mBank’s stable results in Q4 2014

mBank’s stable results in Q4 2014

Despite a difficult situation on the market, the results of mBank Group in Q4 2014 remained at a stable and secure level. The net profit generated in 2014 reached PLN 1.3 billion, only in the last three months it amounted to PLN 309 million, said Cezary Stypułkowski, President of the Management Board of mBank.

The Group reported growth in basic components of its balance sheet, including loans and deposits. The growth rate of gross loan volume in mBank exceeded the market levels — the total increase was at PLN 2.7 billion quarter on quarter. Sales of new loans, both in the retail and in the corporate banking areas, contributed positively to the increase. The bank achieved a higher growth rate with regard to the deposit base — it amounted to 4.1 per cent. Consequently, the loans to deposits ratio improved further and at the end of 2014 it totalled 103.0 per cent.

The income of the Group was lower than in the previous quarter, mainly due to a decrease in the core income: net interest income and net fee and commission income. Net interest income decreased quarter on quarter by 2.7 per cent and totalled PLN 632.5 million, but in comparison with Q4 2013 it increased by 7.6 per cent. Commission income was lower by 7.3 per cent quarter on quarter and amounted to PLN 200.4 million. It was due to, among others, the reduction in the interchange fee, as a result of which, the revenues from payment card commissions dropped by PLN 9.3 million.

Simultaneously, despite the ongoing marketing campaigns as well as implementation of strategic projects, the Group’s costs remained at a level similar to the one in the previous quarter and totalled PLN 443.5 million. In consequence of the decrease in revenues and the stable level of costs, the effectiveness of mBank Group measured by the cost/income ratio remained stable on a quarter-on-quarter basis. The cost/income ratio in Q4 2014 reached 47.2 per cent compared with 43.3 per cent in Q3 2014.In Q4 2014 the bank registered a decrease in risk costs to 61 bps. The net impairment losses on loans and loans for any purpose dropped to PLN 112.6 million.

The Orange Finanse project, a joint undertaking of mBank and Orange Polska, started in October. This modern tailor-made product offer for the clients of Orange resulted in over 41 thousand personal accounts opened in Orange Finanse by the end of 2014.In Q4 2014 mBank launched the project of light, ultra-modern banking outlets in shopping centres, equipped with touch screens with Kinect technology. The first such branches were opened in Łódź and Szczecin. It is a part of a complex project of redevelopment of the sales network scheduled for a few years, consisting in separating redesigned branches and advisory centres from the current structure. The Bank plans to invest more than PLN 70 million in the project over a few years and the network reorganisation will bring savings exceeding PLN 50 million annually.

mBank Group's capital ratios remained at a safe level. At the end of December 2014 the total capital ratio and the Common Equity Tier 1 ratio stood at 14.7 per cent and 12.3 per cent, respectively.