Management Board Report
on Performance of mBank S.A. Group
in 2024
(including Management Board Report on Performance of mBank S.A.)
This document is a translation from the original Polish version. In case of any discrepancies between the Polish and English versions, the Polish version shall prevail.
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mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Table of content
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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mBank Group in 2024
Universal financial services
Our clients
Our employees
Mobile application
Transactions
5,714 thou. retail clients
36.1 thou. corporate clients
7,569 FTE in mBank Group
3.8 million users
12.2% market share in value of card transactions (9M 2024)
Mobile banking at its best
Active users of mBank’s services in Poland
Growing importance of digital channel in daily banking
Convenient and safe mOkazje zakupy e-commerce marketplace
New functionalities in Personal Finance Manager (PFM)
Number of monthly active users increased to 3,459 thou. ;
active users of BLIK increased to 2,333 thou.
89% of processes in retail banking area are initiated by
the clients in digital channels;
94% of corporate clients use mBank mobile app
new feature co- developed with Morele.net facilitates ordering favorite products directly from the mBank’s mobile app
retirement calculator allows to build a personalized saving plan for retirement
Key results and indicators
Revenues
Cost to income ratio
Total assets growth
Total capital ratio
PLN 12,007 million
28.2%
+8.4% year on year
15.9%
Basic facts for investors
Market capitalisation
Share price
Member of the WSE indices, including:
mBank ratings
PLN 23.3 billion
(EUR 5.4 billion)
PLN
547.2
(as at 31.12.2024)
Fitch : BBB-
Standard & Poor’s : BBB
Sustainalytics : 13.4 (low ESG risk)
MSCI : AA (leader)
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Executive summary
Excellent financial results driven by high profitability of the Core Business
Highest net profit in the history of mBank Group at the level of PLN 2,243.2, despite high costs of legal risk related to foreign currency loans which amounted to PLN 4,307.0 million
Net profit of the Core Business (mBank Group excluding FX Mortgage Loans segment ) at PLN 5,637.9 million
Net ROE of the Core Business at 39.7%
High dynamics of loans and increase of market share driven by growth of new sales of retail and corporate loan
Net loans and advances increased by 7.1% year on year
Positive dynamics of retail lending at the level of 6.7% year to year, due to record high volume of sales of mortgage and non-mortgage loans, at the level of PLN 10.6 billion and PLN 11.3 billion respectively
Corporate loan portfolio up by 6.8% year on year, driven by increase of loan sales by 21% compared with 2023.
Strengthening of the capital position in order to pave the way for growth
Consolidated Tier 1 ratio at 14.52% and Total Capital Ratio at 15.85%
Material surplus over the PFSA capital requirements: 5.4 p.p. over the Tier 1 capital ratio and 4.8 p.p. over the Total Capital Ratio
Inaugural Additional Tier 1 bond issuance executed by mBank allowed to obtain PLN 1.5 billion and improve capital ratios by 1.5 p.p.
Synthetic securitisation transaction for a portfolio of PLN 5.2 billion, improving TCR of mBank Group by approximately 0.4 p.p. at the end of the year
Decision to retain profit earned in 2024 and 2025
MREL TREA at the level of 23.51%, MREL TEM at the level of 9.10%, above the requirements
Effective management of the CHF loan portfolio to further decrease balance sheet risk
Under the settlement program rolled out in Q4 2022, mBank singed over 22,900 settlements with clients by the end of 2024
The number of active credit agreements has been reduced by 80.8% compared to the initial number of contracts
Total income at the highest level in history
Record high total income of PLN 12,006.9 million generated by growth in both segments of mBank clients
Net interest income at highest level in history driven by favourable monetary policy, rising volumes and lower deposit costs despite the negative impact of the “credit holidays”
Significant improvement of net interest margin to 4.4%
Excellent efficiency despite increase of total overhead costs
Normalised cost to income ratio at 28.3%
Increase in total overhead costs (including depreciation) by 10.2% due to inflationary pressure, growth of volumes and scale of operations and investments in future growth
Prudent risk management reflected in a high quality portfolio – cost of risk at 49 bps, NPL ratio at 4.1%
Constant focus on providing clients with convenient and useful solutions which improve their financial health
mOkazje zakupy program, a new feature co-created with mBank partner Morele.net, which allows clients to easily order products directly from mBank mobile application
Implementation of new functionalities in the finance manager (PFM), which, among others, support clients in planning their retirement
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Summary of results of mBank Group Core Business in 2024
PLN million
Core Business
Non-core
mBank Group
Net interest income
9,562.1
26.9
9,589.0
Net fee, trading and other income
2,483.7
-65.8
2,417.9
Total income
12,045.8
-38.9
12,006.9
Total costs
-3,362.4
-25.9
-3,388.3
Net impairment losses and fair value change on loans and advances
-638.9
53.4
-585.5
Cost of legal risk related to FX loans
0.0
-4,307.0
-4,307.0
Operating profit
8,044.5
-4,318.4
3,726.1
Taxes on the Group balance sheet items
-739.8
-12.6
-752.4
Profit/loss before income tax
7,304.7
-4,330.9
2,973.7
Net profit/loss
5,637.9
-3,394.7
2,243.2
Total assets
243,849.4
2,108.0
245,957.4
Net interest margin
4.39%
4.35%
Cost/Income ratio
27.9%
28.2%
ROE net
39.7%
14.8%
ROA net
2.5%
1.0%
Core Business – results of mBank Group excluding the FX Mortgage Loans segment.
Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Net impairment losses and fair value change on loans and advances - the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.
Net interest margin – calculated by dividing net interest income by average interest earning assets. Net interest income calculated for the purpose of net interest margin excludes gains or losses on modification. Gains or losses on modification includes co sts of credit holidays. Interest earning assets are a sum of cash and balances with the Central Bank, loans and advances to banks, debt securities (in all valuation methods) and loans and advances to customers (net; in all valuation methods). The average interest earning assets are calculated on the basis of the balances as at the end of each month. Net interest income is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Cost/Income ratio – calculated by dividing overhead costs and depreciation by total income (excluding tax on Group’s balance sheet items).
ROE net – calculated by dividing net profit/loss attributable to Owners of the Bank by the average equity attributable to Owners of the Bank, net of the year’s results. The average equity is calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
ROA net - calculated by dividing net profit/loss attributable to Owners of the Bank by the average total assets. The average total assets are calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
In order to present the genuine and undistorted performance of mBank Group, the non-core part, comprising of foreign currency mortgage loans, is shown separately from the total business. Non-core assets are defined as all residential mortgage loans granted to individual customers in Poland that at any point in time were in another currency than PLN. In addition to the FX mortgage loan portfolio, associated provisions for legal risk arising from these contracts are also allocated to the segment .
The capital allocated to the non-core unit amounted to PLN 657 million as of December 31, 2024. It is calculated primarily based on:
total risk exposure amount of the segment and minimum Tier 1 capital ratio required by PFSA,
economic capital for operational risk.
From the managerial perspective, growth of mBank’s core business is effectively based on lower capital due to its portion being set aside for FX Mortgage Loans segment.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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1. About mBank Group
1.1. Business model and history of mBank Group
mBank Group conducts business based on the universal banking model, specialising in servicing all client groups. The offer includes retail, SME, corporate and investment banking as well as other financial products and services such as leasing, factoring, brokerage, wealth management, investment funds, insurance, payment gateway and corporate finance. Services provided under mBank logo are marked with different colours, depending on the target group of the offer.
Personal Banking
Premium Banking
Private Banking
Business
SME and corporates
Young
The bank was established in 1986 as Bank Rozwoju Eksportu (BRE Bank) , initially focusing on corporate clients. We have been operating in the segment of individual clients since 2000, i.e. from the moment of launching mBank, a fully online bank. In 2001, we established MultiBank, which complemented the bank’s business model with servicing clients in the outlet network in the largest Polish cities. Since the very beginning, mBank has relied on organic growth, which means that the current scale of its business has been achieved without takeovers of other banks and financial institutions. mBank is the only bank in Poland with successful track record of rolling out its online retail banking model into foreign markets. Since 2007, we have been operating in the Czech Republic and Slovakia. In 2013, we unified our brand under mBank name, which was most powerful of our brands.
1986
Establishment of Bank Rozwoju Eksportu as a joint-stock company
1992
Listing of BRE Bank on the Warsaw Stock Exchange
1994
Signing of a strategic partnership agreement with Commerzbank AG
1998
Acquisition and merger with Polski Bank Rozwoju SA
2000
Establishment of mBank – the first internet-only bank in Poland – completed in just one hundred days
2001
Launch of Multibank, the second retail arm of BRE Bank, targeting affluent customers
2007
Foreign expansion of retail operations, the first branches of mBank are set up in the Czech Republic and Slovakia
2013
Rebranding – Replacing of three existing brands by one: mBank New mBank transactional platform is launched
2018
Strategic partnership with WOŚP, launch of e-commerce services via mElements
2020
Adjustment of internal processes and client offer during the COVID-19 pandemic
Systematic increase of Renewable Energy Sources funding
2021
New strategy for 2021-2025
2022
Development of sustainable banking and significant expansion of our range of ESG banking products and services Two credit risk sharing transactions of mBank’s portfolio, landmark for the Polish market
2023
Launch of mTFI company
Largest synthetic securitisation transaction in Central and Eastern Europe
Largest ever issuance of green NPS bonds by a Polish bank
2024
Launch of mOkazje zakupy, a new shopping platform available for mBank customers
The first AT1 bond issuance in Poland conducted by a commercial bank
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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mBank Group’s activities are based on the model of values focused on the benefit of customers, shareholders, employees and other stakeholders. We identify their real needs and implement appropriate solutions in order to meet the existing and future requirements.
Authenticity
Empathy
Courage
Responsibility
Cooperation
mBank’s widely recognised operational excellence is based on the state-of-the-art user interface for online banking, next-generation mobile application, video banking, as well as real-time, event-driven customer relationship management (CRM) based on client behaviour patterns. The whole product offer is centred around the current account with a broad spectrum of financial services accessible in just “one click”, as the strategic aim of mBank is to be the most convenient transactional bank on the market. Our internet platform available to clients is modern, convenient, easy-to-access and user-friendly. We have also been systematically expanding our mobile application to provide customers with the possibility of managing their finances wherever they are.
Giving priority to users’ comfort, mBank regularly improves its offer and thus remains at the forefront of institutions introducing new solutions, such as Personal Finance Manager (PFM) for retail clients or further development of Paynow payment gateway for e-commerce. mBank has been accompanying its retail customers in their everyday lives for 23 years, providing a wide range of additional services based on online or mobile banking. These involve, among others, the possibility to access public administration services from mBank’s transactional platform and the possibility to submit an application for benefit programs such as the “ Family 500+ ” benefit in mBank’s mobile application. Further benefits include additional services, such as mOkazje zakupy (mDiscounts e- commerce market place) and possibility to pay for car parks in several dozen Polish cities using mBank’s application.
mBank’s offer includes products and services tailored to various customers’ needs, including loans, savings, investment and insurance products as well as other solutions dedicated to enterprises and businesses. The comprehensive offer makes it possible to more effectively address specific requirements of particular groups of customers. At the same time, the coherent business model in all of the mentioned areas enables clients’ to easily move between segments, which allows mBank to support their professional and personal development at all stages.
mBank Group aims to build a partnership with corporate customers, which is based on good relations and comprehensive advisory. Drawing on the BRE Bank S.A. experiences and competencies, we know how important it is to take individual approach to a customer and to adequately understand the specifics of their business. We support entrepreneurs from the very beginning of their professional path, enabling them to launch their business with mBank online or in the bank’s branch and offering them a package of kick-off services such as financing, accounting and currency services or terminals. We introduce new products to our offer on a regular basis and pay special attention to providing remote access to our services. Large enterprises and international corporations successfully use the integrated range of commercial banking solutions, with particular focus on the advanced platform of transactional banking and mobile application. This comprehensive product offer is complemented by investment banking services, such as equity capital markets (ECM), debt capital markets (DCM) and mergers & acquisitions (M&A) advisory services.
mBank’s distribution concept combines the most technologically advanced solutions, which meet the market challenges and set new trends in the Polish banking sector. Internet and mobile-based tools as well as the extensive network of distribution outlets and call centre build a comprehensive contact platform for mBank’s customers. The IT platform architecture allows the bank to develop and introduce new products, services and sales channels efficiently and with a low operational risk. Thanks to such a flexible infrastructure, mBank is able to effectively manage its business expansion strategy.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Selected financial and business data of mBank Group
Selected financial data
(PLN mln)
2020
2021
2022
2023
2024
Total assets
178,861
198,373
209,892
226,981
245,957
Net loans
108,271
117,677
120,183
113,521
121,419
Deposits
133,672
157,072
174,131
185,467
200,809
Equity
16,675
13,718
12,715
13,737
17,767
Total income
5,867
6,111
7,857
10,802
12,007
Total costs
-2,411
-2,457
-3,319
-3,074
-3,388
Loan loss provisions
-1,293
-879
-849
-1,106
-586
Net profit
104
-1,179
-703
24
2,243
Selected financial ratios
2020
2021
2022
2023
2024
Net interest margin
2.3%
2.2%
3.7%
4.2%
4.3%
Cost/Income ratio
41.1%
40.2%
42.2%
28.5%
28.2%
Cost of risk
1.20%
0.76%
0.69%
0.93%
0.49%
Return on Equity (ROE)
0.6%
-7.2%
-5.3%
0.2%
14.8%
Return on Assets (ROA)
0.1%
-0.6%
-0.3%
0.0%
1.0%
Tier I capital ratio
17.0%
14.2%
13.8%
14.7%
14.5%
Total Capital Ratio (TCR)
19.9%
16.6%
16.4%
17.0%
15.9%
Loan-to-deposit ratio
81.0%
74.9%
69.0%
61.2%
60.5%
NPL ratio
4.8%
3.9%
4.0%
4.2%
4.1%
Coverage ratio
58.3%
53.1%
52.2%
54.7%
51.1%
Selected business data
2020
2021
2022
2023
2024
Individual customers (thous.)
5,660
5,514
5,642
5,716
5,714
Corporate customers
29,083
31,315
33,025
34,546
36,123
Number of employees (FTEs)
6,688
6,738
7,014
7,319
7,569
Net loans (Net loans and advances to customers) the sum of loans and advances to customers measured at amortised cost, non-trading loans and advances mandatorily measured at fair value through profit or loss, and loans and advances classified as trading assets.
Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Total costs (Total overhead costs (including deprecation)) - calculated as the sum of total overhead costs and depreciation.
Loan loss provisions (Net impairment losses and fair value change on loans and advances) – the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.
Net interest margin - calculated by dividing net interest income by average interest earning assets. Net interest income calculated for the purpose of net interest margin excludes gains or losses on modification. Gains or losses on modification includes c osts of credit holidays. Interest earning assets are a sum of cash and balances with the Central Bank, loans and advances to banks, debt securities (in all valuation methods) and loans and advances to customers (net; in all valuation methods). The average interest earning assets are calculated on the basis of the balances as at the end of each month. Net interest income is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Cost/Income ratio - calculated by dividing overhead costs and depreciation by total income (excluding tax on Group’s balance sheet items).
Return on Equity (ROE) (Net ROE) - calculated by dividing net profit/loss attributable to Owners of the Bank by the average equity attributable to Owners of the Bank, net of the year’s results. The average equity is calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Return on Assets (ROA) (Net ROA) - calculated by dividing net profit/loss attributable to Owners of the Bank by the average total assets. The average total assets are calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
2007
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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1.2. Composition of mBank Group
Composition of mBank Group and main areas of its activity
The subsidiaries of mBank Group offer a complex service for the customers and allow for processes optimisation and achieving various business targets. The structure of mBank Group from the perspective of segments and business areas as of end of 2024, is presented below:
1 mBank owns 100% shares in Asekum Sp. z o.o. and LeaseLink Sp. z o.o. indirectly, through mLeasing Sp. z o.o.
2 mBank owns 100% shares in mFinanse CZ s.r.o. and mFinanse SK s.r.o. indirectly, through mFinanse S.A.
At the beginning of 2021, we have separated FX Mortgage Loans segment from Retail Banking segment. This change aimed to present separately results related to the product, which has been withdrawn from the offer for individual customers, and at the same time is significant from the point of view of the assigned assets and the impact on the Group's results. As a result a more accurate and undistorted image of mBank Group is presented. Additionally, we separated the Treasury and Other segment from the core business.
mAccelerator (Future Tech FIZ) is the investment fund supporting the development and commercialization of new technologies. It was equipped with a budget of EUR 51 million (over PLN 220 million). The fund invests in minority shares in technology startups, and independently, as a venture builder, establishes and develops technological companies.
mBank Group (including consolidated subsidiaries) as at the end of 2024 was composed as presen ted below.
Seg men t
Retail Banking
Corporate and Investment Banking
Bank
Retail customers and microenterprises
Affluent retail customers (Private Banking and Wealth Management)
Corporations and non-banking financial institutions (K1)
Large Companies (K2)
Small and Medium Enterprises (K3)
Cooperation with banks and financial markets activity
mLeasing Sp. z o.o. – Retail
Asekum Sp. z o.o. 1 – Retail
LeaseLink Sp. z o.o. 1
mBank Hipoteczny S.A.
mFinanse S.A.
mFinanse CZ s.r.o. 2
mFinanse SK s.r.o. 2
mElements S.A. – Retail
mTowarzystwo Funduszy Inwestycyjnych S.A.
mLeasing Sp. z o.o. – Corporate
Asekum Sp. z o.o. 1 – Corporate
mFaktoring S.A.
mElements S.A. – Corporate
Consolidated subsidiaries
Other subsidiaries
Future Tech FIZ
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Key subsidiaries of mBank Group from the perspective of client offer
the longest track record of issuing covered bonds on the Polish capital market
supporting the stable, long-term and safe funding of the Group with the use of pooling model in co-operation with mBank
rating by Moody’s Investors Service for mortgage covered bonds at a level of Aa1, which is the long-term country ceiling for local and foreign currency bonds
the subsidiary offers leases and loans, as well as additional services in three main business lines: passenger cars, machinery and equipment, green assets, addressed to both corporate and retail clients
various leasing products and services in the corporate segment, including passenger and commercial vehicle leasing, heavy equipment fleet management, machinery and equipment leasing, support in the decarbonization process, and energy transition transformation
in the retail segment the subsidiary offers products for micro-enterprises and SMEs, which can enter into lease and advancement agreements
leasing in e-commerce online payments offered through LeaseLink
brokerage services in the area of motor and property insurance provided by Asekum
the sixth largest player among the members of the Polish Factors Association
financing of ongoing business operations, receivables management, assumption of insolvency risk, maintenance of settlement accounts of clients and collection of receivables, domestic and export factoring with recourse, non-recourse domestic and export factoring, reverse factoring – financing of client's liabilities
products offered by mFaktoring are available in all mBank branches providing services to SMEs and corporates in Poland
member of the Polish Factors Association
member of Poland’s first factoring consortium
the subsidiary is an open platform for selling financial products of various financial entities, including mBank
offer includes a wide range of products, such as mortgage loans, accounts and non- mortgage loans: cash loans and revolving loan for both individuals and corporates
it offers products of 27 active external financial entities in 180 points of sale located across Poland and 136 partner outlets
broad market offering including investment solutions targeting retail banking and private banking clients
integrating environmental, social and governance (ESG) aspects into investment processes – most mTFI-managed funds promote environmental or social aspects
supporting the idea of long-term investing thru a systematic savings programs, cycle of life funds and retirement programs
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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mBank’s Authorities
Supervisory Board of mBank
On January 1, 2024, Bernhard Spalt has begun his tenure as a Member of the Supervisory Board of mBank S.A. He replaced Marcus Chromik, who announced his resignation from his position as a Member of the Supervisory Board of mBank to the Chairwoman of the Supervisory Board of mBank on October 20, 2023, with effect on December 31, 2023.
On October 14, 2024, Bettina Orlopp resigned from her position as a Member of the Supervisory Board of mBank. She will remain a Member of the Supervisory Board until February 27, 2025. The Remuneration and Nomination Committee of the Supervisory Board recommended Carsten Schmitt as a candidate for the vacant position. His appointment to the Supervisory Board of mBank is subject to a positive assessment of suitability. On November 21, 2024, Carsten Schmitt was appointed to the position of Chief Financial Officer (CFO) to the Board of Managing Directors of Commerzbank AG, subject to regulatory approvals. Due to Bettina Orlopp's resignation from her position as a Member of the Supervisory Board of mBank, the Supervisory Board appointed Bernhard Spalt as Deputy Chairperson of the Supervisory Board of mBank, effective December 13, 2024.
As of December 31, 2024, the composition of the Supervisory Board of mBank S.A. was as follows:
1. Agnieszka Słomka-Gołębiowska – Chairwoman of the Supervisory Board
2. Bernhard Spalt – Deputy Chairperson of the Supervisory Board
3. Hans-Georg Beyer – Member of the Supervisory Board
4. Tomasz Bieske - Member of the Supervisory Board
5. Mirosław Godlewski - Member of the Supervisory Board
6. Aleksandra Gren - Member of the Supervisory Board
7. Bettina Orlopp – Member of the Supervisory Board
8. Thomas Schaufler - Member of the Supervisory Board
There are four independent members in the Supervisory Board:
1. Agnieszka Słomka-Gołębiowska
2. Tomasz Bieske
3. Mirosław Godlewski
4. Aleksandra Gren
Four committees operate within the Supervisory Board: Risk Committee, Audit Committee, Remuneration and Nomination Committee and IT Committee. The composition and tasks of each committee is described in chapter 11. “Statement of mBank on application of corporate governance principles in 2024”.
