mBank Group generated a profit before tax of PLN 515.4 million in Q3 2019, which represents an increase by 23.2% quarter on quarter. Net profit attributable to the owners of mBank reached PLN 353.9 million. Q3 2019 saw quarter-on-quarter growth in income driven by higher core income and net trading income.
The main factors determining the Group’s performance in Q3 2019 included:
- Increase in income to PLN 1,430.3 million (+7.6% quarter on quarter) spurred by a significant increase in net interest income (+6.7% quarter on quarter), net fee and commission income (+10.0% quarter on quarter), and net trading income (+17.6% quarter on quarter).
- Slight quarter-on-quarter increase in operating expenses (including depreciation and amortisation) to PLN 542.5 million.
- Increase in risk costs to PLN 249.4 million, i.e. 97 basis points compared with 90 basis points in the previous quarter.
- Quarter-on-quarter decrease in tax on the Group’s balance sheet items to PLN 123.0 million.
- Continued organic growth and business expansion as demonstrated by:
- Increase in the number of corporate customers to 25,890 (+888 customers compared with the end of June 2019);
- Ever higher housing loan sales (of PLN 2,291.7 million in Q3 2019, up by 3.2% from the previous quarter and 92.7% from Q3 2018) and continued high sales of non-mortgage loans (PLN 2,402.0 million, down by 8.3% from the previous quarter and up by 3.1% compared with Q3 2018).
At the end of Q3 2019, net loans and advances to customers stood at PLN 104,725.6 million, up by PLN 4,304.1 million or 4.3% on the previous quarter. Net of reverse repo/buy-sell-back transactions and FX effect, the value of loans and advances to customers went up by 2.9% quarter on quarter.
In Q3, amounts due to customers rose by PLN 5,624.6 million, i.e. 5.1% quarter on quarter, with amounts due to corporate customers going up by PLN 4,185.6 million, i.e. 11.0% quarter on quarter, and amounts due to individual customers by PLN 1,886.3 million or 2.7%.
Consequently, the loan to deposit ratio of mBank Group stood at 90.3%.
The changes in the Group’s results translated into the following profitability ratios:
- Gross ROE of 13.4% (compared with 11.1% in Q2 2019);
- Net ROE of 9.2% (compared with 8.8% in Q2 2019).
The capital ratios of mBank Group rose slightly in Q3 2019 amid an increase in own funds (resulting from the inclusion of 50% of H1 2019 profit). As at the end of September 2019, the Total Capital Ratio stood at 19.8% and the Common Equity Tier 1 ratio at 16.8%.