Slide 1: Results of mBank Group Q3 2017
Results of mBank Group Q3 2017 Good momentum of core income maintained on strong business development Management Board of mBank S.A. Investor Presentation October 26, 2017
Slide 2: Key highlights of Q3 2017
Key highlights of Q3 2017 Improving net profit of PLN 291.4 M, up by 8.1% compared to Q2/17 Historically high level of core income of PLN 1,053.3 M Net interest income at PLN 796.8 M (+10.9% YoY) with margin improvement to 2.50% Net fee and commission income at PLN 256.5 M (+9.5% YoY); constantl
Slide 3: Agenda
Agenda Summary of Q3/17 in mBank Group Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3/17 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: Business Development of Retail Banking and Corporate Banking
Summary of Q3/17 in mBank Group Business Development of Retail Banking and Corporate Banking Retail Banking Number of Clients (thou.) Market shares +302 Android Pay available also for 6.5% 6.5% 6.5% 6.5% 6.4% +25 +25 Visa card holders 5,234 5,259 ePUAP trusted profile added in 4,957 319 343 252
Slide 5: Key Financials: Profit and Loss Account
Summary of Q3/17 in mBank Group Key Financials: Profit and Loss Account PLN million Q3/16 Q2/17 Q3/17 change QoQ change YoY Net interest income 718.7 764.8 796.8 +4.2% +10.9% Net fee and commission income 234.4 252.6 256.5 +1.5% +9.5% Total income 1,038.7 1,080.9 1,149.4 +6.3% +10.7% Total costs (ex
Slide 6: Key Financials: Balance Sheet
Summary of Q3/17 in mBank Group Key Financials: Balance Sheet PLN million Q3/16 Q2/17 Q3/17 change QoQ change YoY Total assets 129,781 129,417 132,478 +2.4% +2.1% Gross loans to customers 84,199 86,221 88,484 +2.6% +5.1% Retail client loans 48,119 48,758 48,949 +0.4% +1.7% Corporate client loans 1 3
Slide 7: Agenda
Agenda Summary of Q3/17 in mBank Group Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3/17 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 8: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Lending acceleration in corporate segment, focus on higher-margin products in retail Development of Gross Loans and Advances to Customers (PLN M) +10.9% +5.1% +5.9% +6.2% +2.6% +2.7% 38,288 88,484 34,528 34,174 34,841 36,143 84,581 84,538 86,221 84,199 1,24
Slide 9: Results of mBank Group: New lending business
Results of mBank Group: New lending business Seasonally weaker sales of housing and non-mortgage loans, rebound in corporate lending Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +18% +6% -18% -18% -13% -13% 1,002 1,904 1,801 798 172 818 1,560 1,514 156
Slide 10: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Deceleration of retail inflows more than compensated by an increase of corporate deposits Development of Amounts due to Customers (PLN M) +2.6% +6.4% +3.5% +6.1% +6.9% +2.9% 37,383 +3.9% +2.0% 34,725 91,418 90,678 33,829 1,600 33,551 32,737 540 88,744 88,156
Slide 11: Results of mBank Group: Total income
Results of mBank Group: Total income Core revenues at record high level, improvement of FX result Development of mBank Group’s Total Income (PLN M) +10.7% +6.3% 1,149.4 QoQ YoY 1,044.7 1,081.8 1,080.9 18.6 1,038.7 83.1 10.8 3.1 1.6 4.5 17.7 2.4 8.5 76.9 61.1 0.1 74.4 0.3 26.6 0.2 3.0 0.4 256.5 +36.1
Slide 12: Results of mBank Group: Net interest income
Results of mBank Group: Net interest income Margin has benefited from rising loan yield, no space for further reduction of deposit cost Development of mBank Group’s Interest Income Development of mBank Group’s Net Interest Income (PLN M) (PLN M) +4.7% +10.9% +3.3% +4.2% 977.0 1,003.3 982.5 990.3 1,0
Slide 13: Results of mBank Group: Total costs
Results of mBank Group: Total costs Solid efficiency improved further, costs kept under control Development of mBank Group’s Costs Q4/16 costs include additional payment to the BFG related to the (PLN M) bankruptcy of Cooperative Bank in Nadarzyn of PLN 10.9 million. Q1/17 costs include annual c
Slide 14: Results of mBank Group: Loan loss provisions
Results of mBank Group: Loan loss provisions Increase of risk costs driven by proactive provisioning of some corporate exposures Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 78 +18% 69 +37% 58 46 41 164.4 59 55 49 20 41 139.5 80 120.4 74.5 76 76 67
Slide 15: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Resilient risk indicators confirming good loan portfolio quality mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) 5.9% mBank Group applies -7.5% 5.4% a conservative client- +5.5% 5.2% 5.2% oriented approach in 5.0% 4,949 its method
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 199% 21.59% 21.24% 20.29% 20.47% 2.83% 2.77% 18.61% 2.64% 168% 2.97% 156% 17.02% 151% 152% 2.73% 114% 114% 116% 112% 110% Basel III requiremen
Slide 17: Agenda
Agenda Summary of Q3/17 in mBank Group Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3/17 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) GDP growth to exceed 4% in 2017 and 2018 Investment is perking up, finally. More to come. Record-high consumer sentiment is supporting consumption 24% 1 16% 0 8% -1 0% -2 -8% -16% -3 YoY -24% -4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2004 2005 2006 2007 2008 200
Slide 19: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Slight rebound in credit growth. Polish assets are in demand. Corporate loans and deposits (% YoY, FX-adjusted) Household loans and deposits (% YoY, FX-adjusted) 30% 15% 12% 20% 9% 10% 6% 0% 3% -10% 0% Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 J
Slide 20: 2017 in forecasts and the impact on mBank Group
2017 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Outlook for mBank 2015 2016 2017F Net interest income & NIM (Slightly positive) GDP growth (YoY) 3.8% 2.7% 4.3% Continued gradual increase of margin driven by cha
Slide 21: Agenda
Agenda Summary of Q3/17 in mBank Group Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3/17 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: Appendix
Appendix Page Page Additional Information: Selected Financial Data No. Detailed Results of the Business Lines No. Consolidated Profit and Loss Account 23 Retail Banking 37-42 Consolidated Statement of Financial Position 24 Summary of Q3/17: Financial Results and Volumes 38-39 mBank Group’s Ratios 25
Slide 23: Consolidated Profit and Loss Account
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Net interest income 718,712 753,270 749,007 764,779 796,762 Net fe
Slide 24: Consolidated Statement of Financial Position
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Cash and balances with Central Bank 5,859,485 9,164,281 7,139,929 5,8
Slide 25: mBank Group's Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries mBank Group’s Ratios Financial Ratios Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Net Interest Margin (quarterly) 2.31% 2.35% 2.42% 2.43% 2.50% Net Interest Margin YtD 2.28% 2.3
Slide 26: mBank Group's historical performance
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance Business Lines Subsidiaries 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% 2.3% 2.4% 46.5% 45.7% 44.9%
Slide 27: mBank Group's historical performance
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance Business Lines Subsidiaries Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) CAGR +2% 18.73% 19.38% 14.66% 17.25% 20.29% 18.61% 20.47% +7% CAGR +8% +8% +8% 123.5 133.7 129.8 132.5 118.0 13,967
Slide 28: Profit and Loss Account: Net Interest Income
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Profit and Loss Account: Net Interest Income Interest Income Structure Interest Expense Structure (PLN M) (PLN M) +4.7% +3.3% +3.3% -12.5% 1,003.3 1,022.7 258.3 98
Slide 29: Profit and Loss Account: Net Fee and Commission Income
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Profit and Loss Account: Net Fee and Commission Income Fee and Commission Income Structure Fee and Commission Expense Structure (PLN M) (PLN M) +4.6% -2.1% +1.8% +
Slide 30: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities and Equity (PLN B) (PLN B) 133.7 132.5 133.7 132.5 129.8 130.5 129.4 129.
Slide 31: Balance Sheet Analysis: Currency Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Currency Structure Currency Structure of Loans to Customers (net) Currency Structure of Amounts due to Banks and Customers1 (PLN B) (PLN B)
Slide 32: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Structure of Loans and Deposits Structure of mBank Group’s Gross Loans Structure of mBank Group’s Deposits as of 30.09.2017 as of 30.09.201
Slide 33: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 30.09.2017 Households Real estate management 12.8% Building indust
Slide 34: Balance Sheet Analysis: Funding Structure and Liquidity Levels
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Funding Structure and Liquidity Levels mBank Group’s funding structure mBank’s ratings Loan-to-Deposit Ratio as of 30.09.2017 -0.3 pp Fitch
Slide 35: Balance Sheet Analysis: Detailed Development of Capital Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Detailed Development of Capital Ratios mBank Group’s Common Equity Tier 1 (CET 1) Ratio 18.76% -0.31 +0.17 -0.17 +0.02 18.47% -0.57 +0.19 -
Slide 36: Balance Sheet Analysis: Details of Capital Requirements
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Details of Capital Requirements Regulatory capital requirements for mBank Group as of 30.09.2017 17.02% Countercyclical Capital Buffer is c
Slide 37: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q3/17 Retail Banking Investor Presentation – Q3 2017 |37
Slide 38: Retail Banking Summary of Q3/17: Financial and Business Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q3/17: Financial and Business Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 316 322 326 332 +27% 304 +25% +25% 37 37 35 34 36 43 43 43
Slide 39: Retail Banking Summary of Q3/17: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q3/17: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +1.7% +6.5% +0.4% +0.4% 48,950 48,758 48,949 53,495 53,829 53,835 5
Slide 40: Loan Portfolio Structure of mBank Group in Poland
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries 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 30.09.2017 7.6% 7.7% 7.6% 7.6% 7.5%
Slide 41: mBank in the Czech Republic and Slovakia
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries 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 +6% +21% +4% 9.1% +3% 16.3% 4,291 4,
Slide 42: mBank in the Czech Republic and Slovakia
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries mBank in the Czech Republic and Slovakia Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) +3% +29% +15% Czech +1% +7% +1% Republic 16,977 17,163 17,416 3,964 37,533 37,8
Slide 43: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q3/17 Corporates & Financial Markets Investor Presentation – Q3 2017 |43
Slide 44: Corporates and Financial Markets Summary of Q3/17: Financial and Business Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q3/17: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 +41% 12 29 mBank’s branches, 2 Pomo
Slide 45: Corporates and Financial Markets Summary of Q3/17: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q3/17: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +10.9% +5.9% +2.6% +6.1% 38,288 37,383 36,143 34,725 34,5
Slide 46: Corporates and Financial Markets: Market Shares
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Market Shares mBank’s Market Shares in Investment Banking Services1 mBank in the Market for Non-Treasury Debt2 as of 31.08.2017 (PLN M) 69,145 15.6% 12.8% 41,289 14,731 12,876 8,
Slide 47: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of mBank Group’s companies in Q3/17 Subsidiaries Investor Presentation – Q3 2017 |47
Slide 48: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Issuance of Covered Bonds Profit before Income Tax (PLN M, by year) 1,908 (PLN M) established in 1999 Private placement 300 +23% 1,570 specialised mortgage bank
Slide 49: mBank Hipoteczny: Issuance Activity on the Covered Bonds Market
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH): Issuance Activity on the Covered Bonds Market Summary of Mortgage Covered Bonds issued in 2014-2017 (public issues) Amount Currency Issue date Maturity date Ten
Slide 50: Leasing and Factoring
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Leasing and Factoring Leasing contracts Market share & position – 9M 2017 Profit before Tax (PLN M) (PLN M) +14% 7.4% -24% established 3,546 61.5 in 1991 3,104 1,192 Rank 20.3 46.6 pro
Slide 51: mBank Group's Brokerage Services
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Brokerage Services Business Lines Subsidiaries 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 52: mBank's share price performance in 9M/17
mBank’s share price performance in 9M/17 mBank’s shares gained till August, but unresolved CHF issue has weighed again mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) 145 mBank’s share price in 2017 WIG-30 2.223% 01.01.2017 335.25 140 MIN (01.01.2017)
Slide 53: 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 54: 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 55: mBank Group's Strategy for 2016-2020: Financial performance targets
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 56: 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