Management Board of mBank
On March 27, 2024, the Supervisory Board of mBank elected members to the Management Board o f mBank for the term of office starting on March 28, 2024. On July 4, 2024 Cezary Stypułkowski handed in his resignation as President of the Management Board of mBank with immediate effect. His resignation was submitted following consultations with the Supervisory Board and is an integral part o f the succession process. The process, which was conducted in line with the best practices, was transparent and organised.
On 5 June 2024 Cezary Kocik was conditionally appointed as President of the Managemen t Board of mBank. On October 11, 2024, the Polish Financial Supervision Authority consented to the app ointment of Cezary Kocik as the President of the Management Board of mBank. As a result, Cezary Kocik has f ully assumed the position of President of the Management Board. Moreover, on July 25, 2024, the Supervisory Board of mBank S.A. a ppointed Krzysztof Bratos to the Management Board of mBank S.A. as Vice-president o f the Management Board, Head of Retail Banking, replacing Cezary Kocik, effective July 26, 2024.
Cezary Stypułowski took the helm at mBank in October 2010. Since then the bank has strengthened its position as the most technologically advanced and customer-friendly online banking platform.
As of December 31, 2024, the composition of the Management Board was as follows:
1. Cezary Kocik – President of the Management Board
2. Krzysztof Bratos – Vice-president of the Management Board, Head of Retail Banking
3. Krzysztof Dąbrowski – Vice-president of the Management Board, Head of Operations and Information Technology
4. Marek Lusztyn – Vice-president of the Management Board, Chief Risk Officer
5. Julia Nusser - Vice-president of the Management Board, Chief People & Regulatory Officer
6. Adam Pers - Vice-president of the Management Board, Head of Corpo rate and Investment Banking
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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7. Pascal Ruhland - Vice-president of the Management Board, Chief Financial Officer
For more information on the Management Board and Supervisory Board of mBank, see chapter 11. “Statement of mBank on application of corporate governance principles in 2024”.
1.3. mBank Group geographical presence
mBank offers its services not only in Poland, but also in the Czech Republic and Slovakia. The leading role of mobile and internet banking provider is supplemented by comprehensive service in the branches. In Poland, retail branches network covers 305 outlets whereas corporate network comprises 43 points of service, additionally supplemented by branches of mBank Group subsidiaries. In 2024 the number of branches in Poland decreased by 2, while in Czech Republic and Slovakia it decreased by 4. When contacting the consultants in the branches, clients can not only use products and services of mBank Group, but also install and learn how to use mobile and internet banking.
Retail network in Poland:
82 mBank branches
29 light branches
15 advisory centres
139 mKiosks
40 Financial centres and agency service points of mFinanse
Czech Republic
13 financial centres and light branches
17 mKiosks
Slovakia:
6 financial centres and light branches
7 mKiosks
Corporate branches:
29 corporate branches
14 corporate offices
Depending on their needs, our clients can take advantage of full product offering and cash services in traditional mBank branches. Comprehensive portfolio of more sophisticated financial products, such as mortgage loans and corporate funding, is available also in financial centres and agency service points of mFinanse. In the advisory centres, both individual and corporate clients are served, who can also use the services of mBank Group’s subsidiaries. The light branches are dedicated to distribute basic financial products and provide clients with cash services up to defined limits. mKiosks, located in the shopping malls, allow clients to familiarize with mBank’s offer, open an account and obtain a non-mortgage loan.
1.4. Information for investors
Information on mBank shares and shareholders
mBank shares have been listed on the Warsaw Stock Exchange (WSE) since 1992.
As at December 31, 2024, mBank’s registered share capital amounted to PLN 169,987,892 and was divided into 42,496,973 shares, including 42,485,973 ordinary bearer shares and 11,000 ordinary registered shares with a nominal value of PLN 4 each. Each share carries one voting right at the General Meeting.
In 2024, the total number of shares increased by 31,806. The new shares were issued pursuant to Resolution No. 38 of the 31st Annual General Meeting of mBank S.A. dated May 9, 2018 on issuing subscription warrants, a conditional increase of the share capital with exclusion of the pre-emptive right of the existing shareholders to take up subscription warrants and shares , a change of the Company’s by-laws and on applying for admission of shares to trading on the regulated market, and on dematerialisation of the shares.
mBank shares are included in the following indices: WIG WIG20 WIG20TR WIG30 WIG30TR WIG140 WIG-Poland WIG-Banks CEEplus MSCI Poland
mBank S.A. Group
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Information concerning mBank shares
2023
2024
Total number of shares
42,465,167
42,496,973
Nominal value per share (PLN)
4.00
4.00
Registered share capital (PLN)
169,860,668
169,987,892
Share price at closing of the year’s last trading session (PLN)
535.00
547.20
P/E ratio
944.2
10.4
P/BV ratio
1.7
1.4
Maximum share price (PLN)
573.80
750.00
Minimum share price (PLN)
272.80
493.20
Market capitalisation at the year-end (PLN billion)
22.7
23.3
Average traded volume (PLN million)
13.3
16.2
Dividend per share (paid out in the year, PLN)
0
0
mBank shareholders and share price on the WSE
mBank shareholders
Commerzbank AG has been the strategic shareholder of mBank since 1994. Its stake increased gradually from 21.0% in 1995 to 50.0% in 2000 and 72.2% in 2003. Starting from 2005, Commerzbank’s stake has been gradually declining due to the implementation of the managerial options programs.
As at December 31, 2022, Commerzbank AG held 69.07% of shares and votes at the General Meeting of mBank. Commerzbank AG is the majority shareholder. The remaining shares, which are in free float, are held by financial investors, in particular Polish pension funds and Polish and foreign investment funds. The only shareholder that has exceeded the 5% threshold of shares and votes at the general meeting at the end of 2024 was Nationale-Nederlanden Otwarty Fundusz Emerytalny.
For more information about mBank’s shareholders read the Statement of mBank on Application of Corporate Governance Principles in 2024, chapter 11.3 “Significant blocks of shares”.
Performance of mBank shares on the WSE in 2024
The Polish stock market in 2024 was characterized by significant volatility. Structural factors such as improved corporate profits, the release of EU funds, and the prospect of significant investments in the energy transformation had a positive impact on investor demand. On the other hand, investor sentiment was affected by uncertainty on the markets. It resulted, among other things, from concerns about economic growth in the world's largest economies, geopolitical tensions, expectations about the results of the US elections and their subsequent consequences.
In the first half of 2024, the Warsaw Stock Exchange indices broke through multi-year highs. Positive trends on the WSE were supported by improving macroeconomic situation with falling inflation and a high real increase in wages, as well as good financial results reported by companies from various sectors, including in particular the banking sector and the construction industry.
The demand for bank shares, in addition to good financial results generated especially by the net interest income, was impacted by the postponement of the prospect of interest rate cuts, the consent of the Polish Financial Supervision Authority to pay dividends from 2023 profits and the chances for dividends in the longer term. The increased demand for shares of Polish banks from abroad resulted from the improvement in investment sentiment in Poland after the political change resulting from the elections in October 2023. In the first quarter, mBank shares were a particular beneficiary of the positive sentiment on the WSE. On March 26, 2024, mBank's quotations reached a historic high, after which some investors started to take profits.
Stronger turbulence was recorded at the turn of July and August under the impact of foreign markets. The expected rise in unemployment in the US, the increase in interest rates in Japan and the growing tensions
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in the Middle East raised concerns among investors that the United States started to face a recession. This led to a sell-off of stocks on global markets, including the Warsaw Stock Exchange. After a short- term correction, stock prices began to rise again. Nevertheless, in the fourth quarter of 2024, a downward trend prevailed, with high volatility of quotations. Market trends were impacted by economic and political developments, such as further interest rate cuts by central banks and the results of the presidential election in the United States. After Donald Trump's victory in the presidential election, new potential scenarios for ending Russia's war in Ukraine have emerged. In turn, Donald Trump's announcement about the possibility of introducing tariffs had a negative impact on investors’ sentiment.
The chart below shows relative changes in mBank share prices and stock market indices (left axis) and the volume of trading in mBank shares in 2024 (right axis).
In 2024, WIG increased by 1.4% and the WIG20 index declined by 6.4% compared to the levels at the end of 2023. Bank stocks performed significantly better than the major indices. The WIG-Banks index increased by 11.6% in 2024 compared to the level recorded at the end of December 2023. The level of the WIG-Banks index was significantly influenced by the strong growth in PKO BP share quotations, which have the largest share in the index portfolio.
The closing price of mBank share at the last trading session in 2024 (December 30) stood at PLN 547.20, up by 2.3% compared with the last trading day of 2023. The relatively low free float of mBank (30.9%) compared to other banks listed on the WSE had a negative impact on the value of turnover in mBank shares on the WSE. The average daily turnover in mBank shares in 2024 amounted to PLN 16.2 million (i.e. 0.06% of market capitalization).
mBank’s capitalisation amounted to PLN 23.3 billion (EUR 5.4 billion) as at December 31, 2024, which represents an increase from PLN 22.7 billion (EUR 5.2 billion) reported at the end of 2023. P/BV (price/book value) ratio of mBank Group stood at 1.4 compared with 1.7 a year before.
The chart below shows the relative changes in mBank’s share price and stock market indices over the last five years.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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From among the bank analysts and brokers actively monitoring mBank’s financial performance and issuing recommendations on mBank shares, seven analysts advised investors to buy shares of mBank and two issued “hold” recommendations. For comparison, a year before, six analysts recommended buying mBank’s shares, four issued a "hold" recommendation, and one analyst recommended selling the shares.
mBank share price vs. indices
2020
2021
2022
2023
2024
mBank
54.0%
+141.7%
-31.7%
+80.7%
+2.3%
WIG-Banking
-29.6%
+81.3%
-27.6%
+76.9%
+11.6%
WIG
-1.4%
+21.5%
-17.1%
+36.5%
+1.4%
EURO STOXX Banks Index
-23.7%
+36.2%
-4.6%
+23.5%
+23.4%
mBank S.A. Group
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The current consensus regarding mBank Group’s expected results is available on mBank’s website: https://www.mbank.pl/en/investor-relations/shares/consensus.html .
Investor Relations at mBank
The Investor Relations team, acting in cooperation with the Management Board and other organisational units, provides analysts and investors with reliable and complete information about mBank Group.
When communicating with investors, the media and clients, mBank applies the Information Policy, which is based on the principles of open and transparent communication, taking into account the needs of all stakeholders. We provide them with universal and equal access to information in accordance with the highest market standards and applicable laws. We spare no effort to ensure that the information provided by us is up to date, reliable, useful, coherent, and comparable with information provided by other banks.
We have been actively communicating with capital market participants, which includes addressing our activities to the information needs of individual groups, in accordance with the best market standards and practices.
Similar to other issuers worldwide, we have adopted a hybrid approach to the IR activities, which combines the advantages of face-to-face shareholder meetings with remote communication.
Information provided via e-mail and the regularly updated content published on the official mBank’s website play a significant role in communications with stakeholders.
Investor Relations website ( https://www.mbank.pl/en/investor-relations/ ) features information
divided into categories, including: periodic reports, financial results and selected business data, presentations and video recordings of earnings conferences, data on shareholders and share price of mBank on the WSE, consensus of forecast results of the Group, compendium of knowledge for new investors, current reports, information on general meetings, ratings and debt instruments. The website gives investors access to historic results of the Group and the bank (periodic reports, presentations and video recordings of earnings conferences) and to an archive of general meetings.
In addition, the Responsible Bank website contains information on various aspects of our activities related
to sustainable development. Materials published there include our integrated/ESG reports and information about our ESG strategy and activities, sustainable development standards (i.e. primarily policies and procedures applicable at the bank), declarations regarding our ESG goals, as well as ratings, indices and awards related to this area.
Analysts and mBank’s investors are kept informed about major developments in mBank Group via a monthly Newsletter and ad-hoc messages sent by email.
In 2024, investors and stock market analysts participated in four earnings conferences . All meetings with the Management Board accompanying the announcement of quarterly figures were posted on the bank’s website. Our relations with analysts, shareholders and potential investors are also strengthened through meetings at conferences organised by Polish and foreign brokerage houses . In 2024, mBank participated in six conferences, two roadshows (in London as well in MENA and Asia) and meetings organised in connection with the issuance of bonds under the EMTN Program and Additional Tier 1 bonds.
In 2024, the Management Board representatives also held meetings with analysts from rating agencies . In addition, the bank has been in regular contact with rating agencies through teleconferences and emails.
1.5. Credit ratings of mBank and mBank Hipoteczny
mBank's credit ratings assigned on request
mBank has solicited ratings assigned by S&P Global Ratings (S&P) and Fitch Ratings (Fitch).
S&P Global Ratings
On May 17, 2024, S&P Global Ratings affirmed mBank’s ”BBB” long-term issuer credit rating, its ”A2” short-term rating and the rating of senior unsecured bonds issued by mBank: Senior Preferred Debt at ”BBB” and Senior Non-Preferred Debt at ”BB+”. At the same time the rating agency improved the outlook of the long-term rating from stable to positive. The positive outlook reflects S&P’s view that mBank is taking significant steps to derisk FX mortgage loans. S&P expects that legal costs related to its CHF loan portfolio will remain substantial, but gradually recede over the next two years.
mBank S.A. Group
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Fitch Ratings
On June 28, 2024, Fitch affirmed mBank’s Long term Issuer Default Rating at “BBB-”, Viability Rating at “bbb-” and the stable outlook of the long-term rating.
Fitch reiterated its opinion that legal risks related to FX mortgage loans constrain mBank’s ratings. At the same time, according to Fitch, mBank has well-established domestic franchise, conservative risk appetite, adequate capitalisation, and good funding and liquidity profile.
Ratings of mBank S.A.
S&P
Fitch
Long-term issuer credit rating (foreign currency)
BBB
BBB-
Short-term issuer credit rating (foreign currency)
A-2
F3
Stand-alone rating (Stand-alone Credit Profile by S&P / Viability rating by Fitch)
bbb-
bbb-
Long-term resolution counterparty ratings (long-term RCR)
BBB+
-
Short-term resolution counterparty rating (short-term RCR)
A-2
-
Ratings for unsecured issuances under Euro Medium Term Note Program (EMTN)
1. Senior Preferred Debt
- Long-term rating
- Short-term rating
2. Senior Non-Preferred Debt
- Long-term rating
- Short-term rating
BBB
A-2
BB+
A-2
BBB-
F3
BB+
F3
Rating of AT1 instruments
-
B+
Outlook of Long-term rating
positive
stable
Changes in mBank's solicited long-term ratings are presented in the diagram below.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Other credit ratings
Rating of mBank and mBank Hipoteczny assigned by Moody’s Investors Service
Moody's Investors Service (Moody's) evaluates mBank's creditworthiness based on publicly available information. Moody's assigned solicited rating to mBank Hipoteczny and mortgage covered bonds issued by mBank Hipoteczny.
On April 26, 2024, Moody’s affirmed mBank’s Baa1/P-2 long-term and short-term deposit ratings and revised the rating outlook to positive from negative. The reasons is that Moody’s expects that the legal risks stemming from CHF mortgages will decline over the next 12-18 months and it will lead to enhancement of mBank’s profitability and restoration of its organic capital generation.
Moody’s Investors Service
Ratings of mBank 1)
Ratings of mBank Hipoteczny
Long-term Deposit Rating (foreign currency)
Baa1
-
Short-term Deposit Rating (foreign currency)
Prime-2
-
Long-term Issuer Rating (foreign)
-
Baa2
Short-term Issuer Rating (foreign)
-
Prime-2
Long-term Counterparty Risk Rating (foreign currency)
A3
A3
Short-term Counterparty Risk Rating (foreign currency)
Prime-2
Prime-2
Baseline Credit Assessment (BCA)
ba1
-
Adjusted Baseline Credit Assessment
Baa3
-
Rating of covered bonds issued by mBank Hipoteczny
-
Aa1
Outlook of Long-term Deposit Rating / Issuer Rating
positive
positive
1) Ra tings based solely on publicly available information
Capital Intelligence Ratings
On April 3, 2024 Capital Intelligence Ratings affirmed mBank's long-term foreign currency rating at ”BBB” and short-term foreign currency rating at ”A2”. The rating outlook remains stable.
Summary of ratings for Poland, mBank and Commerzbank
The table below compares long-term ratings (foreign currency) for mBank, Commerzbank and Poland assigned by S&P, Fitch and Moody’s as of December 31, 2024.
Rating agency
Poland
mBank S.A.
Commerzbank AG
S&P Global Ratings
A- (stable)
BBB (positive)
A (stable)
Fitch Ratings
A- (stable)
BBB- (stable)
-
Moody’s Investors Service
A2 (stable)
Baa1 1) (positive)
A1 1) (positive)
1) Long-term deposit rating. For mBank based on publicly available information. LT ICR of Commerzbank by Moody’s is A2 (positive).
Rating outlook in parentheses.
1.6. ESG ratings and indices of mBank
Rating of mBank assigned by Sustainalytics
On December 19, 2024, Morningstar Sustainalytics conducted the annual full review of the ESG risk assessment of mBank Group. After taking into account all documents, on January 9, 2025, the ESG Risk Rating of mBank Group was slightly increased to 13.4 from 12.8 (the result of the rating update after a methodology change in May 2024). According to the scale used by the agency, the Group is exposed to
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low risk of significant financial impacts related to ESG factors. Previous full ESG Risk Rating assessment for the Group was published on April 25, 2023.
In no case can the ESG Risk Rating Report be interpreted as investment advice or an expert opinion within the meaning of applicable law.
The Morningstar Sustainalytics ESG Risk Rating measures a company's exposure to significant industry- specific ESG risks and how well the company manages those risks. This multidimensional way of measuring ESG risk combines management and exposure concepts to obtain an ESG risk rating. It is a quantitative measure of unmanaged ESG risk (ESG risk score or ESG Risk Rating), which is comparable across all industries. The ESG risk rating from Sustainalytics distinguishes five levels of risk: negligible, low, medium, high, and severe. More information about ESG risk ratings can be found on the website: www.sustainalytics.com/corporate-solutions/esg-solutions/esg-risk-ratings .
The latest Sustainalytics ESG Risk Rating report along with the legal notice is published at: https://www.mbank.pl/en/investor-relations/ratings-debt-instruments/ratings/ . It should be noted that
the rating may change during the year due to the impact of various ESG factors on the assessment. The current rating can be obtained by investors from Sustainalytics. Legal notice: https://www.sustainalytics.com/legal-disclaimers .
More information about mBank's activities in the ESG area is presented on our website: https://www.mbank.pl/en/about-us/corporate-social-responsibility/main-page/ .
Rating of mBank assigned by MSCI
On November 8, 2024, MSCI ESG Ratings upgraded mBank's rating to AA (on a scale from AAA to CCC). The previous rating published on October 26, 2023, was at level A.
The report indicates that the upgrade was due to the expansion of mBank's consumer protection practices, which are now on par with comparable banks and include debt collection policies. In terms of corporate governance, mBank applies leading practices compared to its peer group.
The MSCI ESG Rating measures a company's resilience to long-term ESG risks. Companies are rated on a scale from AAA (leader) to CCC (laggard) based on their exposure to sector-specific risks and their ability to manage those risks compared to their peer group. The MSCI ESG Rating for mBank along with the legal notice is available on our website: https://www.mbank.pl/en/investor-relations/ratings-debt-
instruments/ratings/ . It should be emphasized that the rating may change during the year due to the
impact of various ESG factors. Investors can download the company's current rating from MSCI.
FTSE4Good Index Series
FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that mBank S.A. has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products. More information on the index can be found on the website: https://www.ftserussell.com/products/indices/ftse4good/
Bloomberg Gender-Equality Index 2023
mBank has been included in the elite group of companies listed in the Bloomberg Gender-Equality Index 2023, which actively support equal opportunities in the workplace. The publication of the index was completed on October 21, 2024.
The Bloomberg Gender-Equality Index analyzes the performance of public companies with a market capitalization of over $1 billion in terms of gender equality in the workplace, measured in five areas: female leadership and talent development, equal pay and gender pay parity, inclusive work culture, anti- sexual harassment policies, and pro-women brand. Only companies that have achieved a score exceeding the globally defined threshold qualify for the index.
1.7. Key events and projects of mBank Group in 2024
Settlement program for mBank’s clients with mortgages in CHF
In the fourth quarter of 2022, following completion of the pilot phase, mBank launche d an attractive settlement program for customers with CHF loans. mBank has signed o ver 22,9 thousand settlements with clients until end of 2024. mBank has presented the settlement offer to all clients and regularly renews it. The offer consists in converting the loan into PLN as if it had been take n out and repaid in the Polish
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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currency from the beginning. As a result, the outstanding principal is reduced. Until end of 2024, mBank's CHF mortgage portfolio decreased by 80.8%. The settlement process is efficient and does not require many formalities from borrowers. The bank is also open to negotiation with its customers. The converted loan bears interest at a variable or periodically fixed rate at an attractive level (4.99% at the date of preparation of this report). Settlements allow customers to definitively eliminate FX risk and interest rate risk for up to 5 years (interest rates may vary in the future depending on market conditions). The bank has launched a special website (in Polish) which describes the settlement program in detail. For more
information on the settlements, see 34. explanatory note of the Consolidated Financial Statements of mBank Group S.A. for 2024.
