Results of mBank Group Q1 2016 Solid start to the year despite - PowerPoint PPT Presentation

Results of mBank Group Q1 2016 Solid start to the year despite market headwinds Management Board of mBank S.A. Investor Presentation April 28, 2016

Key highlights of Q1 2016 Core revenues of PLN 888.2 M Total revenues exceeded remained at high levels PLN 1.0 B • NII at PLN 676.4 M (+15.1% YoY), as margin rebound continued Profit & Loss • NFC at PLN 211.7 M (+9.2% YoY), Sound volume development despite new lending slowdown • Gross loans at PLN 80.9 B Solid efficiency maintained (+0.7% QoQ, +6.1% YoY) 1 • Cost/Income ratio at 47.7% • Customer deposits at PLN 81.1 B Volumes (+0.3% QoQ, +20.2% YoY) 1 Excess deposit funding Focus on higher margin lending • Loan-to-Deposit ratio at 96.1% • Mortgage loan sales at PLN 0.7 B in Q1/16 (-14% YoY); non-mortgage Capital ratios well above loan sales at PLN 1.3 B (+11% YoY) Capital & regulatory requirements • CET 1 Ratio at 16.2%/19.3% 2 Liquidity Accelerating client acquisition • Total Capital Ratio at 19.0%/22.6% 2 • 5,037 thou. retail clients (+373 thou. YoY) and 19,992 corporate Issues of covered bonds add clients (+1,859 YoY) to long-term financing sources Business Strengthening the position as development mobile and transactional bank Net Profit of PLN 307.8 M, • Rising number of non-cash card -0.6% compared to Q4/15 payments • Cooperation with strategic partners 1 Volume dynamics presented excl. reverse repo / buy-sell-back transactions and repo transactions, respectively; 2 Stand-alone capital ratios Investor Presentation – Q1 2016 |2

Agenda Summary of Q1/16 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q1/16 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios Macroeconomic Update Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Investor Presentation – Q1 2016 |3

Summary of Q1/16 Results in mBank Group Key Financials: Profit and Loss Account Q1/16 Q1/15 Q4/15 in PLN million Change YoY 676.4 587.4 +15.1% 676.6 Net interest income 211.7 193.9 +9.2% 237.4 Net Fee & Commission income 1,008.9 1,118.1 -9.8% 1,110.5 Total income (480.8) (451.9) +6.4% (457.2) Total costs 1 − − (193.8) One-off regulatory costs − (68.5) (100.0) -31.5% (102.6) Loan Loss Provisions 459.6 566.2 -18.8% 356.9 Operating profit (57.3) (0.9) (0.9) Taxes on bank balance sheet items − 402.3 565.3 -28.8% 356.0 Profit before income tax 307.8 450.9 -31.7% 309.5 Net profit 2.29% 2.06% +0.23 p.p. 2.22% Net Interest Margin (NIM) 2.66% 2.38% +0.28 p.p. 2.58% NIM excl. CHF portfolio 47.7% 40.4% 58.6% Cost/Income ratio +7.3 p.p. 0.35% 0.52% -0.17 p.p. 0.52% Cost of Risk 10.1% 16.4% -6.3 p.p. 11.2% Return on Equity (ROE) 0.99% 1.48% 0.97% Return on Assets (ROA) -0.49 p.p. 1 Including contribution to the Bank Guarantee Fund of PLN 141.7 million to cover the cost of payments to deposit holders of bankrupt Cooperative Bank in Wołomin and contribution to the support fund for distressed mortgage borrowers of PLN 52.1 million Investor Presentation – Q1 2016 |4

Summary of Q1/16 Results in mBank Group Key Financials: Balance Sheet Q1/16 Q1/15 Q4/15 in PLN million Change YoY 80,925 81,883 -1.2% 81,409 Gross loans to customers 46,511 43,788 46,259 Retail client loans +6.2% 1 32,801 29,728 32,416 Core corporate client loans +10.3% 81,134 71,861 81,141 Amounts due to customers +12.9% 47,835 39,693 46,117 Retail client deposits +20.5% 1 31,771 25,743 33,330 Core corporate client deposits +23.4% 96.1% 109.9% -13.8 p.p. 96.7% Loan to Deposit ratio 5.8% 6.1% -0.3 p.p. 5.7% NPL ratio 58.6% 53.7% +4.9 p.p. 58.9% Coverage ratio 16.2% 12.9% 14.3% Common Equity Tier 1 Ratio +3.3 p.p. 19.0% 16.3% 17.3% Total Capital Ratio +2.7 p.p. 1 Excl. reverse repo / buy-sell-back transactions for loans and repo transactions for deposits Investor Presentation – Q1 2016 |5

