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In 2017, mBank generated record high total income at PLN 4,454 million, which represents an increase by 3.7%, without excluding the 2016 one-off events. The result was achieved due to organic growth of the business and development of the offer.
Net interest income increased by 10.7% to PLN 3,136 million, while net interest margin improved by 18 bps and stood at 2.48%. The profitability of the loan portfolio is gradually growing – the share of high margin products increases, while the share of mortgage loans in foreign currencies decreases. Interest expenses arising from deposits were significantly reduced, while term deposits were converted into current accounts.
Net fee and commission income increased by 9.5% to PLN 992 million thanks to business expansion. Commission income benefited from strong acquisition, growing customer activity, higher number and volume of transactions, the acceleration in lending and a better situation on the capital markets.
Total overhead costs (including amortisation) of mBank Group stood at PLN 2,043 million, which represents a 4.1% increase in comparison with 2016. In turn, the Bank’s efficiency slightly decreased in 2017 – its cost to income ratio stood at 45.9%, compared to 45.7% in 2016. The increase was driven by i.a. higher contributions to the Bank Guarantee Fund. mBank also continued its investments in future growth by running numerous strategic projects.
Costs of risk stoo dat 61 bps, compared with 46 bps in 2016, when a major release of loan loss provisions took place. Prudent risk management is reflected in the NPL ratio at 5.2%.
Net profit attributable to the owners of mBank stood at PLN 1,092 million.
At the end of 2017, ROE net, i.e. return on equity, reached 8.3%, down by 2.6 p.p. due to the banking tax of PLN 375 million.
ROA net, i.e. return on assets, reached 0.83% in 2017.
Gross loans and advances reached PLN 87.4 billion. Excluding the FX effect , the gross portfolio grew by 7.4% due to acceleration in the corporate segment and record-high sale of non mortgage loans, which increased by 16% year on year and stood at PLN 7.1 billion. Sales of mortgage loans increased by 19.1% to PLN 3.4 billion.
Moreover, the volume of mortgage loans in CHF decreased by CHF 376 million, i.e. 8% in 2017.
At the end of 2017 the deposit base was stable at PLN 91.5 billion. Outflow from term deposits was compensated by the dynamic inflow of funds into current and saving accounts (+14.9% year on year).
mBank recorded high level of capital ratios. The Common Equity Tier 1 capital ratio at 18.3% and the Total Capital Ratio at 21.0% are significantly above the levels recommended by the PFSA (13.67% and 17.55% respectively).
Moreover, the Polish Financial Supervision Authority (PFSA) increased the other systemically important institution buffer for mBank up to 0.75%. Moreover, an additional capital requirement related to the foreign currency loans was revised upwards.
Start of mAccelerator. mBank launched the first and the largest fund in the region of Central and Eastern Europe, which invests in fintech start-ups. At the end of 2017, our portfolio consists of 2 companies: Cyber Rescue (cybersecurity solution based on passive biometrics) and Digital Teammates (pure-play Robotic Process Automation).
Strengthening the position of mBank as a mobile and transactional bank through implementation of projects increasing innovations:
mBox project – within the scope of the project, mBank sells its retail banking solutions abroad. They include access to its electronic platforms (the internet platform and the mobile application) as well as product and marketing know-how. In 2017, mBank closed its first transaction, i.e. the sale of mBank’s license for mobile and on-line transactional platform to La Bank Postale, owned by the French postal company La Poste.