% -30 2% -40 0% Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 J
Slide 19: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Lower demand for credit and robust deposit base Corporate loans and deposits (% YoY, FX-adjusted) Household loans and deposits (% YoY, FX-adjusted) 20% 12% 15% 10% 10% 8% 5% 6% 0% 4% -5% 2% -10% 0% Jan.13 Jan.14 Jan.15 Jan.16 Jan.17 Jan.18 Jan.19 Jan.20 Jan.13 Jan.14 Jan.1
Slide 20: Economic forecasts and impact on mBank Group
Economic forecasts and impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Short-term outlook for mBank 2019 2020F 2021F Net interest income & NIM (Negative) GDP growth (YoY) 4.1% -4.2% 3.5% Reduction of interest rates by 100 bps in total w
Slide 21: Agenda
Agenda Summary of Main Trends in Q1 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q1 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Quality Capital and Liquidity Ratio
Slide 22: Selected Financial Data: Consolidated Profit and Loss Account
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: Consolidated Profit and Loss Account Subsidiaries Historical view Quarterly results (PLN thou.) Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Net interest income 930,253 997,780 1,064,238 1,010,501 1,065,464 Net fee and commission
Slide 23: Selected Financial Data: Consolidated Statement of Financial Position
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: Consolidated Statement of Financial Position Subsidiaries Historical view Assets (PLN thou.) Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Cash and balances with Central Bank 5,553,368 6,689,767 8,454,457 7,897,010 10,823,272 Loans
Slide 24: Selected Financial Data: mBank Group's Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: mBank Group’s Ratios Subsidiaries Historical view Financial Ratios Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Net Interest Margin (quarterly) 2.60% 2.75% 2.81% 2.60% 2.63% Net Interest Margin YtD 2.60% 2.68% 2.72% 2.69% 2.63% Ne
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) +11.2% -0.4% +4.6% +1.5% 1,331.1 1,335.0 1,276.1 2% 270.6 269.5 1,263.6 4
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) +17.0% +0.5% +5.8% -7.7% 541.6 544.4 516.0
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) 173.8 173.8 158.8 158.7 15.2 9% 158.8 158.7 16.6 10% 150.8 152.4 150.8
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 and advances to customers Structure of mBank Group’s amounts due to customers as of 31.03.20
Slide 29: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data Subsidiaries Historical view Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 31.03.2020 Households Real estate management 12.3% Building industry 1.1% 1.4% Financial a
Slide 30: 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 31.03.2020 -4.3 pp Fitch 90.8% 91.0% Other 90.3%
Slide 31: 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 +0.17 16.82% -0.06 +0.09 0.00 -0.34 16.68% -0.19 +0.29 +0.86 -0.18 -0.13 16.51% -0.43 16.
Slide 32: 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 31.03.2020 Countercyclical Capital Buffer (CCyB) is calculated as the weighte
Slide 33: Detailed Results of the Business Lines: Retail Banking
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q1 2020 Retail Banking Investor Presentation – Q1 2020 |33
Slide 34: Retail Banking Summary of Q1/20: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q1/20: Financial and Business Results Profit before Tax of the Segment Presented without provisions for legal Number of Retail Service Locations (PLN M, by quarter) risk related to FX m
Slide 35: Retail Banking Summary of Q1/20: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q1/20: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +17.2% +21.5% +5.0% +6.8% 63,362 82,919 60,361 77,664 159 58,983 56
Slide 36: 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 31.03.2020 7.6% 7.3% 7.3% 6.9% 6.9%
Slide 37: mBank's Mobile Application: Functionalities and Users
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view mBank’s Mobile Application: Functionalities and Users Focus on client convenience through well-designed functionalities Active Users of mBank’s Mobile Application (thou.) Google Pay and Apple Pa
Slide 38: 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 +13% +9% +4% 8.5% +4% 13.4% 5,067 5,
Slide 39: 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) +3% +18% +4% Czech +1% +5% +2% Republic 17,347 17,799 17,950 5,568 43,839 44,67
Slide 40: Detailed Results of the Business Lines: Corporates & Financial Markets
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of the Business Lines in Q1 2020 Corporates & Financial Markets Investor Presentation – Q1 2020 |40
Slide 41: Corporates and Financial Markets Summary of Q1/20: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q1/20: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 -91% Pomorskie 12 2 Warmińsko- -95%
Slide 42: Corporates and Financial Markets Summary of Q1/20: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q1/20: Loans and Deposits Gross Loans to Corporate Customers Deposits from Corporate Customers (PLN M) (PLN M) +9.3% +20.4% +18.9% +5.7% 50,494 45,333 48,647 47,786 46
Slide 43: Detailed Results of mBank Group's major companies: Subsidiaries
Summary Appendix Profit & Loss Balance Sheet Business Lines Subsidiaries Historical view Detailed Results of mBank Group’s major companies in Q1 2020 Subsidiaries Investor Presentation – Q1 2020 |43
Slide 44: 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) 2 issues: established in 1999 Private placement PLN 100 M -38% 700 specialised
Slide 45: mBank Hipoteczny: 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 2014-2020 (public issues) Amount Currency Issue date Maturity date Ten
Slide 46: 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 – 2019 Profit before Tax (PLN M) [the latest available data] (PLN M) 0% 6.8% -31% Lower profit established 1,150 1,146 2
Slide 47: 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) 2.3% 2.1% 2.3% 2.5% 2.6% 2.7
Slide 48: 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) CAGR (PLN M) +6% 14.66% 17.25% 20.29%
Slide 49: mBank's share price performance
mBank’s share price performance mBank’s stock price dropped due to the spread of COVID-19 pandemic mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) – last 12 months 110 WIG-30 1.828% 105 100 WIG-20 1.992% 95 WIG 1.420% 90 85 WIG-Banks 6.171% 80 75 WIG-
Slide 50: mBank Group's Strategy for 2020-2023
mBank Group’s Strategy for 2020-2023 What will mBank be like in the horizon of the strategy for 2020-2023? … continue mBank’s organic growth, based on the acquisition of young clients and dynamic companies from prospective industries. … accompany our clients throughout their lifecycle and developmen
Slide 51: mBank Group focuses on 4 areas
mBank Group’s Strategy for 2020-2023 In the strategy for 2020-2023, mBank Group focuses on 4 areas Client Platform Acquisition & Ecosystem & long-term relations user experience Four pillars of the strategy for 2020-2023 correspond to the key components of mBank’s business model Employees Efficiency
Slide 52: Corporate Social Responsibility and Sustainable Development Strategy
mBank Group’s Strategy for 2020-2023 Corporate Social Responsibility and Sustainable Development Strategy of mBank Be among top three leaders of social Top aim responsibility in the banking sector Direction Sustainable Development Goals guidelines (SDGs) set by the United Nations mBank cares about t
Slide 53: Financial targets of mBank Group for 2020-2023
mBank Group’s Strategy for 2020-2023 Financial targets of mBank Group for 2020-2023 Measure Target level Current level Profitability in 2023 2019 (recurrent) Net interest margin (NIM) ~3.0% 2.7% Cost/Income ratio (C/I) ~40% 42.2% Return on equity (ROE net) ~10.5% 9.2% Stability every year 31.12.2019
Slide 54: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy Head of Investor Relations E-mail: joanna.filipkowska@mbank.pl Paweł Lipiński Direct dial: +48 22 829 15 33 E-mail: pawel.lipinski@mbank.pl