Slide 1: Results of mBank Group Q1 2016
Results of mBank Group Q1 2016 Solid start to the year despite market headwinds Management Board of mBank S.A. Investor Presentation April 28, 2016
Slide 2: Key highlights of Q1 2016
Key highlights of Q1 2016 Core revenues of PLN 888.2 M remained at high levels Total revenues exceeded • NII at PLN 676.4 M (+15.1% YoY), PLN 1.0 B as margin rebound continued • NFC at PLN 211.7 M (+9.2% YoY), Profit & Loss despite new lending slowdown Sound volume development • Gross loans at PLN 8
Slide 3: Agenda
Agenda Summary of Q1/16 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q1/16 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 Q1/16 Results in mBank Group Key Financials: Profit and Loss Account in PLN million Q1/16 Q1/15 Change YoY Q4/15 Net interest income 676.4 587.4 +15.1% 676.6 Net Fee & Commission income 211.7 193.9 +9.2% 237.4 Total income 1,008.9 1,118.1 -9.8% 1,110.5 Total costs (480.8) (451.9) +6.4% (4
Slide 5: Key Financials: Balance Sheet
Summary of Q1/16 Results in mBank Group Key Financials: Balance Sheet in PLN million Q1/16 Q1/15 Change YoY Q4/15 Gross loans to customers 80,925 81,883 -1.2% 81,409 Retail client loans 46,511 43,788 +6.2% 46,259 1 Core corporate client loans 32,801 29,728 +10.3% 32,416 Amounts due to customers 81,1
Slide 6: Business Development: Client acquisition and Market shares
Summary of Q1/16 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +8.0% +10.3% +1.8% +2.2% 5,037 19,086 19,562 19,992 4,665 4,743 4,864 4,947 18,133 18,654 193 216 1,867 1,931 1,983 2,152 76 121 159 1,839 767 775 8
Slide 7: Development of Retail and Corporate business
Summary of Q1/16 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) -14% +11% +11% -45% -45% 1,334 1,305 1,338 1,204 1,255 1,201 1,207 272 121 9% 1,031 309 7% 82 87 96 102 834 99 72 23% 276 301 377 2
Slide 8: Agenda
Agenda Summary of Q1/16 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q1/16 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 9: Development of Loans to Customers
Analysis of Q1/16 in mBank Group Development of Loans to Customers Core lending remains stable across segments Development of Gross Loans and Advances to Customers (PLN M) -7.2% -1.2% +10.3% -1.9% -2.1% -0.6% +1.2% 35,340 32,227 34,959 33,447 32,805 -0.3% 81,883 82,449 81,409 80,925 5,612 842 2,654
Slide 10: Development of Deposits
Analysis of Q1/16 in mBank Group Development of Deposits Dynamic annual deposit growth in both retail and corporate segment Development of Amounts due to Customers (PLN M) +5.8% +12.9% +23.4% -5.2% +20.2% 0.0% -4.7% +0.3% 34,922 34,424 32,618 81,141 81,134 30,816 29,661 3,089 1,094 78,546 847 600 68
Slide 11: Income of mBank Group
Analysis of Q1/16 in mBank Group Income of mBank Group Core revenues remained at high levels Development of mBank Group’s Income (PLN M) -10.9% +9.2% -9.1% QoQ YoY +2.4% 1,118.1 1,110.5 39.2 979.9 127.4 1,008.9 195.0 884.8 13.4 70.9 3.4 33.2 84.1 84.1 1.3 9.2 14.3 0.0 0.0 +18.6% -18.1% 102.6 3.2 35.
Slide 12: Costs of mBank Group
Analysis of Q1/16 in mBank Group Costs of mBank Group Solid efficiency maintained despite investments in strategic areas Development of mBank Group’s Costs In Q4/15 mBank Group paid a contribution to the Bank Guarantee (PLN M) Fund of PLN 141.7 million to cover the cost of payments to deposit holder
Slide 13: Loan Loss Provisions and Risk Costs
Analysis of Q1/16 in mBank Group Loan Loss Provisions and Risk Costs Cost of risk influenced by provision releases in the corporate segment Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 55 57 54 52 111.0 -33.2% 107.7 52 54 55 52 102.6 35 100.0 35 43.
