Slide 1: Results of mBank Group Q2 2023
Results of mBank Group Q2 2023 Continued excellent operating performance and stronger protection against legal risk Presentation for Investors and Analysts, 02.08.2023
Slide 2: Agenda
Agenda Key highlights of Q2 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2023 12 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 3: Key highlights of Q2 2023 in mBank Group
Key highlights of Q2 2023 in mBank Group ✓ Further improvement of net interest income thanks to active Net interest income Net fee income deposit management, slightly weaker net fee income +8.2% QoQ -2.7% QoQ ✓ Efficiency maintained at excellent level despite continued Total costs w/o BFG Cost/Incom
Slide 4: 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 PLN M +20% -5.9pp +121% +22.3pp 5,197 42.9% 2,540 41.7% 4,340 30.0% 1,147 19.4% 35.6% 28.5% H1/22 H1/23 H1/22 H1/23 H1/22 H1/23 H1/22 H1/23 Gross loans to cust
Slide 5: Development of mBank's offer and new solutions in Q2 2023
Development of mBank’s offer and new solutions in Q2 2023 mBank's campaign "Happy Eco-loan for corporate clients Cooperation with KUKE to with age" motivates clients to with co-financing from Polish finance domestic investments financially plan their future Development Bank (BGK) of Polish exporters
Slide 6: 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 9.1% current deposits 9.1% inactive accounts -18 +33 7.7% term deposits 8.8% with arrears 8.7% 8.7% 8.3% 8.4% 5,660 5,514 5,642 5
Slide 7: 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 +150 +150 growth in total active mBank CZSK per year 3,338 3,489 customer base mBank PL +395 2,960 419 446 2,577 372 2,128 303 1,670 234 by
Slide 8: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million Q2 2022 Q1 2023 Q2 2023 ∆ QoQ ∆ YoY Net interest income 1,702.8 2,033.1 2,200.6 +8.2% +29.2% Net fee and commission income 547.8 501.1 487.6 -2.7% -11.0% Total income 2,161.7 2,501.7 2,695.4 +7.7% +24.7% Total costs (excl. obligatory
Slide 9: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q2 2022 Q1 2023 Q2 2023 ∆ QoQ ∆ YoY Total assets 202,170 217,529 212,928 -2.1% +5.3% Gross loans to customers 129,483 124,800 121,727 -2.5% -6.0% Individual client loans 75,388 70,224 68,155 -2.9% -9.6% Corporate client loans 53,957 54,476 53,4
Slide 10: Strong protection against legal risks and ongoing settlement program
Strong protection against legal risks and ongoing settlement program CHF mortgage loans to individual customers (CHF M, net) Summary of pending court cases and severity of verdicts portfolio deductions due to legal risks PLN 3,491 M as of 30.06.2023 Number of individual court cases Distribution of f
Slide 11: Excellent performance of the core business demonstrated in H1 2023
Excellent performance of the core business demonstrated in H1 2023 Summary of financial results for mBank’s core activity and run-off portfolio in H1/23 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the genuine and undistorted performa
Slide 12: Agenda
Agenda Key highlights of Q2 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2023 12 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 13: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Decline of loan portfolio due to adjustments related to CHF provisions and focus on margin Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M -1.0% -6.0% +0.7% -1.9% -4.9% -2.5% -0.4% 53,957 55,375 52,207 54,
Slide 14: Results of mBank Group: New lending business
Results of mBank Group: New lending business Visible growth of new mortgage lending, accompanied by stable sales of consumer credit Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter 2,139 -46% -21% 59 193 +69% -4% -4% 2,555 2,212 2,114 2,029 1,162 551 1,875 984
Slide 15: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Deposit volume driven by active pricing management amid very high liquidity Development of customer deposits Deposits from corporate customers PLN M PLN M +1.8% +9.7% -2.4% +1.4% -2.1% +9.6% -2.7% -2.5% 49,334 51,055 49,981 51,295 50,215 180,917 176,662 170,
Slide 16: Results of mBank Group: Total income
Results of mBank Group: Total income Total revenues at the record level thanks to further increase of net interest income Development of mBank Group’s total income Development of interest income PLN M Total negative impact PLN M of “credit holidays” on +56% +1% +1% +24.7% revenues in 2022 +7.7% reac
Slide 17: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Underlying operating costs driven by inflation, excellent efficiency continued Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M Costs in H2/22 were impacted 76.5% excluding "credit by additional contrib
Slide 18: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Provisioning level impacted by recalibration of macroeconomic and portfolio parameters Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 77 71 69 -4.8% +7.5% 64 59 192.2 65 4.5 60 63 62
Slide 19: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Good asset quality with stable impaired loans, NPL ratios affected by declining portfolio mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to -0.2% 4.0% 4.1% EBA definition, 4.0% 4.0% +0.4% 3.8% consolidated NPL ratio was:
Slide 20: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Improved capital position with higher surplus over regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR +4.48 Group’s LCR: 217% 16.81% 206% 16.39% 16.36% 16.13% 199% 2.34% 184% 186% 2.46% 14.66% 2.55% 2.41% 173% 2
Slide 21: Agenda
Agenda Key highlights of Q2 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2023 12 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 22: Macroeconomic situation and outlook
