Mbank Sa · GPW:MBK
Mbank Sa — Debt Investor Presentation (September 2023)
57 slides from Mbank Sa's debt investor presentation, September 2023
Slide 1: mBank Group Non-Preferred Senior, Green Bond Issuance
mBank Group Non-Preferred Senior, Green Bond Issuance Debt Investor Presentation, September 2023
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) This presentation has been prepared by mBank S.A. (the "Bank") solely for use at meetings regarding the offer and sale of the notes referred to herein (the “Notes”) and constitutes a summary of certain proposed terms of an offering of notes as currently contemplated and has been pre
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined i
Slide 4: Agenda
Agenda mBank Group in a snapshot 5 Macroeconomic outlook 7 Characteristics of main business lines 10 Overview of financial results 17 ESG strategy of mBank Group 30 mBank Group’s Green Bond Framework 36 Summary of proposed transaction 43 Appendix 44 mBank | Green NPS Presentation | 2023 4
Slide 5: Digital banking is the foundation of mBank's diversified business model
Digital banking is the foundation of mBank’s diversified business model General description Key financial data (PLN M) 2020 2021 2022 H1 2023 ✓ ▪ Poland’s fifth largest universal banking Total assets 178,861 198,373 209,892 212,928 group in terms of total assets Net loans 108,271 117,677 120,183 118
Slide 6: Summary of strategic & financial highlights
Summary of strategic & financial highlights Key financial highlights (30.06.2023) Balanced business model in an attractive market. Well positioned to capture growth prospects Significantly 4.1% increased NIM +0.7 p.p. YoY Leading digital & mobile banking platform in both customer segments Outstandin
Slide 7: Macroeconomic outlook
Macroeconomic outlook mBank | Green NPS Presentation | 2023 7
Slide 8: Resilient economy with good growth prospects
Resilient economy with good growth prospects GDP path and forecast for Poland (% YoY) NBP is expected to cut rates this year due to declining inflation 14 21% 12 12.3 18% 8.6 8.8 10 6.6 6.1 6.1 5.7 5.2 5.2 6.1 15% 8 5.1 4.5 5.7 5.2 5.9 4.2 3.4 6 3.9 12% 2.7 2.3 2.3 4 9% 2 -0.5 0.0 0 6% mBank’s -2 0.
Slide 9: Polish growth story continues, high competitiveness compared to peers
Polish growth story continues, 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 Bulgaria Romania
Slide 10: Characteristics of main business lines
Characteristics of main business lines mBank | Green NPS Presentation | 2023 10
Slide 11: Poland's largest organically developed retail banking franchise
Poland’s largest organically developed retail banking franchise Number of mBank’s retail clients (thou.) Business volumes of Retail Banking segment without Kompakt Finanse CAGR Loans (PLN B) Deposits (PLN B) +1% CAGR CAGR A drop in 2021 due to closing of +4% +12% 5,601 5,660 5,514 5,642 5,676 inacti
Slide 12: A leading mobile banking offer for individual clients
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 recent trans
Slide 13: Supportive demographic profile of mBank's retail client base
Supportive demographic profile of mBank’s retail client base Net revenue per active customer – individual clients at mBank in Poland, 2020 MAX Core banking products Peak earning point = 46 ▪ mBank’s current customer Savings demographic profile is a Non-mortgage loans consequence of our digital PLN m
Slide 14: 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 15: Strong presence and leading expertise in corporate banking
Strong presence and leading expertise in corporate banking Number of mBank’s corporate clients Business volumes of Corporate & Investment Banking segment CAGR Corporate customers split: Loans (PLN B) Deposits (PLN B) +9% K1 CAGR CAGR 33,025 33,669 31,315 2,327 annual sales +7% +19% 29,083 2,218 over
Slide 16: Best digital banking services for corporate clients in Poland
Best digital banking services for corporate clients in Poland 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 17: Overview of financial results
Overview of financial results mBank | Green NPS Presentation | 2023 17
