Changes in the assets of mBank Group
The assets of mBank Group increased by PLN 12,940.0 million, i.e. 8.9% in 2019. Total assets stood at PLN 158,720.6 million as at December 31, 2019.
The table below presents changes in particular items of mBank Group assets.
| PLN M | 31.12.2018 | 31.12.2019 | Change in PLN M |
Change in % |
|---|---|---|---|---|
| Cash and balances with Central Bank | 9,199.3 | 7,897.0 | -1,302.3 | -14.2% |
| Loans and advances to banks | 2,546.3 | 4,341.8 | 1,795.4 | 70.5% |
| Financial assets held for trading and derivatives held for hedges | 2,091.6 | 2,693.3 | 601.8 | 28.8% |
| Net loans and advances to customers | 94,765.8 | 105,347.5 | 10,581.7 | 11.2% |
| Investment securities | 33,469.7 | 34,305.2 | 835.5 | 2.5% |
| Intangible assets | 776.2 | 955.4 | 179.3 | 23.1% |
| Tangible assets | 785.0 | 1,262.4 | 477.4 | 60.8% |
| Other assets | 2,146.7 | 1,918.0 | -228.7 | -10.7% |
| Total assets of mBank Group | 145,780.6 | 158,720.6 | 12,940.0 | 8.9% |
Loans and advances to customers – 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 and financial assets held for trading
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 2019. As at December 31, 2019, they accounted for 66.4% of the total balance sheet compared with 65.0% at the end of 2018. The net volume of loans and advances to customers increased by PLN 10,581.7 million, i.e. 11.2%, year on year.
| PLN M | 31.12.2018 | 31.12.2019 | Change in PLN M | Change in % |
|---|---|---|---|---|
| Loans and advances to individuals | 52,925.4 | 60,360.7 | 7,435.3 | 14.0% |
| Loans and advances to corporate entities | 44,233.1 | 47,785.7 | 3,552.6 | 8.0% |
| Loans and advances to public sector | 649.8 | 391.4 | -258.4 | -39.8% |
| Total (gross) loans and advances to customers | 97,808.3 | 108,537.8 | 10,729.5 | 11.0% |
| Provisions for loans and advances to customers | -3,042.5 | -3,190.3 | -147.7 | 4.9% |
| Total (net) loans and advances to customers | 94,765.8 | 105,347.5 | 10,581.7 | 11.2% |
Gross loans and advances to retail customers increased by PLN 7,435.3 million, i.e. 14.0% annually. Net of the FX effect, loans and advances to individuals grew by 13.4% in 2019. The sales of mortgage loans grew by 77.0% (in 2019 it stood at PLN 8,176.4 million against PLN 4,618.3 million in the previous year). In addition, in 2019, mBank Group sold PLN 10,260.0 million worth of non-mortgage loans, which represents an upturn by 14.9% year on year.
The volume of gross loans and advances to corporate clients increased by PLN 3,552.6 million, i.e. 8.0%, compared with the end of 2018. Excluding reverse repo/buy sell back transactions and the FX effect, the value of loans and advances to corporate clients increased by 11.2% against the end of 2018.
The volume of gross loans and advances to the public sector decreased by PLN 258.4 million or 39.8% in 2019.
Investment securities constituted mBank Group’s second largest asset category (21.6%). During 2019, their value grew by PLN 835.5 million, i.e. by 2.5%. The portfolio of treasury and municipal bonds shrank by PLN 1,480.2 million or 5.1%, while the portfolio of debt securities issued by the central bank increased by PLN 2,629.7 million, i.e. more than four times.
The balance of financial assets held for trading and derivatives held for hedges grew in 2019 by PLN 601.8 million, i.e. 28.8% driven mainly by the increased portfolio of treasury and municipal bonds.
