Changes in the assets
The assets of mBank Group increased by PLN 14,326.1 million, i.e. 10.9% in 2018. Total assets stood at PLN 145,750.1 million as at December 31, 2018.
The table below presents changes in particular items of mBank Group assets.
| PLN M | 31.12.2017 | 31.12.2018 | Change in PLN M | Change in % |
|---|---|---|---|---|
| Cash and balances with Central Bank | 7,384.9 | 9,199.3 | 1,814.4 | 24.6% |
| Loans and advances to banks | 1,707.7 | 2,546.3 | 838.6 | 49.1% |
| Financial assets held for trading and derivatives held for hedges | 2,761.7 | 2,104.3 | -657.4 | -23.8% |
| Net loans and advances to customers | 84,475.8 | 94,722.6 | 10,246.7 | 12.1% |
| Investment securities | 32,144.7 | 33,469.7 | 1,325.0 | 4.1% |
| Intangible assets | 710.6 | 776.2 | 65.5 | 9.2% |
| Tangible assets | 758.7 | 785.0 | 26.3 | 3.5% |
| Other assets | 1,479.8 | 2,146.7 | 666.9 | 45.1% |
| Total assets of mBank Group | 131,424.0 | 145,750.1 | 14,326.1 | 10.9% |
Loans and advances to customers – starting from 2018, the item covers the sum of loans and advances to customers recognised in: financial assets measured at amortised cost, non-trading financial assets mandatorily measured at fair value through profit or loss.
Investment securities – the sum of debt securities included in financial assets measured at fair value through other comprehensive income, debt securities included in assets measured at amortised cost and non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Loans and advances to customers remained the largest asset category of mBank Group at the end of 2018. As at December 31, 2018, they accounted for 65.0% of the total balance sheet compared with 64.3% at the end of 2017. The net volume of loans and advances to customers increased by PLN 10,246.7 million, i.e. 12.1%, year on year.
| PLN M | 31.12.2017 | 31.12.2018 | Change in PLN M |
Change in % |
|---|---|---|---|---|
| Loans and advances to individuals | 48,142.8 | 52,925.4 | 4,782.6 | 9.9% |
| Loans and advances to corporate entities | 37,941.7 | 44,189.9 | 6,248.2 | 16,5% |
| Loans and advances to public sector | 995.6 | 649.8 | -345.7 | -34.7% |
| Other receivables | 307.6 | 0 | -307.6 | – |
| Total (gross) loans and advances to customers | 87,387.7 | 97,765.1 | 10,377.4 | 11.9% |
| Provisions for loans and advances to customers | -2,911.9 | -3,042.5 | -130.7 | 4.5% |
| Total (net) loans and advances to customers | 84,475.8 | 94,722.6 | 10,246.7 | 12.1% |
Other receivables – starting from 2018 this item is not extracted from loans’ categories.
Gross loans and advances to retail customers increased by PLN 4,782.6 million, i.e. 9.9% annually. Net of the FX effect, loans and advances to individuals grew by 7.5% in 2018. The sales of mortgage loans grew by 35.3% (in 2018 it stood at PLN 4,618.3 million against PLN 3,412.5 million in the previous year). In addition, in 2018, mBank Group sold PLN 8,933.2 million worth of non-mortgage loans, which represents an upturn by 25.4% year on year.
The volume of gross loans and advances to corporate clients increased by PLN 6,248.2 million, i.e. 16.5%, compared with the end of 2017. Excluding reverse repo/buy sell back transactions and the FX effect, the value of loans and advances to corporate clients increased by 12.4% against the end of 2017.
The volume of gross loans and advances to the public sector decreased by PLN 345.7 million or 34.7% in 2018.
Investment securities constituted mBank Group’s second largest asset category (23.0%). During 2018, their value grew by PLN 1,325.0 million, i.e. by 4.1%. The portfolio of treasury and municipal bonds went up by PLN 1,410.0 million or 5.1%, while the portfolio of debt securities issued by the central bank shrank by PLN 1,733.0 million or 74.6%.
The balance of trading securities and trading loans and advances dropped by PLN 427.2 million in 2018, primarily as a result of a reduction in the treasury bonds portfolio.
