Slide 1: Results of mBank Group Q1-Q4 2017
Results of mBank Group Q1-Q4 2017 Record high total revenues. Strong organic growth continues. Management Board of mBank S.A. Investor Presentation February 8, 2018
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by mBank S.A. for information purposes only and is based on the non-audited financial data for mBank Group for the fourth quarter of 2017, prepared under the International Financial Reporting Standards. For more detailed information on the Bank’s and Gr
Slide 3: Agenda
Agenda Key Highlights of 2017 in mBank Group Summary of Main Trends in Q4/17 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/17 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 4: Key highlights of 2017 in mBank Group
Key highlights of 2017 in mBank Group Revenues Record high total income of PLN 4,454 million, despite Visa gain in 2016 NII increased by 11% to PLN 3,136 million and NIM improved by 18 bps to 2.48% driven by changing asset mix and falling funding costs Net interest income & margin Gradual uptrend
Slide 5: Key highlights of 2017 in mBank Group
Key highlights of 2017 in mBank Group Solid growth of loans to PLN 87.4 billion, focus on higher-margin products Loans Excluding FX effect, gross portfolio expanded by 7.4% YoY, driven by lending acceleration in corporate segment and record high non-mortgage loan sales (at PLN 7.1 billion, +16% Yo
Slide 6: Key Financials: Profit and Loss Account
Summary of 2017 in mBank Group Key Financials: Profit and Loss Account PLN million 2015 2016 2017 change ’17/16 Net interest income 2,511.4 2,832.8 3,135.7 +10.7% Net fee and commission income 897.2 906.4 992.2 +9.5% Total income 4,093.3 4,295.4 4,453.6 +3.7% Total costs -1,856.8 -1,952.3 -2,043.2 +
Slide 7: Key Financials: Balance Sheet
Summary of 2017 in mBank Group Key Financials: Balance Sheet PLN million 2015 2016 2017 change ’17/16 Total assets 123,523 133,744 131,424 -1.7% Gross loans to customers 81,409 84,581 87,388 +3.3% Retail client loans 46,259 48,950 48,143 -1.6% Corporate client loans 1 32,416 34,118 37,885 +11.0% Amo
Slide 8: Core income on the growth trajectory, improving efficiency
Summary of 2017 in mBank Group Core income on the growth trajectory, continued improvement of underlying efficiency Development of mBank Group’s Total Income Development of mBank Group’s Total Costs (PLN M) (PLN M) Cost/Income ratio, 2.13% 2.30% 2.48% Net Interest Margin 49.2% 48.2% 45.9% excl. one-
Slide 9: Agenda
Agenda Key Highlights of 2017 in mBank Group Summary of Main Trends in Q4/17 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/17 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 10: Key highlights of Q4 2017
Key highlights of Q4 2017 Net profit of PLN 311.6 M, up by 6.9% compared to Q3/17 Historically high level of core income of PLN 1,058.6 M Net interest income at PLN 825.1 M (+9.5% YoY) with margin improvement to 2.57% Net fee and commission income at PLN 233.5 M (-6.8% YoY), but transactionality
Slide 11: Business Development of Retail Banking and Corporate Banking
Summary of Q4/17 in mBank Group Business Development of Retail Banking and Corporate Banking Retail Banking Number of Clients (thou.) Market shares +291 A multi-currency card VISA 6.5% 6.6% 6.5% +83 +83 6.5% Aquarius World for payments 6.3% and ATM withdrawals in 151 5,052 5,259 5,342 6.1% currenc
Slide 12: Key Financials: Profit and Loss Account
Summary of Q4/17 in mBank Group Key Financials: Profit and Loss Account PLN million Q4/16 Q3/17 Q4/17 change QoQ change YoY Net interest income 753.3 796.8 825.1 +3.6% +9.5% Net fee and commission income 250.6 256.5 233.5 -9.0% -6.8% Total income 1,044.7 1,149.4 1,141.5 -0.7% +9.3% Total costs (excl
Slide 13: Key Financials: Balance Sheet
Summary of Q4/17 in mBank Group Key Financials: Balance Sheet PLN million Q4/16 Q3/17 Q4/17 change QoQ change YoY Total assets 133,744 132,478 131,424 -0.8% -1.7% Gross loans to customers 84,581 88,484 87,388 -1.2% +3.3% Retail client loans 48,950 48,949 48,143 -1.6% -1.6% Corporate client loans 1 3
Slide 14: Agenda