Slide 18: 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 19: Summary of key financial metrics for mBank Group in H1 2023
Summary of key financial metrics for mBank Group in H1 2023 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 lo
Slide 20: Segmentation reveals excellent performance of the core business
Segmentation reveals excellent performance of the core business 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 performance
Slide 21: Highly efficient platform underpinning solid financial results
Highly efficient platform underpinning solid financial results Total income (PLN M) & net interest margin (NIM) Total operating expenses (PLN M) & Cost/Income ratio (C/I) Net interest income Net fee income Net trading and other income Personnel costs Material and other costs compulsory contributions
Slide 22: Well-balanced growth of business volumes, solid capital position
Well-balanced growth of business volumes, solid capital position Total gross loans (PLN B) Total customer deposits (PLN B) Individual clients Corporate clients Public sector Individual clients Corporate clients Public sector CAGR: +4.5% -1.4% +1.5% CAGR: +15.4% 120.9 123.4 121.7 174.1 176.7 108.2 11
Slide 23: Strong protection against legal risks and ongoing settlement program
Strong protection against legal risks and ongoing settlement program CHF mortgage loans to individual customers (PLN M, net) Summary of pending court cases and severity of verdicts portfolio deductions due to legal risks CHF 766 M as of 30.06.2023 Number of individual court cases Distribution of fin
Slide 24: Good loan portfolio quality confirmed by risk indicators
Good loan portfolio quality confirmed by risk indicators mBank Group’s impaired loans portfolio (PLN M) mBank Group’s NPL ratio at amortized cost at fair value through profit and loss 4.8% According to EBA definition, 4.5% consolidated CAGR: +0.3% 3.9% 4.0% 4.1% +1.3% NPL ratio was: 3.6% < 5% 5,433
Slide 25: Loan portfolio and deposit base with favourable product split
Loan portfolio and deposit base with favourable product split 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% 17.2
Slide 26: Diversified funding profile
Diversified 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 Note (EMTN) Programme Debt
Slide 27: Capital ratios well exceeding the regulatory requirements
Capital ratios well exceeding the regulatory requirements Regulatory capital requirements for mBank Group as of 30.06.2023 +4.48 pp Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of +4.43 pp the countercyclical buffer rates that apply in the countries where the relevant
Slide 28: Expected MREL requirements to be fulfilled by bond issuances
Expected MREL requirements to be fulfilled by bond issuances Summary of key information MREL TREA interim and fully-fledged requirement ▪ Based on the joint decision of Resolution College, the Multiple Point of as communicated to mBank on 12.04.2023 Entry (MPE) approach was applied in case of Commer
Slide 29: Evaluation of financial targets in the middle of strategic horizon
Evaluation of financial targets in the middle of strategic horizon Current financial performance of mBank Group compared to the strategic targets Target level Current level – H1 2023 Measure announced in strategy reported execution and comment Efficiency interest-induced revenue boost [in 2025] Cost
Slide 30: ESG strategy of mBank Group
ESG strategy of mBank Group mBank | Green NPS Presentation | 2023 30
Slide 31: ESG strategy of mBank Group for 2021-2025
ESG strategy of mBank Group for 2021-2025 ESG aspects play a crucial role in the way we manage our company. We want to make progress in our ESG agenda and stand out from our peer group. We will be a more responsible and inclusive bank and expect it from our employees, clients and commercial partners
Slide 32: mBank's ESG Risk Rating from Sustainalytics upgrade: 13.0 (low risk)
mBank’s ESG Risk Rating from Sustainalytics upgrade: 13.0 (low risk) Rating improvement mBank among banking ESG leaders ESG Risk Category ESG Risk Exposure ESG Risk Rating Change* Management Corporate 9.0 (High risk) 61.8 (Strong) 3.4 (Low) Governance Data Privacy and 8.8 (High risk) 90.0 (Strong) 2