First issuance of AT1 bonds in Poland by commercial bank
mBank as the first commercial bank in Poland offered AT1 (Additional Tier 1) bonds to a wide range of institutional investors. In the pioneering issuance of bonds, mBank raised PLN 1.5 billion, which was the maximum planned nominal of bonds to be issued, whereby with investor demand amounting to PLN 1.76 billion.
The transaction was settled on December 6, 2024. The bonds are the first of their kind publicly issued by a Polish bank. AT1 bonds are perpetual securities, entitling the holder to receive interest indefinitely, with the provision that mBank may redeem them after 5 years, subject to KNF approval.
The interest rate on AT1 bonds is fixed for five years, then set for subsequent five-year periods as the sum of the current PLN Swap 5Y rate and a fixed margin of 6.00 percentage points. The interest rate for the first five-year period is 10.63% per annum. Interest is paid semi-annually.
According to the KNF decision of December 30, 2024, AT1 bonds were classified as additional Tier I capital instruments, thereby increasing own funds and improving capital ratios at both the individual and consolidated levels. This issuance will enable mBank to more dynamically grow the volume of loans granted to individual and corporate clients.
The issuance of AT1 bonds by mBank also represents a significant contribution and impetus for the development of the Polish capital market. The bonds are listed in the alternative trading system on the Warsaw Stock Exchange (WSE).
mBank conducted a green preferred senior transaction worth EUR 500 million
In September 2024, mBank placed a green issuance of preferred senior bonds worth EUR 500 million with 6-year tenor and call option after 5 years (6NC5) on the international market under the EMTN program. The transaction attracted significant interest from investors, having the largest order book and the highest number of investors in the history of mBank's issuances.
The transaction aims to support fulfillment of MREL requirements. The bonds have a fixed coupon of 4.034% per annum for the first five years, and in the sixth year, the coupon becomes variable, set as the sum of the EURIBOR 3M rate and a fixed margin of 1.75 percentage points per annum. The bonds were admitted to trading on the Luxembourg Stock Exchange.
The transaction was the third mBank’s benchmark issuance denominated in euro and structured in a green format according to the Green Bond Framework. To date, mBank has raised a total of EUR 1.75 billion from green bond issuances. The proceeds will be used to finance and refinance retail mortgage loans for energy-efficient residential buildings and onshore wind and photovoltaic projects. These assets are selected according to the criteria established in the Green Bond Framework and verified for compliance with the Climate Bonds Initiative requirements by an independent reviewer, Sustainalytics. Climate Bonds Initiative certificates, pre-issuance and post-issuance opinions issued by Sustainalytics, and allocation and impact reports are available on the bank's website.
Synthetic securitization of corporate loan portfolio
On November 6, 2024, mBank concluded a synthetic securitization transaction on corporate loans portfolio with total nominal value of PLN 5,237 million. This is a fourth securitization transaction carried out by mBank. As part of the transaction, the bank transferred a significant portion of the credit risk to the investor, while the loan portfolio subject to securitization remains on mBank's balance sheet. The transaction positively impacts capital ratios and MREL, both at the individual and consolidated levels.
The transfer of risk of the securitized portfolio is conducted through the issuance of credit linked notes (CLN). CLN with a nominal value of PLN 560 million were issued on November 6, 2024. On the issuance date, the bonds were paid in the amount of approximately PLN 419 million. mBank has the option to increase the securitized portfolio to a maximum of PLN 7.0 billion, subject to investor approval (ramp-up option). After exercising the ramp-up option, the paid amount of CLN will increase to PLN 560 million.
mBank S.A. Group
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CLN were introduced to the alternative trading system on the Vienna MTF organized by Wiener Börse AG. The new securitization transaction meets the STS criteria (simple, transparent, and standardized securitization).
Updated mBank’s Group Strategy for capital management
On July 24, 2024, the Management Board decided to update the „Capital management strategy of mBank Group”. It assumes that no dividend will be paid out from the profit earned by the bank in 2024. On July 25, 2024, the Supervisory Board approved the updated „Capital management strategy of mBank Group”.
mBank plans to use the retained profit for dynamic lending growth and further business development while maintaining the capital buffers above regulatory requirements. It will also ensure maintaining the Tier 1 ratio at a level of at least 2.5 p.p. above the minimum requirements at the end of the year, in line with mBank Group’s Strategy for 2021-2025. The long-term dividend strategy of the bank for subsequent years assumes dividend pay-out at the level of 50% of net profit.
mOkazje zakupy is a new shopping platform available to mBank clients
“mOkazje zakupy” is an mBank project that makes it even easier for customers to shop online, directly from their bank app. Both purchase and payment take place without leaving the app. A pilot of the “mOkazje zakupy” project was launched in June 2024. In the first phase of the project, 50,000 mBank clients were given the opportunity to buy on the Morele platform directly in the bank's mobile application. One product per day was offered at a unique, attractive price.
The implementation of “mOkazje zakupy” was divided into several phases. In August 2024, another 450,000 customers received an invitation to use “mOkazje zakupy”. The number of products offered through the service (from categories such as electronics, gaming, small appliances, home and garden, sports, tourism) also increased to more than 100. The pilot ended in the fourth quarter of 2024. Since mid-December 2024, “mOkazje zakupy” is available to all mBank clients, and they can choose from about a million of offers segregated in two thousand categories. The functionality includes all essential eCommerce tools such as a search engine, filtering, various delivery methods for orders, transaction history, and instant payments.
On the Morele platform, clients will also find personalized offers in many categories, promotions and daily deals. The store reaches over 1 million recipients daily via its own media and fulfills orders on 13 foreign markets, which gives merchants and brands simple and quick access to many European markets.
mBank, in its development strategy for 2021-2025, announced an increase in its share in the e- commerce market. Entering into cooperation with the Morele purchasing platform is a key action that will help achieve this goal. In the future, mBank also wants to invite its corporate clients to join the platform. mBank estimates that over 50,000 e-shop owners use its service (which constitutes 1/3 of all e-shops in Poland). In 2023, mBank’s clients made 240 million transactions in e-shops and spent nearly PLN 27 billion in them. It means that every fourth zloty which appeared on the e-commerce market at that time came from mBank’s account (calculations based on the bank’s data and PMR “Handel Internetowy w Polsce 2022”, Strategy & „Perspektywy rozwoju rynku e-commerce w Polsce 2018-2027”).
New, innovative methods of payment
mBank has expanded its offer of mobile wallets. Now clients can pay for purchases with a ring or watch strap equipped with Fidesmo Pay or Digiseq Pay software. Thus, mBank has become a leader among banks that enable customers to use modern forms of mobile payments.
Wearable accessories, among their numerous functions, also allow users to pay. It works similarly to smartphones or watches connected to a mobile wallet, e.g. Apple Pay or Garmin Pay. A client has to only bring such a gadget close to the terminal.
The software which allows clients to pay with a ring or a special watch strap is called Fidesmo Pay (available for Visa and Mastercard cards) or Digiseq Pay (for Mastercard cards). The devices can be purchased on the website of both software manufacturers. The device comes with instructions that explain step by step how to connect a payment card to it.
mBank clients have long been able to use Apple Pay, Google Pay, Garmin Pay, Fitbit Pay, Xiaomi Pay and Swatch Pay mobile wallets. Now more methods have been added: Fidesmo Pay, Digiseq Pay, Tappy Pay and Zepp Pay.
Deferred payments in Paynow
Paynow is an advanced technological payment gat eway offered to mBank clients. The gateway is based on cloud solutions, enabling it to seamlessly handle hundreds of transactions per second. Over 20,000 clients have already used Paynow, including the largest online stores in Polish e-commerce. Its development is
mBank S.A. Group
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managed by mElements, a company from mBank Group. Since September, companies using the gateway have been able to offer deferred payments in their online stores, thanks to collaboration with PayPo.
Deferred payments, commonly referred to as BNPL (Buy Now, Pay Later), is a service that allows customers to purchase goods and pay for them at a later date, usually within 30 days. According to the "Global Payments Trends" forecast, by 2025, 12% of all e-commerce transactions will be completed using this payment method. Paynow charges a commission of 1.2% of the transaction amount for using deferred payments. Data from PayPo shows that customers who use deferred payments are more likely and quicker to make purchase decisions, which leads to increased sales for the store.
New version of mBank CompanyMobile, mobile application for corporations
mBank has launched a new version of CompanyMobile mobile application for corporations, offering many attractive features that facilitate daily financial management for businesses. One of these features is the expansion of the app to include previously unavailable card management functions, allowing users to easily manage their cards directly from their phones.
The app allows users to add all or selected cards to the card widget. With the introduction of a clear list, using the cards in the app has become more intuitive and user-friendly. If a user has more than one card, they can simply click the card widget to navigate to the list screen. All cards assigned to the user are displayed there, organized and grouped by the contexts to which they have been assigned. Additionally, the app offers a realistic representation of the cards' appearance – the graphics reflect their actual design. This allows users to quickly and easily identify their cards within the app. This is another enhancement that makes financial management in CompanyMobile even more convenient and modern.
The new strategy of mLeasing and expanded payment options
At the beginning of 2024, the Management Board of mLeasing ado pted new strategy. The adopted strate gy is a response to the dynamically changing market environment and growing impact of climate change on business challenges. Strategy assumes the support of clients and partners in the co ming transformation of the automotive market, including fleet owners and individual car users. The new GreenHub introdu ced by the strategy is a comprehensive solution to facilitate the implementation of decarbonization a nd emission reduction plans for mLeasing customers. The distribution strategy focuses on diversifying a nd strengthening its own sales channels, mainly the mAuto platform and digital shopping channels.
LeaseLink, a fintech owned by mLeasing, has introduced deferred payments for businesses. It has become the only entity on the market offering such a broad payment ecosystem aimed at businesses, which includes leasing, installment payments, and BNPL (buy now, pay later). Small and medium-sized enterprises also have access to the Paynow payment gateway, allowing them to finance company purchases without cash. Furthermore, in the third quarter of 2024, LeaseLink launched equipment rental services and merchant finance, creating a comprehensive financing offer – LeaseLink 360°.
mLeasing is a leader in electromobility and support in the energy transformation
mLeasing actively supports clients and partners in the transformation of the automotive market. The subsidiary registered 1,349 new battery electric vehicles (BEV) this year, making it the leader among companies financing and leasing new cars.
According to the latest data from CEPIK, mLeasing registered one of the h ighest number of BEVs on the market in the 2024 — fully electric vehicles that are leading the way in reducing the carbon footprint. Th is is the result of the subsidiary's consistent efforts in the field of electromobility. For fleet owners, mLeasing o ffers a full range of services, from helping with car selection to financing and facilitating everyday use. With ca r users in mind, the subsidiary is piloting a comprehensive fleet decarbonization program.
In October 2024, mLeasing launched a new online platform called " Green Transformation " (in Polish). The
platform will support small and medium-sized businesses in reducing energy costs and lowering CO2 emissions. Entrepreneurs will receive assistance at every stage of goal implementation. They will gain essential knowledge about environmental protection, as well as a comprehensive set of products and services for sustainable business development. Through the platform, entrepreneurs will conduct an energy audit and estimate their carbon emissions. These values form the basis for reducing operating costs, developing a decarbonization plan, and limiting the negative environmental impact.
mBank increases the limit for financing sustainable energy
In July 2024, mBank once again increased its financing limit for renewable energy sources (RES) to PLN 6.4 billion. We finance the construction of wind and solar farms through bilateral and syndicated loans with the participation of other commercial banks and the European Bank for Reconstruction and Development. In consortium loans mBank serves as the credit agent or collateral agent.
mBank Group's Strategy for 2021-2025 aims to support sustainable investments totaling PLN 10 billion. The funds will be directed towards areas such as energy transformation, the circular economy,
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electromobility, the implementation of the ESG strategy, and the decarbonization of the bank's clients. One of the key actions in this area is the financing of investments in renewable energy sources.
More information about the sustainable financing at mBank is available in chapter 10.2 “Environmental information (ESRS E1,E4)”.
mBank and KUKE jointly support entrepreneurs in implementing green investments
mBank, in cooperation with KUKE, introduces an innovative guarantee program for entrepreneurs undertaking green energy investments. The offer enables attractive financing for projects related to renewable energy sources and improving energy efficiency. As a result, mBank clients can execute their investment plans more quickly and easily, contributing to environmental protection. Thanks to the guarantees, companies can obtain loans for green investments that cover up to 80% of the required financing. The repayment period for such loans can exceed 20 years, with a minimum loan amount of PLN 10 million.
mBank has been cooperating with KUKE since June 2023, when the institutions signed their first cooperation agreement. This agreement enabled companies to access attractive investment loans secured by payment guarantees for the purpose of developing their export potential.
Co-organizing the issuance of green bonds
mBank became a co-organizer, dealer, and structuring agent for Polenergia's green bond issuance. The issuance is part of the strategy to support the transformation of the Polish energy sector. Polenergia, the largest private energy group in Poland, issued green bonds for the first time. mBank was one of three institutions involved in organizing the issuance. Polenergia will use the proceeds to finance or refinance the development, acquisition, construction, and operation of green projects in the renewable energy sector, including offshore wind farms, as well as energy efficiency projects. The debt securities issued under this framework meet the Green Bond Principles established by the International Capital Market Association.
The issuance of 5-year bonds worth PLN 750 million was met with tremendous interest from investors, confirming the growing awareness of the importance of investing in renewable energy projects.
50% of clients to be financially resilient
mBank, as the first bank in Poland, signed the Commitment to Financial Health and Inclusion and Principles for Responsible Banking, as part of the United Nations Environment Program Financial Initiative (UNEP-FI). In June 2024, mBank announced the first goal that it will implement as part of this activity. The goal is to increase and maintain financial resilience and financial well-being of Poles, through support in managing expenses and building a financial cushion.
mBank's goal set together with UNEP-FI is to increase the percentage of clients who believe they are financially resilient to at least 50%. In 2024, we achieved this goal at a level of 54%. This means that more than half of our clients consider themselves financially resilient. We will continue to pursue this goal by encouraging clients to actively use the Finance Manager, a personal finance management tool (PFM).
The Finance Manager is designed to help clients manage their current and future finances wisely. Its role also includes supporting clients in preparing for life-cycle events (e.g. retirement). By the end of 2024, 1.92 million users were utilizing the PFM tool.
The bank will even better help its clients to plan their finances, avoid unnecessary debt and improve risk management skills. Finance manager is a tool available in the mBank mobile application and the website. By transparently presenting current inflows and outflows, categorizing them and comparing them over time, it allows clients to efficiently analyze and manage their finances on an ongoing basis.
Education on cybersecurity, saving and safely investing for retirement
mBank conducts regular educational activities related to safety. In 2024, as part of the "Self-Defense Online" campaign, we highlighted ways to protect against common online scams. The campaign included TV and radio spots, as well as online initiatives. Additionally, we promoted mBank's solution: identity confirmation via mobile authorization, on the internet and radio. This feature allows clients to verify whether a caller claiming to represent the bank is truly one of our employees or a fraudster impersonating them. In the second half of the year, we launched a broad communication campaign encouraging audiences to listen to the audio series “Clamor – Stories” (“Jazgot – Historie”), an mBank production, that illustrates the methods used by fraudsters and shares stories of individuals subjected to psychological manipulation. This was the second season of the audio series, which received highly positive feedback from both the industry and listeners. The audio series was made available on the most popular podcast platforms. This unconventional form of communication allowed us to expand the reach of our efforts and draw attention to the complex issue of social engineering tactics used by fraudsters to gain their victims' trust.
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As the general partner, we have continued our participation in the “Capticated by Economy” (“Porwani Przez Ekonomię”) project for another year. Together with the Warsaw Institute of Banking, Professor Witold Orłowski, and PwC, we help to teach young people a healthy approach to finance. In 2024, we provided students and teachers registered in the project with additional lessons on the topics of credit and investing. Lessons based on our scenarios are conducted in schools across Poland, enriched with interactive educational tools. Since the launch, the project drew a total of over 1,200 schools, 1,400 teachers, and 330,000 students. An additional initiative under the project in 2024 was the preparation of a report titled "Let’s Talk About Money". The report was created to understand the challenges of educating young people about finance. It addresses teenagers’ and their parents' attitudes towards finances, sources of financial knowledge, and their assessment of financial literacy. The report serves as a resource for parents and teachers to facilitate further discussions about finances.
mBank manages the largest number of brokerage retirement accounts, including IKE and IKZE, in Poland. To encourage Poles to save, from September 2024, mBank stopped charging deposit fees on foreign securities held in these accounts. For all clients, mBank has created a special educational website, " Invest
for Your Retirement on Your Own " (in Polish). Additionally, within the mobile app, as part of the financial
manager tool, mBank has introduced a retirement calculator. This tool helps mBank clients determine how much money they need to save for retirement and plan regular savings.
ETF funds are one of the most popular financial instruments in Poland. Seven out of ten people who invest in foreign markets have this type of instrument in their portfolio. To help new investors, mBank launched an educational project "Akcja Edukacja" (Action Education). It consists of several videos and articles where mBank explains what ETF funds are and how to invest passively. mBank's specialists explain the benefits and risks associated with such investments. In eMakler, the brokerage service integrated with mBank accounts, mBank offers an advanced ETF search engine. This tool allows users to access key information and conveniently choose from over 400 funds available at mBank.
With Polish women in mind, mBank launched the campaign "Women Live Longer... Also in Retirement." A study conducted by Maison & Partners in May 2024 revealed that only one in three women in Poland takes actions that could increase their pension. Just 6% invest in financial markets. mBank's campaign was inaugurated with a meeting attended by financial educators and journalists. The campaign produced podcasts, interviews, and reports to highlight the issue. Online, advertising spots based on memes "That's why women live longer than men" were published. The goal is to humorously draw attention to the serious problem and encourage action. The spots direct viewers to a specially prepared website where women can find tips on how to start securing their financial future.
Operations of mBank Foundation
We have been implementing the M for Mathematics (m jak matematyka) strategy since 2013. We strongly believe that mathematics provides the foundation for logical thinking and is vital to understanding the world around us. Knowing mathematics helps to take informed financial decisions and encourages interest in science. mBank believes that mathematics contributes to both personal professional success and the development of Poland’s economy. In 2024, the mFoundation allocated over PLN 3,600,000 to statutory activities connected with mathematics education.
As part of our initiatives, we support children, teenagers and their parents and teachers, as well as university students and young scientists. In 2024, grants for educational projects were awarded to 270 entities, including public schools and kindergartens, non-governmental organisations, higher education institutions and libraries.
First edition of the grant program “mFactorial”
On March 14, mFactorial (mSilnia) program has begun. It is a new program for elementary schools students. The mFactorial has replaced mPower (mPotęga) after 10 years. The main goal of the program is to develop mathematical thinking. mFactorial also promotes practical approach to teaching mathematics and encourages cooperation between teachers of different subjects. The new program consists of two categories: an educational project competition - for schools and a lesson scenario competition - for educators. Public elementary schools, teacher training centers, universities, libraries and NGOs took part in the first competition. In the second competition, methodologists, teachers, educators and popularizers of mathematics could took part and submit their scenario. In the first edition of mFactorial, mBank has awarded grants to 65 projects from all over Poland and 8 original scenarios for the total amount of PLN 857,000.
Contest “A Step in the Future” for the best student thesis in mathematics
On March 30, the birthday of the great Polish mathematician Stefan Banach, the mFoundation announced the results of its annual competition “A Step into the Future” (“Krok w przyszłość”). The jury of the competition, chaired by Professor Paweł Strzelecki from the Faculty of Mathematics, Informatics and Mechanics of the University of Warsaw, selected the best papers in mathematics written by students that
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promoted innovative, original ideas or set new research directions and methods. The jury awarded the grand prize of PLN 20,000 and three equivalent awards of PLN 10,000 each. On June 30, 2024, mBank announced the next, ninth edition of the competition.
„Rethinking Maths: Recipes for Effective Maths Education”
In June 2024 mFoundation organized conference „Rethinking Maths: Recipes for Effective Ma ths Education”. Over 100 teachers from all over Poland took part in this event. The main goal of this event w as to find universal solutions, which would help to improve mathematical education and a llow to teach math more efficiently. The key element of the conference was a debate featuring Polish and Eston ian experts. It focused on the need for systemic changes pertaining to teacher autonomy, communication between teachers teaching different subjects and at different levels, and maths education based on problem solving. mBank F oundation forwarded the conclusions from the debate to the Ministry of National Education.
Fourth edition of “Growing with Maths” grant program for kindergartens
In September, mFoundation started accepting applications for the fourth edition of the Growing with Maths (Rosnę z matematyką) program. The program was available to kindergartens, schools with kindergartens and non-governmental organisations from all over Poland. This year’s edition gathered 446 ideas for educational math activities for children aged 3–7. The jury of the contest selected 127 projects and awarded grants totaling PLN 860,000. The money will fund hundreds of hours of creative maths classes for the youngest school children.