Agenda Key Highlights of 2017 in mBank Group Summary of Main Trends in Q4/17 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/17 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 15: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Portfolio expansion dimmed by FX rates development, focus on higher-margin products Development of Gross Loans and Advances to Customers (PLN M) +11.0% +3.3% +13.5% -0.9% +7.4% -1.2% +0.2% +0.4% 38,288 37,942 88,484 87,388 34,174 34,841 36,143 84,581 84,538
Slide 16: Results of mBank Group: New lending business
Results of mBank Group: New lending business Better non-mortgage lending, new housing loans kept stable, strong performance of leasing Sales of Mortgage Loans Sales of Non-mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +13% +17% +7% +7% 1,002 -3% 1,801 1,904 172 1,770 798 818 795 218 1,649 1
Slide 17: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Reduction of term deposits and repo compensated by continued inflows to current accounts Development of Amounts due to Customers (PLN M) -7.5% +0.1% -4.6% +1.4% +0.9% -0.4% +2.4% +3.7% 37,383 34,725 34,590 91,418 90,678 91,496 1,600 33,551 32,737 1% 540 88,7
Slide 18: Results of mBank Group: Total income
Results of mBank Group: Total income Core revenues at record high level, NII growth compensating for weaker NFC Development of mBank Group’s Total Income (PLN M) +9.3% -0.7% 1,149.4 1,141.5 QoQ YoY 1,044.7 1,081.8 1,080.9 18.6 18.5 1.6 4.5 17.7 83.1 73.0 10.8 3.1 76.9 61.1 0.1 0.2 0.3 26.6 0.2 3.0 2
Slide 19: Results of mBank Group: Total costs
Results of mBank Group: Total costs Costs kept under control, increase due to accelerated amortization of IT infrastructure Development of mBank Group’s Costs Q4/16 costs include additional payment to the BFG related to the (PLN M) bankruptcy of Cooperative Bank in Nadarzyn of PLN 10.9 million.
Slide 20: Results of mBank Group: Loan loss provisions
Results of mBank Group: Loan loss provisions Improvement of risk costs driven by lower provisioning in corporate segment Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 78 -15% 66 58 164.4 46 41 61 59 49 140.0 20 41 120.4 74.5 80 80 76 45.7 67 68 40.5
Slide 21: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Good quality of loan portfolio evidenced by resilient risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) -0.7% 5.4% mBank Group applies 5.2% 5.2% 5.2% a conservative client- -1.6% 5.0% oriented approach in 4,537 4,580
Slide 22: Results of mBank Group: Key regulatory ratios
Results of mBank Group: Key regulatory ratios Strong capital ratios well above regulatory requirements mBank Group’s Total Capital Ratio mBank’s NSFR and LCR 199% 21.59% 21.24% 20.99% 20.29% 20.47% 2.83% 2.77% 2.68% 168% 2.97% 2.64% 165% 17.55% 156% 152% 114% 116% 114% 112% 110% Basel III requiremen
Slide 23: Agenda
Agenda Key Highlights of 2017 in mBank Group Summary of Main Trends in Q4/17 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/17 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 24: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Brisk (4.6%) GDP growth to be maintained in 2018 Investment is perking up, finally. More to come. Record-high consumer sentiment is supporting consumption 60% 1 YoY 40% 0 20% -1 0% -2 -20% -40% -3 -60% -4 2010 2011 2012 2013 2014 2015 2016 2017 2004 2005 2006 2007 2008 200
Slide 25: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Rebound in credit growth. Polish assets are in demand. Corporate loans and deposits (% YoY, FX-adjusted) Household loans and deposits (% YoY, FX-adjusted) 30% 15% 20% 12% 9% 10% 6% 0% 3% -10% 0% Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 J
Slide 26: 2018 in forecasts and the impact on mBank Group
2018 in forecasts and the impact on mBank Group Macroeconomic environment and challenges for the banking sector Key economic indicators Outlook for mBank 2016 2017 2018F Net interest income & NIM (Slightly positive) GDP growth (YoY) 2.9% 4.6% 4.6% Continued gradual increase of margin driven by cha
Slide 27: Agenda
Agenda Key Highlights of 2017 in mBank Group Summary of Main Trends in Q4/17 Business Development of Retail and Corporate Segment Key Financials Analysis of the Results after Q4/17 Loans and Deposits Total Income and its Main Components Total Costs and Efficiency Loan Loss Provisions and Portfolio Q
