Slide 1: Results of mBank Group Q1-Q4 2020
Results of mBank Group Q1-Q4 2020 Strong operating performance of core business. Results hampered by legacy portfolio. Management Board of mBank S.A. Investor Presentation February 9, 2021
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by mBank S.A. for information purposes only and is based on the non-audited financial data of mBank Group for the fourth quarter of 2020, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mBa
Slide 3: Agenda
Agenda Key Highlights of 2020 in mBank Group Summary of Main Trends in Q4 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfol
Slide 4: Key highlights of 2020 in mBank Group
Key highlights of 2020 in mBank Group Revenues Total income at record-high level of PLN 5,867 M despite market challenges Stable NII at PLN 4,009 M (+0.2% YoY), NIM dropped by 37 bps to 2.32% Net interest Three interest rate cuts by 140 bps in total to the lowest level ever recorded in Poland of 0
Slide 5: Key highlights of 2020 in mBank Group
Key highlights of 2020 in mBank Group Slight expansion of loans to PLN 113.5 B (+1.9% YoY, excl. FX effect) Credit portfolio shaped by opposing trends, with record-high sales of mortgage loans offsetting Loans a decline of corporate exposures, while dynamics of consumer lending volume slowed down
Slide 6: Key product and offer innovations in 2020
Key product and offer innovations in 2020 At mBank, we are permanently working to provide the best customer experience We are constantly developing …taking into account ESG and ...and supplementing the product our offer and platform… pandemic-related challenges... palette with related services Ope
Slide 7: Key Financials: Profit and Loss Account
Summary of 2020 in mBank Group Key Financials: Profit and Loss Account PLN million 2018 2019 2020 change YoY Net interest income 3,496.5 4,002.8 4,009.3 +0.2% Net fee and commission income 1,257.8 1,270.6 1,508.3 +18.7% 1 Trading and other income 325.3 251.0 349.2 +39.1% Total income 5,079.5 5,524.4
Slide 8: Key Financials: Balance Sheet
Summary of 2020 in mBank Group Key Financials: Balance Sheet PLN million 2018 2019 2020 change YoY Total assets 145,781 158,721 180,136 +13.5% Gross loans to customers 97,808 108,538 113,473 +4.5% Retail client loans 52,925 60,361 67,216 +11.4% Corporate client loans 44,233 47,786 46,025 -3.7% Custo
Slide 9: Revenues kept on growth trajectory, continued improvement of underlying efficiency
Summary of 2020 in mBank Group Revenues kept on growth trajectory, continued improvement of underlying efficiency Development of mBank Group’s Total Income Development of mBank Group’s Total Costs (PLN M) (PLN M) Cost/Income ratio, 2.58% 2.69% 2.32% Net Interest Margin 44.5% 42.2% 41.1% excl. one-of
Slide 10: Provisions for legal risk cover more than 10% of the CHF portfolio
Summary of 2020 in mBank Group Provisions for legal risk cover more than 10% of the CHF portfolio and full value of claims Carrying amount of mortgage loans granted to individual customers Number of individual court cases concerning indexation clauses in in CHF mortgage loans in CHF in CHF million i
Slide 11: Agenda
Agenda Key Highlights of 2020 in mBank Group Summary of Main Trends in Q4 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfol
Slide 12: Key highlights of Q4 2020
Key highlights of Q4 2020 Strong core income of PLN 1,386.4 M, despite still unfavourable market conditions Net interest income at PLN 976.9 M (-3.3% YoY), severely affected by rate cuts and declining loan yields Net fee and commission income at PLN 409.5 M (+18.8% YoY), driven by client activit
Slide 13: Business Development of Retail Banking and Corporate Banking
Summary of Q4 2020 in mBank Group Business Development of Retail Banking and Corporate Banking Number of Retail Clients (thou.) Market shares - Households Innovations and new products +58 7.8% mBank introduced a remote identity Retail Banking 1 7.5% -15 verification with myID (mojeID). 7.0% 5,604
Slide 14: Key Financials: Profit and Loss Account (Q4 2020)
Summary of Q4 2020 in mBank Group Key Financials: Profit and Loss Account PLN million Q4/19 Q3/20 Q4/20 change QoQ change YoY Net interest income 1,010.5 960.3 976.9 +1.7% -3.3% Net fee and commission income 344.7 373.2 409.5 +9.7% +18.8% Total income 1,409.3 1,410.7 1,552.3 +10.0% +10.1% Total cost
