Net profit attributable to the shareholders of mBank was PLN 332.7 million in Q4 2018, an increase of 16.6% on the previous quarter.
mBank Group’s total income went up by 4.2% quarter on quarter to PLN 1.26 billion. Core income grew slightly and reached an all-time high. An increase in net interest income of 2.3% was offset by lower net fee and commission income (down by 8.2%). Net interest margin of mBank Group rose on the quarter before and stood at 2.60% in Q4 2018.
Net commission income went down on lower sales of external partners’ products. Net trading income expanded significantly (up by 46.5%) from the prior quarter, driven predominantly by a higher FX result. Total overhead costs of mBank Group (incl. amortisation/depreciation) shrank by 1.8% compared with Q3 to PLN 523 million. To a large extent it was a consequence of a reduction in IT expenses and real property administration and maintenance costs. Staff-related expenses remained stable with amortisation/depreciation up by 4.2%. As a result, the cost/income ratio went down to 41.5% from 43.9% in the prior quarter.
The changes in the Group’s performance translated into an increase in net ROE from 8.2% in Q3 2018 to 9.7% in Q4 2018.The balance sheet total of mBank Group stood at PLN 146 billion at the end of 2018, down by 0.6% compared with the end of September 2018.With a net year-end volume of PLN 95 billion, loans and advances to clients were the largest asset category, accounting for 65.0% of total assets.
Gross loans and advances to corporate clients grew to PLN 44 billion (up by 5.3%) compared with Q3 2018. Loans to individuals rose by 2.1% on the prior quarter to PLN 53 billion. In Q4 2018, amounts due to clients, which are the Group’s principal source of funding, fell slightly compared with Q3 2018.
mBank Group’s capital ratios rose slightly in Q4 2018, driven largely by a rise in own funds resulting from partial appropriation of Q3 2018 profit and qualification of subordinated bonds worth PLN 750 million as Tier 2 capital, combined with early repayment of subordinated bonds worth PLN 500 million. At the end of 2018, the Total Capital Ratio and Common Equity Tier 1 ratio stood at 20.7% and 17.5%, respectively.