Slide 1: Results of mBank Group Q2 2022
Results of mBank Group Q2 2022 Strong results continue, but headwinds ahead Presentation for Investors and Analysts, 03.08.2022
Slide 2: Agenda
Agenda Key highlights of Q2 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2022 15 ▪ 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 2022 in mBank Group
Key highlights of Q2 2022 in mBank Group ✓ Historically high core revenues over PLN 2.2 billion, driven Net interest income Net fee income by growing net interest income and very strong fee result +75.6% YoY +22.7% YoY ✓ Costs impacted by contribution to the protection scheme Total costs Cost/Income
Slide 4: Summary of regulatory measures introduced by the government
Summary of regulatory measures introduced by the government Three pillars of support for borrowers Government interventions result in large transfers of economic value from banks to mortgage borrowers ! “Credit holidays” Borrowers' Support Fund WIBOR replacement Estimated impact for the largest bank
Slide 5: Potential risks stem from the government aid programme
Potential risks stem from the government aid programme Possible implications of government interventions on the banking sector and local economy Strong reduction of mortgage loans origination potential in Poland ▶ PLN 13 billion of estimated costs for the largest banks would equal to ca. PLN 300 bil
Slide 6: Tax and social burdens borne by mBank Group
Tax and social burdens borne by mBank Group Development of obligatory contributions paid by mBank Group (PLN million) Reported net profit Total 2016-2021 In the considered period, mBank paid a dividend only once. It amounted to PLN 217.9 million 1,219 1,092 1,303 1,010 104 -1,179 ∑=3,549 and equalle
Slide 7: mBank's key achievements and new solutions in Q2 2022
mBank’s key achievements and new solutions in Q2 2022 Credit Information Bureau (BIK) Pursuing its ESG strategy, mBank in cooperation with invested in a fintech from mBank added eco-loan for UNIQA proposed special mAccelerator’s portfolio small companies to the offer insurance for online buyers ▪ On
Slide 8: 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 9.0% current deposits 8.4% +123 8.2% 8.3% 8.3% 8.3% 5.3% term deposits +43 8.0% 7.8% 5,586 7.7% 8.2% 5,463 5,543 7.5% 8.1% 1,015 1,032 1,038
Slide 9: 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 by the share thousand #1 of mobile users in total active mBank CZSK average growth per year 2,960 +140 3,100 customer base mBank PL +398 2,577 372 385 2,128 303 1,670 234 by the number 1,329
Slide 10: Summary of key financial highlights for mBank Group
Summary of key financial highlights for mBank Group Total income Cost/Income ratio 1 Net profit of Core Business 2 ROE of Core Business 2 PLN M PLN M +45% -3.9pp +52% +8.7pp 4,333 39.6% 1,147 19.4% 35.7% 2,982 752 10.7% H1/21 H1/22 H1/21 H1/22 H1/21 H1/22 H1/21 H1/22 Gross loans to customers NPL rat
Slide 11: Summary of financial results: Profit and Loss Account
Summary of financial results: Profit and Loss Account PLN million Q2 2021 Q1 2022 Q2 2022 ∆ QoQ ∆ YoY Net interest income 961.5 1,499.3 1,688.4 +12.6% +75.6% Net fee and commission income 452.6 598.0 555.3 -7.1% +22.7% Total income 1,442.8 2,178.6 2,154.8 -1.1% +49.4% Total costs (excluding BFG and
Slide 12: Summary of financial results: Balance Sheet
Summary of financial results: Balance Sheet PLN million Q2 2021 Q1 2022 Q2 2022 ∆ QoQ ∆ YoY Total assets 198,471 204,914 204,397 -0.3% +3.0% Gross loans to customers 119,949 126,773 129,937 +2.5% +8.3% Individual client loans 70,093 75,122 75,822 +0.9% +8.2% Corporate client loans 49,635 51,480 53,9
Slide 13: Strong protection against legal risks related to CHF portfolio
Strong protection against legal risks related to CHF portfolio CHF mortgage loans granted to individual customers Number of individual court cases concerning indexation clauses CHF M, carrying amount equivalent to: PLN 8,676 M as of 30.06.2022 new court proceedings initiated against mBank +9% 23.6%
Slide 14: Excellent performance of the core business demonstrated in H1 2022
Excellent performance of the core business demonstrated in H1 2022 Summary of financial results for mBank’s core activity and run-off portfolio in H1 2022 Separation of FX mortgage loan portfolio PLN million Core Business Non-core1 mBank Group ▪ In order to present the genuine and undistorted perfor
Slide 15: Agenda
Agenda Key highlights of Q2 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2022 15 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 16: Results of mBank Group: Loans to customers
Results of mBank Group: Loans to customers Slowdown of retail loan portfolio offset by selective expansion in corporate segment Development of gross loans and advances to customers Gross loans to corporate customers PLN M PLN M +8.7% +8.3% +7.2% +4.8% +6.2% +2.5% +4.5% +2.1% 49,883 51,480 53,976 129
Slide 17: Results of mBank Group: New lending business
