mBank Group closed H1 2017 with a net profit of PLN 488.5 million compared with PLN 696.3 million in the same period last year. The decrease is attributable to one-off factors and tax charges. mBank continued to grow organically in H1 2017. It acquired almost 200 thousand retail and 560 corporate clients.
mBank Group’s financial result in H1 2017 was primarily driven by a 2.2% decrease in income against the same period last year when the Group recognised proceeds from the takeover of Visa Europe Limited by Visa Inc. At the same time income from core operations rose by 13.1%. The period from January to June was also marked by higher costs driven by the contribution towards the Bank Guarantee Fund and growing bank tax charge - up to PLN 184.3 million from PLN 146.3 million in H1 2016. Net impairment losses on loans and advances increased as well.
The first half of 2017 was also a period of solid organic growth. Gross loans and advances rose by 1.9% compared with the end of 2016, supported by intensified sales efforts in both retail and corporate banking. Net of reverse repo/buy sell back transactions and FX effects, gross loans increased by 4.3% in H1. The expansion in the retail loans market was reflected by the record-high sales of non-mortgage loans of PLN 3.7 billion, which represents an increase by 20.2% compared with H1 2016. Sales of mortgage loans rose considerably as well with PLN 1.8 billion worth of loans originated in H1 2017, up by 22.3% against the same period last year.
In addition, mBank’s net profit generated in Q2 2017 stood at PLN 269.7 million compared with PLN 218.8 million in Q1 2017. Net interest income went up by 2.1% quarter on quarter thanks to lower interest costs - down by 3.4%. Moreover, net fee and commission income grew by 1.2% due to an increase in commissions for brokerage services and issue organisation, trade finance commissions and commissions for agency services regarding sale of products of external financial entities.
Net trading income fell by PLN 15.8 million quarter on quarter due to negative valuation of CIRS instruments and lower market volatility. In Q2 2017 mBank had to create higher loan loss provisions, mainly in the corporate area.
Gross loans and advances to clients increased by PLN 1.7 billion in Q2 2017. Higher credit volumes were reported in both retail (+PLN 0.4 billion) and corporate banking (+PLN 1.3 billion). Net of FX effects, the value of loans and advances to individuals rose by approx. 1.4%. In Q2 2017, mBank Group sold PLN 1 billion worth of mortgage loans and PLN 1.9 million worth of non-mortgage loans.