Slide 1: Results of mBank Group Q3 2015
Results of mBank Group Q3 2015 Record core revenues in a challenging market Management Board of mBank S.A. Investor Presentation October 29, 2015
Slide 2: Key highlights of Q3 2015
Key highlights of Q3 2015 Core revenues of PLN 877.3 M at historical high Total revenues increased • NII at PLN 641.8 M (+6.0% QoQ), to PLN 979.9 M QoQ amid record low interest rates • NFC at PLN 235.6 M (+2.3% QoQ), Profit & Loss on rising client transactionality Sound volume development • Gross lo
Slide 3: Agenda
Agenda Summary of Q3/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 4: Key Financials: Profit and Loss Account
Summary of Q3/15 Results in mBank Group mBank Analyzer Key Financials: Profit and Loss Account in PLN M Q3/15 Q3/14 Change YoY Q2/15 Net interest income 641.8 649.9 -1.3% 605.5 Net Fee & Commission income 235.6 216.2 +8.9% 230.3 Total income 979.9 1,018.9 -3.8% 884.9 Total costs (464.2) (441.2) +5.2
Slide 5: Key Financials: Balance Sheet
Summary of Q3/15 Results in mBank Group mBank Analyzer Key Financials: Balance Sheet in PLN M Q3/15 Q3/14 Change YoY Q2/15 Gross loans to customers 82,449 74,698 +10.4% 80,261 Retail client loans 45,381 40,555 +11.9% 45,329 1 Core corporate client loans 32,305 28,796 +12.2% 31,384 Amounts due to cus
Slide 6: Business Development: Client acquisition and Market shares
Summary of Q3/15 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +10.7% +9.8% +2.6% +2.3% 5,054 18,133 18,654 19,086 4,689 4,803 4,924 17,390 17,787 4,565 147 193 1,839 1,867 1,931 41 94 809 1,794 1,838 725 762 76
Slide 7: Development of Retail and Corporate business
Summary of Q3/15 in mBank Group Development of Retail and Corporate business Sales of mortgage loans Sales of non-mortgage loans (PLN M, by quarter) (PLN M, by quarter) +47% +29% +29% +11% -4% 1,334 1,204 1,255 1,201 272 20% 1,164 1,031 1,077 82 87 8% 909 99 8% 81 96 833 834 8% 90 205 276 301 244 16
Slide 8: Rapid growth of client transactionality, rebound in interchange revenues
Summary of Q3/15 in mBank Group Rapid growth of client transactionality, rebound in interchange revenues Development of value and number of non-cash transactions with mBank’s payment cards 5,666 Value of transactions (PLN M) XX.X Average value of transaction (PLN) 5,325 80.9 4,697 4,864 75.5 Number
Slide 9: Agenda
Agenda Summary of Q3/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 10: Development of Loans to Customers
Analysis of Q3/15 in mBank Group mBank Analyzer Development of Loans to Customers Core lending remains strong across segments Development of Gross Loans and Advances to Customers (PLN M) +10.9% +10.4% +12.2% +8.5% +6.8% +2.7% +2.9% +3.5% 32,841 35,340 32,227 34,959 31,535 81,883 82,449 5,612 842 2,6
Slide 11: Development of Deposits
Analysis of Q3/15 in mBank Group mBank Analyzer Development of Deposits Dynamic deposit growth in both corporate and retail segment Development of Amounts due to Customers (PLN M) +10.6% +17.0% +17.7% +17.7% +12.9% +7.5% +11.1% +15.7% 34,922 +4.7% 31,576 32,237 30,816 29,661 78,546 3,089 4,367 3,738
Slide 12: Income of mBank Group
Analysis of Q3/15 in mBank Group mBank Analyzer Income of mBank Group Core revenues at historical high Development of mBank Group’s Income (PLN M) -3.8% 1,118.1 +10.7% QoQ YoY 39.2 1,018.9 979.9 3.5 36.7 939.9 195.0 884.8 13.4 96.3 34.5 1.0 84.1 16.2 70.5 1.3 9.2 14.3 1.0 102.6 3.2 35.3 0.0 +138% -1
Slide 13: Costs of mBank Group
Analysis of Q3/15 in mBank Group mBank Analyzer Costs of mBank Group Structural cost advantage resulting in strong efficiency Development of mBank Group’s Costs (PLN M) +5.2% +1.6% -4.3% 485.3 QoQ YoY 452.8 464.2 441.2 443.5 34.1 34.1 34.1 17.7 17.7 49.2 47.7 47.9 47.1 12.6 50.2 7.3 6.6 11.6 6.4 +2.