Slide 15: Key Financials: Balance Sheet (Q4 2020)
Summary of Q4 2020 in mBank Group Key Financials: Balance Sheet PLN million Q4/19 Q3/20 Q4/20 change QoQ change YoY Total assets 158,721 182,147 180,136 -1.1% +13.5% Gross loans to customers 108,538 113,395 113,473 +0.1% +4.5% Retail client loans 60,361 65,115 67,216 +3.2% +11.4% Corporate client lo
Slide 16: Agenda
Agenda Key Highlights of 2020 in mBank Group Summary of Main Trends in Q4 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfol
Slide 17: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Subdued dynamics of loan portfolio, rising retail volumes offset declining corporate credits Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) -3.7% +4.5% -6.2% -4.1% +1.9% +0.1% -4.6% -0.7% 47,786 50,494
Slide 18: Results of mBank Group: New lending business
Results of mBank Group: New lending business Accelerating sales of housing loans, more cautious approach to consumer lending Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +36% +39% +39% -36% 2,666 2,950 222 2,361 -6% 290 2,174 2,227 2,124 977 745 1,828 1
Slide 19: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Strong inflows to retail current accounts, intentional reduction of corporate deposits Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +2.9% +18.0% +3.1% -18.7% -2.4% +18.1% -18.3% -2.2% 49,078 48,239 139,623 141,119 45,333
Slide 20: Results of mBank Group: Total income
Results of mBank Group: Total income Net interest income bottomed out, net fees kept growing, support from non-core income Development of mBank Group’s Total Income In Q4/20, total revenues were positively impacted by: (PLN M) sale of bonds (PLN 93 M); upward revaluation of minor stakes held by
Slide 21: Results of mBank Group: Total costs
Results of mBank Group: Total costs Best-in-class efficiency despite difficult operating conditions, tight cost discipline Development of mBank Group’s Costs Annual contribution to the Resolution Fund: (PLN M) PLN 97.1 million in Q1/18 PLN 197.3 million in Q1/19 -3.2% PLN 167.0 million in Q1/2
Slide 22: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Conservative approach reflected in still increased provisioning amid the COVID-19 pandemic Net Impairment Losses and Fair Value Change on Loans 1 mBank Group’s Cost of Risk by Segment (PLN M) (bps) 151 141 409.3 126 1.2 151 119 128 352.2 79 98 96 186.6 -2.3% 67 1
Slide 23: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust asset quality confirmed by no material deterioration of risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) According to 4.9% EBA definition, +12.2% 4.8% 4.8% consolidated -0.2% NPL ratio was: 4.5% 4.5% 4.4% < 5
Slide 24: 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 +6.01 p.p. 226% 222% 221% 19.46% 19.53% 19.86% 19.38% 19.26% 202% 2.79% 2.87% 2.95% 2.87% 2.83% 169% 13.86%
Slide 25: Agenda
Agenda Key Highlights of 2020 in mBank Group Summary of Main Trends in Q4 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfol
Slide 26: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Economy still in the grip of the virus but victory is near Consumers still in the virus-induced bad moods Unemployment rate stable but so far rather jobless recovery 20 12% 10 10% 0 8% -10 6% -20 4% -30 2% Source: GUS Source: GUS -40 0% Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 J
Slide 27: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) 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 Oct.13
Slide 28: 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 (compared to 2020) 2019 2020 2021F Net interest income & NIM (negative) GDP growth (YoY) 4.5% -2.8% 3.8% Interest rate cuts to the histo
Slide 29: Agenda
Agenda Key Highlights of 2020 in mBank Group Summary of Main Trends in Q4 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4 2020 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfol
Slide 30: Selected Financial Data: Consolidated Profit and Loss Account – quarterly
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: Consolidated Profit and Loss Account – quarterly Subsidiaries Historical view Quarterly results (PLN thou.) Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Net interest income 1,010,501 1,065,464 1,006,611 960,295 976,930 Net fee and
