Slide 1: Results of mBank Group Q1-Q4 2023
Results of mBank Group Q1-Q4 2023 Record revenues and net interest margin. Strong protection against legal risk. Presentation for Investors and Analysts, 08.02.2024
Slide 2: Agenda
Agenda Key highlights of 2023 in mBank Group 2 Overview of main trends in Q4 2023 18 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2023 22 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 3: Key highlights of 2023 in mBank Group
Key highlights of 2023 in mBank Group ▪ Record total income of PLN 10,802 million, +16.8% YoY, generated by growth in strategic products and supported by high market rates ▪ Rising net interest income to PLN 8,873 million, +21.7% YoY adjusted Highest ever level of revenues for “credit holidays”, dri
Slide 4: Key highlights of 2023 in mBank Group
Key highlights of 2023 in mBank Group ▪ Gross loan portfolio of PLN 117.2 billion, -3.1% YoY excl. FX effect, driven mainly by declining non-core exposure and focus on margins Dynamics of loans weakened ▪ New production of mortgage loans and sales of consumer credit by negative adjustments under sig
Slide 5: Summary of key financial metrics for mBank Group
Summary of key financial metrics for mBank Group Total income Cost/Income ratio 1 Net profit of Core Business 2 ROE of Core Business 2 PLN M excluding impact PLN M excluding impact excluding impact of "credit holidays" of "credit holidays" of "credit holidays" -5.6pp +17% +39% +8.1pp 34.3% 10,733 28
Slide 6: mBank's achievements in implementation of its strategy
mBank’s achievements in implementation of its strategy Retail Banking Corporate Banking successful acquisition of new (primarily cooperation with companies from young) clients supported by rising share of prospective industries and SME segment, mobile onboarding process support of energy transition
Slide 7: Business development under mBank Group's strategy for 2021-2025
Business development under mBank Group’s strategy for 2021-2025 Leading retail banking franchise integrated with client life cycle Functionalities supporting clients New features to personalize Tools supporting optimal usage in responsible management the mobile application of mBank's services and of
Slide 8: Business development under mBank Group's strategy for 2021-2025
Business development under mBank Group’s strategy for 2021-2025 Best digital corporate banking for high-potential companies Development of Electronic Credit Enhanced functionalities Business expansion of Paynow Application as part of broad in mobile application supported by partnerships credit proce
Slide 9: ESG well embedded in mBank Group's strategy (1/2)
ESG well embedded in mBank Group's strategy (1/2) Environmental pillar SBTi commitment mBank joined the Science Reducing greenhouse gases (GHG) emissions of our loan portfolio, steered by SBTi as the Based Targets initiative (SBTi) in 2022. In line with most prominent driver to become net-zero our o
Slide 10: ESG well embedded in mBank Group's strategy (2/2)
ESG well embedded in mBank Group's strategy (2/2) Social pillar Governance pillar Providing an attractive work environment that ensures Enhancing our corporate governance by ESG aspects diversity, equity and inclusion ▶ ensure gender balance in the succession program ▶ have all TOP 100 managers (at
Slide 11: 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 current deposits 9.3% term deposits 6.4% inactive accounts -18 +74 with arrears 9.1% 8.7% 8.8% 8.7% 8.7% 5,660 5,514 5,642 5,716
Slide 12: mBank remains a front-runner in mobile banking adoption
mBank remains a front-runner in mobile banking adoption Number of active users of mBank’s mobile application 1 by the share thousand #1 of mobile users average +308 +308 growth in total active mBank CZSK per year 3,646 3,338 customer base mBank PL +395 2,960 478 419 2,577 372 2,128 303 1,670 234 by
Slide 13: mBank Group's financial results in 2023: Profit and Loss Account
mBank Group’s financial results in 2023: Profit and Loss Account PLN million 2021 2022 2023 ∆ YoY Net interest income 4,126.3 7,246.4 8,816.0 +21.7% Net fee and commission income 1,867.8 2,120.1 1,915.9 -9.6% Net trading and other income 117.1 -175.2 0.9 -/+ Total income 6,111.1 9,191.3 10,732.9 +16
Slide 14: mBank Group's financial results in 2023: Balance Sheet
mBank Group’s financial results in 2023: Balance Sheet PLN million 2021 2022 2023 ∆ YoY Total assets 198,373 209,892 226,981 +8.1% Gross loans to customers 120,856 123,437 117,229 -5.0% Individual client loans 72,871 71,122 66,260 -6.8% Corporate client loans 47,832 52,207 50,836 -2.6% Customer depo
