In Q3 2016 the bank earned PLN 230.5 million. Once more quarterly income exceeded PLN 1 billion and the number of clients rose by another 100 thousand.
The Q3 2016 results of mBank Group reflect the difficult operating conditions affecting the performance of Polish financial institutions. Historically low interest rates, sluggish demand for investment loans among companies, negative sentiment towards the stock market, high capital requirements, and finally, the bank tax are only some of the factors adversely affecting the sector’s profitability. On the other hand, a pick-up in households’ income driven by rising salaries had a positive effect on the economy and banks.
In Q3 2016, the core income of mBank Group reached a record high of PLN 953.1 million. The quarter-on-quarter rise was spurred by the upward trend followed by both net interest income, which grew by 5.0%, and net commission income, up by 11.8%.
Moreover, the bank’s performance was also impacted by higher operating costs, which stood at PLN 499.9 million (up by 1.9% compared with Q2 2016), and net impairment losses on loans and advances, which rose to PLN 139.5 million. Consequently, the cost of risk reached 69 basis points in Q3 2016, compared with 59 basis points a quarter earlier. The bank tax charge remained flat compared with the previous quarter and stood at PLN 89.8 million.
Profit after income tax attributable to mBank's shareholders reached PLN 230.5 million, which represents a drop by 41% quarter on quarter. However, it should be remembered that in Q2 2016 the bank made a one-off income from settling the takeover of Visa Europe by Visa Inc.
The capital ratios of mBank Group increased following the inclusion of the Q2 profit in Common Equity Tier 1 capital. At the end of September 2016, Total Capital Ratio and Common Equity Tier 1 ratio stood at 18.6% and 15.9%, respectively.
In Q3 2016, mBank was continuing its organic growth. The number of retail clients increased by 104 thousand to reach 5.25 million at the end of September. At the same time, mBank acquired 475 new corporate clients.
Over the last few months the bank was busy perfecting its mobile banking solutions. Retail clients were given access to a new service available in mBank’s mobile application, the payment assistant, which automatically suggests new transfers based on the history of client’s transactions. The clients no longer have to remember about their bills to pay them.
It is also noteworthy that thanks to its high quality service and client-friendly offer mBank won in the mobile banking category of the 15th edition of the “Newsweek’s Friendly Bank” ranking. Moreover, mBank was named “The Best Bank for Companies” in a poll organised by Forbes. The award ceremony was held in September 2016.