Slide 14: Loan Loss Provisions and Risk Costs
Analysis of Q3/15 in mBank Group Loan Loss Provisions and Risk Costs Stable cost of risk reflecting strong financial standing of clients Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 157.9 89 72 76 55 57 52 +3.1% 61 76.2 52 54 55 112.6 111.0 107.7 98
Slide 15: Loan Portfolio Quality
Analysis of Q3/15 in mBank Group Loan Portfolio Quality Resilient portfolio quality and improving coverage ratio mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) +3.0% 6.3% 6.4% mBank Group applies +0.2% 6.1% 6.0% a conservative client- 5.9% oriented approach in 4,717 4,915 4,9
Slide 16: Funding Structure Details
Analysis of Q3/15 in mBank Group Funding Structure Details A well diversified funding profile and improving liquidity levels mBank Group’s funding structure mBank’s ratings Loan to Deposit Ratio as of 30.09.2015 Fitch 109.9% Other Retail 5% 37% deposits Long-term Subordinated liabilities rating BBB-
Slide 17: Key Regulatory Ratios
Analysis of Q3/15 in mBank Group Key Regulatory Ratios Strong capital position and liquidity above regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR 17.0% 149% 16.3% 16.4% 15.6% 138% 14.7% 2.9% 129% 2.9% 127% 2.5% 3.4% 2.5% 108% 109% 105% 107% 108% 111% Basel III require
Slide 18: Additional capital buffers for mBank
Analysis of Q3/15 in mBank Group Additional capital buffers for mBank Abundant capital levels allowing for significant strategic flexibility Common Equity Tier 1 Ratio (CET1) – bank level Total Capital Ratio (TCR) – bank level 16.64% 20.07% 19.89% 15.29% 15.29% 17.64% 16.89% 4.39% 13.54% 16.39% 3.29
Slide 19: Agenda
Agenda Summary of Q3/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 20: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Stable economic growth and very low inflation, hence no reason to hike rates A mild slowdown of economic activity (% YoY) GDP forecast (% YoY) mBank’s 7 8 forecast 6 6 4.6 4.5 4.8 5.1 3.7 3.5 3.6 3.3 3.3 3.6 3.3 3.1 3.1 5 3.0 3.0 3.0 3.1 3.2 4 2.2 2.4 4 1.3 0.8 2 0,2 0,5 3
Slide 21: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Strong growth in corporate loans, cautious borrowing by households Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 30% 25% 20% 20% 15% 10% 10% 5% 0% 0% -10% -5% Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Ja
Slide 22: Agenda
Agenda Summary of Q3/15 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/15 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 23: Appendix
Appendix Page Page Additional Information: Selected Financial Data No. Detailed Results of the Business Lines No. Consolidated Profit and Loss Account 24 Retail Banking 39-44 Consolidated Statement of Financial Position 25 Summary of Q3/15: Financial Results and Volumes 40-41 mBank Group’s Ratios 26
Slide 24: Consolidated Profit and Loss Account
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Net interest income 649,880 632,532 587,439 605,548
Slide 25: Consolidated Statement of Financial Position
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Cash and balances with Central Bank 4 176 981 3 054 54
Slide 26: 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 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Net Interest Margin (quarterly) 2.32% 2.27% 2.06% 2.11% 2.12% Net Interest Margin YtD 2.31% 2.3
Slide 27: mBank Group's historical performance (1/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (1/3) Business Lines Subsidiaries Net Interest Income & NIM Net Fee and Commission Income (PLN M) (PLN M) CAGR 2.2% 2.5% 2.4% 2.2% 2.3% 2.3% 2.1% +5% CAGR -6% +8% -1% 840 835 902 746 787
Slide 28: mBank Group's historical performance (2/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (2/3) Business Lines Subsidiaries Operating Costs Pre-provision Income & C/I ratio (PLN M) (PLN M) CAGR Increase due to +2% higher BFG charge 51.8% 47.7% 46.5% 45.7% 44.9% 44.2% 47.0% +6%
Slide 29: mBank Group's historical performance (3/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (3/3) Business Lines Subsidiaries Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) +7% 15.90% 14.96% 18.73% 19.38% 14.66% 15.57% 16.99% CAGR +7% +11% CAGR +12% 118.0 117.3 125.8
Slide 30: Net Interest Income & Margin
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Net Interest Income & Margin Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 2.3 2.3 2.1 2.1 2.1 NIM 385.2 1,035.1 +5.8% 360.2
Slide 31: Fee and Commission Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Fee and Commission Income Fee and Commission Income Structure (PLN M) QoQ YoY 365.5 371.9 339.3 337.4 49.9 51.4 13% -3.0% +27.6% 39.1 314.5 55.0 42.