Slide 15: Revenues on growth trajectory, further improvement of efficiency
Revenues on growth trajectory, further improvement of efficiency Development of mBank Group’s total income and NIM Development of mBank Group’s total costs and C/I ratio PLN M PLN M underlying normalized 2.16% 3.71% 4.18% Net Interest Margin 40.2% 34.3% 28.6% Cost/Income ratio 1 +16.8% +10.9% +17.0%
Slide 16: Protection against legal risks of CHF portfolio further strengthened
Protection against legal risks of CHF portfolio further strengthened Value of CHF mortgage loans to natural persons (PLN M, net) Decomposition of CHF loan contracts at mBank, as of 31.12.2023 23.6% 22.1% portfolio deductions due to legal risks -66.5% 17.1% 14.7% % of total loan portfolio 85,520 12.2
Slide 17: Number of settlements exceeds the inflow of new court cases
Number of settlements exceeds the inflow of new court cases Number of settlements concluded by mBank (cumulative) Number of CHF loan contracts in court (pending cases) repaid conracts All active loan holders received 13,321 21,524 21,411 settlement proposals (~100%). +3,378 active contracts 18,382 3
Slide 18: Excellent performance of the core business demonstrated in 2023
Excellent performance of the core business demonstrated in 2023 Summary of financial results for mBank’s core activity and run-off portfolio in 2023 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the genuine and undistorted performance
Slide 19: Agenda
Agenda Key highlights of 2023 in mBank Group 2 Overview of main trends in Q4 2023 18 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2023 22 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 20: Key highlights of Q4 2023 in mBank Group
Key highlights of Q4 2023 in mBank Group ✓ Record revenues thanks to the highest net interest income Net interest income Net fee income in history driven by an improvement of margins +3.1% QoQ -7.9% QoQ ✓ Best-in-class efficiency, despite higher staff costs and rise of Total costs Cost/Income ratio1
Slide 21: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million Q4 2022 Q3 2023 Q4 2023 ∆ QoQ ∆ YoY Net interest income 1,978.2 2,284.7 2,355.0 +3.1% +19.0% Net fee and commission income 467.8 482.7 444.5 -7.9% -5.0% Total income 2,437.8 2,707.7 2,897.5 +7.0% +18.9% Total costs (excl. obligatory c
Slide 22: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q4 2022 Q3 2023 Q4 2023 ∆ QoQ ∆ YoY Total assets 209,892 225,389 226,981 +0.7% +8.1% Gross loans to customers 123,437 121,419 117,229 -3.5% -5.0% Individual client loans 71,122 67,829 66,260 -2.3% -6.8% Corporate client loans 52,207 53,453 50,8
Slide 23: Agenda
Agenda Key highlights of 2023 in mBank Group 2 Overview of main trends in Q4 2023 18 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2023 22 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 24: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Lower loan portfolio due to adjustments related to CHF provisions and year-end repayments Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M -2.6% -5.0% 0.0% -4.9% -3.1% -3.5% -2.7% 52,207 54,476 53,429 53,45
Slide 25: Results of mBank Group: New lending business
Results of mBank Group: New lending business High sales of both business segments, additionally supported by “2% Safe Mortgage” program Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter +89% +21% +195% +89% +3% +3% 1,482 2,262 2,114 2,029 2,204 1,162 41 33 1,875
Slide 26: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Stable deposit base with favourable changes in term structure in both segments Development of customer deposits Deposits from corporate customers PLN M PLN M +12.9% +6.5% +13.3% +4.1% +0.2% +4.6% 54,201 56,439 185,109 185,467 49,981 51,295 50,215 180,917 1,7
Slide 27: Results of mBank Group: Total income
Results of mBank Group: Total income Record revenues thanks to higher net interest income on active management of deposits Development of mBank Group’s total income Development of interest income PLN M Total negative impact PLN M of “credit holidays” on +11% -4% -4% +18.9% revenues in 2022 +7.0% rea
Slide 28: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Excellent efficiency continued despite increase of operating expenses Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M Costs in H2/22 were impacted excluding "credit holidays“ by additional contribution