Slide 31: 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.) Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Cash and balances with Central Bank 7,897,010 10,823,272 11,141,250 6,683,941 3,968,691 Loan
Slide 32: 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 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Net Interest Margin (quarterly) 2.60% 2.63% 2.34% 2.15% 2.20% Net Interest Margin YtD 2.69% 2.63% 2.48% 2.37% 2.32% Ne
Slide 33: 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) -16.7% 1,335.0 1,276.1 -67.5% 30.4 21.6 30.8 1,210.6 -1.5% 265.6 269.5 39
Slide 34: 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) +12.8% +2.5% +10.4% +10.4% +11.8% +11.8% 61
Slide 35: 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) 182.9 182.1 180.1 182.9 182.1 180.1 173.8 11.0 8.8 5% 173.8 15.5 16.9
Slide 36: 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 31.12.20
Slide 37: 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 31.12.2020 Households Real estate 11.9% Building industry 1.2% 1.2% Food sector 1.5% 1.2%
Slide 38: 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 31.12.2020 Fitch 90.3% +2.1 pp Other Retail Long
Slide 39: 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 +0.15 16.99% +0.22 -0.08 -0.04 +0.08 0.00 -0.30 +0.48 16.74% +0.14 16.51% partial reversa
Slide 40: 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 31.12.2020 Countercyclical Capital Buffer (CCyB) is calculated as the weighte
Slide 41: 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 Q4 2020 Retail Banking Investor Presentation – Q1-Q4 2020 |41
Slide 42: Retail Banking: Summary of Q4/20 Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q4/20: 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 43: Retail Banking: Summary of Q4/20 Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q4/20: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +11.4% +26.2% +3.2% +6.1% 67,216 97,976 65,115 92,303 114 63,362 63
Slide 44: 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 31.12.2020 7.7% 7.9% 7.6% 7.6% 7.3%
Slide 45: 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 46: 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 +42% +30% +17% +17% +11% 10.9% +11%
Slide 47: 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) +30% +15% +24% Czech +15% +1% +7% Republic 23,075 6,093 6,136 51,183 54,569 Cli
Slide 48: 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 Q4 2020 Corporates & Financial Markets Investor Presentation – Q1-Q4 2020 |48
Slide 49: Corporates and Financial Markets: Summary of Q4/20 Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q4/20: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 +19% Pomorskie 12 2 +68% +68% Zacho
Slide 50: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q4/20: Loans and Deposits Gross Loans to Corporate Customers Deposits from Corporate Customers (PLN M) (PLN M) -3.7% +2.9% -18.7% -4.1% 50,494 49,078 48,239 47,786 48,
Slide 51: 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 Q4 2020 Subsidiaries Investor Presentation – Q1-Q4 2020 |51
Slide 52: 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 -67% 700 Lower profit
Slide 53: 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 2014-2020 (outstanding public issues) Amount Currency Issue date Matur
Slide 54: 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 – 9M 2020 Profit before Tax (PLN M) (PLN M) -3% 7.4% -90% Lower profit established 5,294 5,129 96.1 due to high in 1991
Slide 55: mBank Group's 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) 2.1% 2.3% 2.5% 2.6% 2.7% 2.3
Slide 56: mBank Group's 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) CAGR +6% +13% 17.25% 20.29% 2
Slide 57: mBank's share price performance
mBank’s share price performance Banking stocks depressed by worsening profitability due to the pandemic mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 31.12.2020 105 100 WIG30 1.048% 95 1 -7.7% mWIG40 4.236% 90 85 WIG 0.804% 80
Slide 58: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Karol Prażmo Direct dial: +48 607 424 464 Managing Director for Treasury and Investor Relations E-mail: karol.prazmo@mbank.pl Joanna Filipkowska Direct dial: +48 510 029 766 Head of Investor Relat