Grant program „Pragmatic dimension of geometry”
Since 2022 mBank has launched a number of new themed grant programs. Once a year in autumn, mFoundation announces the main theme for the next 12 months. From October 2022 to September 2023, the foundation awarded grants to projects that combined math education with ecology. Since October 2023, the main theme has been geometry. The program “Pragmatic dimension of geometry” (“Praktyczny wymiar geometrii”) supports ideas proving that geometry is an interesting, inspiring field that can be much more than just a boring school subject. It can be taught as part of competitions, special courses, extracurricular classes, meetings and workshops. In 2024, mFoundation awarded grants totaling PLN 643,000 to 85 projects.
Other activities
mFoundation has been organising educational events for many years. In 2023 it held the 9th Maths Picnic in the Copernicus Science Centre and the 9th Festival of Mathematics organised jointly with Gazeta Wyborcza daily. We also support maths Olympians as part of the Masters of Mathematics (Mistrzowie matematyki) project. In 2024, in cooperation with the Association for Mathematics Education, we provided scholarships to 29 winners of the Mathematics Olympiad and Junior Mathematics Olympiad. The total amount of scholarships was PLN 44,000. Additionally, the mFoundation offers free publications promoting maths, which can be downloaded at www.mjakmatematyka.pl . These include:
Matematyka jest wszędzie (Maths is Everywhere), Dziecinnie prosta matematyka (Child’s Play Maths) and Matematyka na zielono (Green Mathematics) dedicated to families with children aged 0–13,
Wielcy polscy matematycy znani i nieznani (Known and Unknown: Great Polish Mathematicians) and Środek do celu (Means to an End) dedicated to teachers who want to learn how to make maths lessons more interesting.
Implementation and financial reports on the foundation’s operations are available at www.mfundacja.pl .
Support for promoting culture – a summer full of concerts
The M for mBank’s Art Collection (“m jak malarstwo”) project is one of mBank’s social responsibility projects. Thanks to our special fund established in 2022, we are creating a collection of artworks authored by the most interesting and promising young Polish artists. The artworks are selected on behalf of mBank by a committee composed of renowned representatives of the art market and a representative of the fund. When selecting individual works, the committee responsible for art purchases is guided by both their artistic worth and prospective valuation in the longer term. This may include both single artworks from individual artists and larger collections. Between 2020 and 2024, mBank bought 152 artworks authored by 96 contemporary Polish painters. mBank’s initiative revitalises the Polish art market and supports the most talented young artists. We expect that in the future mBank’s collection will pave the way for a new generation of artists, and the M for mBank’s Art Collection fund will operate like a perpetual motion machine supporting artists.
In July 2024, mBank became the strategic partner and main stage sponsor of Łódź Summer Festival for the second time. This is the largest urban festival in Poland. The event took place from July 26 to 28, and all concerts were free of charge. The festival featured a unicorn – the unofficial symbol of the revitalized
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city of Łódź. Its design was created by mBank a year ago to mark the city’s 600th anniversary. The unicorn and Łódź dialect form the basis of the creative concept that the bank uses to promote the event.
In August, mBank became the patron of the Academy of Fine Arts for the 7th time during the Pol’and’Rock Festival. The festival took place from August 1 to 3. mBank prepared many attractions for the 30th anniversary edition of the event. Among them were workshops on cybersecurity, a commemorative payment card in both physical and mobile versions, and gifts for festival participants. mBank has been a partner of the Pol’and’Rock Festival since 2018 as the patron of the Academy of Finest Arts – a place for important meetings and discussions.
In September, mBank returned to Łódź for the Great September Festival. The third edition of this unique showcase festival, combining the characteristics of a public event with a meeting for the music industry, took place from September 12 to 14. mBank and Mastercard were patrons of the event. Just like last year, mBank prepared a limited-edition payment card, designed to match the festival's visual identity, which offers a 50% discount on festival merchandise.
mBank is eager to engage in interesting cultural events, especially those that are appealing from the perspective of its customers. The bank has many clients in Łódź, as analysis shows that over 40% of the city's adult residents hold an account with mBank. The retail banking division of mBank also has its roots in Łódź, where it was established over 20 years ago. mBank is also one of the largest employers in the region, employing around 3,000 people.
mBank plays together with the Great Orchestra of Christmas Charity
The Great Orchestra of Christmas Charity (WOŚP) played for the 32nd time in 2024. For mBank, it was the seventh anniversary of its cooperation with the foundation as strategic partner and sponsor. The 32nd WOŚP finale took place on January 28, 2024. This time, the foundation raised money for equipment to treat lung diseases. In addition to the gifts prepared every year and the functions made available in the application, mBank also enabled support for the Foundation's goals through the "heart" icon in the transaction service. In 2024, for the first time, the bank offered payment cards with commemorative WOŚP design and blind notch that makes the use of the card easier for visually impaired people. The youngest clients who opened an eKonto Junior received special pins with motifs associated with the Orchestra for their new payment cards. Companies served by mBank’s corporate and investment banking could make a contribution to the collection organised by the Great Orchestra of Christmas Charity. mBank donated the equivalent of six months’ fees for accounts opened by companies from January to the end of June 2024 to the foundation's account.
The 33rd Great Orchestra of Christmas Charity (WOŚP) finale took place on January 26, 2025. This year, the WOŚP foundation raised money to support and equip pediatric oncology and hematology departments. Once again, mBank participated in the event and supported its organization – in total, about 1,000 employees were involved in various activities. As a result of the joint effort of mBank employees and its clients, nearly PLN 140 million has been raised for WOŚP over the past 8 years. mBank itself donated PLN 19.5 million during this time. This year, clients could also use a special „heart” icon in the mobile application to donate to the foundation. To every click on the icon, PLN 1 was added by mBank. In parallel, mBank offered traditional and digital payment cards with WOŚP motifs designed by Jurek Owsiak, the Charity’s founder, and with a built-in notch for blind people. For corporate clients, mBank prepared another edition of the "In the Rhythm of WOŚP" promotion.
New features of mBank’s online banking and app
In 2024 we focused on improving the functionalities of our online banking and mobile app. The most important changes made in this period include:
Budget and summary in the Financial Manager (PFM) – In the budget management tool in our mobile application, we added new features: budget planning and personalized summaries of income and expenses on a monthly and annual cycle. Their goal is to help clients better understand the flow of funds in their accounts, and consequently gain fuller control over their finances - taking care of so-called financial health. mBank is the first among Polish banks to join the global trend of presenting annual data in a visually intriguing way. In just the first 6 days after making this functionality available, over 485,000 clients viewed their summary.
Retirement calculator - In our mobile application, we have provided our clients with a calculator that allows them to create their own savings plan for retirement. Clients simply need to answer a few questions about their current income, accumulated funds, and the lifestyle they want to lead in retirement. Based on this and data from ZUS, the calculator estimates the amount the client will have available for retirement. If it is not sufficient for the intended goal – the chosen lifestyle – it suggests
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how much needs to be saved monthly to accumulate the missing amount. Making your own retirement calculation does not involve purchasing any product. The plan can be saved and edited in the future. Our goal in creating the retirement calculator was to encourage clients to think about their finances in the long term.
mOkazje zakupy - At the end of the year, with the new version of the mobile application, all mBank clients gained access to mOkazje zakupy. The entire purchasing process is quick, safe, and intuitive: a search engine with filtering and sorting options helps find the right product. Address data is automatically filled in, and finalizing the order only requires entering the app PIN or confirming the transaction with Face ID. Payment is also instantaneous, as it occurs without any external redirects.
Investment management section expansion - We continue to develop the investment managemen t area in the mobile application. Currently, this section provides more information about t he composition of funds in the portfolio. We have added investment visualization and simplified naviga tion.
New loans tab - Now, clients can find all loans in one place in the mobile application, with intuitive filters. The new tab meets the WCAG (Web Content Accessibility Guidelines) requirements.
Downloading transfer confirmation before session - We have enabled clients to download the transfer confirmation immediately after placing the order and before the settlement session. This highly anticipated feature was used 110,000 times in the mobile application and 106,000 times in the transactional service in the first month.
Mobile onboarding with biometrics - At the end of 2024, we introduced biometric verification in the remote account opening process. This improvement enhances the client experience and shortens the time to open an account through the mobile application. Biometrics also increase the security of our clients when opening an account remotely.
Managing payment card tokens - In the mobile application, clients can easily check the list of all available tokens associated with the payment card, such as a smart band or smartwatch. By removing a single token, they can quickly disable payments with a given device if needed.
Changing BLIK limits and phone number in the mobile application - Last year, we added the ability to manage BLIK limits for payments and transactions and update the contact phone number in the mobile application. Clients can now make changes easily while maintaining all security principles.
Personalizing the application dashboard - The mBank application dashboard now allows for the customization of products, shortcuts, and widgets, speeding up and simplifying the use of the application. In 2024, we expanded the dashboard with a new element. Individu al clients gained access to another widget, visible immediately after logging in. Clients with access to the Shopping section w ill find current promotions in it. To make the application even safer, we added the opt ion to hide the account balance on the main screen o f the mobile application in the dashboard view personalization opt ions.
New microanimations communication formats - To effectively reach our clients with communication and reduce the effect of the so-called banner blindness, we introduced the first improvements in this area in 2024. From the fourth quarter, our clients can see a communication microanimation on the dashboard, which appears briefly after logging into the application. As a result, clients more frequently open messages about financial health, online dangers, and offers tailored to the client's situation.
New chat search engine - We implemented a search engine for the most popular topics to help our clients quickly and independently solve problems they encounter in the chat. The new search engine is available after entering the chat from the transactional service and the mBank mobile application. The main advantages of the tool are an intuitive interface designed with the participation of our clients, simplicity and ease of searching for help topics. If the client does not find an answer to their question, they can always write to our employee in the chat.
New video contact path with the bank - Currently, the client can schedule a meeting with a bank employee via video channel. In the first stage, we provide this contact path for discussions about investment products, where we know clients need additional support in handling such products. Clients receive notifications about the scheduled meeting in the message box in the transactional
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service and via a "push" message in the mobile application in advance. Additionally, it is easy to cancel the meeting by responding to the meeting notification.
Thanks to regular changes, we increased the number and involvement of app users in 2024. Our mobile app had 3.8 million users in December 2024 in Poland, Czech Republic and Slovakia (+5.1% YoY). Moreover, the number of Monthly Active Users (MAU) amounted to 3.5 million.
1.8. Awards and distinctions
mBank wins award for best portfolio management and remains best domestic bank - Euromoney Global
Private Banking Awards
At the end of March, mBank was honored with two awards during the Euromoney Global Private Banking Awards gala. An international Jury recognized mBank with the award for the best domestic private banking and the award for the best portfolio management. This year, the panel of experts highlighted a significant number of new initiatives which supported the development of mBank's operations. mBank was also distinguished for digital solutions for clients in online banking.
Four awards in the World’s Best Corporate Digital Bank 2024 contest
In the Global Finance World’s Best Corporate Digital Bank 2024 competition, mBank won 4 accomplishments. The awards were handed for: Best Corporate Mobile Banking in Central and Eastern Europe, Best Corporate Digital Bank in Poland, Best Mobile Banking App in Poland and Best in Innovation in Poland. Once again, mBank received the title of the best digital bank in Poland. The mBank CompanyMobile application received the title of the best corporate mobile banking application in Poland for the second year in a row, but for the first time it was recognized as the best in CEE. For the first time, the jury indicated mBank as the best example of an innovative bank in Poland.
Award for mBank’s Wealth management for outstanding offering to private clients
During the international Global Private Banking Innovation Awards gala, mBank's private banking received an award for the best Wealth Management for portfolios worth from PLN 100,000 up to 250,000 US dollars. The Global Private Banker magazine also recognized mBank for investment facilitation solutions, which give private banking clients ongoing access to their portfolio, results and all statistics from the transaction service. The gala is organized by Global Private Banker magazine.
Honorable mention for best digital private banking at Wealth Tech Awards
In the Wealth Tech Awards 2024 competition, mBank won in the Best Digital Private Banking in Central and Eastern Europe category. The competition was organized by PWM Financial Times. This year, the competition jury appreciated the digital development of mBank's private banking. The award covered all our activities in the digitization of private banking.
Recognition of mBank’s digital offer – second place at highly prestigious Mobile Trends Awards
mBank received a special award in the Mobile Trends Awards competition. Thanks to the votes received in the online poll, mBank took second place in the "Mobile application development" category. More information on new features that appeared in the application last year are included in chapter 1.7 “Key events and projects of mBank Group in 2024”. For 12 years, the awards have been granted to companies which have successfully used mobile technologies in their projects.
Diamond award for the most creative mobile campaign presented to mBank’s mobile onboarding process
During the Performance Marketing Diamonds competition gala, mBank received the ma in prize "Diamond" in the category of the most creative mobile campaign. The competition jury appreciated the acquisition campaign in the mobile onboarding process, i.e. directly within the application. The competition is organized by the Chamber of Electronic Commerce. The event has an international charact er and is a day dedicated to marketers who specialize in performance marketing, affiliation, preparing content and e-commerce strategies.
mBank won the first place at Quorus-Infosys Finacle Banking Innovation Awards 2024
mBank was awarded the first place at international contest Quorus-Infosys Finacle Banking Innovation Awards 2024 in Operational Excellence category. mBank’s project “Unique way to activate mBank’s mobile app”, was selected among 400 solutions from 177 institutions across 57 countries. mBank’s team had introduced innovative method to activate mobile app, which only takes one minute. This method uses NFC technology. A physical card (active) is required to connect with an account. This solution vastly improves user experience and cybersecurity.
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Active Ops Awards
mBank’s Operation Department for the second time in a row was awarded in the prestigious, international contest ActiveOps Awards. mBank was nominated in two categories: OPS Excellence and OPS Team of the Year. Capacity conference, organized by ActiveOps in UK, USA and Australia, offers a unique opportunity to look at the future of operations. During the event, various companies are awarded for introducing innovations in their operations departments, which stand out from the competition.
„Financing Bank of the Year”, the Polish Private Equity & Venture Capital Association
mBank won another award from Polish Private Equity & Venture Capital Association (PSIK) in the Financing Bank of the Year category. The contest promotes the highest standards in the private equity/venture capital sector and PE/VC investor contribution to the development of Polish companies and the society. The award is even more valuable to mBank as it is provided by PSIK members representing the market. This year, mBank received widespread recognition from private equity and venture capital funds.
Laures in „Diamenty Zielonego Przemysłu” (Diamonds of green industry) contest
mBank was awarded in „Diamenty Zielonego Przemysłu” (Diamonds of Green Industry) contest, in category “Leader of Green Financing”. This contest is aimed to honor companies and entre preneurs, that stand out from the competition, and implement sustainable development goa ls in their strategy. The statuettes are awarded to companies that introduce innovative products and solution s, as well as make investments with the highest environmental standards in mind. The competition is organized by the Executive Club.
Paynow awarded with third place at the Reinvention Awards
Paynow’s mechanisms for increasing sales conversion were awarded third place in the Operational Efficiency category in the Qorus Reinvention Awards – Europe competition. Paynow is created by mBank and mElements. Conversion-increasing mechanisms are functions which give a payer buying from an online shop with Paynow implemented the best chance of successfully completing a transaction.
The Best Annual Report
mBank's annual report for 2023 received the title of "The Best of the Best" from the Institute o f Accounting and Taxes. mBank was distinguished in the category of financial institutions for the t welfth time in a row. Every year, mBank's reports are appreciated by market commentators, who confirm the h igh utility value of the reports for shareholders and investors. The competition aims to create stand ards for preparing annual reports in accordance with International Financial Reporting Standards and Inte rnational Accounting Standards, recognized by the market, and to promote publications with the highe st utility value.
Two silvers at the Effie Gala for mBank's cybersecurity efforts
At the 25th Effie Gala, mBank received two silver awards. Honorable mentions went t o mBank's campaigns: self- defense on the net and the criminal audio series Jazgot. mBank has b een building awareness of online threats and showing how to protect against them on a large scale for 9 years. The Effie Gala is one of the most recognizable events at which the most important Polish marketing awards are presen ted.
Honors for mBank’s diversity and inclusion strategy with top position in nationwide ranking
This year, mBank was also among the most advanced employers in the field of diversity and inclusion management in Poland. The Diversity IN Check ranking is based on a study conducted by the Responsible Business Forum. It assesses the level of advancement of Polish companies in managing diversity and inclusion. mBank achieved one of the highest results in the study: over 80%.
Golden awards for customer experience and recruitment campaign
During the Next Generation Contact Center & CX Best Practice conference, mBa nk received golden awards in two categories: Best Contact Center and Best Recruitment Campa ign. The international jury appreciated the presentation of our “CC Premium” strategy and the recruitment process during the presentation at the conference. The “CC Premium” strategy was deemed by the competition jury to b e the best and worth imitating by companies that want to provide customers with the highest quality expe riences.
HR development programs distinguished by main prize
mBank received an award in the Power of Attraction (Siła Przyciągania) competition organized by Puls Biznesu Magazine. In the category “Support for employee development - new competences in a new reality”, mBank received the main prize. The jury appreciated the "Future Skills" project and the "Mission Innovation" conference of mBank which aims to develop future competences.
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First place for “Fridays with Development” program at this year’s HR Dream Team awards
mBank's "Fridays with Development" program won the first place in the 9th edition of HR Dream Team in the category of talent development in the organization. "Fridays with development" is a series of workshops, consultations, remote trainings and webinars held every Friday. Employees can choose topics according to their interests and needs. HR Dream Team is the culmination of the most interesting, boldest and most effective projects implemented by HR teams in organizations.
Multiple prizes for mBank at this year’s Employer Branding Excellence Awards competition
mBank won the main prize in the Employer Branding Strategy category in the Employer Branding Excellence Awards 2024 competition. The jury of the competition appreciated mBank's campaign "We are distinguished by people", which presents the organizational culture and values of mBank. In addition, mBank received distinctions in two other categories: External Campaign (for the "Technologies that matter" project) and Employee Advocacy (for the "Diversity Ambassadors" project). The main idea of the competition organized by the HRM Institute is to reward and present the best employer branding practices in Poland.
mBank’s press office recognized as the best by jounalists
The mBank press office was once again recognized as a leader in the banking sector. At the same time, opinion leaders indicated mBank as the most recommendable to individual customers in a study by ARC Rynek i Opinia Sp. z p.p., market research. PR specialists won first places in the following categories: speed of response, knowledge of the specificity of journalists' work, professionalism and knowledge. They are also best at building relationships with media representatives and presenting topics in an interesting way.
Gold for Contact Center and Best Recruitment Campaign
mBank received gold in the category of Best Contact Center and Best Recruitment Campaign. The awards were granted by an international jury during the Next Generation Contact Center & CX Best Practice conference organized by Contact Center World. mBank's CC Premium strategy was recognized as the best and considered an example to be followed by companies which intend to provide customers with the highest quality experience.
A Series of Awards for mBank's Audio Series "Jazgot," including in a competition for the best podcast
The crime audio series "Jazgot" (“Clamor”), coproduced by mBank and the Voice House studio, has been appreciated once again. This time, its communication and entertainment values, and above all, its beneficent work for the society, which the recording applies by educating recipients in the field of cybersecurity, were appreciated by the jury in the competition organized by Klub Twórców Reklamy. The series received two silver and one bronze awards, and since its publication it has won a total of seven awards. "Jazgot" is very popular.
On the other hand, in the Podcast of the Year contest, “Jazgot” received an award in the “Brand Sponsoring a Podcast” category, as well as an Audioteka award for a well-told story. Podcast of the Year is a competition aimed at promoting the quality, originality and culture of transmission of various audio forms in digital media.
The radio show “Jazgot” also received the top prize in the PR Wings competition organized by the Association of Public Relations Agencies in the “Protection from Misinformation” category. “Jazgot” enjoys great popularity. The second season of the series premiered in October 2024.
More information on awards and distinctions can be found on the Bank’s website in the “Press Centre” section: https://en.media.mbank.pl/ .
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2. mBank Group’s environment
2.1. Macroeconomic environment
Economy and the banking sector in Poland
Key macroeconomic indicators
2024
Banking sector parameters
2024
Real GDP growth rate (mBank estimate)
2.8%
Base interest rate
5.75%
Nominal GDP per capita (EUR)
19 900 1
Loan to Deposit ratio
67.5% 2
GDP per capita in PPS (EU-27=100)
77% 1
NPL ratio
5.0% 2
Average annual inflation rate
3.7%
Total Capital Ratio (TCR)
21.4% 3
Average annual unemployment rate
5.1%
Net Return on Assets (ROA net)
1.34% 2
Population
36.6 mln
Net Return on Equity (ROE net)
15.7% 2
Source: Statistics Poland (GUS), Eurostat, Polish Financial Supervision Authority
1 Data as at the end of 2023
2 Data as at December 2024 (as released on February 18, 2025)
3 Data as at September 30, 2024
Summary of developments
GDP growth in 2024 was significantly better than in the previous year. As a result, final growth is likely to be close to 3%. Consumption proved to be the main driver of growth last year. The change in inventories (future consumption) also had a slightly positive impact. The contribution on the investment side is likely to be close to neutral. On the other hand, weak external demand combined with relatively strong imports resulted in a negative contribution from foreign trade. While we expect foreign trade to remain under pressure in 2025, we see a more pronounced acceleration for investment. It is worth noting that the Polish economy performed significantly better than the Czech Republic or Hungary last year.