Slide 29: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Higher provisioning level due to one-off factors reflecting conservative risk approach Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 165 +148% +85% 87 476.5 69 59 64 Negative one-off
Slide 30: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Stable NPL ratio accompanied by further improvement of the coverage of impaired portfolio mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M NPL ratio +1.4% according to EBA 4.2% 4.2% -3.5% 4.0% 4.1% definition has 4.0% remained consid
Slide 31: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Safe capital position with increased surplus over regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR +5.91 Group’s LCR: 225% 16.81% 16.89% 17.04% 220% 16.36% 16.13% 217% 2.33% 206% 2.34% 2.29% 199% 2.55% 2.41% 1
Slide 32: Agenda
Agenda Key highlights of 2023 in mBank Group 2 Overview of main trends in Q4 2023 18 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2023 22 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 33: Macroeconomic situation and outlook
Macroeconomic situation and outlook NBP unlikely to cut rates in 2024 as inflation and consumption are set to rebound. Consumption on the rise again Unemployment rate is (still) very low 20 12% 10 10% 0 8% -10 6% -20 4% -30 -40 2% Source: GUS Source: GUS -50 0% Jan.16 Oct.16 Jul.17 Apr.18 Jan.19 Oct
Slide 34: Macroeconomic situation and outlook
Macroeconomic situation and outlook Credit growth is rebounding. Bond yields declined and PLN strengthened. Corporate loans and deposits (YoY, FX-adjusted) Household loans and deposits (YoY, FX-adjusted) 30% 14% Source: NBP 12% Source: NBP 25% 10% 20% 8% 15% 6% 10% 4% 5% 2% 0% 0% -2% -5% -4% -10% -6
Slide 35: Poland: economic fundamentals
Poland: economic fundamentals Growth story. High competitiveness compared to peers. Real GDP (Q1 2010 = 100) Hourly labour costs (in EUR) 170 45 Source: Eurostat Source: Eurostat 160 40 150 35 30 140 25 130 20 120 15 110 10 100 5 90 0 Jan.10 Jul.11 Jan.13 Jul.14 Jan.16 Jul.17 Jan.19 Jul.20 Jan.22 Ju
Slide 36: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks has continued being challenging and volatile Key economic indicators for Poland Short-term prospects for mBank (compared to Q4/23) 2022 2023 2024F 2025F Net interest income & NIM slightly negative GDP growth (YoY) 5.
Slide 37: Agenda
Agenda Key highlights of 2023 in mBank Group 2 Overview of main trends in Q4 2023 18 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q4 2023 22 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and
Slide 38: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Net interest income 1,978,213 2,033,110 2,200,635 2,284,687 2,355,039 Net fee and commission income 467,750 501,063 487,641 482,704 444,500 Dividen
Slide 39: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Cash and balances with Central Bank 16,250,951 17,563,426 16,381,485 19,451,659 36,702,427 Loans and advances to banks 9,569,629 12,353,436 11,508,432
Slide 40: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Net Interest Margin, quarterly 4.04% 3.84% 4.33% 4.26% 4.31% Net Interest Margin, YtD 3.71% 3.84% 4.08% 4.14% 4.18% Net Interest Margin, excl. CHF portfolio, Y
Slide 41: 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 Presented development and dynamics are PLN M adjusted for the impact of “credit holidays” +9.3% -0.5% -4.1% -13.7% 3,836.9 1,605.5 3,667.8 3,678.1 1,55
Slide 42: 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 +3.6% +1.2% +18.2% +16.9% 760.6 769.5 742.7 737.8 748.0 325.0 56.3 67.4 68.4 85.7 11% 64.9 275.0 277.9 133.6 120.6 124.5
Slide 43: 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 225.4 227.0 225.4 227.0 217.5 217.5 13.7 6% 209.9 212.9 209.9 212.9 13.7 26.6 13.3 8.4 10.6 5% 24.7 44.0 19% 12.7 13.5 2.7 23.3 23.6 8.6 2.
Slide 44: 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 31.12.2023 as of 31.12.2023 Real estate 5.6% Building industry 4.2% Food sector 2.9% 0.1% 0.3% Transport and logistics
Slide 45: 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 31.12.2023 as of 31.12.2023 Nominal Issue Maturity Currency Tenor Coupon value date date Other Subordinated liabilities 5.0% Issues under Euro Medium Term Not
Slide 46: Selected Financial Data – Capital requirements
Appendix: Selected Financial Data – Capital requirements Regulatory capital requirements for mBank Group as of 31.12.2023 Countercyclical Capital Buffer (CCyB), calculated as the weighted average of the CCyB +5.91 pp rates that apply in the countries where the relevant credit exposures are located.
