Slide 1: Results of mBank Group Q3 2014
Results of mBank Group Q3 2014 On road towards PLN 4 billion revenues Management Board of mBank S.A. Investor Presentation October 30, 2014
Slide 2: Key highlights of Q3 2014
Key highlights of Q3 2014 Core revenues of PLN 866.1 M at historical high Total revenues again • NII up 5.3% QoQ and 14.0% YoY exceeding PLN 1 B amid further acceleration in lending • NFC down 11.3% QoQ, but up Profit & Loss 2.6% YoY, despite interchange cut Volume growth continued • Gross loans at
Slide 3: Agenda
Agenda Summary of Q3/14 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/14 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 4: Key Financials: Profit and Loss Account
Summary of Q3/14 Results in mBank Group mBank Analyzer Key Financials: Profit and Loss Account in PLN M Q3/14 Q2/14 Change Q3/Q2 Q3/13 Net interest income 649.9 617.2 +5.3% 570.0 Net Fee & Commission income 216.2 243.7 -11.3% 210.7 Total income 1,018.9 1,023.8 -0.5% 945.0 Total costs (441.2) (455.3)
Slide 5: Key Financials: Balance Sheet
Summary of Q3/14 Results in mBank Group mBank Analyzer Key Financials: Balance Sheet in PLN M Q3/14 Q2/14 Change Q3/Q2 Q3/13 Gross loans to customers 74,698 72,732 +2.7% 71,968 Retail client loans 40,555 39,664 +2.2% 38,855 1 Core corporate client loans 28,796 27,912 +3.2% 27,205 Amounts due to cust
Slide 6: Business Development: Client acquisition and Market shares
Summary of Q3/14 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +5.5% +8.7% +1.7% +2.3% 4,565 16,333 16,600 17,006 17,390 4,326 4,368 4,427 4,490 16,001 1,255 1,710 1,778 1,794 663 673 688 704 725 1,266 4,885 5,0
Slide 7: Development of Retail and Corporate business
Summary of Q3/14 in mBank Group Development of Retail and Corporate business Sales of Mortgage Loans Sales of Non-Mortgage Loans (PLN M, by quarter) (PLN M, by quarter) +59% +13% +8% -7% 931 1,134 863 1,053 168 18% 1,024 102 93 928 901 90 9% 647 656 82 195 585 198 6% 52 66 152 14% 6 28 247 26% 19% 1
Slide 8: Development of business: strategic update
Summary of Q3/14 in mBank Group Development of business: strategic update Strategic partnership with AXA Cooperation with Orange Polska mBank concluded an agreement with AXA on the sale of mBank launched a joint mobile banking service 100% shares of BRE Ubezpieczenia TUiR (BRE Insurance) with Orange
Slide 9: Agenda
Agenda Summary of Q3/14 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/14 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 10: Development of Loans to Customers
Analysis of Q3/14 in mBank Group mBank Analyzer Development of Loans to Customers Lending remains strong across segments Development of Gross Loans and Advances to Customers (PLN M) +4.4% +3.8% +5.9% +3.2% +5.2% +2.7% +3.2% +2.2% 30,211 29,475 31,884 30,564 31,535 73,390 74,698 3,006 3,287 4,927 2,6
Slide 11: Development of Deposits
Analysis of Q3/14 in mBank Group mBank Analyzer Development of Deposits Deposit volumes particularly strong reflecting client growth Development of Amounts due to Customers (PLN M) +18.5% +15.8% +17.0% +18.7% +9.9% +17.3% +15.0% +8.8% 31,576 69,564 26,636 26,753 28,069 26,595 1,345 2% 4,367 63,596 6
Slide 12: Income of mBank Group
Analysis of Q3/14 in mBank Group mBank Analyzer Income of mBank Group Core revenues at historical high Development of mBank Group’s Income (PLN M) +7.8% -0.5% QoQ YoY 1,023.8 1,018.9 964.2 956.6 945.0 4.1 45.8 36.7 3.6 46.9 33.7 9.9 22.2 96.3 25.3 110.2 16.3 78.4 92.1 16.2 86.3 2.8 9.8 0.0 14.8 216.