Changes in liabilities and equity of mBank Group
The table below presents changes in the equity and liabilities of the Group in 2019:
| PLN M | 31.12.2018 | 31.12.2019 | Change in PLN M |
Change in % |
|---|---|---|---|---|
| Amounts due to other banks | 3,108.8 | 1,166.9 | -1,942.0 | -62.5% |
| Financial liabilities held for trading and derivatives held for hedges | 981.1 | 948.8 | -32.4 | -3.3% |
| Amounts due to customers | 102,009.1 | 116,661.1 | 14,652.1 | 14.4% |
| Debt securities in issue | 18,049.6 | 17,435.1 | -614.4 | -3.4% |
| Subordinated liabilities | 2,474.2 | 2,500.2 | 26.1 | 1.1% |
| Other liabilities | 3,986.6 | 3,855.1 | -131.5 | -3.3% |
| Total Liabilities | 130,609.4 | 142,567.3 | 11,957.9 | 9.2% |
| Total Equity | 15,171.2 | 16,153.3 | 982.1 | 6.5% |
| Total Liabilities and Equity of mBank Group | 145,780.6 | 158,720.6 | 12,940.0 | 8.9% |
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 73.5% of the Group’s equity and liabilities at the end of 2019, compared with 70.0% at the end of 2018.
| PLN M | 31.12.2018 | 31.12.2019 | Change in PLN M |
Change in % |
|---|---|---|---|---|
| Individual customers | 65,923.6 | 77,664.4 | 11,740.8 | 17.8% |
| Corporate customers | 35,346.3 | 38,137.9 | 2,791.6 | 7.9% |
| Public sector customers | 739.2 | 858.9 | 119.7 | 16.2% |
| Total amounts due to customers | 102,009.1 | 116,661.1 | 14,652.1 | 14.4% |
Amounts due to customers were growing rapidly in 2019 to reach PLN 116,661.1 million at the end of the year, compared with PLN 102.009.1 million at the end of 2018 (+14.4%). From the perspective of funding cost, in 2019 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 11,740.8 million, i.e. 17.8% compared with the end of 2018. Current and saving accounts increased by 20.3%, while term deposits went up by 8.6%.
Amounts due to corporate clients increased by PLN 2,791.6 million or 7.9% in 2019, driven mainly by higher volumes on current accounts (+14.9%). Term deposits of corporate clients increased by 1.1% in 2019. The total growth of corporate deposits was partly offset by a drop in the value of repo transactions (-75.4%) and in the amount of loans and advances received (-13.8%), triggered largely by a partial repayment of loans from the European Investment Bank. Excluding repo transactions, amounts due to corporate clients rose by 9.6% compared with the end of 2018.
Amounts due to other banks slid by PLN 1,942.0 million, i.e. by 62.5% compared with the end of 2018 and at the end of 2019 reached 1,166.9 million. The strongest decline was recorded in repo / sell buy back transactions, whose value decreased by 87.5% compared to the end of 2018. A decrease was also reported in loans and advances received (by 74.6%) and funds from other banks placed on accounts with mBank.
The share of debt securities in issue in mBank Group’s funding structure decreased from 12.4% at the end of 2018 to 11.0% at the end of 2019. This change is attributable mainly to the issuances and redemption of bonds under the EMTN programme and covered bonds of mBank Hipoteczny.
In 2019, subordinated liabilities grew by 1.1% year on year, which was caused by the impact of the PLN depreciation (vis-a-vis the Swiss franc) on the PLN equivalent of the subordinated loan with a nominal value of CHF 250 million.
Total equity went up by PLN 982.1 million (+6.5%) in 2019 as a consequence of an increase in retained earnings, while its share in total equity and liabilities of mBank Group amounted to 10.2% at the end of 2019 (compared with 10.4% as at the end of 2018).
Changes in off-balance sheet items, changes in guarantees granted to mBank Group subsidiaries and other agreements
More information on significant off-balance sheet items of mBank Group can be found in Note 33 of the mBank S.A. Group IFRS Consolidated Financial Statements for 2019.
The funds raised by mFinance France S.A. (mFF) from the eurobond issues under the EMTN programme have been deposited with mBank as a result of the guarantees granted by the bank related to the guarantee payment of all amounts to be settled in respect of debt securities issued under the EMTN Programme. In 2019, the value of the guarantee dropped as a result of redemption of the tranche in the nominal value of CHF 500 million redeemed on April 1, 2019.
As at December 31, 2019 mBank S.A. did not have any agreements referred to in Article 141t.1 of the Banking Law Act.