Glossary

A

ABB – Accelerated book building

AIRB – Advanced Internal Rating-Based

ALM – Asset and Liability Management

ANL – Available Net Liquidity

B

BaFin – Bundesanstalt für Finanzdienstleistungsaufsicht, the Federal Financial Supervisory Authority

Banking – online using of banking services or products, e.g. using a mobile application, without visiting a branch

BFG – Bank Guarantee Fund

BGK – Bank Gospodarstwa Krajowego; it is a Poland’s only state-owned bank which primary business covers providing banking services for the public finance sector

BRRD – Banking Recovery and Resolution Directive

BPV – Basis Point Value

C

C/I ratio – Cost to Income; calculated as: (overhead costs + amortisation)/total income (including net other operating income/costs)

CATI – Computer Assisted Telephone Interview (survey)

CDS – Credit default swap; a derivative instrument as collateral in the event of default

CEE – Central and Eastern Europe

Advisory Centres– mBank branches located in high-class office buildings; their offer includes a full range of retail, corporate and private banking services, as well as products of selected mBank Group subsidiaries

CET 1 ratio – Core Tier 1 ratio, core equity capital ratio, calculated as: Tier 1 capital (calculated with accordance with CRR resolution)/total risk exposure amount

CNB – Czech National Bank

CRD IV – Capital Requirement Directive, a part of regulatory package CRD IV/CRR, which forms a part of Basel III

Cross-selling – a trade technique of selling a product or service combined with purchase of another product to an existing customer

CRR – Capital Requirement Regulation, EU regulation

D

Dochód – Net interest income + Net fee and commission income + Dividend income + Net trading income + Gains less losses from investment securities, investments in subsidiaries and associates + The share in the profits (losses) of joint ventures + Other operating income – Other operating expenses

E

EaR – Earnings at Risk – measure the amount that the net income, or earnings, changes when there is a change in interest rates

ECB – European Central Bank

EIB – European Investment Bank

ESMA – European Securities and Market Authority

EURIBOR – Euro Interbank Offer Rate – a daily reference rate, published by the European Money Market Institute; European equivalent of LIBOR

F

Factoring with recourse – involves the purchase of receivables by the factor without taking over the risk of insolvency of the customer’s recipients. The customer is responsible for the solvency of contractors. Full factoring means that the factoring party undertakes to take over the risk of customer’s insolvency.

Inverters – power converters; an electrical device that converts DC (i.e. direct current) to which it is supplied, to AC (i.e. alternating current) with adjustable output frequency.

Fed – US Federal Reserve

FTE – Full Time Equivalent

G

Guarantee de minimis – A form of security of a loan, which dedicates funds to guaranteeing the repayment of loans in case of non-timely repayment

GUS – Polish Central Statistical Office

GDP – Gross Domestic Product – a monetary measure of the value of all final goods and services produced in a country or region over a given period

I

IBNI – Incured but Not Idenified

ICAAP – Internal Capital Adequacy Assessment Process

IPO – Initial Public Offering, shares of stock in a company are sold to the general public on stock exchange market for the first time

K

K1 – Large enterprises (annual sales exceeding PLN 500 million)

K2 – Mid-sized enterprises (annual sales of PLN 30 – 500 million)

K3 – Small enterprises (annual sales below PLN 30 million)

KIR – National Clearing House (pol. Krajowa Izba Rozliczeniowa S.A.)

PFSA – Polish Financial Supervision Authority (pol. KNF)

KSF – Financial Stability Committee

KUKE – Medium-term lending insured in Export Credit Insurance Corporation

L

Lean philiosophy – a way of comprehensive, rational proces management in a company. It consists in limiting the resources needed for the process, including employee energy, investment spendings, time and other resources, while striving to maximize their use. The goal of Lean is to „slim down” the company, i.e. to optimize and improve the quality of processes, among others by eliminating the waste of time, resources or employee creativity resources.

Leasing – under the lease agreement, one of the parties provides the other party with the right to use a particular item for a period agreed upon in the leasing contract, in exchange for fixed installments.

“Light” branches – mBank’s branches located in shopping centers. Their business is focused on customer acquisition and sales of unsecured loans.

LIBOR – London Interbank Offered Rate – the reference rate of interest on deposits and loans in the interbank market in London. Libor rates are set for the following currencies: USD, EUR, CHF, GBP, JPY, for 1 day, 1 week, 1 month, 2 months, 3 months, 6 months and 1 year loans

LtV ratio – Loan to Value ratio, expressing a relation between an amount of a loan and a value of its collateral (usually mortgage)

M

M&A – Mergers and Acquisitions

MBA studies – Executive Master of Business Administration postgraduate studies offered in Polish and addressed to working professionals with higher education who have several years of experience in business, mainly occupying middle and higher management positions

MbO – Management by Objectives

mFinanse outlets –points of sale of financial products of various financial entities in Poland. The branches offer, among others group and individual insurance.

mKiosks – small points of service, usually with 1-2 employees, dedicated to provide limited scope of services and products (excluding cashier services). The customer can use self-service stations, an ATM and a deposit cash mashines without any additional charges.

ML – Mortgage Loans

MPC – Monetary Police Council (in Polish: RPP)

N

Net interest margin – net interest income / average interest earning assets

NFC –Near Field Communication

NML – Non-Mortgage Loans – unsecured loans or loans with other collateral

NPL – Non-Performing Loans – impaired loans

NSFR – Net Stable Funding Ratio

P

P/BV ratio – Share Price/Book value per share

P/E ratio – Share Price/Earnings per share

PD – Probability of Default

PPS – Purchasing Power Standard

R

ROA net – Net profit attributable to owners of the bank/average total assets

ROE gross – Profit before income tax/ average total equity net of the year’s result

ROE net – Net profit attributable to owners of the bank/average total equity net of the year’s result

RWA – Risk Weighted Assets

RWD – Responsive Web Design – a technology enabling to adapt website layouts to the screen of a device displaying the content

S

SME – Small and Medium Enterprises; entities employing up to 250 employees

SoFFin – Sonderfonds Finanzmarktstabilisierung), Germany’s Financial Market Stabilisation Fund

ST – Stress Test

T

Tier 1 –Tier 1 capital, calculated according to article 25 of CRR Regulation (CET1 capital + the instrument eligible for AT1

Tier 2 –Tier 2 capital, calculated according to part II, title 1, chapter 4 of CRR Regulation

TREA – Total Risk Exposure Amount

V

VaR – Value at Risk

W

WIBOR – Warsaw Interbank Offered Rate; Polish equivalent of LIBOR determined for polish zloty in Warsaw

WIG – Warsaw Stock Exchange Index

WSE – Warsaw Stock Exchange (in Polish: GPW)

Z

ZBP – The Polish Bank Association