In Q3 2024, mBank Group’s operational and financial results were strong. Net profit exceeded PLN 570 million, hitting the highest level since Q4 2022. mBank Group’s performance was negatively affected by the provisions for legal risk related to the FX mortgage portfolio, but at the same time, it was boosted by a reversal of a portion of the estimated cost of the “loan payment holidays” booked in Q2 2024. In the coming quarter, the bank will pioneer the issuance of AT1 bonds.
Excluding FX mortgage loans, net profit exceeded PLN 1.5 billion in Q3 2024. This means that mBank’s core business alone generated a ROE of over 42%.
The main drivers of mBank Group’s financial results in Q3 2024 included:
- Increase in income to PLN 3.1 billion (+9% quarter on quarter), driven by higher net interest income and net fee and commission income.
- Increase in operating expenses (including depreciation) to PLN 813 million, triggered mainly by higher material costs.
- Risk costs at the level of PLN 191 million, i.e. 62 basis points.
- Costs of legal risk related to FX loans at the level of PLN 971 million.
- Tax on balance sheet items in the amount of PLN 191 million.
- Continued organic growth and business expansion as demonstrated by:
- increase in the number of retail clients to 5,686,000 (+7,400 clients compared with the end of June 2024),
- increase in the number of corporate clients to 36,044 (+315 compared with the end of June 2024).
The bank’s balance sheet also grew in Q3 2024. Net loans and advances rose by 2.2%, which was mainly attributable to retail clients (up by PLN 2.3 billion or 3.4%). The deposit base grew by 3.2% to PLN 193 billion. As a result, the loan-to-deposit ratio reached 64.0%.
The bank was gradually decreasing the risk associated with the mortgage loan portfolio. Over 2,500 settlements were signed in Q3 alone. At the end of October, the number of settlements exceeded 20,000.
In Q3 2024, the bank placed the third series of green bonds on the international market as part of the EMTN Programme. The issue, which took place in the form of senior preferred bonds with a total nominal value of EUR 500 million, will support compliance with the MREL requirements. The transaction broke new records in mBank’s history, both as regards the demand at the book-building stage and the number of investors. In Q4 2024, the bank plans to issue AT1 in the form of bonds. The bank will be Poland’s first commercial bank to use this capital-boosting instrument. AT1 bonds will enable the bank to lend to Polish companies and contribute to the growth of the Polish economy.
As at the end of September 2024, the Total Capital Ratio stood at 15.4% and the Common Equity Tier 1 ratio at 13.9%.