Depth of recession and pace of upswing in the region (Q4 2019 = 100)
Source: Own calculations based on Macrobond
Inflation has followed a rather uneven path over the past year. In the first half of the year, the annual CPI fell as low as 2%, partly due to base effects. The second half of the year was characterised by much higher figures in the vicinity of 5%. However, the growth was not another wave of inflation caused by strong demand or supply constraints. The reason why inflation accelerated so sharply from July onwards was the government's decision to raise the fixed tariff for the sale of electricity.
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Decomposition of CPI inflation
Source: Own calculations based on GUS
Over the past year, yields on government bonds have risen, although the increase has varied depending on the maturity of the note. The longer duration, the greater the rise in yields. At the same time, the Monetary Policy Council decided not to change interest rates. As a result, the NBP reference rate remained at 5.75%. During the year, however, the MPC's communication changed quite significantly, which had an impact on the high volatility of the expected path of interest rates. In 2025 a record level of borrowing needs to be financed, which in gross terms we expect to exceed PLN 550 billion. However, such a large supply should find adequate demand given the expected growth in deposits, continued interest in government bonds from foreign investors, relatively attractive valuations and the Ministry of Finance's ability to issue treasury bills.
Polish Treasury bond yields
Source: Bloomberg
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Currency exchange rates
Source: Bloomberg
Banking sector
Poland: Household loans and deposits (excl. FX effect)
Source: Own calculations based on NBP data
Household deposits continued their strong growth in 2024, although the change turned to a downward trend. At the same time, loans, including mortgages, were gradually rebounding. In the corporate sector, the rate of deposit growth has been declining, supported by the lagged effect of wage growth combined with weaker demand for offered goods and services. It is worth noting, however, that demand for corporate loans has been improving.
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Poland: Corporate loans and deposits (excl. FX effect)
Source: Own calculations based on NBP data
Economy and the banking sector in the Czech Republic
Key macroeconomic parameters
2024
Banking sector indicators
2024
Real GDP growth rate (estimate)
1.0%
Base interest rate
4.00%
Nominal GDP per capita (EUR)
29 180 1
Loan to Deposit ratio
63.5%
GDP per capita in PPS (EU-27=100)
90% 1
NPL ratio
1.7%
Average annual inflation rate
2.5%
Total Capital Ratio (TCR)
22.7% 2
Average annual unemployment rate
3.8%
Return on Assets (ROA)
1.2% 2
Population
10.9 mln
Return on Equity (ROE)
15.7% 2
Source: Eurostat, Česká národní banka (CNB), Český statistický úřad
1 Data as of end of 2023
2 Cumulative data for 9 months (as at September 30, 2024)
GDP, inflation, interest rates and FX rates
The Czech economy was characterised by modest GDP growth in 2024. The relative weakness can be attributed to exposure to the automotive market, which is associated with a significant dependence on economic activity in Germany. The details of GDP growth show a clearly negative contribution from inventories and a slight increase in investment. At the same time, foreign trade has recently had a positive impact on growth. However, it is not a more pronounced recovery on the export side, but the weakness of domestic demand and the resulting decline in imports.
Inflationary processes in the Czech economy have stabilised in recent quarters. As a result, CPI inflation is recorded within the 2-3% range. Core inflation has also followed a similar trend. The economic weakness combined with the stabilisation of inflationary processes has led to an aggressive monetary easing cycle. As a result, the central bank's key interest rate has been cut from 6.75% to 4%. The central bank's current communication suggests greater caution about the size of future moves.
As a result of the much larger rate cuts in the Czech Republic than in the euro area, t he interest rate differential has widened to the detriment of the Czech currency. As a result, the Czech koruna depreciated by around 2% against the single currency. In terms of government bond yields, the Czech Republic followed a similar trend to o ther economies, with yields on government bonds with longer maturities rising.
Banking sector
The Czech banking sector in 2024 continued its stable and favourable deve lopment. Despite interest rate cuts, it maintained high profitability, with return on equity (ROE) marginally exceeding 15%. It was backed by broadly stable net interest income, accompanied by some cont raction of margin. Cost of deposits started
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falling, helped by their evolving term structure, but rates on new loans were also down in both business segments. Net fee and commission income improved visibly compared to 2023. Good cost discipline allowed for keeping the rise of operating expenses in line with the inflation pace. Loan loss provisions persisted at low level, translating into risk costs close to zero.
Asset quality in the Czech Republic remained very resilient as evidenced by the NPL ratio of 1.7% at the end of 2024, which is the second lowest level compared to other countries in the CEE region. Funding and liquidity profiles continued to be solid with the sector’s loan-to-deposit ratio of 64%. Czech banks have also been very well-capitalized. A small decline in the aggregate risk weight coupled with a growth of own funds offsetting an increase in total risk exposure amount contributed to their robust position. At its meeting on financial stability issues in April 2024, the Board of ČNB decided to lower the countercyclical capital buffer rate from 2.0% to 1.75%. On the basis of an assessment of cyclical systemic risks, it was reduced further to 1.25% in mid-2024.
The dynamics of total loans to households in the Czech Republic has been mainly shaped by mortgage segment. Over the last three years, credit activity was markedly influenced by interest rate cycle and development of residential property prices, determining affordability of housing. As a result, the growth of retail exposure declined to below 5% at the end of 2022 and maintained close to this level until recent revival of mortgage lending, which translated into un upward trend in H2 2024. Further to an assessment of systemic risks associated with mortgage lending and the real estate market, the Czech National Bank decided to leave the upper limit on the LTV ratio (loan-to-value) unchanged at 80% (or 90% for applicants under 36 years purchasing owner-occupied housing). The upper limit on the DTI ratio (debt- to-income) was deactivated from January 2024. The portfolio of non-mortgage loans was rising faster in 2024, with the annual pace approaching to 9%. No deterioration of asset quality in the retail segment was observed in 2024 and the share of non-performing loans in the total volume of loans to households remained unchanged in annual perspective at 1.3%. Rising expenditures, driven by post-pandemic reopening of the economy and high inflation, caused the growth of retail deposits to slow down visibly in 2022. Then, the trend reverted and annual dynamics accelerated to 7.5% at the end of 2023 and continued at the similar level over 2024. Development of term deposits turned to negative territory at the end of the year and their share edged down to 24% of total base.
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Having passed the contraction phase in H1 2021, corporate loans in the Czech Republic started rebounding and reached the growth pace exceeding 10% in Q3 2022. Their development in 2023 was volatile, with dynamics averaging at mid-single digit, followed by an uptick in H1 2024 and return to around 5% in the final quarter of the year. The share of non-performing loans in the total volume of loans to non-financial corporations was constantly declining from the end of 2021. It went down to historically low level of 2.5% in December 2023 and did not diverge materially from that in 2024. Companies kept solid liquidity, reflected in growth of corporate deposits staying above 5%, with an exception of June 2024 affected by base effects.
Economy and the banking sector in Slovakia
Key macroeconomic parameters
2024
Banking sector indicators
2024
Real GDP growth rate (estimate)
2.1%
Base interest rate
3.15%
Nominal GDP per capita (EUR)
22 520 1
Loan to Deposit ratio
114.1%
GDP per capita in PPS (EU-27=100)
74% 1
NPL ratio
1.6%
Average annual inflation rate
2.8%
Total Capital Ratio (TCR)
20.7% 2
Average annual unemployment rate
5.0%
Return on Assets (ROA)
0.7% 2
Population
5.4 mln
Return on Equity (ROE)
7.8% 2
Source: Eurostat, Národná banka Slovenska (NBS)
1 Data as of end of 2023 2 Cumulative data for 9 months (as at September 30, 2024)
GDP, inflation and interest rates
The Slovak economy is expected to have reached average annual GDP growth of close to 2% last year. This will be an improvement compared to 1.4% growth in 2023. In the course of last year, private consumption, which had been in recession the year before, recovered markedly. At the same time, public consumption grew quite strongly. Despite the excellent investment performance in 2023, the previous year was also quite strong in this respect. The recovery in domestic demand was reflected on the import side, where growth rates exceeded those of exports.
Inflation in the Slovak economy has recently stabilised in the 2-3% range. Core inflation has slowed even more. As in other economies, inflation in Slovakia is relatively high for services and quite low for goods. The European Central Bank has cut the deposit rate from 4% to 3%. At the same time, the central bank decided to narrow the interest rate corridor. Looking ahead, we expect monetary easing to continue due to the weakness in economic activity and the expected slowdown in wage growth.
Banking sector
After many years when it was weaker than in other countries of the CEE region , the profitability of Slovak banking sector improved significantly in 2023. However, with an effect starting from Janu ary 2024, the local government approved a new tax on banks as part of a set o f measures aimed at consolidating public finances
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and reducing a soaring deficit. Its rate was determined at 30% of profits. Then, the levy is set to fall 5 percentage points per year to 15% in 2027. Consequently, despite f urther rise of net interest income, accompanied by an uptrend of net fees and commissions, the return on equity worsened to a single-digit level in 2024. Growth of operating expenses was slower than revenues, translating into better efficiency, while loan loss provisions declined to an equivalent of risk costs of around 0.1%.
The NPL ratio for Slovakia is among lowest in the CEE region, reaching 1.6% at the end of 2024, and maintaining at the same level as a year earlier. Stable asset quality was supported by a reduction of non- performing receivables in corporate segment. The overall loan-to-deposit ratio continued to be above 100% in 2024, but including covered bonds and other issued debt securities, which are commonly used source of funding for Slovak banks, it would amount to around 90%. The sector’s total capital ratio was further supported by a growth of own funds due to a partial retention of 2023 earnings counterbalancing an increase in risk-weighted assets, strengthening the resilience against potential unfavourable developments. Národná banka Slovenska increased the countercyclical capital buffer (CCyB) rate by 0.5 percentage point to 1.5% with effect from August 2023 and saw no reasons to adjust it in the course of 2024.
Due to high interest rates, total loans to households were on a downward trend in 2023. The development of portfolio was predominantly driven by mortgages, taking into account some time lag related to the changes in their origination. A monetary policy easing in the Eurozone implied signs of a recovery in the Slovak housing loan market. A rise in new sales observed from Spring 2024, and particularly in the final quarter of the year, translated into a slight acceleration of annual growth rate for the outstanding volume at the end of 2024. Shift in buyer sentiment and higher demand, amid expectations of falling interest rates, stopped a downward trend in prices of residential real estate which began in mid-2022 and continued in 2023 in all regions of the country. Consumer credit returned to positive development from a shrinking phase in H2 2022. Its annual growth reached the highest level since the outbreak of Covid-19 pandemic, and continued at steady pace of 7-8% in 2024. After improvement recorded in preceding years, the share of non-performing loans in the total volume of loans to households remained broadly stable during 2023 and 2024, oscillating around 1.8%. For both mortgage and consumer credit, the indicators marked the historical lows. The post-pandemic surge in consumer spending and subsequent period of high inflation dampened the inflow of new retail funds. Growth of household deposits dropped from 10% observed in Q2 2021 to a negative territory. A one-year period of contraction ended in Q4 2023, followed by a rebuilding of savings reflected in an increasing dynamics, which stabilised at 6-7% in H2 2024.
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Development of corporate credit volume in Slovakia rebounded co nsiderably during 2022, picking in September with a year-on-year growth of 13%. In 2023, a constant slowdown of loan dynamics was observed, driven mainly by industry sector and commercial real estate, which dropped markedly afte r a significant expansion in a preceding year. Uncertain economic outlook, worse business sentiment and a d ecline in order book levels in some sectors resulted in a weak demand for financing for fixed investment and falling need for working ca pital financing, what led to a contraction of corporate loans, with negative dynamics persisting f rom Q2 2024. After a slight deterioration of credit quality indicators in 2023, the share of non-performing loans in the total volume of loans t o non-financial corporations decreased to 2.7% at the end of 2024 from 2.8% a year earlier. The annual growth of corporate d eposits accelerated from close-to-zero level in December 2021 to above 20% in Q1 2023 owed to post-pandemic cash inflows. Then, the dynamic started gradually normalizing and ultimately slowed down to aroun d 5% at end of 2024.
2.2. Market and regulatory environment
mBank Group is an active participant and often a leader of changes introduced in anticipation of and in response to developments in its environment, including the area of regulations and technology. The employees of mBank Group spare no effort in proactively adjusting the offer and principles of operation to new challenges, always with an eye on building top quality relationships with stakeholders. Some of the requirements imposed on mBank and the Group subsidiaries do not affect clients directly, but still involve a heavy workload connected with adjusting internal processes. Below we discuss selected key developments significantly affecting mBank Group observed in 2024 or anticipated in the nearest future. Capital requirements as well as regulations on accounting and reporting standards have been addressed in following, dedicated sections of this report.
Regulation (EU) 2024/1183 of the European Parliament and of the Council establishing the European
Digital Identity Framework
On May 20, 2024, Regulation (EU) 2024/1183 of the European Parliament and of the Council establishing the European Digital Identity Framework (eIDAS 2.0 Regulation) entered into force. It aims to improve the effectiveness of Regulation (EU) 920/2014, extend its benefits to the private sector and promote trusted digital identities.
The regulation introduces the European Digital Identity Wallet (EDIW) to the eIDAS Regulation, which is the first electronic identification means harmonised at the European level. Natural and legal persons will use it to identify themselves and to provide authentication of their identity when accessing public and private services across the European Union. The sectors obliged to recognise the EDIW include banking and financial services. Institutions will be obliged to start recognising the EDIW not later than 36 months from the date of entry into force of the implementing acts, which will be adopted by the European Commission by November 21, 2024, exclusively upon the voluntary request of the user.
Resolution of the Supreme Court in case no. III CZP 25/22
On April 25, 2024, the Supreme Court adopted a resolution resolving legal issues relating to loans indexed to or denominated in a foreign currency. The issues were presented by the First President of the Supreme Court in view of the discrepancies in the interpretation of law in the rulings of the Supreme Court and the common courts. The Supreme Court resolved that:
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If it is considered that a provision of an indexed or denominated loan agreement relating to the method of determining the foreign exchange rate constitutes an unlawful contractual provision and is not binding, it cannot be assumed, under current legislation, that this provision is replaced by a different method of determining the foreign exchange rate resulting from law or customs.
If it is impossible to determine the exchange rate of a currency binding on the parties under a loan agreement indexed to or denominated in this currency, the remaining scope of the agreement is not binding on the parties either.
If, in the performance of a loan agreement which is not binding due to unlawful nature of its provisions, the bank disbursed to the borrower the whole or part of the loan amount and the borrower made loan repayments, separate claims for recovery of sums paid but not due arise for each party.
If a loan agreement is not binding due to unlawful nature of its provisions, the limitation period for the bank’s claim for recovery of sums disbursed under the loan begins, in principle, from the day following the day on which the borrower challenged the bank about the binding nature of the agreement.
If a loan agreement is not binding due to unlawful nature of its provisions, none of the parties has legal grounds to demand interest or other consideration for the use of its funds in the period between the time when the undue payment was made and the time when recovery of that payment became delayed.
Moreover, on April 25, 2024, the Polish Bank Association (ZBP) published an announcement in connection with this resolution, which is available at https://zbp.pl/Aktualnosci/Wydarzenia/CZP-25-22 .
Act extending the loan payment holidays into 2024
On May 7, 2024, the Act of April 12, 2024 Amending the Act on Assistance to Home Loan Borrowers in a Difficult Financial Situation and the Act on Crowdfunding of Business Undertakings and Support for Borrowers was promulgated. In accordance with the act, consumers are entitled to suspend their loan repayments:
for two months from June 1, 2024 to August 31, 2024,
for two months from September 1, 2024 to December 31, 2024.
The suspension of loan repayments depends on the borrower meeting certain conditions connected with, among others, the loan amount, the instalment-to-income ratio and the number of children.
Act on Ensuring Compliance of Economic Operators with Accessibility Requirements for Certain Products
and Services
On May 15, 2024, the Act on Ensuring Compliance of Economic Operators with Accessibility Requirements for Certain Products and Services was published. The act sets out, among others, accessibility requirements for products and services and obliges economic operators to ensure compliance with these requirements. This pertains, among others, to automated teller machines and cash deposit machines as well as to retail banking services provided to consumers, such as credit agreements for consumers and mortgage agreements, etc. The requirements laid down in the act aim to facilitate access for persons with disabilities. The act stipulates fines for service providers offering services that do not meet the accessibility requirements. The act enters into force on June 28, 2024, with the exceptions provided for in the act.
Amendments to Recommendation G of the Polish Financial Supervision Authority (KNF) on interest rate
risk management at banks
On February 26, 2024, the Polish Financial Supervision Authority adopted the amended Recommendation G on interest rate risk management at banks. The new Recommendation G is a set of good practices for managing interest rate risk at banks and keeping the interest rate risk-sensitive volatility of the financial result and measures of economic value within limits that do not compromise the security of banks. The recommendation takes into account the current conditions for products generating interest rate risk and techniques used to manage this risk. The final wording of the new Recommendation G was determined by both domestic regulations and the recently adopted package of EU regulations on interest rate risk management. The amended Recommendation G specifies and supplements these regulations, in particular in the scope of interest rate risk management (also in the trading portfolio) at banks. The KNF
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expects banks to comply with the amended Recommendation G by December 31, 2024. Until then, banks must comply with the Recommendation G published in 2002.
Regulation on instant credit transfers in euro
On March 13, 2024, Regulation (EU) 2024/886 of the European Parliament and of the Council amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro was adopted. The regulation governs instant credit transfer transactions. It obliges payment service providers to offer the service of sending and receiving instant credit transfers and ensure verification of payees.
Act on Amending Certain Acts to Mitigate Certain Consequences of Identity Theft
The act introduces an obligation to check whether the person to whom certain services are provided has blocked their personal identification number (PESEL) in the newly created register of blocked PESEL numbers. The act obliges banks to make this check, among others, before concluding the following agreements with a consumer: a savings account agreement; a savings and settlement account agreement; an agreement on the provision of the payment service referred to in Article 3 (1) (4) of the Act of August 19, 2011 on Payment Services if the agreement provides for an option to conclude a loan agreement; a loan for any purpose agreement; or a lease agreement.
EU AML Package
On June 19, 2024, the following three legal acts were published in the Official Journal of the EU (the AML Package):
Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (“AML Regulation”);
Directive (EU) 2024/1640 of the European Parliament and of the Council of 31 May 2024 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive (EU) 2019/1937, and amending and repealing Directive (EU) 2015/849 (“AML IV Directive”); and
Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010 (“AMLA Regulation”).
Act of December 6, 2024 on Amending the Accounting Act, the Act on Statutory Auditors, Audit Firms and
Public Oversight, and Certain Other Acts
The purpose of the act is to implement into the national legislation the EU Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 – CSRD). Pursuant to Article 35, the act enters into force 14 days after its promulgation (i.e. January 1, 2025), except for: 1) Article 3, which enters into force on April 1, 2025, 2) Article 13, which enters into force on June 22, 2025, 3) Article 10, which enters into force on July 1, 2025. Moreover, the act introduces the size criteria for micro, small, medium-sized and large undertakings and large corporate groups in line with Commission Delegated Directive (EU) 2023/2775 of 17 October 2023 amending Directive 2013/34/EU of the European Parliament and of the Council as regards the adjustments of the size criteria for micro, small, medium-sized and large undertakings or groups (OJ L 2023/2775, 21.12.2023), which will make it possible for a larger number of undertakings to apply simplified accounting principles.
Directive (EU) 2024/790 of the European Parliament and of the Council – markets in financial instruments
(MiFID III)
Like its predecessors, MiFID III aims to ensure integrity and stability of financial markets, better transparency of actions taken by market participants and protection of investors, especially retail investors. MiFID III regulates position limits and position management controls in commodity derivatives and derivatives of emission allowances and refers to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC. The EU member states must implement the new provisions of MiFID III into their national legislations by September 29, 2025.
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ESMA guidelines on funds’ names using ESG or sustainability-related terms (ESMA34-472-440)
On May 14, 2024, ESMA published the final report containing guidelines on funds’ names using ESG or sustainability-related terms. The purpose of the guidelines is to ensure investor protection against unjustified or exaggerated use of sustainability-related terms in funds’ names and provide asset managers with clear and measurable criteria to assess their eligibility to use ESG or sustainability-related terms in funds’ names. The guidelines stipulate that these terms can be used in the case of investments with a minimum proportion of at least 80% of funds used to meet the environmental or social characteristics or sustainable investment objectives. The guidelines have been in force since November 21, 2024. However, the transition period for making changes in existing investment funds’ names will last until May 21, 2025.
Directive (EU) 2024/1760 of the European Parliament and of the Council – corporate sustainability due
diligence (Corporate Sustainability Due Diligence Directive – CSDDD)
The CSDDD imposes the due diligence obligations on specified groups of companies to prevent negative impacts of business operations in the field of human rights and environmental protection. Under the directive, companies are obliged to, among others, conduct the due diligence process in the scope of human rights and environmental protection, integrate the due diligence policy into the corporate policy (and update it on an annual basis), establish a complaints procedure, monitor the effectiveness of their due diligence policy and publish the monitoring results, and designate a CSDDD representative. The directive must be implemented into national legislations within the period of two years.
