Mbank Sa · GPW:MBK

Mbank Sa — Q1 2021 Earnings Presentation

50 slides from Mbank Sa's earnings presentation, Apr 29, 2021

  1. Slide 1: Results of mBank Group Q1 2021

    Results of mBank Group Q1 2021 Good operating performance of core business Presentation for Investors and Analysts, 29.04.2021 Investor Presentation – Q1 2021

  2. Slide 2: Agenda

    Agenda Key highlights of Q1 2021 3  Business development  Summary of financial results Analysis of the performance after Q1 2021 17  Loans and deposits  Total income and its main components  Total costs and efficiency  Loan loss provisions and portfolio quality  Capital and liquidity position

  3. Slide 3: Key highlights of Q1 2021 in mBank Group

    Key highlights of Q1 2021 in mBank Group  Total income close to record-high level, fuelled by soaring Net interest income Net fee income net fee and commission income -11.1% YoY +29.1% YoY  Excellent efficiency maintained, anchored in good cost Total costs Cost/Income ratio management and right-si

  4. Slide 4: Main business achievements and innovations in Q1 2021

    Main business achievements and innovations in Q1 2021  as the main partner and sponsor, mBank has played together with WOŚP for the fourth time in a row Mobile application  convenient ways to take part in the New mobile application fundraising, including dedicated to Junior Account “heart” icon fo

  5. Slide 5: 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 inactive 8.8% current deposits 8.0% -130 accounts 7.7% 7.8% with arrears 4.8% term deposits 7.5% -144 -144 7.3% 5,647 5,660 5,516

  6. Slide 6: 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 2,274 +81 2,355 customer base +342 1,895 1,484 1,181 by the number 854 #2 of mobile app users among 565 P

  7. Slide 7: 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

  8. Slide 8: 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

  9. Slide 9: 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 over 20 million Poles are

  10. Slide 10: Focus on sustainable and responsible banking

    Focus on sustainable and responsible banking External ESG assessment Our ESG activities are centred around 3 aspects in line with sustainable development strategy 15.9 ESG Risk Rating  mBank educates  mBank promotes prosperity low risk by Sustainalytics  We support the develop-  We support organ

  11. Slide 11: Summary of key financial highlights

    Summary of key financial highlights Total income Cost/Income ratio 1 Net profit Return on Equity PLN M PLN M +7.3% -5.8pp +249% +5.6pp 1,434 1,539 42.6% 317.1 7.8% 36.8% 90.9 2.2% Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Gross loans to customers NPL ratio Customer deposits Tie

  12. Slide 12: Summary of financial results: Profit and Loss Account

    Summary of financial results: Profit and Loss Account PLN million Q1 2020 Q4 2020 Q1 2021 ∆ QoQ ∆ YoY Net interest income 1,065.5 976.9 946.9 -3.1% -11.1% Net fee and commission income 362.7 409.5 468.1 +14.3% +29.1% Total income 1,434.3 1,552.3 1,538.8 -0.9% +7.3% Total costs (excluding BFG) -539.1

  13. Slide 13: Summary of financial results: Balance Sheet

    Summary of financial results: Balance Sheet PLN million Q1 2020 Q4 2020 Q1 2021 ∆ QoQ ∆ YoY Total assets 173,445 178,872 194,217 +8.6% +12.0% Gross loans to customers 113,867 112,208 116,925 +4.2% +2.7% Individual client loans 62,984 65,952 67,785 +2.8% +7.6% Corporate client loans 50,494 46,025 48,

  14. 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 11,803 M, +22% CAGR 10.1% of total loan portfolio initiated

  15. Slide 15: New segmentation to introduce FX Mortgage Loans segment

    New segmentation to introduce FX Mortgage Loans segment Separation of FX mortgage loan portfolio Currency structure of non-core assets PLN M, as of 31.03.2021  In order to present the genuine and undistorted performance of mBank, the new segmentation was introduced. The non-core part, comprising -1

  16. Slide 16: New segmentation to show genuine performance of core business

    New segmentation to show genuine performance of core business 2020 Q1 2021 PLN million Core Business Non-core1 mBank Group Core Business Non-core1 mBank Group Net interest income 3,862 148 4,009 914.2 32.7 946.9 Net fee, trading and other income 1,853 4 1,857 603.1 -11.2 591.9 Total income 5,715 152

