Slide 1: Results of mBank Group Q2 2021
Results of mBank Group Q2 2021 Robust core operations on strong business flows Presentation for Investors and Analysts, 03.08.2021 Investor Presentation – Q2 2021
Slide 2: Agenda
Agenda Key highlights of Q2 2021 3 Business development Summary of financial results Analysis of the performance after Q2 2021 16 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 Q2 2021 in mBank Group
Key highlights of Q2 2021 in mBank Group Core revenues close to record-high level, driven by strong Net interest income Net fee income fee result and gradually rebounding net interest income -4.5% YoY +24.7% YoY High efficiency amid investments in future growth, Total costs Cost/Income ratio con
Slide 4: New products and innovations in Q2 2021
New products and innovations in Q2 2021 arranger of green bond issuance of R.Power In June, mBank arranged the issuance of the first series of green bonds by R.Power, the largest Polish developer of photovoltaic farms Obtained funds of PLN 150 million will be allocated to the purchase of new PV
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 8.2% inactive 8.9% current deposits 8.0% -206 accounts 7.8% with arrears 4.9% term deposits 7.7% -53 -53 7.5% 7.3% 5,670 5,516 5,
Slide 6: mBank as a front-runner in mobile banking adoption
mBank as a front-runner in mobile banking adoption Active users of mBank’s mobile application in Poland by the share Number in thousand #1 of mobile users in total active average growth per year +148 2,423 customer base 2,274 +342 1,895 1,484 by the number 1,181 854 #2 of mobile app users among 565
Slide 7: Development of leading mobile banking offer for individuals
Development of leading mobile banking offer for individuals easiest way to manage Well-designed functionalities for client convenience your finances fully remote account opening with a selfie and agreement approved via a text message pace of spending logging in with a PIN code, recent fingerprin
Slide 8: Development of best digital banking services for corporate clients
Development of 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
Slide 9: Development of complete solutions for e-commerce segment
Development of 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 mBan
Slide 10: Focus on sustainable and responsible banking
Focus on sustainable and responsible banking External ESG assessment Our ESG activities are centred around 3 aspects in line with sustainable development strategy 15.9 ESG Risk Rating mBank educates mBank promotes prosperity low risk by Sustainalytics We support the develop- We support organ
Slide 11: Summary of key financial highlights
Summary of key financial highlights Total income Cost/Income ratio 1 Net profit of Core Business 2 ROE of Core Business 2 PLN M PLN M +2.7% -2.6pp +96% +5.1pp 2,904 2,982 42.2% 735.6 10.7% 39.6% 374.8 5.6% H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 Gross loans to customers NPL r
Slide 12: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million Q2 2020 Q1 2021 Q2 2021 ∆ QoQ ∆ YoY Net interest income 1,006.6 946.9 961.5 +1.5% -4.5% Net fee and commission income 362.9 468.1 452.6 -3.3% +24.7% Total income 1,469.5 1,538.8 1,442.8 -6.2% -1.8% Total costs (excluding BFG) -538.7 -
Slide 13: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q2 2020 Q1 2021 Q2 2021 ∆ QoQ ∆ YoY Total assets 182,396 194,217 198,471 +2.2% +8.8% Gross loans to customers 111,818 116,925 119,949 +2.6% +7.3% Individual client loans 62,730 67,785 70,093 +3.4% +11.7% Corporate client loans 48,734 48,901 49,
Slide 14: Summary of litigations and provisions related to CHF portfolio
Summary of litigations and provisions related to CHF portfolio CHF mortgage loans granted to individual customers Number of individual court cases concerning indexation clauses CHF M, carrying amount new court proceedings equivalent to PLN 11,035 M, +20% CAGR 9.2% of total loan portfolio initiated a
Slide 15: New segmentation to show genuine performance of core business
New segmentation to show genuine performance of core business Summary of financial results for mBank’s core activity and run-off portfolio in H1 2021 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group In order to present the genuine and undistorted performance
Slide 16: Agenda