Regulation (EU) 2024/3005 of the European Parliament and of the Council – the transparency and
integrity of Environmental, Social and Governance (ESG) rating activities
The regulation aims to enhance the reliability, transparency and comparability of ESG ratings and boost investor confidence in sustainable financial products. In line with the regulation, ESG ratings will be prepared by institutions that have been granted authorisation and are supervised by the European Securities and Markets Authority (ESMA). Rating agencies providing ESG ratings will have to implement adequate organisational and structural solutions ensuring their independence and accuracy. Ratings will be subject to requirements concerning the transparency of their provision, especially in terms of the methodology and information sources. The regulation entered into force on January 2, 2025, and will become effective as of July 2, 2026.
Regulation (EU) 2024/1623 of the European Parliament and of the Council – requirements for credit risk,
credit valuation adjustment risk, operational risk, market risk and the output floor (CRR III) and Directive
(EU) 2024/1619 of the European Parliament and of the Council – supervisory powers, sanctions, third-
country branches, and environmental, social and governance risks (CRD VI)
The CRR III and CRD VI package contains new ESG requirements for banks, including ESG disclosures, e.g. GAR (Green Assets Ratio) and BTAR (Banking Book Taxonomy Alignment Ratio), and introduces requirements for ESG risk management (including stress testing under ICAAP). As regards ESG, the new laws require banks to build/verify relevant strategies and processes, assess their capital needs and manage risk over the short, medium and long term. The risk management system should cover processes for the identification, measurement, management and monitoring of ESG risks (understood as the non-compliance of the bank’s business model and strategy with the EU strategy for sustainable growth) with a time horizon of at least 10 years.
Directive (EU) 2024/825 of the European Parliament and of the Council – empowering consumers for the
green transition through better protection against unfair practices and through better information
The directive aims to tackle unfair commercial practices that prevent consume rs from making sustainable consumption choices. The directive provides for solutions addressing the u se of terms that mislead consumers through non-transparent and non-credible sustainability labels or information t ools. Moreover, the directive supports the achievement of circular economy goals. It envisages, among oth ers, the introduction of the reparability score for a good as provided by the producer in line with the EU law s so as to allow consumers to make an informed transactional decision and choose goods tha t are easier to repair.
Directive (EU) 2024/1275 of the European Parliament and of the Council – the energy performance of
buildings (Energy Performance of Buildings Directive - EPBD)
The purpose of the directive is to improve the energy performance of buildings and reduce the greenhouse gas emissions from buildings within the Union, with a view to achieving a zero-emission building stock by 2050. The directive introduces requirements relating to, among others, minimum energy performance requirements for new buildings and existing buildings that are undergoing a major renovation, the calculation and disclosure of the life-cycle global warming potential of buildings, solar energy in buildings, technical building systems and sustainable mobility infrastructure and regular inspection of technical systems in buildings. The directive requires the member states to introduce a
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scheme for renovation passports, establish a national building renovation plan and a national trajectory for the progressive renovation of the national residential building stock, and to make changes in the energy performance certification scheme by way of application of energy performance classes. A major part of the directive should be implemented by May 29, 2026.
Act of June 14, 2024 on the Protection of Whistleblowers
The act sets forth the conditions for the protection of whistleblowers reporting or publicly disclosing information about legal violations as well as the protection measures for whistleblowers reporting or publicly disclosing information about legal violations. The act introduces rules for: establishing an internal procedure for reporting information on legal violations and taking follow-up measures, reporting information on legal violations to a public authority, publicly disclosing information on legal violations,
and sets out the tasks of public authorities related to reporting information on legal violations and taking follow-up measures.
Directive (EU) 2022/2381 of the European Parliament and of the Council – improving the gender balance
among directors of listed companies and related measures
The directive aims to ensure a balanced representation of women and men among the directors of listed companies. Pursuant to the directive, listed companies are to reach either of the following objectives by June 30, 2026:
a) members of the underrepresented sex hold at least 40% of non-executive director positions;
b) members of the underrepresented sex hold at least 33 % of all director positions, including both executive and non-executive directors.
On September 20, 2024, the Government Legislation Centre published on its website a Draft Act on A mending the Act on Public Offering and Conditions for Introducing Financial Instrume nts to Organised Trading and on Public Companies and the Act on Introducing Certain EU Provisions o n Equal Treatment. As at December 31, 2024, the process of implementing the directive into the Polish legislation was not complet ed.
Directive (EU) 2023/970 of the European Parliament and of the Council – to strengthen the application of
the principle of equal pay for equal work or work of equal value between men and women through pay
transparency and enforcement mechanisms
The directive lays down minimum requirements to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women. The directive must be implemented by June 7, 2026.
Commission Delegated Regulation (EU) 2024/2795 – the own funds requirements for market risk
The regulation defers the obligation to start app lying the provisions in Regulation (EU) 2024/1623 concerning the calculation of own funds requirements for market risk by 1 year, i.e. until January 1, 2026.
Regulation (EU) 2024/1623 introduces into Regulation (EU) No 575/2013 specific disclosure requirements for market risk, tailored to the requirements laid down in the Fundamental Review of the Trading Book (FRTB) standards for the calculation of own funds requirements for market risk. Due to delays to the implementation of the FRTB standards in other jurisdictions, a decision has been made to defer the obligation to implement the standards in the EU to ensure an international level playing field.
Regulation (EU) 2024/2847 of the European Parliament and of the Council – cybersecurity requirements
for products with digital elements
Regulation (EU) 2024/2847 of the European Parliament and of the Council (CRA) is yet another act introduced with a view to achieving the EU’s cybersecurity objectives. It pertains to the making available on the market of products with digital elements. The CRA contains requirements in the scope of the making available on the market of products with digital elements, i.e. software and hardware and their integrated remote data processing solutions. Under the regulation, economic operators that make such products available on the EU single market (manufacturers, importers, distributors) must, among others, ensure that their products meet the CRA requirements and have appropriate documentation. The member states are obliged to designate a market surveillance authority that will verify the compliance of the products.
Regulation of the Minister of Finance of October 28, 2024 – on the granting of de minimis aid by Bank
Gospodarstwa Krajowego in the form of loan repayment guarantees as part of the Strategic Plan for
Common Agricultural Policy for years 2023–2027
The regulation specifies detailed conditions and procedure for the granting of de minimis aid by Bank Gospodarstwa Krajowego (BGK) in the form of loan repayment guarantees, under the government’s guarantee program, as part of the Strategic Plan for Common Agricultural Policy for years 2023–2027.
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The de minimis aid consists in BGK issuing a guarantee covering not more than 80% of the outstanding loan amount. The guarantee is issued at the request of a business owner submitted to the lending bank. Aid in this form may be granted until December 31, 2029.
Regulation of the Minister of Finance of September 18, 2024 on the countercyclical buffer rate
The regulation stipulates that the countercyclical buffer rate accounts for 1% of the total risk exposure amount of institutions that hold credit exposures on the territory of the Republic of Poland, calculated in line with Article 92 (3) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012. The regulation entered into force on September 24, 2024.
Regulation of the Minister of Finance of September 24, 2024 on the Detailed Technical and Organisational
Conditions for Investment Firms, State Banks Providing Brokerage Services, Banks Referred to in Article
70 (2) of the Act on Trading in Financial Instruments, and Custodian Banks
The regulation specifies the detailed technical and organisational conditions required for investment firms, state banks providing brokerage services and banks referred to in Article 70 (2) of the Act of July 29, 2005 on Trading in Financial Instruments to conduct business activity, and for the maintenance of securities accounts, derivatives accounts and omnibus accounts by custodian banks, including among others:
manner of and detailed conditions for safekeeping, registering and safeguarding financial instruments and funds of clients, including detailed conditions for using financial instruments and funds of clients, in particular, for the purpose of collateral establishment, and the categories of entities with which clients’ funds can be deposited;
detailed criteria regarding employees’ compliance with the requirement to have relevant knowledge, competences and experience;
detailed criteria regarding management board members’ and supervisory board members’ compliance with the requirement to have good repute, relevant knowledge, competences and experience;
procedure and conditions applicable to the assessment and verification of compliance of the above- mentioned persons with the relevant requirements binding on them regarding relevant knowledge and competences, good repute and experience, and the procedure and conditions for maintaining and improving knowledge and competences of these persons;
whistleblowing procedure;
method and detailed conditions for registering the concluded transactions and storing and archiving documents and other information carriers drawn up in connection with business activity.
The regulation entered into force on September 28, 2024.
Regulation (EU) 2024/1689 of the European Parliament and of the Council laying down harmonised rules
on artificial intelligence and amending selected regulations
It is the first comprehensive regulation governing the use of artificial intelligence systems (AI systems) in the European Union. The regulation governs AI systems in line with a risk-based approach, categorising them as prohibited systems or high-risk AI systems, among others. Such systems include, e.g. AI systems used for:
processing certain biometric data;
evaluating creditworthiness; or
risk assessment and pricing in relation to natural persons for health and life insurance.
The essential obligations of entities applying high-risk AI systems include:
ensuring they use these systems in accordance with the instructions of use;
human oversight over AI systems by way of designating dedicated employees; and
in the case of certain systems, including those used for the purposes of creditworthiness evaluation, conducting the fundamental rights impact assessment for the high-risk AI systems.
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The regulation entered into force on August 1, 2024.
Commission Delegated Regulation (EU) 2024/1085 – regulatory technical standards on the assessment
methodology under which competent authorities verify an institution’s compliance with the requirements
to use internal models for market risk
The Delegated Regulation stipulates, among other things, that when verifying an institution’s compliance with the requirements to use internal models for market risk, competent authorities assess:
the governance aspects;
aspects relating to the internal risk-measurement model used to compute the expected shortfall measure and the stress scenario risk measure;
aspects relating to the internal default risk model used to compute the additional own funds requirement for default risk.
The regulation entered into force on July 7, 2024.
Commission Delegated Regulation (EU) 2024/1772 – regulatory technical standards specifying the criteria
for the classification of ICT-related incidents and cyber threats, setting out materiality thresholds and
specifying the details of reports of major incidents
The delegated regulation specifies, among others:
criteria for the classification of clients, financial counterparts and transactions;
rules for determining the reputational impact of incidents;
rules for determining the duration of an incident and service downtime and the geographical spread with regard to the areas affected by an incident;
rules for determining the criticality of the services affected by an incident and its economic impact;
rules for classifying an incident as major and materiality thresholds for determining major incidents;
rules for determining significant cyber threats.
The regulation entered into force on July 15, 2024.
Commission Delegated Regulation (EU) 2024/1773 – regulatory technical standards specifying the
detailed content of the policy regarding contractual arrangements on the use of ICT services supporting
critical or important functions provided by ICT third-party service providers
The delegated regulation sets out requirements for the policy regarding the use of ICT services supporting critical or important functions provided by ICT third-party service providers, including, among others:
the size and the overall risk profile of a financial entity, and the nature, scale and elements of increased or reduced complexity of its services, activities and operations;
rules for reviewing and updating the policy;
requirements, including the rules, the responsibilities and the processes, for each main phase of the lifecycle of a contractual arrangement;
requirements to define the business needs of a financial entity before a contractual arrangement is concluded (risk assessment);
rules regarding due diligence in the process for selecting and assessing the prospective ICT third- party service providers;
rules on conflicts of interest.
The regulation entered into force on July 15, 2024.
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Commission Implementing Regulation (EU) 2024/1872 – mapping tables specifying the correspondence
between the credit risk assessments of external credit assessment institutions and the credit quality
steps
The regulation aims to specify the correspondence bet ween the relevant credit assessments issued by external credit assessment institutions (ECAI) and the credit quality steps set out in Regulation (EU) No 575/2013 on prudential requirements for credit institutions. The regulation entered into force on July 25, 2024.
Regulation of the Minister of Finance of July 10, 2024 on Information on Banks’ Operations Related to
Structured Deposits
The regulation aims to specify the detailed scope of the information concerning the commencement, restriction and cessation of these operations, material breaches of the provisions related to these operations and structured deposits offered or concluded, including the form, timing and manner of their communication to the Polish Financial Supervision Authority (KNF). Banks that recommend, offer, conclude or enable the conclusion of structured deposit agreements on the territory of the Republic of Poland or perform these activities on the territory of another country are bound by disclosure obligations. The regulation entered into force on August 2, 2024.
Commission Delegated Regulation (EU) 2024/1700 – regulatory technical standards specifying, for
simple, transparent and standardised non-ABCP traditional securitisation, and for simple, transparent and
standardised on-balance-sheet securitisation, the content, methodologies and presentation of information
related to the principal adverse impacts of the assets financed by the underlying exposures on
sustainability factors
The delegated regulation specifies:
the rules for preparing and for the content of the statement on principal adverse impacts on sustainability factors of the assets financed by underlying exposures of the securitisation;
general rules for the presentation of information. Moreover, annexed to the delegated regulation is a template principal adverse sustainability impacts statement.
The regulation entered into force on July 8, 2024.
Regulation (EU) 2024/1781 of the European Parliament and of the Council (CRR III) – establishment of a
framework for the setting of ecodesign requirements for sustainable products
The regulation establishes a framework for the setting of ecodesign requirements that products have to comply with to be placed on the market or put into service, with the aim of improving the environmental sustainability of products in order to make sustainable products the norm and to reduce the overall carbon footprint and environmental footprint of products over their life cycle, and of ensuring the free movement of sustainable products within the internal market. The regulation also establishes a digital product passport, provides for the setting of mandatory green public procurement requirements and creates a framework to prevent unsold consumer products from being destroyed. In the scope of the financing of ecodesigns, the regulation may also have an indirect impact on financial institutions. The regulation entered into force on July 18, 2024.
Regulation (EU) 2024/1624 of the European Parliament and of the Council – prevention of the use of the
financial system for the purposes of money laundering or terrorist financing
The regulation is part of a comprehensive package that aims to strengthen the Union’s framework for anti-money laundering and countering the financing of terrorism. The regulation contains provisions addressed to obliged entities, which were hitherto included, among others, in Directive (EU) 2015/849 of the European Parliament and of the Council, and provides for their complete harmonisation. This will result in uniform rules and obligations binding on obliged entities across the European Union.
The regulation lays down rules concerning:
the measures to be applied by obliged entities to prevent money laundering and terrorist financing;
beneficial ownership transparency requirements for legal entities, express trusts and similar legal arrangements;
measures to limit the misuse of anonymous instruments.
The regulation entered into force on July 9, 2024.
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2.3. mBank Group’s market position of segments
Performance indicators 1 : mBank Group vs sector
Net interest margin 4.3% vs 3.4%
Cost-to-income ratio 34.5% vs 43.0% (including banking tax)
Return on Assets 0.97% vs 1.34%
Return on Equity 14.8% vs 15.7%
Loans to deposits 60.5% vs 67.5%
Business category (# - market position)
Market share
2020
2021
2022
2023
2024
Corporate Banking
Corporate loans
8.5%
8.2%
8.1%
8.0%
8.1%
Corporate deposits
9.4%
10.7%
10.8%
11.0%
10.8%
Leasing
7.6%
7.4%
6.8%
7.3%
6.5%
Factoring ( #6 on the market)
8.2%
8.2%
7.8%
7.8%
7.8%
Retail Banking in Poland
Total loans
7.4%
7.9%
8.3%
7.9%
7.8%
of which mortgage loans
7.9%
8.4%
8.8%
8.4%
8.4%
PLN mortgage loans
6.2%
7.1%
7.7%
7.7%
8.2%
Non-mortgage loans
6.6%
7.1%
7.2%
7.0%
6.7%
Deposits
7.8%
8.3%
8.8%
8.4%
8.4%
Retail Banking in the Czech Republic
Total loans
1.6%
1.8%
1.7%
1.5%
1.5%
of which mortgage loans
1.7%
1.9%
1.7%
1.5%
1.3%
Non-mortgage loans
1.2%
1.4%
1.7%
1.7%
1.9%
Deposits
1.8%
1.8%
1.8%
1.8%
1.9%
Retail Banking in Slovakia
Total loans
1.0%
1.4%
1.3%
1.2%
1.3%
of which mortgage loans
1.1%
1.3%
1.1%
1.0%
0.9%
Non-mortgage loans
1.0%
1.6%
2.1%
2.7%
3.3%
Deposits
2.1%
2.2%
2.3%
2.2%
2.0%
Investment Banking
Financial markets
Treasury bills and bonds
10.6%
11.0%
9.6%
11.9%
12.3%
IRS/FRA
20.7%
19.9%
14.3%
13.6%
14.7%
Brokerage
Equities trading ( #11 on the market)
5.3%
5.0%
4.0%
4.4%
4.2%
Futures ( #1 on the market)
17.6%
27.7%
18.6%
23.4%
23.7%
Options ( #8 on the market)
4.4%
3.1%
1.7%
1.2%
1.3%
Source: Own calculations based on data from mBank, NBP, WSE, Česká národní banka (ČNB), Národná banka Slovenska (NBS), Fitch Polska, Polish Factors Association, Polish Leasing Association, press reports
1 mBank Group ratios calculated as defined in chapter 4. “Financial position of mBank Group and mBank in 2024”, except for Net Interest Margin which was adjusted to sector calculation (net interest income divided by average total assets). Below presented are definitions for the sector data. According to the PFSA’s methodology, total income is decreased by a part of legal risk costs attributed to active FX mortgage loan portfolio, what negatively affects cost-to-income (C/I) ratio for the sector.
Sector data as at December 31, 2024 (released on February 18, 2025). Sector ratios calculated based on the monthly data of banking sector published by PFSA (banking sector together with branches of credit institutions).
Net interest margin : net interest income divided by average total assets (calculated based on the end-of-month data)
Cost/Income ratio (incl. banking tax): total costs (sum of administration costs and depreciation) divided by net total operating income.
Return on assets : profit for the year divided by average total assets (calculated based on the end-of-month data)
Return on equity : profit for the year divided by average total equity (calculated based on the end-of-month data)
Loan to deposit ratio : sum of loans and advances at amortised cost, loans and advances/other receivables at fair value through other comprehensive income and loans and advances/other receivables designated at fair value through profit or loss divided by deposits (measured at amortised cost) as of the end of period.
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2.4. Outlook for the banking sector and mBank for 2025
What will 2025 be like for the Polish economy?
Key macroeconomic parameters
2023
2024
2025P
GDP growth ( YoY )
0.2%
2.8%
3.8%
Domestic demand ( YoY )
-3.2%
3.3%
4.7%
Private consumption ( YoY )
-1.0%
3.0%
2.9%
Investment ( YoY )
13.1%
2.7%
10.0%
Inflation (EOP)
6.2%
4.8%
2.8%
NBP reference rate (EOP)
5.75%
5.75%
4.0%
CHF/PLN (EOP)
4.68
4.55
4.68
EUR/PLN (EOP)
4.34
4.28
4.45
Source: mBank’s estimates as at January 24, 2025. YoY – year on year, EOP – end of period
The economic outlook for the beginning of the year is promising. In 2025 we expect GDP growth to accelerate to 3.8%, compared with an estimated 2.8% growth in 2024. Importantly, a marked acceleration on the investment side will be the key driver of growth this year. This forecast is based on a material acceleration in Recovery Fund spending. At the same time, private consumption is expected to grow at a similar rate to last year. On the one hand, we expect wage growth to slow down. On the other hand, households have recently rebuilt previously depleted savings. As a result, consumption can still be expected to grow at a decent rate, as the outlook for GDP growth improves. Under these conditions, inflation is expected to decline and at the end of the year to be at the level of 3%. It should be noted that base effects are likely to significantly push inflation down at the beginning of the second half of 2025. In such a scenario, we expect National Bank of Poland to cut interest rates to 4.0%, which should be reflected in a gradual depreciation of the local currency.
Banking sector and monetary aggregates
Banking sector - monetary aggregates
2023
2024
2025P
Corporate loans
-0.7%
4.8%
2.7%
Mortgage loans
-3.6%
3.1%
2.1%
Non-mortgage loans
3.0%
3.9%
4.2%
Corporate deposits
8.7%
2.1%
8.0%
Household deposits
11.3%
8.7%
8.5%
Source: mBank’s estimates as at January 25, 2025
After a very weak 2023, in 2024 we saw a recovery in lending on the mortgage side last year. Loans to the corporate sector also increased, and we continued to see decent growth in other loans to households. Strong wage growth led to another year of solid growth in household deposits. At the same time, the growth rate of corporate deposits slowed down as margins normalized and the lagged effects of wage increases materialized. We expect all analysed monetary aggregates to grow in 2025, with the largest increases to materialize in deposits. One factor that may somewhat dampen mortgage growth are house prices, which have risen sharply in recent years.