Slide 47: Selected Financial Data – MREL requirements
Appendix: Selected Financial Data – MREL requirements Fulfilment of MREL requirements by mBank Group MREL (TREA) MREL (TREA) Subordinated ▪ Based on MREL decision communicated to mBank on +3.87 pp 12.04.2023, the fully-fledged MREL requirements set for +3.44 pp mBank at the consolidated level, exclu
Slide 48: A leading mobile banking offer for individual clients
Appendix: A leading mobile banking offer for individual clients easiest way to manage Well-designed functionalities for client convenience your finances pace of spending ✓ fully remote account opening with e-ID or a selfie and agreement approved via a text message ✓ logging in and confirmation of re
Slide 49: Retail Banking – profit and network
Appendix: Retail Banking – profit and network Profit before income tax of the segment Number of Retail Service Locations PLN M, by quarter excluding impact of "credit holidays“ and Borrowers’ Support Fund -11 mBank CZSK -2% mBank CZSK Poland 365 359 354 -17% -17% 46 47 47 mFinanse1 1,002.5 40 843.2
Slide 50: Retail Banking – business volumes
Appendix: Retail Banking – business volumes Development of gross loans to retail banking clients Development of deposits from retail banking clients PLN M PLN M Investment funds 9,638 Customer funds invested via mBank’s solutions (31.12.2023) Brokerage assets 22,659 -6.8% -2.3% +4.5% 71,122 70,224 -
Slide 51: 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 -11% -6% 13.8% 12.4% -7% -6% 10,268 10,318 9,696 9,816 16,977 17,282 16,700 17,004 9,129 15,954 3,154 3,124 3,104 4,929 4,856 4,636 4
Slide 52: 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 -10% +7% Czech +6% Republic -3% +1% +2% physical network: light 7 branches 26,975 24,986 24,172 10,130 10,292 62,053 64,807 65,665 9,663 financial 7 centres 18 mKiosks 12/22 09/23
Slide 53: Best digital banking services for corporate clients
Appendix: 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 high
Slide 54: Corporate & Investment Banking – profit and network
Appendix: Corporate & Investment Banking – profit and network Profit before income tax of the segment Number of corporate service locations PLN M, by quarter as of 31.12.2023 2 2 -7.4% Pomorskie 1 2 2 Warmińsko- Zachodnio- Mazurskie Pomorskie 1 1 -2.8% 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Po
Slide 55: Corporate & Investment Banking – business volumes
Appendix: Corporate & Investment Banking – business volumes Development of gross loans to corporates and public sector Development of deposits from corporates and public sector PLN M PLN M -2.6% +11.3% +4.4% -4.9% 54,576 57,055 53,573 53,590 54,643 52,315 1,656 50,969 51,874 8,219 51,241 50,738 1,61
Slide 56: Complete solutions for e-commerce segment
Appendix: 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 mBank's p
Slide 57: 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 58: Strategic financial targets of mBank Group
Appendix: Strategic financial targets of mBank Group Updated strategic financial targets of mBank Group for 2023-2025 compared to results for 2023 measure target level execution in 2023 ✓ supported by high Efficiency [in 2025] Cost/Income ratio (C/I) below 40% 28.5% interest rates offsetting inflati
Slide 59: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2019 2020 2021 2022 2023 ∆ YoY Net interest income 4,002.8 4,009.3 4,126.3 5,924.0 8,873.5 +49.8% Net fee and commission income 1,270.6 1,508.3 1,867.8 2,120.1 1,915.9 -9.6% Net trading and other income 251.0 349.2 117.1 -187.2 12.9 -
Slide 60: mBank's share price performance
Appendix: mBank’s share price performance Banking stocks recovered significantly in 2023 due to improved sentiment and lower risks mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 31.12.2023 200 mBank’s share price WIG20 2.395% 19
Slide 61: Disclaimer
Disclaimer This presentation has been prepared by mBank S.A. for information purposes only and is based on selected non-audited consolidated financial information of mBank S.A. Group for the fourth quarter of 2023, prepared under the International Financial Reporting Standards. For more detailed inf
Slide 62: 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