Slide 33: mBank is successively improving the disclosure on GHG emissions
mBank is successively improving the disclosure on GHG emissions GHG disclosure in the 2022 mBank Group’s ESG Report – extended disclosure of scope 3 emissions Emissions (tonnes of CO2e per year) Change YoY Category 2021 2022 2022/2021 CO2e emissions - Scope 1 3,295.42 3,554.03 7.8% CO2e emissions -
Slide 34: Expanding the offer with eco-products for retail and corporate clients
Expanding the offer with eco-products for retail and corporate clients Eco-mortgage loan for Eco-loan for Financing of Renewable individual clients small companies Energy Sources ▪ Eco-mortgage loan for financing the ▪ mBank arranges issuance of green purchase or construction of energy- bonds by its
Slide 35: Sustainability standards at mBank
Sustainability standards at mBank We define our ESG standards in the following policies, procedures and codes of conduct In the interest of transparency, we have published all the documents mentioned below on our website: https://www.mbank.pl/en/about-us/corporate-social-responsibility/our-standards
Slide 36: mBank Group's Green Bond Framework
mBank Group’s Green Bond Framework mBank | Green NPS Presentation | 2023 36
Slide 37: mBank S.A. Group Green Bond Framework
mBank S.A. Group Green Bond Framework The framework is based on the following key pillars of the ICMA Green Bond Principles published in June 2021 (with June 2022 Appendix 1) ✓Use of proceeds Eligible Green Loan Portfolio includes projects with ✓ Project Evaluation & Selection ▪ The Sustainable Deve
Slide 38: Use & management of Proceeds
Use & management of Proceeds All nominated assets fulfill specific Climate Bonds Initiative (CBI) Sector Criteria and are selected with a 3Y look-back period (first disbursement no more than 3Y before the settlement date of the green bond) Unallocated eligible loans Annual CO2 emissions Number of co
Slide 39: Green Bonds Methodology
Green Bonds Methodology Eligibility criteria for residential buildings in Poland mBank | Green NPS Presentation | 2023 39
Slide 40: mBank S.A. Group Green Bond – Eligibility criteria
mBank S.A. Group Green Bond – Eligibility criteria Poland's residential buildings stock by age of building construction (in Top 15% approach (best-in-class) to existing buildings thousands) ✓ based on the statistical analysis of residential buildings in 1 600 25% 1 400 Total numer of Poland with ref
Slide 41: Eligibility criteria for residential buildings by the Climate Bonds Initiative
mBank S.A. Group Green Bond – Eligibility criteria for residential buildings by the Climate Bonds Initiative (CBI) The low carbon trajectory is based on the year of issuance of the green bond and its applied duration since for each year until 2050, the requirements for carbon emissions and non-renew
Slide 42: mBank's Inaugural Non-Preferred Senior Green Bond Issuance
mBank’s Inaugural Non-Preferred Senior Green Bond Issuance Transaction details Distribution by investor location ISIN XS2388876232 (Series 11) United Kingdom + Ireland 1% 4% France Format Green Senior Non-Preferred Notes 3% 5% Switzerland Issue size EUR 500 M (no grow) 8% 37% Germany Issue rating BB
Slide 43: mBank's Green Bond proposed transaction
mBank’s Green Bond proposed transaction Summary of key terms and conditions Issuer mBank S.A. Green Bonds, non-preferred senior notes Issue type (MREL eligible) Expected issue rating Fitch: BBB- (RWN) / S&P: BB+ Issue amount Benchmark Maturity 4NC3 Coupon Fixed-to-floating format Min denomination EU
Slide 44: Appendix
Appendix mBank | Green NPS Presentation | 2023 44
Slide 45: Macroeconomic situation in Poland: monetary aggregates
Macroeconomic situation in Poland: monetary aggregates Corporate loans and deposits (YoY, FX-adjusted) Household loans and deposits (YoY, FX-adjusted) 30% 14% 12% 25% 10% 20% 8% 15% 6% 4% 10% 2% 5% 0% -2% 0% -4% -5% -6% -10% -8% Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 J
