mBank: good performance amid difficult market environment

mBank: good performance amid difficult market environment

mBank makes PLN 381 million net in Q1 2015. The Bank increases its client base and forms a strategic alliance with Allegro.

In Q1 2015 banks had to face unfavourable market conditions. These included mainly interest rate cuts and reduced interchange fee for payment cards. mBank came away unscathed, says Cezary Stypułkowski, mBank’s CEO.

 The quarterly rise in net income was driven by posting the profit from the sale of BRE Ubezpieczenia TUiR. In total, the proceeds from the sale amounted to PLN 579.5 million, and the impact of the transaction on the Bank’s pre-tax result amounted to PLN 194.3 million. On the other hand, a rise on the cost side was triggered mainly by higher contribution to the Bank Guarantee Fund compared with 2014, which was recognised by the Bank in whole as cost of Q1 2015.

mBank’s income in Q1 2015: PLN 1,139.1 million Driven by consecutive interest rate cuts, net interest income fell by PLN 45 million (to PLN 587 million) compared with Q4 2014. To some extent the drop was compensated for by a 10% growth in net fee and commission income. Other positive factors included a more than 45% rise in net trading income, which exceeded PLN 102 million in the first three months of 2015. In the analysed period, operating costs amounted to PLN 555 million.

Positive factors on the cost side included lower cost of risk, which stood at 52 basis points, and consequently, reduced impairment losses (PLN 100 million).Q1 2015 was also a period of organic business growth: the number of individual clients increased by 114 thousand and exceeded 4.8 million. In addition, mBank acquired 346 new corporate clients. The value of loans and advances reached almost PLN 79 billion, which represents a quarterly rise by 5.9%. Excluding the FX effect (abrupt rise in the Swiss franc in January) the growth accounted for 1.7%. On the other hand, deposits of mBank clients went down by 0,8% to PLN 71.9 billion. Consequently, the loans to deposits ratio stood at 109.9%.

mBank Group's capital ratios remained at a stable and safe level. At the end of March 2015, the total capital ratio and common equity Tier 1 ratio stood at 16.0% and 12.7% respectively. In December 2014 mBank issued PLN 750 million in subordinated debt, which was recognised as own funds in January 2015.In Q1 2015 mBank signed a long-term agreement with Allegro, an online auction website, on strategic cooperation consisting in offering bank products to the website’s users. As part of the cooperation a special offer of individual and business accounts will be prepared for the Allegro users who do not hold bank accounts with mBank yet.

The Bank was also awarded the “Golden Bank” title in a voting organised by Bankier.pl, an online portal. In the same poll the Internet users also named mBank the bank offering the best mobile banking, personal account and business account.