Letter from the Chairwoman of the Supervisory Board of mBank S.A. to the Shareholders
Dear Shareholders,
The
year
2022
did
not
bring
the
economic
stability
expected
after
the
two-year
Covid-19
pandemic.
The
geopolitical
situation
changed
dramatically
due
to
Russia’s
armed
invasion
of
Ukraine,
making
2022
a
time
of
incredible
global
uncertainty.
The
unbelievable
human
tragedy
strongly
affected
the
energy
and
food
markets
and
plunged
Europe
into
an
energy
crisis.
In
addition,
two
other
shocks
emerged.
China’s
“zero
COVID”
policy
had
a
huge
impact
on
the
global
supply
chains.
Strict
monetary
tightening
in
the
United
States
lifted
the
interest
rates
to
the
highest
level
since
2007.
As
a
result,
the
world
faced
high
inflation,
record-high
debt,
falling
investment,
widespread
hunger,
while
poverty
reduction
came to an abrupt halt. All of this is fuelling political instability.
High
inflation
and
weakening
economic
growth
did
not
spare
Poland.
A
significant
slowdown
in
household
lending
and
low
consumer
sentiment
posed
an
obstacle
to
private
consumption.
However,
with
strong
liquidity
and
capitalisation,
the
Polish
banking
sector
showed
high
resilience
to
macroeconomic
shocks.
An
additional
challenge
for
the
industry
in
2022
were
the
numerous
government
initiatives
to
support
borrowers,
including
“credit
holidays”,
assistance
for
customers
with
temporary
problems
provided
by
the
Borrower
Support
Fund,
and
the
plan
to
introduce
a
new
benchmark
replacing
WIBOR.
The
aggregate
cost
of
those
new
instruments
is
estimated
at
around
PLN
13
billion
for
the
main
financial
institutions
in Poland.
Despite
significant
adversity
caused
by
the
challenging
external
environment,
mBank
Group
generated
record
revenues
in
2022
at
PLN
7.8
billion,
28%
more
than
in
2021.
The
largest
contribution
came
from
net
interest
income,
which
increased
by
43%
year
on
year
to
PLN
5.9
billion.
The
Group
delivered
excellent
operating
performance
on
its
core
business
in
2022.
However,
due
to
significant
public
charges
and
legal
costs
on
the
CHF
portfolio
(PLN
3.11
billion),
mBank
reported
a
net
loss
of
PLN
703
million.
In
Q4
2022,
mBank
launched
a
settlement
programme
offering
conversion
of
foreign
currency
loans.
Uncertainty
related
to
the
upcoming
ruling
of
the
Court
of
Justice
of
the
European
Union
with
regard
to
remuneration
for
the
usage
of
capital
by
Swiss
franc
borrowers
does
not
affect
the
plan
to
continue this programme.
The
mBank
Group’s
overall
expenses
were
strongly
raised
by
contributions
to
the
institutional
protection
scheme
(IPS)
at
PLN
428
million
and
the
Borrower
Support
Fund
at
PLN
171
million.
Excluding
mandatory
contributions,
total
expenses
increased
by
11%
over
2021
and
did
not
exceed
PLN
2.5
billion.
Half
of
the
expenses
were
personnel
costs,
which
increased
by
almost
15%
year
on
year
due
to
an
increase
in
headcount
in
key
areas
and
an
increase
in
remuneration
in
line
with
the
motto
“our
people
make
the
difference”.
mBank
values
the
competences
of
its
employees,
their
commitment
and
the
contribution
they
make
to
the
bank’s
growth.
Measures
have
been
out
in
place
for
several
years
now
to
close
the
pay
gap
between
women
and
men.
The
bank
focuses
on
employees
returning
from
long-term
absences;
according
to
observations,
it
is
at
this
stage
that
the
pay
gaps
first
form.
Despite
their
impact
on
costs,
these
measures
are
necessary
to
continue
the
strategy
of
attracting
and
retaining
the
best-qualified
employees
in
the
financial
sector.
It
is
important
to
note
that
the
strategic
goal
of
equal
representation
of
both
genders
in
hiring
and
promotion
was
achieved
in
2022.
mBank
was
also
included
in
the
Bloomberg
Gender-Equality
Index
(GEI)
for
the
third time.
The
year
2022
saw
significant
pressure
on
capital
ratios.
The
key
negative
factors,
with
a
cumulative
impact
of
around
PLN
5
billion,
included:
(i)
legal
risk
costs
related
to
CHF
mortgages,
(ii)
“credit
holidays”,
(iii)
contributions
to
the
Borrower
Support
Fund,
and
(iv)
contributions
to
the
institutional
protection
scheme
(IPS).
Thanks
to
active
governance,
the
Group
maintained
solid
capital
buffers
in
2022,
including
Tier
1
ratio
and
TCR
(3.4%
and
3.5%,
respectively,
at
31
December
2022).
The
key
factors
that
contributed
to
the
stability
of
the
capital
position
included
the
high
profitability
of
the
core
business
and
two
synthetic
securitisation
transactions
on
corporate
loan
portfolios
with
a
total
value
of
PLN
12.6
billion.
The
“K2”
and
“Everest”
transactions
are
the
largest
synthetic
securitisations
in
Poland,
and
“K2”
is the largest synthetic securitisation in Central and Eastern Europe.
The
bank
reported
high
stability
and
safety
in
liquidity
management.
