mBank Group posts net profit of PLN 262.5 million in Q1 2024. The bank records solid results despite further provisions for CHF loans. At the same time, lending grows as business develops dynamically.
In the first three months of 2024, mBank’s excellent operational results were yet again largely swallowed by legal risk costs connected with the foreign currency mortgage loan portfolio, for which the bank wrote off PLN 1.37 billion. The write-offs resulted from changes to model parameters, including higher probabilities assigned to scenarios unfavourable to the bank. Simultaneously, the bank focuses on signing settlements with CHF borrowers. Almost 16,000 settlements have been concluded so far.
mBank Group recorded an all-time high quarterly total income of over PLN 2.9 billion. Its main component was net interest income, which dropped by only 0.6% compared to the record-high Q4 2023 level. At the same time, mBank’s interest margin increased again to approx. 4.4% (up by 6 bps quarter on quarter), while net commission income grew by 9% on the previous quarter.
mBank’s total costs amounted to PLN 900 million, including PLN 148 million attributable to the mandatory contribution to the resolution fund, which is always booked in Q1. Net of the contribution, the cost base grew by 10% year on year, which was mainly due to an increase in remuneration and headcount. mBank retained excellent efficiency, as evidenced by its cost-to-income ratio of 30.4%.
In Q1 2024, risk costs amounted to only 17 bps, reaching the lowest level in 11 years. mBank’s total provisions were positively affected by solutions applied to the corporate portfolio, profit on the sale of non-performing retail loans, and a generally better repayment discipline demonstrated by clients. The NPL ratio stood at 4.1% as at the end of March 2024, significantly below the sector’s average, which corroborates the high quality of mBank’s assets.
Gross loans grew by 2.4% compared with the 2023 year-end, partly as a result of the bank’s participation in the Safe 2% Loan programme. Conversely, the deposit base fell by 1.3% on the previous quarter.