Slide 1: Results of mBank Group Q2 2020
Results of mBank Group Q2 2020 Impact of COVID-19 pandemic materializes in volumes, revenues and provisions Management Board of mBank S.A. Investor Presentation July 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 half of 2020, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mBank
Slide 3: Agenda
Agenda Summary of Main Trends in Q2 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2 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 Q2 2020
Key highlights of Q2 2020 Strong core income of PLN 1,369.5 M, despite weakened business momentum Net interest income at PLN 1,006.6 M (+0.9% YoY), affected by rate cuts, but changing asset mix helped Net fee and commission income at PLN 362.9 M (+20.6% YoY), a rebound anchored in client transac
Slide 5: Our support for clients amid COVID-19 pandemic
Our support for clients amid COVID-19 pandemic Solutions and offer for retail clients Loan moratoria New digital solutions mBank was the first bank in Poland which offered a loan A possibility to open an account from Opening an repayment moratorium to its individual and SME clients on home. Neither
Slide 6: Our support for clients amid COVID-19 pandemic
Our support for clients amid COVID-19 pandemic Solutions and offer for microfirms and corporate clients Aid package for enterprises New digital solutions Starting from 29.04.2020, Polish enterprises Fully digital process includes opening Remote The PFR employing from 1 to 249 people can submit of a
Slide 7: Business Development of Retail Banking and Corporate Banking
Summary of Q2 2020 in mBank Group Business Development of Retail Banking and Corporate Banking Number of Retail Clients (thou.) Market shares - Households Innovations and new products +119 1 7.5% In further enhanced mBank's mobile Retail Banking +23 +23 7.0% application, retail clients have been 5
Slide 8: Key Financials: Profit and Loss Account
Summary of Q2 2020 in mBank Group Key Financials: Profit and Loss Account PLN million Q2/19 Q1/20 Q2/20 change QoQ change YoY Net interest income 997.8 1,065.5 1,006.6 -5.5% +0.9% Net fee and commission income 301.1 362.7 362.9 +0.1% +20.6% Total income 1,352.4 1,434.3 1,469.5 +2.5% +8.7% Total cost
Slide 9: Key Financials: Balance Sheet
Summary of Q2 2020 in mBank Group Key Financials: Balance Sheet PLN million Q2/19 Q1/20 Q2/20 change QoQ change YoY Total assets 152,433 173,823 182,943 +5.2% +20.0% Gross loans to customers 103,651 114,245 112,365 -1.6% +8.4% Retail client loans 56,049 63,362 63,277 -0.1% +12.9% Corporate client lo
Slide 10: Agenda
Agenda Summary of Main Trends in Q2 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2 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 11: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers A small contraction of loan portfolio driven by lower corporate and consumer volumes Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) +3.6% +8.4% +2.0% -3.5% +6.3% -1.6% -2.8% -0.9% 47,047 48,647 47,786
Slide 12: Results of mBank Group: New lending business
Results of mBank Group: New lending business Origination of all loan types and new leasing declined considerably due to the pandemic Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) -24% -55% -24% -24% -50% -50% 2,221 2,292 2,227 2,621 2,666 2,174 2,402 222
Slide 13: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Surging deposit base, with strong inflows observed in both business segments Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +28.7% +31.0% +8.3% +26.5% +8.3% +8.3% +9.2% +27.3% +8.6% 49,078 139,623 42,313 45,333 715 768 1% 3
Slide 14: Results of mBank Group: Total income
Results of mBank Group: Total income Net interest income negatively influenced by lower rates, net fees kept solid 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. of PLN 45.1
Slide 15: Results of mBank Group: Total costs
Results of mBank Group: Total costs Best-in-class efficiency, good cost discipline slightly overshadowed by elevated depreciation 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 +6.4% PLN 167.0 million
Slide 16: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Cautious approach reflected in 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) -14% 151 141 409.3 1.2 151 97 90 128 79 352.2 76 83 67 157 186.6 147 147 24
Slide 17: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust asset quality despite some worsening of risk indicators for corporate portfolio mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) According to 4.9% EBA definition, +10.8% 4.8% consolidated +6.8% 4.7% NPL ratio was: 4.5% 4.7%
Slide 18: 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 +4.85 p.p. 226% 221% 19.66% 19.79% 19.46% 19.38% 19.26% 2.98% 2.97% 2.95% 2.87% 183% 2.83% 173% 169% 14.41%
Slide 19: Agenda
Agenda Summary of Main Trends in Q2 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2 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 20: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) The worst is already behind us. „Tick” recovery afterwards. Consumers awaken in V-manner Severe recession and unemployment rate is barely moving 20 12% 10 10% 0 8% -10 6% -20 4% -30 -40 2% Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19 Jul.19 Jan.20 Jul.20 0% Consumer Co