Slide 46: Stable and operationally efficient banking sector
Stable and operationally efficient banking sector Loan penetration in Poland: key credit categories to GDP (%) Capital adequacy and funding: T1 capital and L/D ratios 2010 2015 2020 2022 Tier 1 capital ratio Loan-to-Deposit ratio 21.0 20.2 18.5% 90.2% 17.4% 18.3% 18.1 18.6 17.0% 79.2% 76.5% 75.1% 15
Slide 47: mBank Group's financial results in 2022: Profit and Loss Account
mBank Group’s financial results in 2022: Profit and Loss Account reported adjusted PLN million 2020 2021 2022 ∆ YoY 2022 ∆ YoY Net interest income 4,009.3 4,126.3 5,909.2 +43.2% 7,231.6 +75.3% Net fee and commission income 1,508.3 1,867.8 2,120.1 +13.5% 2,120.1 +13.5% Net trading and other income 34
Slide 48: Pillars of mBank Group's strategy for 2021-2025
Pillars of mBank Group’s strategy for 2021-2025 Our business activities and initiatives are focused on 5 areas Retail Banking area will be organized around demographic segments to Corporate and Investment Banking area will cooperate with companies develop the complete offer and value proposition pre
Slide 49: Vision for mBank Group and guiding principles for the organisation
Vision for mBank Group and guiding principles for the organisation We anchor the future of mBank on seven pillars understanding of customer banking secrecy and needs in their life cycle firm promise to protect and calibrating products customer information, adequately to support them personal data an
Slide 50: mBank Group's ESG strategy for 2021-2025
mBank Group’s ESG strategy for 2021-2025 Responsibility for climate Our promise: By 2050 we will become a fully climate-neutral bank. By 2030 we will reach climate neutrality in scope 1 and 2. Our goals (climate neutrality and energy transformation) – direct impact: reduce direct environmental footp
Slide 51: mBank Group's ESG strategy for 2021-2025
mBank Group’s ESG strategy for 2021-2025 Responsibility for climate Our promise: By 2050 we will become a fully climate-neutral bank. By 2030 we will reach climate neutrality in scope 1 and 2. Our goals (climate neutrality and energy transformation) – indirect impact: be a leading bank supporting th
Slide 52: mBank Group's ESG strategy for 2021-2025
mBank Group’s ESG strategy for 2021-2025 Responsibility for the financial health of our clients Our promise: We support customers in safe and convenient banking as well as making conscious financial decisions. Our goals (transparency and ethics, inclusive banking): take care of good financial standi
Slide 53: mBank Group's ESG strategy for 2021-2025
mBank Group’s ESG strategy for 2021-2025 Responsibility for being an organization in line with ESG values Our promise: We walk the talk. We first accomplish and then communicate. We build corporate culture based on values and incorporate ESG into our daily life. Our goals (authenticity): introduce E
Slide 54: mBank Group's ESG strategy for 2021-2025
mBank Group’s ESG strategy for 2021-2025 Responsibility for society Our promise: We will contribute to social well-being. We will be a responsible corporate citizen. We will take care of our employees and their families. Our goals (a responsible corporate citizen): act for the financial and non-fina
Slide 55: Performance of mBank's shares and outstanding NPS bonds
Performance of mBank’s shares and outstanding NPS bonds mBank stock price and secondary market spread level for outstanding Senior Non-Preferred issued by mBank (EUR 500 M, Sep’27) I-Spread to maturity Stock price (mid); in bps in PLN 600 500 500 450 400 400 mBank NPS EUR 500mn 300 I-Spread to matur
Slide 56: 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 Paweł Lipiński +48 508 468 023 pawel.lipinski@mbank.pl Kamila Kałuża +48 501 533 050 kami
Slide 57: Disclaimer
Disclaimer The certification of the Non-preferred Senior Green Bonds series 12 as Climate Bonds by the Climate Bonds Initiative is based solely on the Climate Bond Standard and does not, and is not intended to, make any representation, warranty, undertaking, express or implied, or give any assurance