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Outlook for mBank Group in 2025
Total revenues to be above PLN 11 billion, but slightly lower than in 2024, assuming interest rate scenario described on the previous page
Capital base to increase further thanks to planned Tier 2 issuance and strong profit generation
Both corporate loans and retail credit portfolio to rise above the market
Legal risk costs related to FX mortgages to materially burden the financial results for the last time in 2025
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3. Strategy of mBank Group
3.1. From an icon of mobility, to an icon of possibility - strategy for 2021-2025
In 2024, we continued following the strategy of mBank Group for 2021-2025 titled "From an icon of mobility, to an icon of possibility", adopted by the management board and approved by the supervisory board in Autumn 2021. It was developed to leverage on our current competitive strengths and successfully adapt to new environment and market challenges and as a result establish a bank that will continue to be ranked among top financial players in Poland, whilst reaching better market valuation.
Defining mBank Group’s aspirations and goals included in the strategy for 2021-2025, we took into account expected economic and market prospects, regulatory requirements, technological progress, evolution of consumer behaviour, local constraints and internal conditions. With rapid changes in most of these dimensions over the last 2 years, we reviewed the strategy in the middle of its implementation horizon. As a result, the management board concluded that no modifications of the main development directions and key elements of the current strategy are needed and has kept them binding, but decided to adjust selected targets and measures in response to the changed operating environment.
In the increasingly competitive market, attacking by new entrants, fintechs and internet giants, we believe that we can further build our advantage around fundamental banking values such as stability, security and secrecy. They are hard to be delivered by non- or scarcely-regulated entities. Our clients should have strong conviction that they can trust our services, because we comply with much more demanding rules and standards.
Our mission is: " Convenient, secure, focused on your future... mBank – more than a mobile bank. "
In mBank Group’s strategy for 2021-2025, we are focusing on 5 areas :
Retail banking : We aspire to be a leading retail banking franchise integrated with client life cycle. The continued successful organic growth will be fuelled by acquisition of new (primarily young) clients and deepening of banking relations with the existing client base. We are organized around demograp hic segments to develop a complete offer and value proposition precisely responding to the needs arising at d ifferent phases of the customer life. We will focus on personal financial management tools, comprehensive investment offering (via own newly-established TFI), mortgage lending directed to mBank’s transactional clientele (than ks to enhanced underwriting process), and non- banking services. With a reinforced mobile-first approach, we design mBank’s contact channels aligned to a primacy of remote access and digital sales. We will support entrepreneurs and small firms by providing them with industry- customized expertise and integrated platform for managing their busine ss-related activities.
E-commerce : Having already strong position in the e-commerce market in Poland and out standing transactional capabilities, we aspire to be the preferred ban k for merchants and online shops, as well as favourite platform for customers buying on the Internet. We see the growth opportunity in further enhancement of our offer and supplementing it with new components. We want our payment integrator Paynow to gain a significant share in processing transactional volumes. We w ill also broaden the range of value added services and provide financing tailored for online sellers to increase t he importance of relationship with mBank and become partner in the main parts of their e-commerce activity.
Corporate banking : We are expanding our operations in the corporate banking segment, focusing on the profitability of relationships and optimizing exposures towards higher revenues. We will initiate, develop and intensify the cooperation with companies from prospective industries and the fastest growing sectors of the economy, aligned with our sustainable agenda. We are increasing our focus on SME segment to support their progressing e-commerce entry. To further improve customer satisfaction and internal efficiency, we will provide the best end-to-end digital banking experience for corporates in Poland. We will redesign our credit process to make it supporting business development as well as ensuring prudent level of risk costs. In parallel, we intend to strengthen cooperation with our clients through additional knowledge-based services, assistance of top-rated advisors and deep industry expertise.
Technology, security and data : Our primary goal is to provide high quality, availability and security of mBank’s services and solutions to customers. By being cloud-ready, we will strive to maintain the technological advantage of mBank in the financial sector. It will allow us to boost flexibility, foster innovation of business applications, shorten time-to-market, and enlarge the scalability of used technology. Continuous development of a multi-layer cybersecurity defence model and assuring data secrecy is our constant effort. We aim to offer the highest possible protection of our mobile application and deliver the most secure and client-friendly identity confirmation process in all digital channels. We will employ artificial intelligence and data science to support creation of
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innovative customer products and better risk assessment, as well as increase effectiveness of internal systems and workflows.
Employees and organisation culture : We will create a culture where cooperation is based on trust and positive intentions. This gives people a comfortable space to experiment, innovate and make bold decisions. We want to assure a best-in-class hybrid work environment. mBank’s managers will progress practical skills in managing distributed teams, while our employees will take advantage of new communication and collaboration technology. We will make people capabilities a competitive advantage for the company through a strengths-based approach to leverage individual talents and focus on key future competences needed for the organisation to succeed.
Defined sustainable development goals are an integral part of our strategy, updated in Q4 2023. We aim to maintain our position as a leader in sustainable banking in Poland, fully aware of our responsibility for the climate, society, the financial well-being of our clients, and alignment with our declared values. We have committed to reducing our greenhouse gas emissions both from our direct operations and our loan portfolio. We will achieve net-zero emissions in own operations by 2040 and the same goal for our credit exposures will be achieved by 2050. To decarbonize our portfolio we are following Science Based Targets initiative method based on the latest scientific knowledge. We encourage our clients to use products and services that promote sustainable development and support the energy transition. By integrating sustainable standards into our business processes and risk management, we ensure responsible sales, clear and precise communication, transparently presenting the risks associated with financial products. We also continue our educational initiatives on safe banking practices, cybersecurity and personal data protection. Thanks to development of special personal financial management functionalities, we support financial health of mBank’s clients. We want to build a working environment that fosters sustainability and gender equality, recognizing diversity and inclusion as an fundamental principles of our organization. Our goal is to build transparent, trust-based relationships with our stakeholders, ensuring the highest quality of sustainability disclosures. Detailed information on our initiatives and progress in achieving our sustainability goals can be found in the non-financial section of our report in chapter 10. “Sustainability statement of mBank Group for 2024”.
3.2. Vision for mBank Group, pillars of the strategy and main directions of development
Based on its advanced transactional solutions and expertise in financing and servicing selected market segments, mBank will continue to attract individual and corporate customers who are seeking the easiest ways to move, manage and invest their money or address their liquidity needs. We will aspire to be not only the bank of first choice for our customers, but the place where they will concentrate all their financial-related activities.
We anchor the future of mBank on the following principles:
understanding of customer needs in their life cycle and adequately designing products,
providing our clients with advanced financial management solutions,
mobile access being the core medium/channel for interaction with the client,
security of clients’ payments and assets,
banking secrecy and promise to protect customer information, personal data and financial profile of their activities,
ensuring our clients the best experience in the e-commerce universe,
executing sustainable development agenda focused on our responsibility for climate, society and financial health of our clients.
Key initiatives and business activities which we undertook and execute in the horizon of this strategy have been grouped into 5 blocks:
1. Leading retail banking franchise integrated with client life cycle
We aspire to be a partner for a 100-year long life of our clients. We also want to provide a complete business management centre for entrepreneurs and small companies. Therefore, our efforts are concentrated on a thorough and precise understanding of customer needs, as well as their evolving preferences and behaviours. In-depth knowledge will allow us to provide a holistic and well-calibrated
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value proposition, covering not only banking products, but also additional services, in order to increase the usage intensity of mBank’s offer and strengthen the relationships. Our success in the coming years will be measured by a dynamic acquisition of customers, with a particular focus on young segment. This will protect the existing unique demographic profile of our client base, which will continue to be a key factor driving further mBank’s growth.
The main goals we focused on in 2024 included:
organic growth through the continuous acquisition of new (primarily young) clients and accompanying them throughout the whole life cycle, providing precisely designed value proposition . To support mBank’s favourable demographic structure and maintain the assumed trajectory of new account openings, we performed special campaigns in digital channels, including a marketing activity dedicated to young clients aged 18-24. Our efforts were also focused on strengthening mBank’s presence on the lists of the best business bank accounts for entrepreneurs and small companies. With an intention to boost retention, we continued appreciating existing customers for their relationship with mBank through dedicated promotional offers within the loyalty program "benefits zone".
developing a comprehensive investment offer tailored to the needs of each client segment, supporting clients in long-term wealth accumulation and leveraging their earning potential . Assets under management grew in line with the strategy, and at the same time, the number of clients investing their funds with mBank increased significantly. We continued raising awareness of investing among Poles, with a particular focus on retirement savings. As part of these measures, we implemented two key solutions: a personalised tool enabling clients to create their own retirement savings plan, and a retirement package as part of which clients can open an Individual Pension Account (IKE) or an Individual Pension Security Account (IKZE) and invest in life- cycle funds, which have been designed for long-term retirement savings. The life-cycle funds are managed by mTFI S.A., which in 2024 completed the takeover of portfolios of investment funds that had previously been managed as white label funds by external entities cooperating with mBank.
helping clients manage their finances wisely thanks to structured information on inflows, expenses and assets . The development of subsequent functionalities of the finance manager (PFM) is a multi-stage process scheduled up until 2025. In 2024, the finance manager underwent a number of upgrades improving user experience and strengthening the bank’s position in personal finance management. We implemented a new design of the “Finance Overview” section, with an intuitive user interface that clearly presents the structure of assets and liabilities. We launched a new, more engaging format of the monthly summary, which has been rated positively by clients at 4.4 (maximum rating: 5). We prepared annual summaries resembling those available in popular sports apps or music streaming services. These innovations propelled mBank to the forefront of global banking in personal finance management, earning it the prestigious Global Digital Champion title in Deloitte’s mystery client survey, which evaluated 350 institutions across 44 countries.
boosting the scope of digital sales and service by enabling to easily fulfil all needs on a mobile device . We are working on streamlining the mobile account opening process to ensure that its share in new client acquisition continues to steadily increase. We expanded the use of mojeID to make identity confirmation in remote services even more convenient and implemented biometric client verification. Our branch advisors and contact centre employees educate clients in self-service in digital channels and help them apply for products. We systematically analyse the issues reported by the clients to our employees and expand the scope of operations that clients can perform independently in digital channels.
expanding ecosystem of non-banking services to strengthen the intensity of relationship with customers through providing them with additional utility and convenience . In response to our clients’ growing interest in travel, we introduced a dedicated “Travel” category in our additional services section and began developing new services (such as eSIMs) to provide comprehensive support throughout their journeys. We improved the parking service in that we added the option to purchase a “start-stop” ticket allowing clients to end their parking session at their convenience.
2. The first-choice bank for e-commerce market participants
The e-commerce market in Poland has been booming in recent years; between 2020 and 2024, it grew by 14% annually on average. E-commerce payments have been growing at an even greater pace among mBank clients, by about 20% a year. The trend is expected to continue in the coming years. We
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anticipate that shifts in consumer shopping preferences will drive nearly all businesses to offer their products and services online on an increasingly larger scale. Entering the e-commerce segment is one of the ways for banks to diversify their income structure and strengthen client loyalty. With around 25% of all e-commerce transactions in Poland performed by mBank’s clients (3.3 million active mobile app users and over 100 million logins monthly) and an already wide recognition of mBank’s shopping platform mOkazje (marketing consent granted by 2.7 million clients), we are uniquely positioned to succeed on this market.
The main goals we focused on in 2024 included:
implementing mOkazje Zakupy, an innovative solution enabling clients to order products easily, quickly and conveniently without leaving mBank’s app . We launched mOkazje Zakupy in December 2024. All adult individual clients of mBank (3.8 million clients) can use it to buy close to 1.5 million products from about 2,000 categories, browse individual recommendations (e.g. based on shopping habits), and take advantage of special offers and time-limited deals. The service offers all the key e-commerce tools, such as a browser, filters, various shipping methods, transaction history, instant mBank payments and mBank’s BNPL (Buy Now, Pay Later), introduced in January 2025.
developing Paynow’s unique offer focused on improving payment conversion, which directly translates into better sales in our merchants’ online shops . Measures taken in this area included the implementation of new functions, such as the optimisation of the one-click payment process and new payment methods. We developed Paynow with a view to serving new business models, with a particular focus on the dynamically growing marketplace segment. In Q4 2024, we piloted an innovative solution enabling the handling of split payment transactions for marketplace platforms, which opens new possibilities of cooperating with clients operating in this model. Furthermore, we strengthened the cooperation within mBank Group by integrating e- commerce product offerings and other banking products. These measures helped increase cross- selling efficiency and deepen our relationships with business clients. We worked on extending the target group by establishing cooperation with sales platforms to reach a broader group of merchants and end clients. In 2024, we initiated cooperation with the key e-commerce platforms operating in Poland, which contributed to the increased reach of Paynow and further strenghtened our position in the online payments market.
providing value adding services (VAS) designed for online sellers to increase the importance of relationship with mBank by partnering with them in main parts of their e- commerce activity . We are offering a set of tools for a start, such as the option to launch an e- shop with Sky-Shop, using ready-made templates and a technical support of experts, mOrganizer for handling invoices, useful particularly at the later stage of business growth, as well as a free-of- charge accounting helpline. We also promote dedicated webinars, articles and blog for firms entering e-commerce market and already operating in the Internet.
3. Best digital corporate banking for high-potential companies
mBank's aspiration is to provide the best corporate banking services in Poland. We commit ourselves to be distinguished by professionalism, expertise and quality of the service as well as a personalised and transparent offer, taking into account the needs of particular customer segments. It will be confirmed by industry benchmarks and high net promoter score (NPS). In parallel, corporate area of mBank continues its thorough digital transformation. By moving the offering and all post-sales processes into remote channels, we are increasing the range of products available via virtual branch integrated with mBank CompanyNet system. Comfortable remote communication will increase the satisfaction rate from cooperation with us. We digitize processes, supporting and enabling customers to self-service online. However, human assistance is still available when needed, as it remains crucial to developing and strengthening relationships.
The main goals we focused on in 2024 included:
initiating, developing and intensifying the cooperation with companies from prospective industries and the fastest growing sectors of the economy as well as continued support of energy transformation . Thanks to the development of financing offer, implementation of financing policies and adequately determining the limits, we have been increasing our involvement in projects related to the sustainable development, including renewable energy sources, e-commerce and businesses supporting it, automation and digitalization solutions, modern technologies and digital entertainment as well as healthcare and pharma industry, with the aim to lift their share in mBank's portfolio.
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contributing to the growth of SME segment in Poland and benefitting from its progressing e-commerce presence and higher profitability . Tailored, digital service model, operational excellence, pre-approved products and activities aimed at boosting product penetration (cross-sell) are key success factors in K3 segment.
continued development of sales management support tools . In 2024, we continued to develop the new CRM platform supporting the sales units in serving the existing clients and acquiring new ones. We focused on further migration of key functionalities to the new platform. We introduced a new user-friendly dashboard with new navigation. At the same time, we significantly boosted the system usability. The changes to CRM gained users’ appreciation reflected by a very high CSAT (Customer Satisfaction Index) at 77% (increase by 32 pp against last year’s result). We are working on further changes, which we will be gradually introducing in 2025. In addition, we prepared an analytical tools to facilitate client portfolio management, including, in particular, a module for analysing a range of indices (benchmarking) and comparing them within groups of clients with similar features (clustering) at the level of business lines, segments and branches. We also introduced several significant elements enhancing cross-selling based on predictive analytics. On top of that, we carried out a market potential analysis. All the tools are available to client advisors in CRM to support acquisition-related activities
providing the best end-to-end digital banking experience for corporate customers in Poland . Building new relationships with corporate clients, both SMEs and large companies, in digital channels has become the norm for mBank. In 2024, we opened over 88% of accounts digitally. We are continuously improving the digital onboarding process through, among others, automation of its further steps and addition of new legal forms of entities served. We broadened the scope of methods for identity confirmation in mBank CompanyNet and implemented the biometric verification. Clients can now perform authorisation with the use of electronic IDs or passports from over 90 countries registered in the ICAO Public Key Directory. At the same time, we worked on digitisation of further processes and services . Among others, we are developing the remote agreement signing process in each product line (it currently covers 18 product agreement types). The process will be fully integrated with mBank CompanyNet and will not require clients’ qualified electronic signatures. We are enhancing and automating service-related processes, e.g., we implemented a process to handle the so-called “hybrid agreements” that arise from changes in the law and are used in transition periods. mBank CompanyMobile users can now use improved app functionalities, including a new currency exchange module that allows them to confirm transactions with a single click and a state-of-the-art payment card management module. These modifications have stepped up the mobile banking penetration level, which has already exceeded the initial target set in the 2025 strategy.
redesigning the corporate lending process to make it more predictable and ensure better business development support and safe and adequate level of risk costs . In 2024, we concentrated our efforts on further enhancement of the lending process efficiency and on reducing the TTC (Time to Cash). The recorded improvement in the TTC by several dozen percent year on year is the result of the implementation of monitoring based on early warning signals, a new limit process for corporate groups, the implementation of further 16 agreement templates for automatic generation, a new eBGK module (including fully digitised application process for products covered with the de minimis guarantee) and further standardisation and optimisation of the operations performed as part of the lending process, e.g. improved SLA (Service-Level Agreement) and error- free transmission of credit applications between units participating in the process. Thanks to the rapidly progressing migration of clients to the tools supporting the new process, we limited the number of systems used in the lending process. Thanks to the use of a single tool supporting the process, we can precisely measure its duration and ensure its high predictability.
developing a profitable business in the corporate banking area while ensuring capital and cost efficiency (at the level of both business lines and individual client relationships) . By taking advantage of market possibilities, we are expanding our credit portfolio and increasing the use of capital, while maintaining high capital efficiency. We continue applying a selective approach towards new exposures, strictly based on the analysis of their profitability. Companies for which the assumed AROR (the relation of adjusted revenues to risk weighted assets) threshold is not fulfilled are subject to special decision framework. Centralisation of internal processes, development of remote channels, and digitalisation of the offer increase employment productivity.
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4. Technology, security and data as a source of advantage
Historically, mBank’s success was achieved thanks to its technological prowess, reflected in advanced and innovative products and services (mobile applications, first 24/7 core banking system on the Polish market). Now, when most institutions in financial sector aspire to the title of technological leaders, we want to keep ourselves a few steps ahead of competition, making sure all innovation enablers and IT- related advantages are available for our business leaders in their continuous pursuit in delivering the best digital offer and experience. Giving access to most modern technologies and ways of work (e.g. DevOps, Microservice architectures, agile self-organising teams), we count on attracting talents in the industry.
The main goals we focused on in 2024 included:
providing high quality, availability, security and stability of mBank’s solutions and services to customers on a continuous basis . Key strategic IT projects included the modernization of our two central platforms, Globus for corporate banking and Altamira for retail banking, to eliminate technological debt and enable their further effective upgrades in the future. We increase the level of maturity of the software development process through continuous monitoring and automation of security controls and tests, as well as implementation of multi-level quality gates.
maintaining the technological advantage of mBank in the financial sector by being cloud- ready, allowing for flexibility, scalability of technology and swift adaptation to business and organizational needs . As one of the first banks in Poland, we provided our employees with modern tools for communication and cooperation in the public cloud through the organisation-wide implementation of the Microsoft Office 365 service. We introduced appropriate legal frameworks and adopted a standardised way of implementing SaaS and PaaS based solutions at mBank, reflecting all security, regulatory and operational requirements. It is followed by preparation of architectural patterns and migration schemes for various groups of bank systems. We advance competences of our teams in the field of developing applications in private and public cloud.
ensuring highest possible security level to mBank’s clients and employees by continuous development of a multi-layer cybersecurity defence model for both on-premise and cloud solutions . We constantly search for weaknesses in our infrastructure and address vulnerabilities before they are exploited. In line with a defined frequency, we conduct comprehensive Red Team tests, verifying the organization's security level and its resistance to emerging cyber threats. We implemented the Stop Scams Program for retail clients, aimed at building a comprehensive fraud prevention system. We raise the awareness of employees thanks to trainings performed as part of the Security Academy, an internal mBank’s initiative where experts to present crucial risks and remedies.
caring for the highest protection of mobile application serving as a digital key to all mBank’s channels and delivering the most secure and client-friendly identity confirmation process in all digital channels . We are implementing RASP-like (Realtime Application Self- Protection) functionalities, progressively increasing mobile app’s security level and dynamically reacting to emerging threats. We want to introduce upgraded solutions that are able to learn customer behavioural patterns in order to detect possible anomalies on their mobile devices. We promote digital identity services as allowing for a convenient authentication, in particular in the process of opening a new account and mobile application onboarding.
5. Distinctive people and organisation culture
Companies offering people greater flexibility will be better at attracting talent and retaining key employees. Due to concerns about negative effect of remote work on company culture, innovation and sense of belonging to the organisation, employers are adopting hybrid work models aimed at combining advantages of working from the office and from home. Strong employer brand supports mBank in recruiting top specialists. We are also helping our people to leverage their strengths and obtain future competences. Through strategic, long-term capability planning, we are ready to facilitate learning in the direction which is beneficial for both individual and the organisation. Our aspiration is that mBank’s employee will be a reference of a digital-savvy person.
The main goals we focused on in 2024 included:
creating culture where cooperation is based on trust and positive intentions . At mBank, it is defined by 5 key values: authenticity, empathy, courage, responsibility and cooperation. We used internal communication, employee events and development events to strengthen these values in the organization.
