mBank entered the year with upbeat operating results. Revenues hit a record high of PLN 2.5 billion. Net profit of PLN 143 million was dented by legal risk costs connected with the CHF loan portfolio. The bank was active in offering settlements to CHF borrowers, with the number of signed agreements exceeding 5,000. mBank’s mobile app had over 3.4 million active users.
Pre-tax profit from mBank’s core business exceeded PLN 1.3 billion in Q1 2023. To a large extent it was reduced by provisions set aside for the CHF loan portfolio. The costs of legal risk posed by this portfolio amounted to PLN 808 million in the first three months of the year. They were driven mostly by rising costs of the ongoing settlement programme and costs of complying with final court rulings. This pushed the net profit of mBank Group down to PLN 143 million in Q1 2023, which represents a decrease by more than 72% compared with the same period in 2022.
mBank’s revenues generated in the first three months of 2023 reached a record high of PLN 2.5 billion with net interest income being the largest contributor. Compared with Q4 2022, net interest income grew 6% supported by active balance sheet management and high interest rates maintained by the Monetary Policy Council (RPP). On a year-on-year basis, the rise accounted for nearly 40%. Net commission income picked up by 7% on the previous quarter, but fell by 15% compared with the same period in 2022.
The bank maintained strict cost discipline with core operating costs growing slower than inflation. Excluding compulsory charges, costs increased by 12% compared with Q1 2022, driven by both staff-related and material expenses. Cost-to-income ratio stood at 33.4% in Q1 2023 (including the contribution to the resolution fund).
Risk costs rose to 79 basis points, which is in line with the mid-term forecast.
The beginning of the year saw a clear disparity between the rates of growth in business volumes. While the value of extended loans rose by 1% compared with the end of 2022, the deposit base grew by almost 4% quarter on quarter and by nearly 12% compared with the same period last year (driven mostly by a continued influx of retail deposits).
So far the bank has signed more than 5,000 settlements with CHF borrowers. The clients appreciate the attractive fixed interest rate offered on their loans following the conversion and the bank’s customised approach to their expectations. In order to find out the details of the bank’s settlement offer, clients simply need to fill out an application form available at mbank.pl/ugody.
At the end of Q1 2023, mBank had more than 5.6 million retail clients, including over 1 million in Czechia and Slovakia. At the same time, the number of corporate clients exceeded 33,000. The bank’s mobile app had over 3.4 million active retail users. To deal with their matters, clients initiate as many as 87% of processes in digital channels (which represents an increase by 20 percentage points compared with 2020).