Slide 13: Costs of mBank Group
Analysis of Q3/14 in mBank Group mBank Analyzer Costs of mBank Group Strong efficiency improved further Development of mBank Group’s Costs (PLN M) +5.8% -3.1% QoQ YoY 455.3 of which 441.6 430.6 441.2 BFG levy 416.8 25.2 30.0 25.0 (annual and 20.1 29.5 prudential): 52.0 48.6 47.7 45.4 45.8 PLN 17.7 M
Slide 14: Loan Loss Provisions & Risk Costs
Analysis of Q3/14 in mBank Group Loan Loss Provisions & Risk Costs Conservative provisioning across all exposures Net Impairment Losses on Loans and Advances mBank Group’s Cost of Risk by Segment (PLN M) (bps) 173.6 98 88 89 155.9 157.9 68 51 76 70 70 70 76.7 117.1 67.7 51 72.7 103 93 93 88 89 84 47
Slide 15: Loan Portfolio Quality
Analysis of Q3/14 in mBank Group Loan Portfolio Quality Improving coverage ratio, resilient risk indicators mBank Group’s Impaired Loans Portfolio mBank Group’s NPL Ratio (PLN M) Q4/13 +1.7% 6.3% 6.1% 6.4% 6.3% The increase in the NPL ratio results from a methodology 4,512 4,636 4,717 4,424 change t
Slide 16: Funding Structure Details
Analysis of Q3/14 in mBank Group Funding Structure Details A robust balance sheet and a diversified funding base mBank Group’s funding structure mBank’s ratings mBank Group’s funding strategy as of 30.09.2014 • Funding needs reduced by CHF loan book Fitch repayments (c. CHF 350-400 M per annum) Reta
Slide 17: Activity on the covered bond markets
Analysis of Q3/14 in mBank Group Activity on the covered bond markets Issues of covered bonds add to long-term financing sources Successful issuance activity of mBank Hipoteczny mBank’s mortgage unit issued Summary of mortgage covered bonds issued in 2014 covered bonds with a total amount of PLN 500
Slide 18: Key Regulatory Ratios
Analysis of Q3/14 in mBank Group Key Regulatory Ratios Stable capital and liquidity ratios ready for Basel III mBank Group’s Capital Adequacy Ratio / Total Capital Ratio mBank’s NSFR and LCR 19.2% 19.4% 187% 18.1% 173% 174% 5.2% 5.2% 16.3% 15.8% 15.6% 2.7% 2.6% 2.5% 127% 122% 111% 113% 109% 111% 108
Slide 19: Asset Quality Review (AQR) and Stress Test Results of mBank Group
Asset Quality Review (AQR) and Stress Test Results of mBank Group Strength of mBank’s balance sheet and business model confirmed mBank Group’s Common Equity Tier 1 Ratio – Asset Quality Review and Stress Test outcome 14.21% +0.19 14.40% -1.12 13.28% -0.87 12.41% -1.33 11.08% 2013 Basel II Basel III
Slide 20: Agenda
Agenda Summary of Q3/14 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/14 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 21: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Record low inflation. European environment detrimental to economic growth. GDP forecast (% YoY) Euro area increasingly more important for Poland’s growth and mBank’s 8 forecast inflation (business cycle correlations between Poland and euro area) 6 4.7 4.5 4.3 4.4 4.9 60% 9
Slide 22: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Strong growth in corporate loans, cautious borrowing by households Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 30% 25% 20% 20% 15% 10% 10% 5% 0% 0% -10% -5% Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-10 Jul-10 Ja
Slide 23: Agenda
Agenda Summary of Q3/14 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q3/14 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity R
Slide 24: Appendix
Appendix Page Page Additional Information: Selected Financial Data No. Detailed Results of the Business Lines No. Consolidated Profit and Loss Account under IFRS 25 Retail Banking 39-43 Consolidated Statement of Financial Position 26 Summary of Q3/14: Financial Results and Volumes 40-41 mBank Group’
Slide 25: Consolidated Profit and Loss Account under IFRS
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Profit and Loss Account under IFRS Quarterly results (PLN thou.) Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net interest income 570,000 588,096 591,