Slide 14: Loan Portfolio Quality
Analysis of Q1/16 in mBank Group Loan Portfolio Quality Resilient portfolio quality and stable risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) -6.1% 6.1% 6.0% mBank Group applies 5.9% 5.7% 5.8% a conservative client- +0.7% oriented approach in 4,964 4,849 4,857
Slide 15: Funding Structure Details
Analysis of Q1/16 in mBank Group Funding Structure Details A well diversified funding profile and safe liquidity levels mBank Group’s funding structure mBank’s ratings Loan-to-Deposit Ratio as of 31.03.2016 109.9% Fitch Other Retail 105.7% 5% deposits Long-term -0.6 pp Subordinated liabilities 43% r
Slide 16: Key Regulatory Ratios
Analysis of Q1/16 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 19.01% 144% 138% 139% 16.99% 17.25% 2.81% 16.97% 129% 16.26% 16.38% 2.90% 2.96% 112% 2.93% 107% 109% 111% 109% 3.38% 105%
Slide 17: Agenda
Agenda Summary of Q1/16 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q1/16 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 18: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) High growth, economic centre of gravity shifts from investment to consumption Massive boost to consumer income from wages and benefits On the other hand, public investment is set to decline in 2016 12% 40% YoY YoY 10% 30% 8% 20% 6% 10% 4% 0% 2% -10% 0% -20% -2% -30% 2010 2
Slide 19: 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 20: 2016 in forecasts and the impact on mBank Group
2016 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Impact on mBank 2014 2015 2016F Net interest income & NIM (Slightly positive) GDP growth (YoY) 3.3% 3.6% 3.8% MPC decision on reduction of interest rates less lik
Slide 21: Agenda
Agenda Summary of Q1/16 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q1/16 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
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 38-43 Consolidated Statement of Financial Position 24 Summary of Q1/16: Financial Results and Volumes 39-40 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.) Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Net interest income 587,439 605,548 641,753 676,633 676,418 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.) Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Cash and balances with Central Bank 2 406 938 3 187 463 4 630 886 5 9
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 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Net Interest Margin (quarterly) 2.06% 2.11% 2.12% 2.22% 2.29% Net Interest Margin YtD 2.06% 2.0
Slide 26: mBank Group's historical performance (1/3)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance (1/3) Business Lines Subsidiaries Net Interest Income & NIM Net Fee and Commission Income (PLN M) (PLN M) CAGR 2.5% 2.4% 2.2% 2.3% 2.1% 2.1% 2.3% +2% CAGR +4% 840 835 902 897 +15% 787 2,280 2,226 2,491
Slide 27: mBank Group's historical performance (2/3)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance (2/3) Business Lines Subsidiaries One-off regulatory costs Operating Costs (additional payments to the BFG Pre-provision Income & C/I ratio (PLN M) and Mortgage Support Fund) (PLN M) CAGR +5% 47.7% 46.5
Slide 28: mBank Group's historical performance (3/3)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s historical performance (3/3) Business Lines Subsidiaries Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) CAGR 0% 14.96% 18.73% 19.38% 14.66% 17.25% 16.26% 19.01% +6% CAGR +9% +11% 118.0 123.5 123.3 123.3 98.9 102.1
Slide 29: Net Interest Income & Margin
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Net Interest Income & Margin Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 2.06 2.11 2.12 2.22 2.29 NIM 324.8 -1.5% [%] 2.4 -5.1% 24.7 960.3
Slide 30: Fee and Commission Income
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Fee and Commission Income Fee and Commission Income Structure (PLN M) QoQ YoY 382.0 365.5 371.9 351.9 49.9 55.5 -14.8% +11.7% 51.4 314.5 47.3 13% 42.9 40.6 -9.5% +
Slide 31: Trading and Other Income
Summary Appendix Historical view Profit & Loss Balance Sheet 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) -18% 102.6 +19% 23.9 84.1 84.1 70.9 16.3 12.3 3.
Slide 32: 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) 125.8 123.5 125.8 123.5 123.3 123.3 123.3 123.
Slide 33: 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 34: 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 31.03.2016 as of 31.03.201
Slide 35: 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 31.03.2016 Households Real estate management 1.2% 10.2% Building i
Slide 36: 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 +0.42 16.20% +1.42 +0.41 -0.05 -0.16 +0.02 14.29% +
Slide 37: 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 are rising in cover pool Covered Bonds Issuance Summary of Mortgage Covered Bonds issued in 2014-2016 (PLN M) Target 2016: Amount Currency
Slide 38: Detailed Results of the Business Lines: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q1/16 Retail Banking Investor Presentation – Q1 2016 |38
Slide 39: Retail Banking Summary of Q1/16: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q1/16: Financial Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 268 274 278 280 262 -8% 35 36 36 36 413.3 35 23 excl. one-off gain 23 23
Slide 40: Retail Banking Summary of Q1/16: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q1/16: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +6.2% +0.5% +20.5% +3.7% 46,259 46,511 47,835 45,329 45,381 46,117
Slide 41: 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 31.03.2016 7.6% 7.7% 7.6% 7.7% 7.7%
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 Gross Loans (PLN M) and Share in Total mBank’s retail volume Deposits (PLN M) and Share in Total mBank’s retail volume +33% +19% +4% +4% 8.6% +4% 13.8% 3,8
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 Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) +23% +16% +19% +4% +4% Czech +4% Republic 15,507 16,184 2,835 28,459 29,704 2,7
Slide 44: Detailed Results of the Business Lines: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q1/16 Corporates & Financial Markets Investor Presentation – Q1 2016 |44
Slide 45: Corporates and Financial Markets Summary of Q1/16: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q1/16: Financial Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 +23% Pomorskie 12 2 Warmińsko- 0% 29 mBank’s bra
Slide 46: Corporates and Financial Markets Summary of Q1/16: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q1/16: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) -7.2% +5.8% -5.2% -1.9% 35,340 34,959 34,922 34,424 33,44
Slide 47: 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 31.03.2016 (PLN M) 64,691 14.8% 14.7% 31,383 11,091 11,717 7,
Slide 48: Detailed Results of the mBank Group's companies: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the mBank Group’s companies in Q1/16 Subsidiaries Investor Presentation – Q1 2016 |48
Slide 49: Development of Profit before Tax of Consolidated Companies
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. Q1/15 Q1/16 Change YoY 2014 2015 Change YoY mBank Hipoteczny 14,624 11,819 -19.2% 29,475 26,797 -9.1% mLeasing 15,6
Slide 50: 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 +36% +5% -19% specialised mortgage bank and 14.6 7,475 7,821 the larg
Slide 51: 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 – Q1 2016 Profit before Tax (PLN M) (PLN M) +45% +31% 7.8% established 1,010.7 20.5 in 1991 Rank 15.6 696.6 provides fin
Slide 52: 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 Q1/16, by volume Profit before Tax (PLN M) established in 1991 incl. block Session +33% transactions transactions providing a full range of
Slide 53: mBank's share price performance in Q1/16
mBank’s share price performance in Q1/16 Banking stocks have recovered slightly this year, but sentiment remains negative mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) 115 WIG-30 2.473% 110 WIG-20 2.585% +8.3% +7.5% +6.8% WIG 1.707% 105 WIG-Banks 5.
Slide 54: 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