Results of mBank Group: New lending business A noticeable decline in new mortgage lending, but sales of consumer credit kept at high level Sales of mortgage loans Sales of non-mortgage loans PLN M, by quarter PLN M, by quarter -38% -1% -9% -9% 3,424 -24% -24% 2,793 3,172 2,570 2,717 2,553 2,916 2,82
Slide 18: Results of mBank Group: Customer deposits
Results of mBank Group: Customer deposits Deposit base affected by market situation, retail T-bonds and intensifying competition Development of customer deposits Deposits from corporate customers PLN M PLN M +6.4% +4.7% -0.4% +6.2% -1.1% +4.7% -0.5% 54,479 -1.3% 164,743 49,095 52,783 52,219 164,142
Slide 19: Results of mBank Group: Total income
Results of mBank Group: Total income Historically high core revenues driven by growing net interest income and strong fee result Development of mBank Group’s total income Development of interest income PLN M PLN M +125.3% +35.9% +35.9% -1.1% -1.1% +49.4% 2,332.1 2,178.6 2,154.8 383.7 1,716.3 0.9 1.1
Slide 20: Results of mBank Group: Total costs and efficiency
Results of mBank Group: Total costs and efficiency Costs inflated by contribution to the IPS, but underlying efficiency remained excellent Development of mBank Group’s operating costs Cost/Income ratio of mBank Group – quarterly PLN M 47.3% Excluding +X.X% +20.8% BFG & IPS 43.0% +75.7% 42.5% +5.2% +
Slide 21: Results of mBank Group: Loan loss provisions and cost of risk
Results of mBank Group: Loan loss provisions and cost of risk Provisioning level reflecting prudent risk approach amid persistent uncertainties Net impairment losses and fair value change on loans mBank Group’s cost of risk, by segment PLN M bps 98 -15% 89 80 76 -27% 69 89 289.8 0.5 70 76 268.5 66 0
Slide 22: Results of mBank Group: Loan portfolio quality
Results of mBank Group: Loan portfolio quality Robust asset quality confirmed by resilient risk indicators, some support from sale of NPLs mBank Group’s impaired loans portfolio mBank Group’s NPL ratio PLN M According to -5.7% 4.4% EBA definition, +1.6% 4.0% consolidated 3.9% 3.9% 3.8% NPL ratio was
Slide 23: Results of mBank Group: Capital ratio and liquidity position
Results of mBank Group: Capital ratio and liquidity position Solid capital position and outstanding liquidity securing safety and operational stability mBank Group’s Total Capital Ratio mBank’s NSFR and LCR The impact of negative bond valuation on capital ratios Group’s LCR: 184% amounted to -0.11 p
Slide 24: Agenda
Agenda Key highlights of Q2 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2022 15 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 25: Macroeconomic situation and outlook
Macroeconomic situation and outlook Cyclical, inflationary upswing more and more likely to turn stagflationary Consumers under constant, broadening pressure Unemployment rate at cyclical bottoms 20 12% 10 10% 0 8% -10 6% -20 4% -30 -40 2% Source: GUS Source: GUS -50 0% Jan.16 Sep.16 May.17 Jan.18 Se
Slide 26: Macroeconomic situation and outlook
Macroeconomic situation and outlook Household credit lost momentum, corporate credit has still some juice left 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
Slide 27: Macroeconomic forecasts and outlook for mBank Group
Macroeconomic forecasts and outlook for mBank Group Operating environment for banks has become difficult and increasingly unpredictable Key economic indicators for Poland Short-term prospects for mBank (4 quarters ahead) 2020 2021 2022F 2023F Net interest income & NIM neutral GDP growth (YoY) -2.2%
Slide 28: Agenda
Agenda Key highlights of Q2 2022 2 ▪ Business development ▪ Summary of financial results Analysis of the performance after Q2 2022 15 ▪ Loans and deposits ▪ Total income and its main components ▪ Total costs and efficiency ▪ Loan loss provisions and portfolio quality ▪ Capital and liquidity position
Slide 29: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Profit and Loss Account – quarterly Quarterly results (PLN thou.) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Net interest income 961,537 1,004,845 1,190,766 1,499,335 1,688,372 Net fee and commission income 452,569 479,438 489,954 597,994 555,346 Dividend
Slide 30: Appendix: Selected Financial Data
Appendix: Selected Financial Data Consolidated Statement of Financial Position – quarterly Assets (PLN thou.) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Cash and balances with Central Bank 16,523,318 18,015,638 12,202,266 17,971,383 12,522,901 Loans and advances to banks 9,750,443 14,398,589 7,229,681
Slide 31: Appendix: Selected Financial Data
Appendix: Selected Financial Data mBank Group’s Ratios – quarterly and cumulatively Financial Ratios Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Net Interest Margin, quarterly 2.04% 2.02% 2.39% 3.15% 3.54% Net Interest Margin, YtD 2.07% 2.05% 2.14% 3.15% 3.34% Net Interest Margin, excl. CHF portfolio, Y
Slide 32: 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 +36% +36% +197% +197% +125% +774% 2,332.1 643.7 132.6 6% 9.3 0% 246.5 11% The increase in the “other” category 1,716.3 is primarily driven by int
Slide 33: 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 +18.7% -3.2% +9.4% 792.9 +8.8% 767.4 233.7 723.7 67.5 219.5 698.9 63.8 8% 212.1 646.3 71.8 193.8 194.9 67.6 124.8 136.3
Slide 34: 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 208.2 204.9 204.4 208.2 204.9 204.4 198.5 199.5 198.5 199.5 23.7 16.5 13.6 13.4 7% 19.0 25.7 20.9 10% 16.7 13.7 22.0 6.9 8.2 9.4 5% 2.6 6.5
Slide 35: 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 30.06.2022 as of 30.06.2022 Real estate 5.1% Building industry 4.2% Financial activities 2.9% 0.1% 1.1% Food sector 2.7
Slide 36: 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 30.06.2022 as of 30.06.2022 Nominal Issue Maturity Currency Tenor Coupon Other value date date Subordinated liabilities 4.9% Issues under Euro Medium Term Not
Slide 37: Appendix: Selected Financial Data – Capital Requirements
Appendix: Selected Financial Data – Capital Requirements Regulatory capital requirements for mBank Group as of 30.06.2022 +3.22 pp Countercyclical Capital Buffer (CCyB) is calculated as the weighted average of the countercyclical buffer rates that apply in the countries where the relevant credit exp
Slide 38: Appendix: A leading mobile banking offer for individual clients
Appendix: 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 re
Slide 39: Appendix: Retail Banking – profit and network
Appendix: Retail Banking – profit and network Profit before income tax of the segment Number of Retail Service Locations PLN M, by quarter -2 mBank CZSK +49% mBank CZSK Poland +3% 368 365 366 43 45 46 mFinanse1 493.9 503.0 519.3 40 40 40 33.0 46.8 47.8 mKiosks 390.1 347.6 28.0 149 149 149 Advisory c
Slide 40: Appendix: Retail Banking – business volumes
Appendix: Retail Banking – business volumes Development of gross loans to retail banking clients Development of deposits from retail banking clients PLN M PLN M +8.2% +3.0% +0.9% -1.1% 75,122 75,822 112,446 111,174 73,124 73,244 108,921 109,914 70,093 106,700 220 208 212 8,233 7,640 202 201 8,675 8%
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 +14% +5% 13.5% 14.8% +1% +2% 9,825 10,204 10,262 15,502 16,036 15,791 15,916 16,252 9,031 9,608 2,946 2,981 3,069 3,098 4,541 4,667 4
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 -1% +37% -3% Republic -1% +3% +9% physical network: light 6 branches 28,080 28,281 61,834 27,928 9,084 58,473 60,232 financial 8,358 7 6,613 centres 18 mKiosks 06/21 03/22 0
Slide 43: Appendix: Best digital banking services for corporate clients
Appendix: 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 high
Slide 44: Appendix: Corporate & Investment Banking – profit and network
Appendix: Corporate & Investment Banking – profit and network Profit before income tax of the segment Number of corporate service locations PLN M, by quarter 2 2 Pomorskie 1 2 +130% +33% 2 Zachodnio- Warmińsko- Mazurskie Pomorskie 1 1 2 1 Podlaskie 29 mBank’s branches, Kujawsko- Pomorskie 4 2 incl.
Slide 45: Appendix: Corporate & Investment Banking – business volumes
Appendix: Corporate & Investment Banking – business volumes Development of gross loans to corporate customers Development of deposits from corporate customers PLN M PLN M +8.7% +4.8% +6.4% -1.1% 53,976 54,479 51,480 52,783 52,219 49,635 49,883 3,882 47,836 49,095 3,682 2,701 9,623 46,849 9,182 3,653
Slide 46: Appendix: Complete solutions for e-commerce segment
Appendix: 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 mBank's p
Slide 47: 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 48: Appendix: ESG is well embedded in mBank Group's strategy
Appendix: ESG is well embedded in mBank Group's strategy ESG aspects play a crucial role in the way we manage our company Responsibility for financial health Responsibility for climate of our clients By 2050 we will become a fully climate-neutral bank. We support customers in safe and convenient ban
Slide 49: Appendix: Historical financial results of mBank Group
Appendix: Historical financial results of mBank Group PLN million 2017 2018 2019 2020 2021 ∆ YoY Net interest income 3,135.7 3,496.5 4,002.8 4,009.3 4,104.0 +2.4% Net fee and commission income 1,249.5 1,257.8 1,270.6 1,508.3 1,890.0 +25.3% Net trading and other income 68.4 325.3 251.0 349.2 117.1 -6
Slide 50: Appendix: mBank's share price performance
Appendix: mBank’s share price performance Banking stocks declined on worsened sentiment due to package of governmental proposals mBank’s index membership and weights mBank’s share performance v. main indices (rebased to 100) – last 12 months as of 30.06.2022 180 mBank’s share price WIG20 1.538% 170
Slide 51: 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 2022, prepared under the International Financial Reporting Standards. For more detailed information on mBank S.A. and mBank
Slide 52: 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 Marta Polańska +48 508 468 016 mar