Slide 28: Selected Financial Data: Consolidated Profit and Loss Account
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account Quarterly results (PLN thou.) Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Net interest income 753,270 749,007 764,779 796,762 825,112 Net fee and commission income
Slide 29: Consolidated Statement of Financial Position
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Cash and balances with Central Bank 9,164,281 7,139,929 5,855,425 6,028,470 7,384,869 Loans a
Slide 30: mBank Group's Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries mBank Group’s Ratios Financial Ratios Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Net Interest Margin (quarterly) 2.35% 2.42% 2.43% 2.50% 2.57% Net Interest Margin YtD 2.30% 2.42% 2.42% 2.45% 2.48% Net
Slide 31: mBank Group's historical performance
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines mBank Group’s historical performance Subsidiaries Total Income & Margin NII NFC Trading and other Total Costs & C/I ratio Personnel Material and other BFG (PLN M) (PLN M) 2.4% 2.2% 2.3% 2.1% 2.3% 2.5% 46.5% 45.7% 44.9% 50.1%
Slide 32: mBank Group's historical performance
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines mBank Group’s historical performance Subsidiaries Total Assets Equity & Total Capital Ratio (PLN B) (PLN M) +5% -2% 18.73% 19.38% 14.66% 17.25% 20.29% 20.99% CAGR +8% +10% +10% CAGR 123.5 133.7 131.4 118.0 102.1 104.3 14,292
Slide 33: Profit and Loss Account: Net Interest Income
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Profit and Loss Account: Net Interest Income Interest Income Structure Interest Expense Structure (PLN M) (PLN M) +5.3% +3.3% +3.3% -7.4% 1,056.5 +2.4% 1,022.7 1,003.3 982.5 990.3 24.7 2%
Slide 34: Profit and Loss Account: Net Fee and Commission Income
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Profit and Loss Account: Net Fee and Commission Income Fee and Commission Income Structure Fee and Commission Expense Structure (PLN M) (PLN M) -3.5% +1.2% -2.1% +8.6% 429.2 423.0 407.1 4
Slide 35: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities and Equity (PLN B) (PLN B) 133.7 132.5 131.4 133.7 132.5 130.5 129.4 130.5 129.4 131.4 11.9 8.8 1
Slide 36: Balance Sheet Analysis: Currency Structure
Summary Appendix Historical view Profit & Loss Balance Sheet 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) 85.5 84.5 103.8 83.4 99
Slide 37: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet 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 31.12.2017 as of 31.12.2017 Public sector Corporat
Slide 38: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 31.12.2017 Households Real estate management 12.9% Building industry 1.2% Food sector 1.2%
Slide 39: Balance Sheet Analysis: Funding Structure and Liquidity Levels
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Funding Structure and Liquidity Levels mBank Group’s Funding Structure mBank’s ratings Loan-to-Deposit Ratio as of 31.12.2017 Fitch -2.0 pp Retail 94.6% Long-term
Slide 40: Detailed Development of Capital Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Detailed Development of Capital Ratios mBank Group’s Tier 1 Capital Ratio 18.76% -0.31 +0.17 -0.17 +0.02 18.47% -0.57 +0.21 -0.05 18.31% +0.18 +0.19 -0.23 +0.14 -0
Slide 41: Details of Capital Requirements
Summary Appendix Historical view Profit & Loss Balance Sheet Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Details of Capital Requirements Regulatory capital requirements for mBank Group starting as of 01.01.2018 Countercyclical Capital Buffer is calculated as the weigh
Slide 42: Detailed Results of the Business Lines in Q4/17: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q4/17 Retail Banking Investor Presentation – Q1-Q4 2017 |42
Slide 43: Retail Banking: Summary of Q4/17 Financial and Business Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q4/17: Financial and Business Results Profit before Tax of the Segment Number of Retail Service Locations (PLN M, by quarter) 316 322 326 332 333 +1% 37 35 34 33 -12% -12% 37 41 43 43 4