Slide 26: Consolidated Statement of Financial Position
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Consolidated Statement of Financial Position Assets (PLN thou.) Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Cash and balances with Central Bank 794 706 1 650 467
Slide 27: mBank Group's Ratios
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries mBank Group’s Ratios Financial Ratios Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net Interest Margin (quarterly) 2.23% 2.31% 2.30% 2.30% 2.32% Net Interest Margin YtD 2.17% 2.2
Slide 28: mBank Group's historical performance (1/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (1/3) Business Lines Subsidiaries Net Interest Income & NIM Net Fee and Commission Income (PLN M) (PLN M) CAGR 2.3% 2.2% 2.5% 2.4% 2.2% 2.2% 2.3% +9% +16% CAGR +8% +13% 840 787 835 746 70
Slide 29: mBank Group's historical performance (2/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (2/3) Business Lines Subsidiaries Operating Costs Pre-provision Income & C/I ratio (PLN M) (PLN M) CAGR +2% 54.2% 51.8% 47.7% 46.5% 45.7% 45.6% 44.2% +7% CAGR +11% +14% 1,545 1,617 1,680
Slide 30: mBank Group's historical performance (3/3)
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer mBank Group’s historical performance (3/3) Business Lines Subsidiaries Total Assets Equity & CAR (PLN B) (PLN M) +13% 11.50% 15.90% 14.96% 18.73% 19.38% 19.17% 15.57% CAGR +7% +9% CAGR +24% 117.3 98.9 102.1 104.3 104.0 10,25
Slide 31: Net Interest Income & Margin
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Net Interest Income & Margin Interest Income Structure Interest Expense Structure Change in the presentation of premiums (PLN M) (PLN M) on bonds: s
Slide 32: Fee and Commission Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Fee and Commission Income Fee and Commission Income Structure (PLN M) QoQ YoY 369.2 353.8 344.8 339.3 331.8 49.6 -6.6% +8.8% 47.4 53.1 46.3 14% 42.5
Slide 33: Trading and Other Income
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Trading and Other Income Net Trading Income Structure Gains less Losses from Investment Securities (PLN M) (PLN M) +12% -13% 25.3 110.2 96.3 92.1 86
Slide 34: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Assets & Liabilities Structure of Assets Structure of Liabilities (PLN B) (PLN B) 117.3 117.2 111.9 6.8 6% 111.9 107.1 107.1
Slide 35: Balance Sheet Analysis: Currency Structure
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: 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
Slide 36: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Appendix mBank Historical view Profit & Loss Balance Sheet Analyzer Additional Information: 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 30.09.2014
Slide 37: Balance Sheet Analysis: Loan Portfolio Structure
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure mBank Group’s Sector Exposure by Industry as of 30.09.2014 Households Real estate management 19.2% Construction in
Slide 38: Detailed Development of Core Tier 1 and CAR
Summary Appendix Historical view Profit & Loss Balance Sheet Additional Information: Selected Financial Data Business Lines Subsidiaries Balance Sheet Analysis: Detailed Development of Core Tier 1 and CAR mBank Group’s Core Tier 1 Ratio 14.21% -0.24 -0.03 -0.63 +0.60 -0.33 13.58% -0.35 +0.00 -0.03 1
Slide 39: Detailed Results of the Business Lines: Retail Banking
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q3/14 Retail Banking Investor Presentation – Q3 2014 |39
Slide 40: Retail Banking: Summary of Q3/14 Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q3/14: Financial Results Profit before Tax of the Segment Number of Retail Outlets (PLN M, by quarter) +13% 260 260 258 258 256 -10% 35 35 35 35 35 24 24 24 24 23 301.3 297.5 68 68 67 6