  17. Slide 17: Agenda

    Agenda Key highlights of Q1 2021 3  Business development  Summary of financial results Analysis of the performance after Q1 2021 17  Loans and deposits  Total income and its main components  Total costs and efficiency  Loan loss provisions and portfolio quality  Capital and liquidity position

  18. Slide 18: Results of mBank Group: Loans to customers

    Results of mBank Group: Loans to customers Loan portfolio returned to growth trajectory, positive quarterly dynamics in both segments Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M -3.2% +2.7% -3.8% +6.2% +2.2% +4.2% 50,494 +5.8% +4.0% 48,734 47,9

  19. Slide 19: Results of mBank Group: New lending business

    Results of mBank Group: New lending business Good sales of housing loans, accompanied by gradually rebounding consumer lending Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter +28% -9% -3% -3% +26% +26% 2,950 2,855 2,361 2,157 2,227 2,124 977 290 1,828 997 1,71

  20. Slide 20: Results of mBank Group: Customer deposits

    Results of mBank Group: Customer deposits Strong inflows to current accounts continued after intentional year-end reduction of deposits Development of customer deposits Deposits from corporate customers PLN M PLN M +5.6% +17.9% +7.7% +22.0% +10.5% +18.8% +21.9% +10.4% 45,333 49,078 48,239 47,862 152

  21. Slide 21: Results of mBank Group: Total income

    Results of mBank Group: Total income Surging net fees and good trading result compensated for pressure on net interest income Development of mBank Group’s total income Development of interest income PLN M PLN M Sale of bonds: +7.3% -23.6% Q4/20 Q1/21 -0.9% -4.1% -4.1% 92.7 89.4 1,335.0 1,210.6 1,552

  22. Slide 22: Results of mBank Group: Total costs and efficiency

    Results of mBank Group: Total costs and efficiency Best-in-class efficiency supported by tight cost discipline, while investments continued Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M 51.3% -9.7% Excluding +X.X% the BFG 43.1% 43.2% -5.2% 41.7% 736.

  23. Slide 23: Results of mBank Group: Loan loss provisions and cost of risk

    Results of mBank Group: Loan loss provisions and cost of risk Lower provisions for expected credit losses as most clients seem to be resilient to the pandemic Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps Impact of COVID-19: 152 141 409.3 Q1/20

  24. Slide 24: Results of mBank Group: Loan portfolio quality

    Results of mBank Group: Loan portfolio quality Robust asset quality confirmed by no visible deterioration of risk indicators mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to +5.0% 4.9% 4.8% 4.8% EBA definition, -0.4% 4.6% consolidated 4.5% NPL ratio was: 5,150 5,502

  25. Slide 25: 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: 245% +5.33 19.86% 226% 230% 19.38% 19.26% 19.53% 19.19% 221% 222% 2.79% 2.87% 2

  26. Slide 26: Agenda

    Agenda Key highlights of Q1 2021 3  Business development  Summary of financial results Analysis of the performance after Q1 2021 17  Loans and deposits  Total income and its main components  Total costs and efficiency  Loan loss provisions and portfolio quality  Capital and liquidity position

  27. Slide 27: Macroeconomic situation and outlook

    Macroeconomic situation and outlook Services still in the grip of the virus but other sectors are doing much better Consumers still in the virus-induced bad moods Unemployment rate stabilized but expected to decline 20 12% 10 10% 0 8% -10 6% -20 4% -30 2% Source: GUS Source: GUS -40 0% Jan.16 Jul.16

  28. Slide 28: Macroeconomic situation and outlook

    Macroeconomic situation and outlook Demand for credit to pick up somewhat but huge liquidity a damping factor 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 S

  29. Slide 29: Macroeconomic forecasts and outlook for mBank Group

    Macroeconomic forecasts and outlook for mBank Group Operating environment for banks remains difficult due to low rates and high tax burdens Key economic indicators for Poland Short-term prospects for mBank (compared to 2020) 2019 2020 2021F 2022F Net interest income & NIM negative GDP growth (YoY) 4

  30. Slide 30: Agenda

    Agenda Key highlights of Q1 2021 3  Business development  Summary of financial results Analysis of the performance after Q1 2021 17  Loans and deposits  Total income and its main components  Total costs and efficiency  Loan loss provisions and portfolio quality  Capital and liquidity position

  31. Slide 31: Appendix: Selected Financial Data

    Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net interest income 1,065,464 1,006,611 960,295 976,930 946,895 Net fee and commission income 362,676 362,937 373,201 409,471 468,060 Dividend inco