Agenda Key highlights of Q2 2021 3 Business development Summary of financial results Analysis of the performance after Q2 2021 16 Loans and deposits Total income and its main components Total costs and efficiency Loan loss provisions and portfolio quality Capital and liquidity position
Slide 17: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Continuous loan portfolio expansion driven by strong momentum of retail exposures Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M +1.8% +7.3% +1.6% +1.5% +6.9% +2.6% +2.6% +3.4% 48,734 47,970 46,025 48,901
Slide 18: Results of mBank Group: New lending business
Results of mBank Group: New lending business Accelerating sales of housing loans, accompanied by strong rebound of consumer lending Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter +103% +20% +20% +116% +19% +19% 3,424 2,574 2,950 2,855 2,157 366 1,097 1,828 1,
Slide 19: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Growth of deposit base fueled by constant inflows to current accounts in both segments Development of customer deposits Deposits from corporate customers PLN M PLN M 0.0% +12.1% +1.1% +2.6% +2.9% +12.6% +2.4% 49,078 48,239 47,862 49,095 156,584 152,097 715 3
Slide 20: Results of mBank Group: Total income
Results of mBank Group: Total income Solid core revenues driven by gradually recovering net interest income and high fee result Development of mBank Group’s total income Development of interest income PLN M PLN M Sale of bonds: -14.5% -1.8% Q4/20 Q1/21 +1.5% +1.5% -6.2% 92.7 89.4 1,210.6 1,079.5 1,0
Slide 21: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Best-in-class efficiency anchored in disciplined cost management, despite investments Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M 43.1% 43.2% 42.5% +1.5% Excluding 41.7% +X.X% +3.1% -12.7% the BFG
Slide 22: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Provisions for expected credit losses reflecting prudent approach amid still uncertain situation Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps Impact of COVID-19: 141 Q1/20 Q2/20 Q3/
Slide 23: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust asset quality confirmed by resilient risk indicators, no pandemic-related deterioration mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to -4.1% 4.9% 4.8% 4.8% EBA definition, -2.5% 4.6% consolidated NPL ratio was:
Slide 24: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Strong capital position and outstanding liquidity securing safety and operational stability mBank Group’s Total Capital Ratio mBank’s NSFR and LCR Group’s LCR: 249% 19.86% 236% 19.26% 19.53% +3.69 226% 230% 19.19% 222% 2.79% 2.87% 17.55% 2
Slide 25: Agenda
Agenda Key highlights of Q2 2021 3 Business development Summary of financial results Analysis of the performance after Q2 2021 16 Loans and deposits Total income and its main components Total costs and efficiency Loan loss provisions and portfolio quality Capital and liquidity position
Slide 26: Macroeconomic situation and outlook
Macroeconomic situation and outlook Grand reopening meets recurring (albeit every time smaller) Covid-19 risks Consumers feeling better Unemployment rate expected to decline 20 12% 10 10% 0 8% -10 6% -20 4% -30 2% Source: GUS Source: GUS -40 0% Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19 Jul.19
Slide 27: Macroeconomic situation and outlook
Macroeconomic situation and outlook Demand for credit expected to pick up Corporate loans and deposits (YoY, FX-adjusted) Household loans and deposits (YoY, FX-adjusted) 30% 14% Source: NBP Source: NBP 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 Ju
Slide 28: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks remains challenging due to low rates and high tax burdens Key economic indicators for Poland Short-term prospects for mBank (compared to 2020) 2019 2020 2021F 2022F Net interest income & NIM negative GDP growth (YoY)
Slide 29: Agenda
Agenda Key highlights of Q2 2021 3 Business development Summary of financial results Analysis of the performance after Q2 2021 16 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: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net interest income 1,006,611 960,295 976,930 946,895 961,537 Net fee and commission income 362,937 373,201 409,471 468,060 452,569 Dividend income
Slide 31: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Cash and balances with Central Bank 11,141,250 6,683,941 3,968,691 16,355,429 16,523,318 Loans and advances to banks 6,921,359 8,991,355 7,354,268 7,3