Slide 41: Retail Banking: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Summary of Q3/14: Loans and Deposits Gross Loans to Individuals1 Deposits from Individual Customers (PLN M) (PLN M) +4.4% +12.4% +2.2% +2.6% 39,664 40,555 36,642 38,855 38,973 35,726 38,308 34,203
Slide 42: Mortgage and Non-mortgage Loans: Portfolio Structure and Key Parameters
Summary Appendix Historical view Profit & Loss Balance Sheet Retail Banking Business Lines Subsidiaries Mortgage and Non-mortgage Loans: Portfolio Structure and Key Parameters mBank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Loans to individuals of Retail
Slide 43: 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 +23% +6% +9% 6.6% +2% 14.6% 2,658 5,
Slide 44: Corporates & Financial Markets
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the Business Lines in Q3/14 Corporates & Financial Markets Investor Presentation – Q3 2014 |44
Slide 45: Corporates and Financial Markets: Financial Results
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q3/14: Financial Results Profit before Tax of the Segment Corporate Branch Network Offices (PLN M, by quarter) Branches +37% +23% 47 47 47 47 47 18 18 18 18 18 143.3 1
Slide 46: Corporates and Financial Markets: Loans and Deposits
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Summary of Q3/14: Loans and Deposits Gross Loans to Corporate Entities Deposits from Corporate Customers (PLN M) (PLN M) +4.4% +18.5% +18.7% +3.2% 31,576 31,884 31,535 30,211 30,
Slide 47: Corporates and Financial Markets: Market Shares
Summary Appendix Historical view Profit & Loss Balance Sheet Corporates and Financial Markets Business Lines Subsidiaries Market Shares mBank’s Market Shares in Investment Banking Services1 mBank in the Market for Non-Treasury Debt2 as of 30.09.2014 (PLN M) 47,704 15.9% 27.0% 28,525 19,223 8,958 5,9
Slide 48: mBank Group's companies: Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Detailed Results of the mBank Group’s companies in Q3/14 Subsidiaries Investor Presentation – Q3 2014 |48
Slide 49: Financial Results of Major Subsidiaries
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Summary of Q3/14: Financial Results of Major Companies Profit before Tax of Consolidated Subsidiaries (PLN M) Q3 -9% -20% Q1-Q2 48.6 46.1 44.4 18.7 36.9 13.5 21.3 +299% 13.9 +36% +32%
Slide 50: mBank Hipoteczny (mBH)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries mBank Hipoteczny (mBH) Loan Portfolio: Balance-sheet Exposure Profit before Tax (PLN M, net value) (PLN M) established in 1999 +13% +299% +10% specialised mortgage bank and 20.4 the la
Slide 51: Leasing and Factoring (Poland)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Leasing and Factoring (Poland) Leasing contracts Market share & position – 9M 2014 Profit before Tax (PLN M) (PLN M) +26% 7.3% -20% established 2,260 46.1 in 1991 1,793 Rank 36.9 770 p
Slide 52: Dom Maklerski mBanku (mDM)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries Dom Maklerski mBanku (mDM) Market Shares in Q3/14, by volume Profit before Tax (PLN M) established in 1991 incl. block Session +3% transactions transactions providing a full range of s
Slide 53: BRE Ubezpieczenia (BRE Insurance)
Summary Appendix Historical view Profit & Loss Balance Sheet mBank Group’s Subsidiaries Business Lines Subsidiaries BRE Ubezpieczenia (BRE Insurance) Bancassurance Retail Direct Insurance (Internet platform) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) -21% +1% 1,304.4 107.6 109.2 2
Slide 54: mBank Analyzer
mBank Analyzer mBank Analyzer Further enhancing our reporting standard Analyse, customise, export and print selected data on mBank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Comprehensive Summary of Data covering Details on each structure and report on key fin
Slide 55: Contact details
Contact details mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 E-mail: wojciech.chmielewski@mbank.pl Head of Investor Relations Paweł Lipiński Direct dial: +48 22 829 15 33 E-mail: pawel.lipinski@mbank.pl Deb