Slide 1: Results of mBank Group Q3 2020
Results of mBank Group Q3 2020 Underlying business in good shape. Financial performance impacted by difficult market conditions. Management Board of mBank S.A. Investor Presentation October 29, 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 third quarter of 2020, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mB
Slide 3: Agenda
Agenda Summary of Main Trends in Q3 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3 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 Q3 2020
Key highlights of Q3 2020 Solid core income of PLN 1,333.5 M, despite unfavourable market conditions Net interest income at PLN 960.3 M (-9.8% YoY), strongly affected by rate cuts and declining loan yields Net fee and commission income at PLN 373.2 M (+12.7% YoY), supported by selective adjustme
Slide 5: Our support for clients amid COVID-19 pandemic
Our support for clients amid COVID-19 pandemic Solutions and offer for retail clients, microfirms and corporations Information on loans and advances subject to moratoria, by client segment and residual maturity (PLN M) Households Non-financial corporations Active moratoria Total moratoria Active mor
Slide 6: Business Development of Retail Banking and Corporate Banking
Summary of Q3 2020 in mBank Group Business Development of Retail Banking and Corporate Banking Number of Retail Clients (thou.) Market shares - Households Innovations and new products 7.7% +138 Thanks to open banking solutions, Retail Banking 7.3% +5 +5 clients with an account at mBank, who 6.9% 5
Slide 7: Key Financials: Profit and Loss Account
Summary of Q3 2020 in mBank Group Key Financials: Profit and Loss Account PLN million Q3/19 Q2/20 Q3/20 change QoQ change YoY Net interest income 1,064.2 1,006.6 960.3 -4.6% -9.8% Net fee and commission income 331.2 362.9 373.2 +2.8% +12.7% Total income 1,496.8 1,469.5 1,410.7 -4.0% -5.8% Total cost
Slide 8: Key Financials: Balance Sheet
Summary of Q3 2020 in mBank Group Key Financials: Balance Sheet PLN million Q3/19 Q2/20 Q3/20 change QoQ change YoY Total assets 158,774 182,943 182,147 -0.4% +14.7% Gross loans to customers 108,124 112,365 113,395 +0.9% +4.9% Retail client loans 58,983 63,277 65,115 +2.9% +10.4% Corporate client lo
Slide 9: Agenda
Agenda Summary of Main Trends in Q3 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3 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 10: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers A small growth of loan portfolio driven by higher retail volumes, subdued corporate credits Development of Gross Loans and Advances to Customers Gross Loans to Corporate Entities (PLN M) (PLN M) -1.4% +4.9% -2.4% -1.6% +3.9% +0.9% -1.9% +0.7% 48,647 47,786
Slide 11: Results of mBank Group: New lending business
Results of mBank Group: New lending business Loan origination and new leasing have started rebounding after significant drop Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) -7% -24% +26% +26% 2,666 2,292 2,174 2,227 2,402 222 2,361 +53% 8% 186 2,124 249 8%
Slide 12: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Deposit inflows decelerated, a large-scale shift to current accounts in both segments Development of Customer Deposits Deposits from Corporate Entities (PLN M) (PLN M) +14.0% +21.7% +14.5% -1.7% +1.6% +1.1% -1.0% +21.9% +1.3% 49,078 48,239 139,623 141,119 42
Slide 13: Results of mBank Group: Total income
Results of mBank Group: Total income Net interest income negatively influenced by lower rates, but net fees kept uptrending 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
Slide 14: Results of mBank Group: Total costs
Results of mBank Group: Total costs Best-in-class efficiency despite difficult operating conditions, costs under scrutiny Development of mBank Group’s Costs Annual contribution to the Resolution Fund: (PLN M) PLN 97.1 million in Q1/18 +1.0% PLN 197.3 million in Q1/19 PLN 167.0 million in Q1/20
Slide 15: Results of mBank Group: Cost of risk
Results of mBank Group: Cost of risk Cautious approach reflected in still 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) 151 141 409.3 126 1.2 151 -24% 97 128 352.2 79 98 83 186.6 67 157 147
Slide 16: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust asset quality confirmed by no material deterioration of risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) According to 4.9% EBA definition, +7.9% 4.8% consolidated -0.8% 4.7% NPL ratio was: 4.5% 4.5% 4.5% < 5%
Slide 17: 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 +5.14 p.p. 226% 221% 222% 19.79% 19.46% 19.53% 19.38% 19.26% 2.97% 2.95% 2.87% 2.79% 2.83% 173% 169% 14.39%
Slide 18: Agenda
Agenda Summary of Main Trends in Q3 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3 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 19: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Abrupt return of epidemics generates downside risks Thick clouds ahead of consumers. Again. Severe recession and unemployment rate is barely moving 20 12% 10 10% 0 8% -10 6% -20 4% -30 2% -40 0% Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19 Jul.19 Jan.20 Jul.20 Jan.16 J
Slide 20: 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 Oct.13 Jul.14 Apr.15 Jan.16 Oct.16 Jul.17 Apr.18 Jan.19 O