  32. Slide 32: Appendix: Selected Financial Data

    Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Cash and balances with Central Bank 10,823,272 11,141,250 6,683,941 3,968,691 16,355,429 Loans and advances to banks 9,513,378 6,921,359 8,991,355 7,3

  33. Slide 33: Appendix: Selected Financial Data

    Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net Interest Margin, quarterly 2.63% 2.34% 2.15% 2.20% 2.10% Net Interest Margin, YtD 2.63% 2.48% 2.37% 2.32% 2.10% Net Interest Margin, excl. CHF portfolio, Y

  34. Slide 34: 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 1,335.0 -23.6% 269.5 37.2 5.6 10.2 30.4 1,210.6 19.3 172.1 50.6 -4.1% -4.1% -73.1% 9.5 43.9 1,079.5 1,063.2 1,019.4 72.5 204.0 168.0 74.3 78.0 4.

  35. Slide 35: 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 +18.6% -2.1% +5.7% -11.8% 645.9 611.1 201.7 55.9 9% 553.5 62.4 181.8 180.3 177.9 544.4 535.5 172.6 89.0 14% 56.0 50.5 65

  36. Slide 36: 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 194.2 194.2 182.4 181.4 178.9 182.4 181.4 178.9 16.7 9% 21.6 11% 173.4 11.0 173.4 15.5 8.8 16.9 17.0 6.2 3% 16.7 2.6 1% 15.2 16.6 2.6 4.9 5

  37. Slide 37: 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 31.03.2021 as of 31.03.2021 Real estate 6.2% Building industry 4.2% Financial activities 2.6% 0.4% 0.2% Transport and l

  38. Slide 38: 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 31.03.2021 as of 31.03.2021 Nominal Issue Maturity Currency Tenor Coupon Other value date date Subordinated liabilities 3.5% Retail Issues under Euro Medium T

  39. Slide 39: Appendix: Selected Financial Data – Capital Requirements

    Appendix: Selected Financial Data – Capital Requirements Regulatory capital requirements for mBank Group as of 31.03.2021 13.86% Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of the 0.50% 0.04% countercyclical buffer rates that apply in the countries where the relevant

  40. Slide 40: Appendix: Retail Banking

    Appendix: Retail Banking Profit before income tax of the segment Number of Retail Service Locations PLN M, by quarter -26 mBank CZSK +66% 395 mBank CZSK Poland -16% 383 369 324.3 40 41 mFinanse1 307.1 44 41 277.3 16.8 273.5 42 42 19.1 mKiosks 13.4 29.3 166 161 149 Advisory centres 164.6 29.4 288.0 3

  41. Slide 41: 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 +7.6% +2.8% +24.9% +5.7% 67,785 103,583 64,404 65,952 62,984 62,730 97,976 185 92,303 114 9,358 9% 89,777 19,001 28% 116 10,158 18,729 82,919 149 30% 19,071 1

  42. Slide 42: 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 +53% 12.1% +36% 14.6% +12% +10% 8,219 15,153 7,311 13,819 11,884 12,470 6,242 2,445 11,107 4,511 5,366 5,656 2,076 4,254 1,770 3,789

  43. Slide 43: 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% +11% +34% Republic +10% +1% +9% physical network: light 7 branches 23,075 25,485 5,568 6,136 6,199 54,569 59,700 financial 17,950 44,677 4 centres 19 mKiosks 03/20 12/2

  44. Slide 44: 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 1 2 -5.9% 2 Pomorskie Warmińsko- +1,502% Zachodnio- Pomorskie 2 1 Mazurskie 1 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomorskie 4 2 incl. 13 advisory centre

  45. Slide 45: 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 -3.2% +5.6% +6.2% +22.0% 50,494 49,078 48,239 48,734 48,901 47,862 47,970 46,025 45,333 4,297 3,709 7,214 4,739 7,033 7,305 8,091 4,400 4,364 7,659

  46. Slide 46: 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

  47. Slide 47: 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.

  48. Slide 48: Appendix: mBank’s share price performance

    Appendix: mBank’s share price performance Banking stocks gained since Autumn, but CHF-related risks still weigh on mBank mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 31.03.2021 140 135 WIG30 1.287% 130 +30.7% +28.2% mWIG40 4.3

  49. Slide 49: 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 2021, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mB

  50. Slide 50: 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 Magdalena Hanuszewska +48 510 479 500 magdalena.hanuszewska@mbank.pl Paweł Lipiński +48 5

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