Slide 1: Results of mBank Group Q3 2023
Results of mBank Group Q3 2023 Strong performance of core business continues Presentation for Investors and Analysts, 31.10.2023
Slide 2: Agenda
Agenda Key highlights of Q3 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2023 14 ▪ 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 Q3 2023 in mBank Group
Key highlights of Q3 2023 in mBank Group ✓ Record high revenues thanks to further improvement of net Net interest income Net fee income interest income driven by better loan and deposit margins +3.8% QoQ -1.0% QoQ ✓ Efficiency maintained at excellent level, despite higher staff Total costs Cost/Inco
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 excluding impact PLN M excluding impact excluding impact of "credit holidays" of "credit holidays" of "credit holidays" -6.1pp +17% +52% +11.4pp 34.5% 7,905 28
Slide 5: 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 9.4% current deposits inactive 9.1% accounts -18 +59 7.2% term deposits 8.8% 8.7% with arrears 8.7% 8.7% 8.3% 8.4% 5,660 5,514 5,
Slide 6: 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 +222 +222 growth in total active mBank CZSK per year 3,338 3,560 customer base mBank PL +395 2,960 419 457 2,577 372 2,128 303 1,670 234 by
Slide 7: mBank’s solutions aimed at better servicing retail clients in Q3 2023
mBank’s solutions aimed at better servicing retail clients in Q3 2023 “2% Safe Mortgage” solutions based on AI/ML increase effectiveness of mBank's added to mBank’s offer campaigns, sale and service ▪ 2,300 applications submitted by clients ▪ advanced marketing automation tools coupled with from the
Slide 8: Progressing digitisation for mBank’s corporate clients in Q3 2023
Progressing digitisation for mBank’s corporate clients in Q3 2023 Digital onboarding is becoming mBank’s standard Growing number of mobile users and dominant form of new account opening receive enhanced functionalities ▪ fully paperless and remote process, with no ▪ number of users of mBank Online r
Slide 9: Two landmark transactions for the Polish market executed in Q3 2023
Two landmark transactions for the Polish market executed in Q3 2023 mBank’s 2nd Green Non-Preferred Senior - largest ever Polish NPS mBank’s 3rd synthetic securitization - largest ever in CEE region Format Green Senior Non-Preferred Notes synthetic securitization, STS (simple, Format Issue size EUR
Slide 10: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million Q3 2022 Q2 2023 Q3 2023 ∆ QoQ ∆ YoY 1 1 Net interest income 736.4 2,200.6 2,284.7 +3.8% +210.3% Net fee and commission income 513.8 487.6 482.7 -1.0% -6.1% Total income 1,078.8 2,695.4 2,707.7 +0.5% +151.0% Total costs (excl. obligato
Slide 11: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q3 2022 Q2 2023 Q3 2023 ∆ QoQ ∆ YoY Total assets 205,676 212,928 225,389 +5.9% +9.6% Gross loans to customers 128,677 121,727 121,419 -0.3% -5.6% Individual client loans 73,173 68,155 67,829 -0.5% -7.3% Corporate client loans 55,375 53,429 53,4
Slide 12: 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 2,766 M as of 30.09.2023 Number of individual court cases Distribution of f
Slide 13: Excellent performance of the core business demonstrated in 9M 2023
Excellent performance of the core business demonstrated in 9M 2023 Summary of financial results for mBank’s core activity and run-off portfolio in 9M/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 14: Agenda
Agenda Key highlights of Q3 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2023 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 15: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Stable loan portfolio impacted by 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 -3.5% -5.6% -1.7% 0.0% -4.3% -0.3% 55,375 -1.3% 128,677 52,207 54
Slide 16: Results of mBank Group: New lending business
Results of mBank Group: New lending business Good sales of consumer and corporate credit, weaker mortgage lending Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter -20% 0% -32% +9% +9% 1,162 2,212 2,204 2,114 2,029 984 47 35 1,875 786 473 372 418 397 63 134 687
Slide 17: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Inflow of deposits in both retail and corporate segment fuelled by current accounts Development of customer deposits Deposits from corporate customers PLN M PLN M +6.2% +8.7% +5.9% +7.9% +4.8% +8.2% 51,055 49,981 51,295 50,215 54,201 180,917 185,109 176,662
Slide 18: 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 +21% +11.7% +5% +5% revenues in 2022 +0.5% reac
Slide 19: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Operating expenses driven by staff costs and amortisation, 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 -12.8% by
Slide 20: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Higher provisioning level due to single corporate cases, no material recalibration effect Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 87 +37.9% +34.2% 71 69 59 64 258.0 70 192.2 0.