This
is
demonstrated
by
the
quarterly
liquidity
measures,
including
the
LCR
in
the
range
of 173%-187% and the NSFR in the range of 135%-150% in 2022.
mBank
reported
a
48%
year
on
year
decline
in
new
mortgage
sales
to
PLN
6.5
billion
in
2022.
Despite
trends
in
the
sector,
the
market
share
of
household
loans
increased
to
8.3%,
while
customer
deposits
with
mBank
grew
by
11%
year
on
year
to PLN 174 billion in December 2022.
This
performance
was
made
possible
by
the
consistent
implementation
of
the
mBank
Group’s
strategy
for
2021-2025:
“From
an
icon
of
mobility
to
an
icon
of
possibility”.
The
strategy
focuses
on
five
areas:
Retail
Banking;
E-commerce;
Corporate
Banking;
Technology,
Security
and
Data;
and
Employees
and
Organisational
Culture.
mBank
has
successfully
pursued
its
aspiration
to
be
a
partner
for
clients
for
life.
For
instance,
a
personal
finance
manager
function
has
been added to the mobile app so clients can monitor their spending in real time.
mBank
intends
to
further
capitalise
on
its
position
as
a
banking
digitalisation
leader
with
some
of
the
world’s
most
exciting
solutions
for
the
5.6
million
demographically
young
customer
population.
The
Covid-19
pandemic
has
changed
the
world
and
the
banking
sector
irreversibly.
Customers’
expectations
of
mobile
banking
are
higher
than
ever
before.
This
is
why
mBank
is
expanding
its
digital
sales
and
customer
service
in
the
area
of
banking
products
and
adding
a
range
of
new
services
available
on
mBank’s
mobile
app,
such
as
parking,
applying
for
social
programmes,
and
other
functions
related
to
remote
access
to
government
services
(e-government).
The
share
of
the
digital
channel
in
non-mortgage
loan
sales
was
80% in 2022, including 55% in the mobile app.
We
strongly
believe
that
the
experience
of
our
customers
-
digital
banking
users
is
an
important
source
of
their
satisfaction
and
loyalty.
This
is
why,
with
a
view
to
better
monitoring
and
planning
of
their
personal
budgets,
mBank
has
implemented
new
personal
finance
management
(PFM)
functionalities.
In
2022,
in
the
face
of
the
war
in
Ukraine,
IT
security
processes
were
of
particular
importance.
mBank
has
a
multi-layered
cyber
security
defence
model
in
place
to
continuously
identify and address vulnerabilities in the bank’s infrastructure.
mBank
sets
its
sights
high
when
it
comes
to
sustainability
goals.
In
Newsweek’s
ranking
“The
World’s
Most
Socially
Responsible
Banks”,
mBank
was
ranked
in
the
Top
10
of
the
most
socially
responsible
financial
institutions
in
the
world.
ESG
agenda,
focusing
on
environmental,
social
and
governance
factors,
is
an
integral
part
of
bank’s
strategy.
The
bank
supports
entrepreneurs
in
the
green
transition
and
offers
reduced
margins
for
mortgages
on
properties
meeting
high
energy
efficiency standards.
The
next
phase
of
work
on
reducing
and
reporting
the
carbon
footprint
began
in
2022.
mBank
was
the
first
bank
in
Poland
to
join
the
Partnership
for
Carbon
Accounting
Financials
(PCAF)
in
April
2022
and
the
Science
Based
Targets
initiative
(SBTi)
in
September.
This
will
help
to
define
the
carbon
footprint
according
to
global
standards,
based
on
reliable,
scientific
criteria.
mBank
signed
the
UNEP-FI
Commitment
to
Financial
Health
and
Inclusion
in
December
2022.
The
bank
will
adopt and publish targets related to supporting these areas in the following year.
From
the
very
beginning,
mBank
has
supported
victims
of
the
war
in
Ukraine.
The
assistance
was
multifaceted.
One
important
pillar
was
the
cooperation
with
the
Polish
Centre
for
International
Aid.
mBank
clients
could
make
donations
to
the
Centre
by
using
a
dedicated
shortcut
in
the
online
banking
service
and
mobile
app.
Two
living
spaces
for
refugees,
a
school
and
a
kindergarten
were
set
up.
Basic
banking
solutions
for
Ukrainians
were
made
available.
We
helped
as
a
bank,
as
an
organisation,
and
as
individuals.
Employees
of
mBank
helped
refugees
individually,
taking
them
in
to
their
homes,
supporting
them
in
joining
the
Polish
labour
market,
organising
necessities.
I
would
like
to
express
my
gratitude
and
appreciation
to
each of them.
On
behalf
of
the
entire
Supervisory
Board,
I
would
like
to
thank
the
Management
Board
and
the
employees
of
mBank
for
their
cooperation
and
commitment.
I
thank
you,
dear
Shareholders,
for
the
trust
you
have
shown.
I
am
certain
that,
despite
the
uncertainty
affecting
many
aspects
of
socio-economic
life
and
the
dynamically
changing
legal
environment,
mBank
will
continue
to
successfully
pursue
its
strategy
“From
an
icon
of
mobility
to
an
icon
of
possibility”
in
2023,
which
will
generate
the
expected
return
on
investment
to
Shareholders
and
ensure
stable
growth of mBank and the entire Group.
Professor Agnieszka Słomka-Gołębiowska
Chairwoman of the Supervisory Board