Summary of Q1/16 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +10.3% +8.0% +2.2% +1.8% 19,992 19,562 5,037 19,086 4,947 18,654 4,864 4,743 18,133 4,665 2,152 1,983 216 1,931 193 1,867 159 121 1,839 76 842 775 809 820 767 5,896 5,748 5,609 5,485 5,317 3,896 3,934 3,979 3,822 3,847 11,831 11,944 11,302 11,546 10,977 03/15 06/15 09/15 12/15 03/16 03/15 06/15 09/15 12/15 03/16 Retail Banking PL mBank CZSK Orange Finance K1 K2 K3 Market shares in Retail Banking segment Market shares in Corporate Banking segment 10.1% 6.6% 6.5% 6.5% 6.5% 6.5% 9.8% 9.8% 9.7% 6.3% 6.3% 6.3% 6.2% 8.9% 8.8% 8.6% 8.5% 5.4% 5.4% 5.3% 5.3% 8.1% 5.1% 5.0% 5.0% 5.8% 5.7% 4.1% 4.1% 4.0% 6.4% 6.3% 6.3% 6.3% 3.8% 6.3% 6.3% 6.3% 3.7% 6.1% 3.6% 6.0% 3.5% 3.4% 3.3% 03/14 06/14 09/14 12/14 03/15 06/15 09/15 12/15 03/16 03/14 06/14 09/14 12/14 03/15 06/15 09/15 12/15 03/16 Loans Loans (excl. FX portfolio) Deposits Loans Deposits Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M. Investor Presentation – Q1 2016 |6

Summary of Q1/16 in mBank Group Development of Retail and Corporate business Sales of mortgage loans Sales of non-mortgage loans (PLN M, by quarter) (PLN M, by quarter) +11% -14% +11% -45% -45% 1,334 1,338 1,305 1,255 1,204 1,201 1,207 121 9% 272 87 1,031 309 7% 82 96 102 99 301 377 28% 834 72 276 23% 295 308 244 718 28% 234 108 481 434 235 33% 11% 87 305 87 12% 70% 867 63% 847 841 237 810 797 28% 224 31% 481 489 374 276 33% 173 24% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Individuals mBank Hipoteczny Entrepreneurs mBank CZSK Individuals Entrepreneurs mBank CZSK Sales of corporate loans New leasing contracts (PLN M, by quarter) (PLN M, by quarter) -30% +45% -9% -47% -47% 1,190.9 3,488 1,105.3 1,010.7 3,009 2,624 1,160 2,493 792.2 696.6 1,115 308 K1 1,845 1,133 299 K2 1,684 1,810 1,463 K3 1,183 1,258 643 430 309 375 288 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M. Investor Presentation – Q1 2016 |7

Agenda Summary of Q1/16 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate business Analysis of Q1/16 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios Macroeconomic Update Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Investor Presentation – Q1 2016 |8

Analysis of Q1/16 in mBank Group Development of Loans to Customers Core lending remains stable across segments Development of Gross Loans and Advances to Customers (PLN M) -7.2% -1.2% +10.3% -1.9% -2.1% +1.2 % -0.6% 35,340 34,959 33,447 32,805 32,227 -0.3 % 2,654 82,449 1,031 4 81,883 81,409 5,612 80,925 842 80,261 2,108 2,755 1,704 3% 1,609 2% 2,705 32,801 31,384 32,305 32,416 29,728 34,959 33,447 32,805 41% 43% 35,340 32,227 03/15 06/15 09/15 12/15 03/16 Core loans to corporates Reverse repo transactions +6.2% +5.5% +0.5% +0.9 % 46,511 46,511 46,259 46,259 57% 45,329 45,381 45,329 45,381 54% 43,788 43,788 9,589 9,897 9,287 9,525 8,908 2,486 2,507 2,521 2,495 2,468 34,184 34,107 33,521 33,361 32,411 03/15 06/15 09/15 12/15 03/16 03/15 06/15 09/15 12/15 03/16 Individual clients +X.X% Excluding FX effect Corporate clients Mortgage loans: to Individuals to Microfirms Non-mortgage loans +X.X% Excluding Reverse repo / Public sector & Other receivables buy-sell-back transactions Investor Presentation – Q1 2016 |9

Analysis of Q1/16 in mBank Group Development of Deposits Dynamic annual deposit growth in both retail and corporate segment Development of Amounts due to Customers (PLN M) +5.8% +23.4 % -5.2% +12.9% 0.0% +20.2 % -4.7 % 34,922 34,424 +0.3 % 32,618 30,816 29,661 81,141 81,134 1,094 3,089 847 78,546 998 600 681 1% 5,074 1,166 73,058 71,861 1,986 33,330 31,833 31,771 1,351 2% 28,663 25,743 32,618 40% 34,424 34,922 29,661 43% 30,816 03/15 06/15 09/15 12/15 03/16 Core corporate deposits Repo transactions +20.5% +3.7% 47,835 59% 47,835 46,117 46,117 42,458 41,411 42,458 39,693 41,411 55% 39,693 14,272 13,605 11,109 10,633 10,687 33,563 31,348 32,512 30,779 29,006 03/15 06/15 09/15 12/15 03/16 03/15 06/15 09/15 12/15 03/16 Individual clients Corporate clients +X.X% Excluding Repo transactions Sight deposits Term deposits Public sector Investor Presentation – Q1 2016 |10