mBank has published the amount of legal risk costs connected with CHF mortgages in Q2. Additional provisions were made to cover the potential consequences of the CJEU ruling regarding remuneration for the use of capital and the costs of settlements. The bank has already signed over 6,500 settlements with clients. mBank will post a profit in H1.
The legal risk costs connected with CHF mortgages amounted to PLN 1.5 billion in Q2 2023. In total, estimated provisions for legal risk costs connected with FX mortgages will reach PLN 7.5 billion as at 23 June 2023.
At the end of Q1, provisions covered 61% of the CHF mortgage portfolio and this ratio is set to increase considerably after adding the provisions set aside in Q2. This secures the bank in the context of CHF-related lawsuits.
The provisions created in Q2 result mostly from the impact that the ruling of the Court of Justice of the European Union (CJEU) concerning remuneration for the use of capital may have on future court rulings in CHF cases and the costs of the settlement programme.
mBank has offered to sign settlements with almost all CHF borrowers and regularly renews its offer. The settlements, which are in line with the proposal of the Polish Financial Supervision Authority (KNF), offer the conversion of loans into the Polish złoty as if the loans had been taken out and repaid in the Polish currency right from the start. The bank is also open to negotiations with clients. So far, mBank has signed more than 6,500 settlements with clients.
At the same time, the bank announced that the net result in Q2 will be close to zero, while in H1 2023, it will be positive. It proves that its financial standing is stable. mBank has an attractive business model. In Q1 2023 alone, total income hit a record high of PLN 2.6 billion.
The mBank Group Tier 1 Capital Ratio and the Total Capital Ratio for Q2 2023 are expected to be higher than the levels reported for Q1 2023. The liquidity ratios significantly exceed the regulatory requirements.