Changes in liabilities and equity
The table below presents changes in the equity and liabilities of the Group in 2018:
| PLN M | 31.12.2017 | 31.12.2018 | Change in PLN M |
Change in % |
|---|---|---|---|---|
| Amounts due to other banks | 5,073.4 | 3,078.4 | -1,995.0 | -39.3% |
| Financial liabilities held for trading and derivatives held for hedges | 1,095.4 | 981.1 | -114.2 | -10.4% |
| Amounts due to customers | 91,496.0 | 102,009.1 | 10,513.0 | 11.5% |
| Debt securities in issue | 14,322.9 | 18,049.6 | 3,726.7 | 26.0% |
| Subordinated liabilities | 2,158.1 | 2,474.2 | 316.0 | 14.6% |
| Other liabilities | 2,986.7 | 3,941.7 | 955.0 | 32.0% |
| Total Liabilities | 117,132.5 | 130,534.0 | 13,401.6 | 11.4% |
| Total Equity | 14,291.6 | 15,216.1 | 924.5 | 6.5% |
| Total Liabilities and Equity of mBank Group | 131,424.0 | 145,750.1 | 14,326.1 | 10.9% |
Amounts due to customers are the main source of funding of mBank Group. Their share in the Group’s funding structure has been increasing systematically. They accounted for 70.0% of the Group’s equity and liabilities at the end of 2018, compared with 69.6% at the end of 2017.
| PLN M | 31.12.2017 | 31.12.2018 | Change in PLN M | Change in % |
|---|---|---|---|---|
| Individual customers | 55 693,6 | 65 923,6 | 10 230,0 | 18,4% |
| Corporate customers | 34,589.6 | 35,346.3 | 756.7 | 2.2% |
| Public sector customers | 1,212.8 | 739.2 | -473.6 | -39.1% |
| Total amounts due to customers | 91,496.0 | 102,009.1 | 10,513.0 | 11.5% |
Amounts due to customers were growing rapidly in 2018 to reach PLN 102,009.1 million at the end of the year, compared with PLN 91,496.0 million at the end of 2017 (+11.5%). From the perspective of funding cost, in 2018 we observed a continuation of a positive trend reflected in higher dynamics of inflows to current accounts than to term deposits.
Amounts due to retail customers rose by PLN 10,230.0 million, i.e. 18.4% compared with the end of 2017. Current and saving accounts increased by 19.0%, while term deposits went up by 15.9%.
Amounts due to corporate clients increased by PLN 756.7 million or 2.2% in 2018, driven mainly by higher volumes of term deposits (+11.8%) and current account (+0.6%) as well as greater value of repo transactions (+62.2%). The total growth of corporate deposits was partly offset by a drop in the value of loans and advances received (-16.6%), triggered largely by a partial repayment of loans to the European Investment Bank. Excluding repo transactions, amounts due to corporate clients rose by 1.4% compared with the end of 2017.
* Including repo transactions, loans and advances received, other liabilities
Amounts due to other banks slid by PLN 1,995.0 million, i.e. by 39.3% compared with the end of 2017, and amounted to PLN 3,078.4 million. The drop in the volume of loans and advances received was spurred mainly by the repayment of loans to Commerzbank AG with a nominal value of CHF 750 million. The amount of current accounts placed by other banks with mBank rose slightly, whereas the value of term deposits went down. Repo/sell buy back transactions and other liabilities to banks grew year on year.
The share of debt securities in issue in mBank Group’s funding structure rose from 10.9% at the end of 2017 to 12.4% at the end of 2018. Their value grew by PLN 3,726.7 million, i.e. by 26.0% year on year. This change is attributable mainly to the issue of bonds under the EMTN programme and issue of covered bonds by mBank Hipoteczny.
In 2018, subordinated liabilities grew by 14.6% year on year, which was caused primarily by the issue of new subordinated debt in PLN and replacement of subordinated bonds in CHF with a subordinated loan of CHF 250 million nominal value.
Total equity went up by PLN 924.5 million (+6.5%) in 2018 as a consequence of an increase in retained earnings, while its share in total equity and liabilities of mBank Group dropped to 10.4% at the end of 2018 (compared with 10.9% as at the end of 2017).