In Q2 2024, mBank Group’s operational results were solid. Even though they were largely absorbed by the costs of legal risk associated with the foreign currency mortgage portfolio, net profit reached PLN 422 million.
mBank Group’s net interest income (excluding the impact of “loan payment holidays”) went up by 3.5% quarter on quarter and by 9.5% year one year, reaching an all-time high at PLN 2.4 billion. The interest margin grew by 7 bps to 4.4%. Net commission income grew by 1.5% quarter on quarter and was slightly shy of PLN 500 million. Together with net trading income and the remaining items, mBank Group’s total income reached PLN 2.9 billion.
Loans continued the rebound from the previous quarter, growing by 1.4% since March. In Retail Banking, mortgage sales remained high even though the processing of applications within the framework of the Safe 2% Loan programme was discontinued. The volume of consumer loans also continued on an upward trend. Corporate loans were driven by RES financing; in H1 2024 alone, the bank earmarked PLN 500 million for this purpose.
Deposits were back on track after a dip in Q1 2024. Total deposit balance went up by 2.4% compared with the end of March thanks to inflows to current accounts in Retail Banking, while the volume of term deposits remained stable. This had a positive impact on the interest margin.
Risk costs recovered from the previous quarter’s eleven-year low, reaching 58 bps in Q2 2024. However, they still remain below mBank’s Group medium-term strategic target at 80 bps. Total provisions were positively affected by an adjustment of risk parameters reflecting favourable macroeconomic trends and the profit from the sale of non-performing retail loans.
High legal provisions exceeding PLN 1 billion resulted from updated forecasts about lawsuits and other parameters of the model applied. At the same time, the bank continued to sign settlements with CHF borrowers. In Q2 2024, more than 1,800 settlements were concluded (similarly as in Q1 2024). At the end of June, the total figure exceeded 17,000. Simultaneously, the number of new lawsuits dropped for the second quarter in a row.
Another factor disrupting mBank Group’s performance were the so-called “loan payment holidays”. The negative impact resulting from their prolongation into 2024 was estimated at PLN 257 million, which has weighed on the net interest income.
Net of contributions to the BFG, operating costs in Q2 2024 grew by 5.5% on the previous quarter and by 11% year on year. Despite that, mBank retained excellent efficiency, as evidenced by its normalised cost-to-income ratio of 27.4% recorded in Q2 2024.