Slide 32: Trading and Other Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Trading and Other Income Net Trading Income Structure Gains less Losses from Investment Securities (PLN M) (PLN M) 34.5 -13% 102.6 +138% 96.3 23.9 8
Slide 33: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer 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) 125.8 125.8 123.3 123.3 120.6 1
Slide 34: Balance Sheet Analysis: Currency Structure
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer 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
Slide 35: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer 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 30.09.2015
Slide 36: 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 30.09.2015 Households Real estate management 12.9% Building indust
Slide 37: 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 +0.17 14.09% +0.62 +1.42 -0.30 13.45% -0.18 +0.03 +
Slide 38: Issuance Activity on the Covered Bonds Market
Summary Appendix Historical view Profit & Loss Balance Sheet Issuance Activity on the Covered Bonds Market Business Lines Subsidiaries Residential mortgage loans to rise in cover pool Covered Bonds Issuance Summary of Mortgage Covered Bonds issued in 2014 and 2015 (PLN M) Target 2015: Amount Currenc
Slide 39: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q3/15 Retail Banking Investor Presentation – Q3 2015 |39
Slide 40: Retail Banking Summary of Q3/15: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q3/15: Financial Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 274 257 258 262 268 -12% 36 35 35 35 35 23 23 23 23 414.1 23 +9% 67 67 7
Slide 41: Retail Banking Summary of Q3/15: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q3/15: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +11.9% +15.9% +0.1% +2.5% 45,329 45,381 42,458 43,788 41,411 41,560
Slide 42: 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 30.09.2015 7.6% 7.5% 7.4% 7.4% 7.6%
Slide 43: 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 +34% +15% +7% +7% 7.8% +3% 14.5% 3,5
Slide 44: 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) +28% +19% +32% +5% +2% Czech +2% Republic 13,905 14,663 26,924 27,527 2,543 2,5
Slide 45: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q3/15 Corporates & Financial Markets Investor Presentation – Q3 2015 |45
Slide 46: Corporates and Financial Markets: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q3/15: Financial Results Profit before Tax of the Segment Corporate Branch Network (PLN M, by quarter) +16% 47 47 47 47 47 +127% 214.6 18 18 18 18 18 190.3 164.1 50.7
Slide 47: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q3/15: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +10.9% +10.6% +8.5% +17.7% +17.7% 35,340 34,959 34,922 32
Slide 48: 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 30.09.2015 (PLN M) 62,003 12.2% 15.7% 31,988 13,557 11,274 6,
Slide 49: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the mBank Group’s companies in Q3/15 Subsidiaries Investor Presentation – Q3 2015 |49
Slide 50: mBank Group's Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Development of Profit before Tax of Consolidated Companies PLN thou. Q3/14 Q3/15 Change YoY 9M/14 9M/15 Change YoY mBank Hipoteczny 6,055 9,076 +49.9% 24,644 17,381 -29.5% mLeasing 13,
Slide 51: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Gross loans and advances to customers Profit before Tax (PLN M) (PLN M) established in 1999 +58% +15% +15% -29% specialised mortgage bank and 7,268 24.6 the larg
Slide 52: 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/15 Profit before Tax (PLN M) (PLN M) +19% 7.5% +23% established 2,680 45.3 in 1991 2,260 Rank 36.9 792 17.5 provide
Slide 53: Dom Maklerski mBanku (mDM)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Dom Maklerski mBanku (mDM) Market Shares in Q3/15, by volume Profit before Tax (PLN M) established in 1991 incl. block Session +60% transactions transactions providing a full range of
Slide 54: mBank Analyzer
mBank Analyzer mBank Analyzer Further enhancing our reporting standard Analyse, customise, export and print selected data on mBank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Comprehensive Summary of Data covering Details on each structure and report on key fin
Slide 55: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 E-mail: wojciech.chmielewski@mbank.pl Head of Investor Relations and Group Strategy Paweł Lipiński Direct dial: +48 22 829 15 33 E-mail: pawel.li