Slide 21: 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) 4.5% -3.1% 3.8% Reduction of interest rates by 140 bps in total i
Slide 22: Agenda
Agenda Summary of Main Trends in Q3 2020 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q3 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 23: 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 9M/19 9M/20 change YoY Net interest income 2,992.3 3,032.4 +1.3% Still positive dynamics of net interest income, but
Slide 24: 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.) Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Net interest income 1,064,238 1,010,501 1,065,464 1,006,611 960,295 Net fee a
Slide 25: 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.) Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Cash and balances with Central Bank 8,454,457 7,897,010 10,823,272 11,141,250 6,683,941 Loan
Slide 26: mBank Group's Ratios
Summary Appendix Profit & Loss Balance Sheet Business Lines Selected Financial Data: mBank Group’s Ratios Subsidiaries Historical view Financial Ratios Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Net Interest Margin (quarterly) 2.81% 2.60% 2.63% 2.34% 2.15% Net Interest Margin YtD 2.72% 2.69% 2.63% 2.48% 2.37% Ne
Slide 27: 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) -18.9% 1,331.1 1,335.0 -55.3% 1,276.1 -10.8% -10.8% 43.9 33.5 30.4 21.6 3
Slide 28: 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) +7.3% +3.4% -2.4% 541.6 544.4 553.5 535.5 1
Slide 29: 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) 182.9 182.1 182.9 182.1 173.8 11.0 6% 173.8 15.5 16.9 17.0 9% 158.8 15
Slide 30: 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 30.09.20
Slide 31: 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 30.09.2020 Households Real estate management 12.1% Building industry 1.1% 1.2% Food sector
Slide 32: 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 30.09.2020 Fitch 90.3% 90.3% Other Retail Long-t
Slide 33: 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 +0.08 0.00 -0.30 +0.48 16.74% +0.86 -0.18 +0.14 16.51% -0.43 16.51% 16.43% -0.24 +0.10 -0
Slide 34: 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 30.09.2020 Countercyclical Capital Buffer (CCyB) is calculated as the weighte
Slide 35: 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 Q3 2020 Retail Banking Investor Presentation – Q3 2020 |35
Slide 36: Retail Banking: Financial and Business Results
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q3/20: 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 37: Retail Banking: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Retail Banking Subsidiaries Historical view Summary of Q3/20: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) +10.4% +28.0% +2.9% +2.8% 65,115 92,303 63,362 63,277 89,777 116 60
Slide 38: 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 30.09.2020 7.6% 7.6% 7.7% 7.3% 7.4%
Slide 39: 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 40: 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 +23% +18% +10% +10% 9.6% +5% 13.5% 6
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 Mortgage Loans Non-mortgage Loans Customer deposits (CZK M) (CZK M) (CZK M) +15% +20% +19% Czech +9% +5% +5% Republic 20,119 6,093 51,183 17,424 18,454 5,8
Slide 42: 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 Q3 2020 Corporates & Financial Markets Investor Presentation – Q3 2020 |42
Slide 43: 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 Q3/20: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 -24% Pomorskie 12 2 Warmińsko- 226.
Slide 44: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Profit & Loss Balance Sheet Business Lines Corporates and Financial Markets Subsidiaries Historical view Summary of Q3/20: Loans and Deposits Gross Loans to Corporate Customers Deposits from Corporate Customers (PLN M) (PLN M) -1.4% +14.0% -1.7% -1.6% 50,494 49,078 48,239 48,647 47,
Slide 45: 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 Q3 2020 Subsidiaries Investor Presentation – Q3 2020 |45
Slide 46: 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 -82% 700 Lower profit
Slide 47: mBH: 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 48: 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 – 9M 2020 Profit before Tax (PLN M) (PLN M) -6% 7.4% -54% Lower profit established 3,829 66.5 due to high 3,582 impairme
Slide 49: 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) 2.1% 2.3% 2.5% 2.6% 2.7% 2.4
Slide 50: 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) (PLN M) CAGR +6% +15% 17.25% 20.29% 2
Slide 51: mBank's share price performance
mBank’s share price performance Banking stocks depressed by worsening profitability and resurgence of pandemic mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 30.09.2020 120 115 WIG-30 1.233% 110 1 WIG-20 1.317% 105 100 WIG 0.908
Slide 52: 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 53: Strategy for 2020-2023: 4 focus 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 54: CSR and Sustainable Development Strategy of mBank
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 55: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Karol Prażmo Direct dial: +48 22 829 17 12 Managing Director for Treasury and Investor Relations E-mail: Karol.Prazmo@mbank.pl Joanna Filipkowska Direct dial: +48 22 829 04 53 Head of Investor Rel