Slide 44: Retail Banking: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q4/17: Loans and Deposits Gross Loans to Retail Banking Clients1 Deposits from Retail Banking Clients (PLN M) (PLN M) -1.6% +4.1% +3.1% -1.6% 48,950 48,758 48,949 55,694 48,338 48,143 5
Slide 45: 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 31.12.2017 7.7% 7.6% 7.6% 7.5% 7.5%
Slide 46: 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 +3% +12% -1% 9.2% +1% 15.9% 4,291 4,
Slide 47: 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) +4% +32% +13% Czech +1% +4% +3% Republic 16,921 17,416 17,634 4,131 38,885 3,96
Slide 48: Detailed Results: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q4/17 Corporates & Financial Markets Investor Presentation – Q1-Q4 2017 |48
Slide 49: Corporates and Financial Markets: Summary of Q4/17
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q4/17: Financial and Business Results Profit before Tax of the Segment Number of Corporate Service Locations (PLN M, by quarter) 22 -4% 29 mBank’s branches, Pomorskie
Slide 50: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q4/17: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +11.0% -7.5% -0.9% -0.4% 38,288 37,942 37,383 36,143 34,7
Slide 51: Detailed Results of mBank Group's companies: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of mBank Group’s companies in Q4/17 Subsidiaries Investor Presentation – Q1-Q4 2017 |51
Slide 52: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Issuance of Covered Bonds Profit before Income Tax (PLN M, by year) 2,732 (PLN M) established in 1999 Private placement 700 +15% specialised mortgage bank and ac
Slide 53: mBank Hipoteczny: Issuance Activity on the Covered Bonds Market
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH): Issuance Activity on the Covered Bonds Market Summary of Mortgage Covered Bonds issued in 2014-2017 (public issues) Amount Currency Issue date Maturity date Ten
Slide 54: 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 – 2017 Profit before Tax (PLN M) (PLN M) +24% 7.4% -11% established 4,986 72.6 in 1991 64.8 4,031 11.1 1,440 Rank provid
Slide 55: mBank Dom Maklerski (mDM)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Brokerage Services Business Lines Subsidiaries mBank Dom Maklerski (mDM) mDM Equities Trading on WSE and Market Share in Turnover mDM Futures Trading on WSE and Market Share in Turnover (PLN M, by quarter) (thou. of contracts
Slide 56: mBank's share price performance in 2017
mBank’s share price performance in 2017 mBank’s shares recovered on the changed perception of CHF-related risks mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100) 150 WIG-30 2.559% 145 WIG-20 2.747% 140 +38.7% WIG 1.779% 135 +35.4% WIG-Banks 6.167% 130 +
Slide 57: mBank's Mobile Banking
mBank’s Mobile Banking Focus on client convenience through well-designed functionalities mBank launched a new mobile application in April 2017 Key functionalities of the app, inspired by users’ opinions and habits, include: Android Pay (for both Visa and MasterCard holders) Mobile authorisation
Slide 58: mBank Group's Strategy for 2016-2020
mBank Group’s Strategy for 2016-2020 Specific business actions will be based on three strategy pillars 1 2 3 Empathy Mobility Efficiency Be the point of reference in Grow while keeping the FTE Offer the best customer terms of mobile banking base at current level experience i.e. give clients wh
Slide 59: Strategy for 2016-2020: Financial performance targets
mBank Group’s Strategy for 2016-2020 Financial performance targets – 5 key measures Financial measure Target point 1 Cost efficiency: Top3 in Poland, every year Cost/Income ratio to be one of three most efficient listed banks in Poland 2 Top3 in Poland, every year Owner’s capital profitability: Retu
Slide 60: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Ernest Pytlarczyk Direct dial: +48 22 829 14 34 E-mail: ernest.pytlarczyk@mbank.pl Head of Analysis and Investor Relations, Chief Economist Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy