Despite a net loss generated in 2021, mBank Group reported the highest core income in its history exceeding PLN 1.6 billion and record-high income of more than PLN 6 billion. The legal risk provisions set up for CHF loans secure the Group’s position in the future. At the same time, the cost/income ratio fell for another consecutive year to 40.2% (36.7% in Q4), confirming excellent operational efficiency. The bank’s mobile app has nearly 3 million users on three markets.
mBank Group announced its results after four quarters of 2021. In 2021 it posted a net loss of PLN 1,178.8 million, which resulted largely from the last quarter’s result (a net loss of PLN 1,631.1 million). The costs of legal risk related to foreign currency loans, which exceeded PLN 2 billion in Q4, were a major drag on the Group’s result. These included the costs of a potential settlement programme (PLN 1,009.8 million) and other costs relating to pending court disputes. In the entire 2021 the costs of legal risk reached PLN 2,758.1 million.
The provisions for legal risk connected with CHF loans cover over 32% of the portfolio and secure the bank in the context of CHF disputes as well as settlements which the bank may decide to offer to CHF borrowers.
At the end of 2021 the capital ratios of mBank Group were considerably above the regulatory minimums. The consolidated Tier I capital ratio stood at 14.1% (minimum requirement: 10.64%), while the total capital ratio reached 16.6% (minimum requirement: 13.7%).
mBank Group has been running a stable and profitable business. Total income posted by mBank Group in Q4 increased by 7.4% on the previous quarter to PLN 1,620.6 million. Underlying this rise was an increase in net interest income (+18.5%), driven by several interest rate hikes totalling 165 basis points introduced from October to December. The net interest margin of mBank Group grew in Q4 to 2.42%. Net fee and commission income stood at PLN 490 million, up by 2.2% quarter on quarter and by 19.7% compared with 2020.
Total income generated throughout 2021 reached a record high of PLN 6,111.1 million, which represents a rise by 4.2% on the previous year.
Pre-tax profit on core business (excluding the foreign exchange mortgage business) totalled PLN 591.8 million in Q4 (up by over 8% quarter on quarter), and PLN 2.2 billion in the entire 2021.
The Group maintained cost discipline, which enabled a substantial reduction in the cost/income ratio to 36.7% in Q4 (40.9% in Q3) and to 40.2% in 2021 (41.1% in 2020). The cost/income ratio reported last year meets the goal set in the new strategy for 2021-2025 adopted in October, entitled From the Icon of Mobility to the Icon of Possibilities.
In its new strategy the bank assumed that, by way of actively financing green energy and supporting the green transformation of traditional industries, it will become a leader of sustainable banking and ESG. The bank will also continue promoting digital service and sales, and will partner with clients at every stage of their lifecycle. Cybersecurity and – in the business area – efficiency and prudent risk management will be crucial.
At the end of 2021 mBank served 5.5 million retail clients with a favourable demographic profile in Poland, Czech Republic and Slovakia, and 31,300 corporations with a strong growth outlook. The bank’s mobile app was used by almost 3 million users on the three markets (including 2.6 million users in Poland). The sales of non-mortgage loans in the app accounted for over 40% of all non-mortgage loans sold in 2021. The share of processes initiated by retail banking clients in digital channels rose to 76.3% (from 67.5% in 2020).