Slide 32: Appendix: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net Interest Margin, quarterly 2.35% 2.16% 2.21% 2.10% 2.04% Net Interest Margin, YtD 2.49% 2.37% 2.33% 2.10% 2.07% Net Interest Margin, excl. CHF portfolio, Y
Slide 33: Appendix: 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 PLN M -14.5% 1,210.6 204.0 50.6 +1.5% +1.5% 7.9 9.5 43.9 1,079.5 1,063.2 18.4 1,019.4 1,035.2 168.0 74.3 78.0 81.2 -63.9% 4.6 24.9 2.9 26.9 78.7 8% 3.7
Slide 34: Appendix: 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 +20.7% +0.1% +12.3% 645.9 646.3 +8.9% 611.1 201.7 55.9 62.8 10% 193.8 553.5 62.4 180.3 177.9 535.5 89.0 172.6 50.5 99.0
Slide 35: Appendix: 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 198.5 198.5 194.2 194.2 182.4 181.4 22.0 11% 182.4 181.4 16.7 8% 178.9 21.6 178.9 16.7 11.0 6.8 3% 15.5 8.8 16.9 17.0 6.2 2.5 1% 16.7 2.6 1
Slide 36: Appendix: 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 30.06.2021 as of 30.06.2021 Real estate 5.9% Building industry 4.1% Financial activities 2.7% 0.5% 0.2% Transport and l
Slide 37: Appendix: 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 30.06.2021 as of 30.06.2021 Nominal Issue Maturity Currency Tenor Coupon Other value date date Subordinated liabilities 3.7% EMTN bonds Retail Issues under Eu
Slide 38: Appendix: Selected Financial Data – Capital Requirements
Appendix: Selected Financial Data – Capital Requirements Regulatory capital requirements for mBank Group as of 30.06.2021 13.86% Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of the 0.50% 0.04% countercyclical buffer rates that apply in the countries where the relevant
Slide 39: Appendix: Retail Banking
Appendix: Retail Banking Profit before income tax of the segment Number of Retail Service Locations PLN M, by quarter mBank CZSK -28 +13% +27% mBank CZSK Poland 396 369 368 347.6 40 mFinanse1 324.3 44 41 43 307.1 17.6 42 40 277.3 16.8 273.5 mKiosks 19.1 13.4 29.3 166 149 149 Advisory centres 288.0 3
Slide 40: Appendix: Retail Banking
Appendix: Retail Banking Development of gross loans to retail banking clients Development of deposits from retail banking clients PLN M PLN M +11.7% +3.4% +18.8% +3.0% 70,093 106,700 67,785 103,583 64,404 65,952 201 62,730 97,976 185 8,827 8% 92,303 114 9,358 19,946 28% 89,777 19,001 116 10,158 18,7
Slide 41: Appendix: 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 +60% 12.9% +30% +10% +2% 14.5% 9,031 15,153 15,502 8,219 13,819 7,311 2,738 11,884 12,470 4,541 6,242 2,445 4,511 5,656 4,254 2,076 3
Slide 42: Appendix: 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 +52% +14% +27% Republic +10% +7% +4% physical network: light 7 branches 25,485 28,080 5,802 6,199 6,613 59,700 61,834 financial 48,593 0 18,454 centres 23 mKiosks 06/20 03/2
Slide 43: Appendix: Corporate & Investment Banking
Appendix: Corporate & Investment Banking Profit before income tax of the segment Number of corporate service locations PLN M, by quarter 2 2 Pomorskie 1 2 +86% +9% 2 Zachodnio- Warmińsko- Mazurskie Pomorskie 1 1 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomorskie 4 2 incl. 13 advisory centres 2 2
Slide 44: Appendix: Corporate & Investment Banking
Appendix: Corporate & Investment Banking Development of gross loans to corporate customers Development of deposits from corporate customers PLN M PLN M +1.8% 0.0% +1.5% +2.6% 48,734 48,901 49,635 49,078 48,239 49,095 47,970 47,862 46,025 4,297 3,653 4,739 3,709 7,033 7,305 8,091 8,525 7,659 39,236 4
Slide 45: Appendix: 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 46: Appendix: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2016 2017 2018 2019 2020 ∆ YoY Net interest income 2,832.8 3,135.7 3,496.5 4,002.8 4,009.3 +0.2% Net fee and commission income 906.4 1,249.5 1,257.8 1,270.6 1,508.3 +18.7% Net trading and other income 556.2 68.4 325.3 251.0 349.2 +39.
Slide 47: Appendix: mBank's share price performance
Appendix: mBank’s share price performance Banking stocks gained since Autumn, but CHF-related risks still weigh on mBank mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 30.06.2021 172 mBank’s share price 166 WIG30 1.658% 30.06.20
Slide 48: 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 first half of 2021, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mBank
Slide 49: 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