Slide 21: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Lower demand for credit and flood of liquidity Corporate loans and deposits (% YoY, FX-adjusted) Household loans and deposits (% YoY, FX-adjusted) 30% 14% 25% 12% 20% 10% 15% 8% 10% 6% 5% 0% 4% -5% 2% -10% 0% Jan.13 Sep.13 May.14 Jan.15 Sep.15 May.16 Jan.17 Sep.17 May.18 J
Slide 22: 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% 4.6% Reduction of interest rates by 140 bps in total w
Slide 23: Agenda
Agenda Summary of Main Trends in Q2 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q2 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 24: Consolidated Profit and Loss Account – YtD perspective
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: Consolidated Profit and Loss Account – YtD perspective Subsidiaries Historical view PLN million H1/19 H1/20 change YoY Net interest income 1,928.0 2,072.1 +7.5% Still positive dynamics of net interest income, but
Slide 25: 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.) Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Net interest income 997,780 1,064,238 1,010,501 1,065,464 1,006,611 Net fee a
Slide 26: 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.) Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Cash and balances with Central Bank 6,689,767 8,454,457 7,897,010 10,823,272 11,141,250 Loan
Slide 27: mBank Group's Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: mBank Group’s Ratios Subsidiaries Historical view Financial Ratios Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Net Interest Margin (quarterly) 2.75% 2.81% 2.60% 2.63% 2.34% Net Interest Margin YtD 2.68% 2.72% 2.69% 2.63% 2.48% Ne
Slide 28: 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) -4.2% -9.3% -9.3% -23.3% 1,331.1 1,335.0 1,263.6 33.5 1,276.1 30.4 21.6 -
Slide 29: 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) +9.8% -1.6% -7.5% 541.6 544.4 535.5 516.0 1
Slide 30: 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) 182.9 182.9 173.8 173.8 15.5 8% 16.9 9% 158.8 158.7 15.2 158.8 158.7 1
Slide 31: 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 30.06.20
Slide 32: 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 30.06.2020 Households Real estate management 12.3% Building industry 1.1% 1.3% Financial a
Slide 33: 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 30.06.2020 Fitch -8.1 pp 91.0% 90.3% 90.3% Other
Slide 34: 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 16.82% -0.06 +0.09 0.00 -0.34 +0.86 -0.18 +0.08 0.00 -0.30 +0.14 16.51% -0.43 16.51% 16.4
Slide 35: 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 30.06.2020 Countercyclical Capital Buffer (CCyB) is calculated as the weighte
Slide 36: 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 Q2 2020 Retail Banking Investor Presentation – Q2 2020 |36
Slide 37: Retail Banking: Summary of Q2/20 Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q2/20: 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 38: Retail Banking: Summary of Q2/20 Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q2/20: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +12.9% +27.8% -0.1% +8.3% 63,362 63,277 89,777 60,361 149 58,983 82
Slide 39: 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 30.06.2020 7.6% 7.6% 7.3% 7.3% 6.9%
Slide 40: 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 41: 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 +16% +13% +5% 8.9% +7% 13.2% 5,366 5
Slide 42: 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) +6% +19% +11% Czech +3% +4% +9% Republic 17,333 17,950 18,454 5,802 48,593 5,56
Slide 43: 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 Q2 2020 Corporates & Financial Markets Investor Presentation – Q2 2020 |43
Slide 44: Corporates and Financial Markets: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q2/20: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 -46% Pomorskie 12 2 Warmińsko- Zach
Slide 45: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q2/20: Loans and Deposits Gross Loans to Corporate Customers Deposits from Corporate Customers (PLN M) (PLN M) +3.6% -3.5% +28.7% +8.3% 50,494 49,078 48,647 47,786 48,
Slide 46: 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 Q2 2020 Subsidiaries Investor Presentation – Q2 2020 |46
Slide 47: 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 -70% 700 Lower profit
Slide 48: 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 (outstanding public issues) Amount Currency Issue date Matur
Slide 49: 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 – Q1 2020 Profit before Tax (PLN M) [the latest available data] (PLN M) -22% 7.2% -53% Lower profit established 2,617 49
Slide 50: 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) 2.3% 2.1% 2.3% 2.5% 2.6% 2.7
Slide 51: 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) CAGR (PLN M) +6% 14.66% 17.25% 20.29%
Slide 52: mBank's share price performance
mBank’s share price performance Banking stocks depressed by expected worsening of profitability mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) – last 12 months 105 WIG-30 1.701% 100 WIG-20 1.799% 95 90 WIG 1.246% 85 WIG-Banks 6.120% 80 WIG-ESG 1.545%
Slide 53: 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 54: mBank Group's Strategy for 2020-2023: four 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 55: 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 56: 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