Slide 21: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality A slight deterioration of NPL ratios, but coverage of impaired portfolio improved further mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M NPL ratio -1.0% according to EBA 4.2% +3.8% 4.0% 4.1% definition has 4.0% 4.0% remained 5,205
Slide 22: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Safe capital position with significant surplus over regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR +4.56 Group’s LCR: 238% 16.81% 16.89% 220% 16.36% 16.13% 206% 2.34% 2.29% 199% 14.66% 2.55% 2.41% 186% 184%
Slide 23: Agenda
Agenda Key highlights of Q3 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2023 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 24: Macroeconomic situation and outlook
Macroeconomic situation and outlook Falling inflation encourages NBP to keep cutting rates. Consumption on the rise again 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.20 Apr.21 Jan.22 Oct.2
Slide 25: Macroeconomic situation and outlook
Macroeconomic situation and outlook Credit growth starts rebounding. Bond and FX volatility has been elevated. 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%
Slide 26: 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 27: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks has continued being challenging and hardly predictable Key economic indicators for Poland Short-term prospects for mBank (compared to Q3/23) 2021 2022 2023F 2024F Net interest income & NIM slightly negative GDP growt
Slide 28: Strategic financial targets of mBank Group
Strategic financial targets of mBank Group Profitability and efficiency are projected to be stronger, despite slower volumes Updated strategic financial targets of mBank Group for 2023-2025 OLD target level Measure NEW target level (announced in 2021) Efficiency [in 2025] Cost/Income ratio (C/I) ~40
Slide 29: Agenda
Agenda Key highlights of Q3 2023 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q3 2023 14 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 30: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net interest income 736,358 1,978,213 2,033,110 2,200,635 2,284,687 Net fee and commission income 513,818 467,750 501,063 487,641 482,704 Dividend
Slide 31: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Cash and balances with Central Bank 20,488,126 16,014,318 16,477,981 15,962,102 18,223,125 Loans and advances to banks 9,654,087 9,806,262 13,438,881
Slide 32: mBank Group’s Ratios
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net Interest Margin, quarterly 4.03% 4.04% 3.84% 4.33% 4.26% Net Interest Margin, YtD 3.60% 3.71% 3.84% 4.08% 4.14% Net Interest Margin, excl. CHF portfolio, Y
Slide 33: 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 Presented development and dynamics are PLN M adjusted for the impact of “credit holidays” +21% +4.6% +36% +6.6% 3,836.9 3,667.8 1,605.5 3,586.5 265.4 7
Slide 34: 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 +3.1% +1.7% +24.0% +6.8% 742.7 748.0 760.6 737.9 737.8 275.0 277.9 60.2 56.3 67.4 68.4 9% 260.3 64.9 236.7 121.8 133.6 1
Slide 35: 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 225.4 225.4 217.5 217.5 209.9 212.9 209.9 212.9 13.7 6% 205.7 25.4 11% 205.7 13.3 4% 23.6 12.7 13.5 8.4 23.1 23.2 11.5 8.6 2.7 1% 27.4 7.6
Slide 36: 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 30.09.2023 as of 30.09.2023 Real estate 5.5% Building industry 4.3% Financial activities 3.2% 0.1% 0.2% Food sector 2.9
Slide 37: 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 30.09.2023 as of 30.09.2023 Nominal Issue Maturity Currency Tenor Coupon value date date Other Subordinated liabilities 4.0% Issues under Euro Medium Term Not
Slide 38: Selected Financial Data – Capital and MREL requirements
Appendix: Selected Financial Data – Capital and MREL requirements Regulatory capital requirements for mBank Group as of 30.09.2023 Countercyclical Capital Buffer (CCyB), calculated as the weighted average of the CCyB +4.56 pp rates that apply in the countries where the relevant credit exposures are
Slide 39: 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 40: 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 -5 mBank CZSK mBank CZSK Poland +50% 364 360 359 +16% +16% 45 47 47 mFinanse1 1,002.5 40 40 40
Slide 41: 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 8,730 Customer funds invested via Investment funds mBank’s solutions (30.09.2023) Brokerage assets 20,782 -7.3% -0.5% +10.1% 73,173 +3.6% 7
Slide 42: 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 -8% -2% 14.5% 13.0% +1% +2% 10,625 10,268 10,318 17,379 16,977 17,282 16,700 17,004 9,696 9,816 3,278 3,154 3,124 5,037 4,929 4,856 4
Slide 43: 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 Czech -9% +4% +6% Republic -3% +1% +1% physical network: light 7 branches 27,499 25,695 24,986 9,531 10,002 10,130 62,352 64,358 64,807 financial 7 centres 18 mKiosks 09/22 06/23
Slide 44: 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 45: 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 30.09.2023 2 2 -18% Pomorskie 1 2 2 Warmińsko- Zachodnio- Mazurskie 1 1 -22% Pomorskie 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomo
Slide 46: 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 -3.4% +5.7% 0.0% +7.7% 55,504 54,576 53,573 53,590 54,643 52,315 51,874 1,616 51,704 51,241 50,738 9,298 8,219
Slide 47: 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 48: 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 49: 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 50: 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 51: mBank’s share price performance
Appendix: mBank’s share price performance Banking stocks retreated from a 1-year peak in July 2023 amid persisting risks for the sector mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 10.10.2023 240 mBank’s share price WIG20 2.40
Slide 52: 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 third quarter of 2023, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mB
Slide 53: 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