Net profit attributable to the owners of mBank reached PLN 164.0 million in Q1 2019. Income remained stable with costs rising markedly.
The main factors determining the Group’s financial results in Q1 2019 were as follows:
- Stable income at the level of PLN 1,261.4 million, i.e. +0.1% quarter on quarter with a slight increase in core income (+1.4% quarter on quarter).
- Increase in overhead costs (including depreciation) to PLN 715.8 million against the previous quarter driven by posting the annual contribution to the resolution fund of the Bank Guarantee Fund (BFG).
- Risk costs reduced to PLN 145.6 million, i.e. 61 basis points compared with 73 basis points in Q4 2018.
- Increase in tax on balance sheet items quarter on quarter to PLN 109.1 million.
- Continued organic growth and business expansion as demonstrated by:
- Increase in the number of individual customers to 5.77 million (+83.0 thousand customers quarter on quarter and +346.7 thousand year on year).
- Increase in the number of corporate customers to 24,288 (+582 customers quarter on quarter and +1,972 year on year).
- Development of the lease offer dedicated to small and medium-sized enterprises driven by the acquisition of LeaseLink specialising in lease solutions.
At the end of March 2019, net loans and advances to customers stood at PLN 97.7 billion, which represents a PLN 2.96 billion increase (+3.1%) compared with the end of 2018. Net of reverse repo/buy-sell-back transactions and FX effect, the value of loans and advances grew by 2.4%.
Amounts due to customers rose by PLN 5.6 billion (+5.5%) in Q1 2019 compared with Q4 2018, while amounts due to corporate customers and individuals rose by PLN 2.3 billion and PLN 2.3 billion (+3.5%) respectively.
Consequently, the loan to deposit ratio of mBank Group dropped to 90.7% compared with the end of 2018.
The changes in the Group’s results translated into the following profitability ratios:
- Gross ROE of 7.8% (13.3% in Q4 2018);
- Net ROE of 4.4% (9.5% in Q4 2018).
mBank Group’s capital ratios remained stable in Q1 2019 thanks to an increase in own funds (as a result of retaining 50% of the profit generated in the first three quarters of 2018 and 100% of the Q4 2018 profit) and a rise in the total risk exposure amount. At the end of March 2019, the Total Capital Ratio and Common Equity Tier 1 ratio stood at 20.7% and 17.6%, respectively.