Macroeconomic situation and outlook Falling inflation encourages NBP to hike rates before long. Consumption prospects already out of the woods Unemployment rate (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.19 Jul.2
Slide 23: Macroeconomic situation and outlook
Macroeconomic situation and outlook No recovery in credit growth yet. Bonds and zloty flex their muscles. 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 24: 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 Bu
Slide 25: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks has continued being unfavourable and hardly predictable Key economic indicators for Poland Short-term prospects for mBank (compared to Q2/23) 2021 2022 2023F 2024F Net interest income & NIM slightly negative GDP grow
Slide 26: Agenda
Agenda Key highlights of Q2 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2023 12 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 27: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net interest income 1,702,831 736,358 1,978,213 2,033,110 2,200,635 Net fee and commission income 547,772 513,818 467,750 501,063 487,641 Dividend
Slide 28: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Cash and balances with Central Bank 12,522,901 20,488,126 16,014,318 16,477,981 15,962,102 Loans and advances to banks 8,547,677 9,654,087 9,806,262 1
Slide 29: Appendix: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net Interest Margin, quarterly 3.57% 4.03% 4.04% 3.84% 4.33% Net Interest Margin, YtD 3.37% 3.60% 3.71% 3.84% 4.08% Net Interest Margin, excl. CHF portfolio, Y
Slide 30: 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 Presented development and dynamics are adjusted for +2% +2% the impact of “credit holidays”. +57% +129% -9% 3,667.8 1,605.5 3,586.5 10.7 7% 3,364
Slide 31: 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 -1.6% +1.4% +22.8% 759.8 +10.0% 737.9 742.7 737.8 748.0 275.0 63.8 56.3 67.4 9% 260.3 60.2 64.9 236.7 136.3 121.8 133.6
Slide 32: 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 217.5 217.5 209.9 212.9 209.9 212.9 202.2 205.7 202.2 205.7 13.3 23.6 12.7 13.5 6% 23.1 23.2 11% 11.5 8.6 4% 19.2 27.4 13.4 7.6 2.7 8.7 7.9
Slide 33: 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 30.06.2023 as of 30.06.2023 Real estate 5.4% Building industry 4.1% Financial activities 3.7% 0.1% 0.3% Food sector 2.8
Slide 34: 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 30.06.2023 as of 30.06.2023 Nominal Issue Maturity Currency Tenor Coupon value date date Other Subordinated liabilities 4.4% Issues under Euro Medium Term Not
Slide 35: Appendix: Selected Financial Data – Capital requirements
Appendix: Selected Financial Data – Capital requirements Regulatory capital requirements for mBank Group as of 30.06.2023 Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of +4.48 pp the countercyclical buffer rates that apply in the countries where the relevant credit exp
Slide 36: Appendix: 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 37: Appendix: 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 -6 mBank CZSK mBank CZSK Poland +66% +15% +15% 366 365 360 46 47 47 mFinanse1 843.2 862.9 40 75
Slide 38: Appendix: 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 8,593 Customer funds invested via Investment funds mBank’s solutions (30.06.2023) Brokerage assets 20,665 -9.6% +14.6% -2.9% -2.4% 75,388 7
Slide 39: 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 -6% +3% 14.2% 13.3% -6% -3% 10,262 10,625 10,268 10,318 17,379 16,977 17,282 16,700 9,696 16,252 3,098 3,278 3,154 3,124 5,037 4,929
Slide 40: 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 -8% +10% +7% Czech Republic -2% +3% +2% physical network: light 7 branches 27,928 26,326 25,695 9,807 10,002 60,232 62,549 64,358 financial 9,084 7 centres 18 mKiosks 06/22 03/23
Slide 41: Appendix: 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 42: Appendix: 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 30.06.2023 2 2 +49% 1 2 +41% 2 Pomorskie Warmińsko- Mazurskie Zachodnio- Pomorskie 1 1 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomo
Slide 43: Appendix: 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 -1.0% -0.9% -1.8% -2.2% 55,504 54,576 54,095 53,573 51,182 51,704 51,241 51,874 50,738 52,315 1,683 1,664 1,865
Slide 44: Appendix: 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 45: 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
Slide 46: Appendix: ESG is well embedded in mBank Group's strategy
Appendix: ESG is well embedded in mBank Group's strategy ESG aspects play a crucial role in the way we manage our company Responsibility for financial health Responsibility for climate of our clients By 2030 we will reach climate neutrality in scope 1 and 2. We support customers in safe and convenie
Slide 47: Appendix: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2018 2019 2020 2021 2022 ∆ YoY Net interest income 3,496.5 4,002.8 4,009.3 4,126.3 5,924.0 +43.6% Net fee and commission income 1,257.8 1,270.6 1,508.3 1,867.8 2,120.1 +13.5% Net trading and other income 325.3 251.0 349.2 117.1 -187.2
Slide 48: Appendix: mBank's share price performance
Appendix: mBank’s share price performance Banking stocks grew strongly in Q2/23 despite CJEU verdict and risks related to election year mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 30.06.2023 190 mBank’s share price WIG20 2.12
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 half of 2023, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mBank
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