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developing best-in-class hybrid work environment . We continue to work in a flexible and adaptive model that responds to the needs of employees and meets the expectations of managers. We assess its perception within the organisation based on opinions from the cyclical survey. The functioning of staff in the hybrid mode is supported by top practices in management of distributed teams as well as advanced workplace technology and digitized HR processes.
increasing the effectiveness of recruitment and maintaining high retention rate of mBank's employees . In addition to benefiting from succession program and internal promotions, we continued mBank’s recommendation program, in which current employees can encourage their colleagues to join the company and apply for a given position, gaining a reward in the event of their employment. New components were added to the recruitment process to verify a candidate’s fit with the organisational culture and values, raising candidates’ awareness of mBank’s culture at the same time.
diagnosing and developing the capabilities of our employees to make them a competitive advantage for the bank . We are anchoring in strengths-based approach to leverage individual talents, identified according to Gallup’s methodology (CliftonStrengths study). Our training activity is designed to develop future skills needed for the organization to succeed. This year, we have been focused on raising awareness in the Gen AI area. Each year, we invite our employees to join interdisciplinary teams and take part in a special competition aimed at identifying innovations worth implementing internally, within our organisation, or externally, for our clients.
3.3. Strategic financial targets of mBank Group for 2025
The strategic goal of mBank Group is to keep the position among top Polish banks not only in terms of business growth, but also key financial metrics. In the coming years, our profitability will be anchored in high revenues, decent cost discipline and prudent approach to risk management, accompanied by visibly declining legal risk provisions related to FX mortgage loans. Favourable changes in the balance sheet structure are going to support net interest margin, while a well-managed development of operating costs will ensure excellent efficiency. Consequently, we assume to generate a return for the shareholders that will be attractive compared to other players in the Polish sector, and mBank’s long-term goal remains to pay 50% of net profit as a dividend.
We aim to optimize the balance sheet of mBank Group from both profitability and structural perspective, keeping focus on efficient capital usage. In particular, we intend to systematically increase the share of higher yielding assets (retail and SME loans) and maintain diversification of funding sources (in terms of maturity, currency and products). Projected trends in volumes will be reflected in continuously high liquidity and loan-to-deposit ratio oscillating below 70%. We plan to remain an active participant of the international market of debt instruments, with a size of issuances needed to fulfil the MREL requirement. We will focus mainly on non-preferred senior debt in EUR (under green bond framework) that is eligible funding from this perspective.
In 2025, the planned development of our business volumes in key strategic segments is assumed to be faster than in the sector, which shall imply an improvement of market shares. With materializing demographic effect, hidden within our retail customer base, mBank's financial results are foreseen to gain additional boost, unrelated to the current acquisition. It will favourably affect our growth prospects compared to domestic competitors. In parallel, along with progressing decline of FX mortgage loan portfolio, our reported performance will be gradually converging to the profitability of core business, which is alluring in the context of Polish sector.
The strategic financial goals of mBank Group were updated in 2023 to incorporate a new set of macroeconomic parameters as well as other factors impacting the business, volumes, activity and resources. We intend to maintain excellent operational efficiency, ensure stability, achieve specified growth rates and provide satisfactory profitability. Our activities until the end of current strategy in 2025 will be focused on fulfilling the following ratios, metrics and dynamics, describing our aspirations in four dimensions:
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Measure
Target level
Current level
Comment
Efficiency
Cost/Income ratio (C/I)
below 40% in 2025
28.2% in 2024
supported by high interest rates offsetting inflationary pressure
Stability
Tier 1 capital ratio
year-end level min 2.5 p.p. above the PFSA requirement
+5.4 p.p. at the end of 2024
surplus helped by securitisations and issuance of AT1 bonds
Cost of risk (COR)
~0.80% in the mid-term
0.49% in 2024
lower thanks to improving financial standing of clients and sale of NPL receivables
Growth
Loans
CAGR 2022-2025: ~3%
dynamics in 2024: +6.6% YoY
lending revival fuelled by surging new sales of retail loans
Deposits
CAGR 2022-2025: ~6%
dynamics in 2024: +8.3% YoY
growth focused on current accounts amid pricing optimisation
Total revenues
CAGR 2022-2025: 4-5% 1
dynamics in 2024: +11.2% YoY
driven by record-high net interest income and slightly better net fees
Profitability
Net interest margin (NIM)
above 3.0% in 2025
4.3% in 2024
thanks to high loan yields and active deposit management
Return on equity (ROE)
~14% in 2025
14.8% in 2024
depressed by legal risk costs related to FX mortgage loans, while core ROE was at 39.7%
Note: Target level for capital ratios is valid under current regulatory regime and adopted assumptions.
1 the growth pace calculated against the level of revenues adjusted for the negative impact of “credit holidays” at 9 191 million
The financial targets for 2025 reflect a base scenario for mBank Group's development and they may be affected both positively and negatively by a number of factors.
Upside potential to our revenue trajectory and profitability may stem from:
high interest rates for longer than the path assumed in the financial plan
development of investment products, wealth management and brokerage services in Poland supporting growth of fees and commissions in retail segment
stronger rebound of lending, with a utilisation of unlocked EU funds for Poland
On the negative side, our financial performance and capital position may weaken due to:
more adverse line of jurisprudence in court cases related to FX mortgage loans resulting in a need to book still high legal risk provisions
deterioration of geopolitical situation and macroeconomic conditions (lower GDP growth, high unemployment rate, lack of private investments) as well as unfavourable market development (PLN depreciation) impacting business volumes and risk profile
intensification of excessive customer protection, supervisory guidelines and new regulatory requirements
stronger competitive pressure, both from other banks and new players, undermining revenues
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4. Financial position of mBank Group and mBank in 2024
4.1. Financial position of mBank Group
All the growth rate figures presented in the analysis of financial results have been calculated on the basis of the Consolidated Financial Statements of mBank S.A. Group for 2024 (in PLN thousands). Differences in the tables, if any, result from rounding.
Profit and loss account of mBank Group
mBank Group recorded a record high net profit in 2024, despite the burden of further costs of legal risk related to foreign currency mortgage loans. mBank Group reported profit before tax of PLN 2,973.7 million in 2024, compared to a profit of PLN 970.6 million in 2023. Net profit attributable to Owners of mBank S.A. amounted to PLN 2,243.2 million compared to PLN 24.1 million scored a year earlier.
Income tax of mBank Group amounted to PLN 730.4 million in 2024 vs previous year’s PLN 946.5 million.
A summary of the financial results of mBank Group is presented in the table below.
PLN million
2023
2024
Change
in PLN M
Change in %
Interest income
14,826.8
14,523.3
-303.5
-2.0%
Interest expense
-5,953.3
-4,934.2
1,019.1
-17.1%
Net interest income
8,873.5
9,589.0
715.6
8.1%
Fee and commission income
3,015.9
3,207.7
191.8
6.4%
Fee and commission expense
-1,100.0
-1,235.8
-135.8
12.3%
Net fee and commission income
1,915.9
1,971.9
56.0
2.9%
Core income
10,789.4
11,560.9
771.5
7.2%
Dividend income
9.5
14.3
4.8
50.5%
Net trading income
73.3
176.7
103.3
140.9%
Other income
11.9
64.6
52.7
442.2%
Other operating income
317.7
477.6
159.8
50.3%
Other operating expenses
-399.5
-287.1
112.4
-28.1%
Total income
10,802.3
12,006.9
1,204.6
11.2%
Net impairment losses and fair value change on loans and advances
-1,105.5
-585.5
520.0
-47.0%
Costs of legal risk related to foreign currency loans
-4,908.2
-4,307.0
601.2
-12.2%
Overhead costs and depreciation
-3,074.4
-3,388.3
-313.9
10.2%
Operating profit or loss
1,714.1
3,726.1
2,012.0
117.4%
Taxes on Group balance sheet items
-743.6
-752.4
-8.8
1.2%
Profit before income tax
970.6
2,973.7
2,003.1
206.4%
Income tax expense
-946.5
-730.4
216.2
-22.8%
Net profit
24.1
2,243.4
2,219.3
9,224.8%
- attributable to Owners of mBank S.A.
24.1
2,243.2
2,219.2
9,225.9%
- Non-controlling interests
0.0
0.1
0.1
-
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ROA net
0.0%
1.0%
ROE gross
7.1%
19.7%
ROE net
0.2%
14.8%
Cost / Income ratio
28.5%
28.2%
Net interest margin
4.18%
4.35%
Common Equity Tier 1 ratio
14.7%
13.1%
Tier 1 ratio
14.7%
14.5%
Total capital ratio
17.0%
15.9%
Leverage ratio
5.3%
5.6%
Core income – calculated as the sum of net interest income and net fee and commission income.
Other income – calculated as gains or losses from derecognition of financial assets and liabilities not measured at fair value through profit or loss and gains or losses from non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Total income – calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Overhead costs and depreciation – calculated as the sum of total overhead costs and depreciation.
Net impairment losses and fair value change on loans and advances – calculated as the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.
Net ROA – calculated by dividing net profit/loss attributable to the owners of mBank by the average total assets. The average total assets are calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to the owners of mBank is annualised based on the number of days in the analysed period (the annualisation ratio is calculated as the quotient of the number of days in a year and the number of days in the analysed period).
Gross ROE – calculated by dividing pre-tax profit/loss by the average equity (net of the year’s results). The average equity is calculated on the basis of the balances as at the end of each month. Pre-tax profit/loss is annualised based on the number of days in the analysed period (the annualisation ratio is calculated as the quotient of the number of days in a year and the number of days in the analysed period).
Net ROE – calculated by dividing net profit/loss attributable to the owners of mBank by the average equity (net of the year’s results). The average equity is calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to the owners of mBank is annualised based on the number of days in the analysed period (the annualisation ratio is calculated as the quotient of the number of days in a year and the number of days in the analysed period).
Cost/Income ratio – calculated by dividing overhead costs and depreciation by total income (excluding tax on balance sheet items of the Group).
Net interest margin – calculated by dividing net interest income by average interest earning assets. To calculate the margin, net interest income was calculated without factoring in the result from the non-substantial modification which includes the cost of the credit holidays. Interest earning assets are the sum of cash and balances with the Central Bank, loans and advances to banks, debt securities (in all valuation methods) and loans and advances to clients (net; in all valuation methods). The average interest earning assets are calculated on the basis of the balances as at the end of each month. Net interest income is annualised based on the number of days in the analysed period (the annualisation ratio is calculated as the quotient of the number of days in a year and the number of days in the analysed period).
The main drivers of the financial results of mBank Group in 2024 included:
Record high total income at PLN 12,006.9 million. Net interest income remained its main component. It reached PLN 9,589.0 million and increased year on year due to active managemen t of deposit costs and our focus on the profitability of client relationships, despite the negative impact of “credit holidays”. Net fee and commission income also recorded an increase and reached PLN 1,971.9 million.
Increase of operating expenses (including depreciation) to PLN 3,388.3 million linked to inflationary pressures and growing business scale.
Improved efficiency measured by the cost/income ratio, which stood at 28.3% in 2024 vs 28.6% in 2023 (adjusted for the effect of the “credit holidays” and one-off income re lated to recovery of receivables).
Decrease in cost of risk to 49 basis points vs 93 points last year, due to maintained good quality of the loan portfolio.
Costs of legal risk related to foreign currency loans at PLN 4,307.0 million vs PLN 4,908.2 million in 2023.
Continued organic growth and business expansion as demonstrated by:
increase in the number of corporate clients to 36.1 thousand (+1.6 thousand clients compared with the end of 2023);
increase in the number of active mobile app users by 196.0 thousand to 3,842.0 thousand
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increase in the number of the Personal Financial Manager users to 1,921.0 thousand (+449.0 thousand compared with the end of 2023).
Profit before tax of the Core Business (mBank Group excluding FX Mortgage Loans segment) totalled PLN 7,304.7 million in 2024, up by 22.0% from PLN 5,988.4 million in 2023. Net profit rose by 22.4% to PLN 5,637.9 million in the period under review. This was reflected in net ROE, which stood at 39.7% in 2024 vs 40.0% in 2023.
Capital ratios of mBank Group remained at a high level in 2024. At the end of the year, the consolidated Total Capital Ratio stood at 15.85% compared with 17.04% in the previous year. Tier 1 capital ratio amounted to 14.52% compared with 14.71% at the end of 2023. The Common Equity Tier 1 capital ratio reached 13.05% vs 14.71% at the end of 2023. The leverage ratio stood at 5.6% at the end of December 2024 compared with 5.3% the year before.
Selected data of mBank Group by country
Selected data
(PLN mln)
Revenues (total income)
Profit/Loss before income tax
Income tax
Net profit/loss
Number of employees (in FTE)
Poland
11,476.5
2,764.8
-666.5
2,098.3
7,187
Czech Republic
353.9
127.3
-31.0
96.3
286
Slovakia
176.6
81.6
-32.9
48.7
96
Group
12,006.9
2,973.7
-730.4
2,243.4
7,569
Revenues (total income) - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Income of mBank Group
Total income generated by mBank Group was record high, reaching PLN 12,006.9 million in 2024, compared with PLN 10,802.3 million the year before, which represents an increase of PLN 1,204.6 million, i.e. 11.2%. The increase was mainly driven by improved net interest income.
Net interest income was mBank Group’s largest income source in 2024 (79.9%). It reached PLN 9,589.0 million, compared with PLN 8,873.5 million in 2023 (+8.1%, or 10.3% excluding the impact of “credit holidays”). The increase in net interest income resulted mainly from active management of deposit costs and our focus on the profitability of client relationships, and was achieved despite interest rate cuts by a total of 100 bps in 2023.
Net interest margin , calculated as a relation between net interest income and average interest earning assets, stood at 4.35% compared with 4.18% in 2023. To calculate the margin, net interest income was calculated without factoring in the result from the non-substantial modification which includes the cost of the credit holidays.
Interest income decreased by PLN 303.5 million or -2.0% year on year to PLN 14,523.3 million (by -0.7% if adjusted for the impact of “credit holidays”). Loans and advances were the main source of the Group’s interest income. Interest income from loans and advances decreased by PLN 390.1 million or -3.6% year on year. Interest income from investment securities grew by PLN 204.7 million, or 7.8%, while interest income from cash and short-term funds increased by PLN 159.7 million, i.e. 18.1%.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
61
PLN million
2023
2024
Change
in PLN M
Change
in %
Loans and advances
10,916.4
10,526.4
-390.1
-3.6%
Investment securities
2,641.3
2,846.0
204.7
7.8%
Cash and short-term placements
882.9
1,042.6
159.7
18.1%
Trading debt securities
69.9
59.6
-10.2
-14.7%
Interest income on derivatives classified into banking book
119.5
120.9
1.4
1.2%
Gains or losses on the non-substantial modification (net)
44.8
-155.8
-200.7
-447.7%
Other
151.9
83.6
-68.4
-45.0%
Total interest income
14,826.8
14,523.3
-303.5
-2.0%
Interest income from loans and advances includes interest income from loans and advances on the following items: assets held for trading, non-trading financial assets measured mandatorily at fair value through profit or loss and financial assets measured at amortised cost.
Interest income from investment securities includes interest income on the following items: non-trading financial assets measured mandatorily at fair value through profit or loss, including debt securities, financial assets measured at fair value through other comprehensive income and financial assets measured at amortised cost, including debt securities.
In the period under review, interest expense fell significantly (by PLN 1,019.1 million or -17.1%), which was mainly attributable to lower deposit costs (down by PLN 699.7 million).
Net fee and commission income , accounting for 16.4% of mBank Group’s total income, increased year on year. In the period under review, it stood at PLN 1,971.9 million, which represents an increase by PLN 56.0 million or 2.9%.
PLN million
2023
2024
Change
in PLN M
Change
in %
Payment cards-related fees
685.5
766.2
80.7
11.8%
Credit-related fees and commissions
610.3
623.4
13.1
2.2%
Commissions from currency transactions
496.5
484.9
-11.5
-2.3%
Commissions for agency service regarding sale of insurance products of external financial entities
135.5
149.6
14.1
10.4%
Fees from brokerage activity and debt securities issue
162.6
165.5
2.9
1.8%
Commissions from bank accounts
286.5
311.2
24.6
8.6%
Commissions from money transfers
239.1
251.9
12.9
5.4%
Commissions due to guarantees granted and trade finance commissions
113.7
114.6
0.9
0.8%
Commissions for agency service regarding sale of products of external financial entities
84.7
119.4
34.7
41.0%
Commissions on trust and fiduciary activities
30.2
31.6
1.3
4.4%
Fees from portfolio management services and other management related fees
27.0
36.4
9.4
34.8%
Fees from cash services
61.9
65.7
3.8
6.1%
Other
82.5
87.3
4.9
5.9%
Total fee and commission income
3,015.9
3,207.7
191.8
6.4%
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
62
Fee and commission income increased by PLN 191.8 million or 6.4% year on year. Owing to the growing number of clients and transactions, payment card-related fees reported the highest increase (rising by PLN 80.7 million or 11.8%). In the period under review, the value of cashless transactions went up by 16.2%, while its number was higher by 9.9%. Commissions for agency service regarding sale of insurance products of external financial entities increased by PLN 34.7 million or 41.0%. Due to a raise in some fees charged from retail customers, commissions from bank accounts increased by PLN 24.6 million, i.e. 8.6%.
Commission expenses grew in the period under review by PLN 135.8 million or +12.3%. The largest increase was recorded in the payment card-related fees, which was mainly driven by a higher volume of mBank clients’ transactions in 2024.
Dividend income amounted to PLN 14.3 million in 2024, compared with PLN 9.5 million in 2023.
Net trading income stood at PLN 176.7 million in 2024 and increased by PLN 103.3 million or 140.9% year on year. The increase in the net trading result was mainly driven by an improvement in the foreign exchange result.
Other income, calculated as gains or losses from derecognition of financial assets and liabilities not measured at fair value through profit or loss and gains or losses from non-trading equity and debt securities mandatorily measured at fair value through profit or loss, increased by PLN 52.7 million and stood at PLN 11.9 million. The income was mainly driven by the revaluation of Polski Standard Płatności Sp. z o.o.
Net other operating income (other operating income net of other operating expenses) stood at PLN 190.8 million in 2024 vs PLN -81.8 million in 2023. In 2024, a one-off income at PLN 164.0 million from a recovery of receivables was booked under a final court decision issued in the bank’s favour.
Contribution of business segments and business lines to the financial results
A summary of financial results of individual business lines of mBank Group is presented in the table below.
PLN million
2023
2024
Change
in PLN M
Change
in %
Share in income (in %)
Retail Banking
6,809.2
7,457.0
647.8
9.5%
62.1%
Corporate and Investment Banking
3,778.9
4,321.6
542.7
14.4%
36.0%
Treasury and Other
281.2
266.9
-14.3
-5.1%
2.2%
Core business income
10,869.3
12,045.5
1,176.2
10.8%
100.3%
FX Mortgage Loans
-67.0
-38.6
28.4
-42.4%
-0.3%
Income of mBank Group
10,802.3
12,006.9
1,204.6
11.2%
100.0%
Costs of legal risk related to foreign currency loans
Total costs of legal risk related to foreign currency loans recognised in the income statement in 2024 stood at PLN 4,307.0 million (compared to PLN 4,908.2 million in 2023). They are mainly due to updates to the expected costs of the settlement program, updates to the projected number of lawsuits, updates to the statutory interest costs included in the model, and updates to the probabilities of possible court judgments. The methodology is described in detail in Note 34 to the Consolidated Financial Statements of mBank S.A. Group for 2024.
Costs of mBank Group
In 2024, mBank Group continued to implement measures aimed at improving efficiency measured by the Cost/Income ratio. The total overhead costs (including depreciation) of mBank Group stood at PLN 3,388.3 million, which represents a 10.2% increase on the previous year.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
63
PLN million
2023
2024
Change in PLN M
Change in %
Staff-related expenses
-1,447.3
-1,619.0
-171.7
11.9%
Material costs, including:
-886.8
-967.4
-80.6
9.1%
- costs of administration and real estate services
-333.7
-349.6
-15.9
4.8%
- IT costs
-250.7
-276.6
-26.0
10.4%
- marketing costs
-194.9
-215.6
-20.6
10.6%
- consulting costs
-87.1
-105.0
-18.0
20.6%
- other material costs
-20.4
-20.5
-0.1
0.5%
Taxes and fees
-41.5
-48.3
-6.9
16.6%
Contributions and transfers to the Bank Guarantee Fund
-181.8
-146.8
35.0
-19.3%
Contributions to the Borrower Support Fund
0.0
0.0
0.0
0.0%
Contributions to the Social Benefits Fund
-13.0
-20.3
-7.3
55.7%
Institutional Protection Scheme
-0.1
0.0
0.1
0.0%
Depreciation
-504.0
-586.6
-82.6
16.4%
Costs of mBank Group
-3,074.4
-3,388.3
-313.9
10.2%
Cost / Income ratio
28.5%
28.2%
-
-
Employment (FTE)
7,319
7,569
250
3.4%
Cost/Income ratio – calculated by dividing overhead costs and depreciation by total income (excluding tax on balance sheet items of the Group).
In 2024, staff-related expenses increased by PLN 171.7 million or 11.9%. In the period under review, remuneration costs increased and number of FTE went up by 250 (mainly in IT and retail areas).
Material costs rose by PLN 80.6 million (9.1%) in the period under review, in particular as a result of higher costs of IT, marketing and consulting. Depreciation increased by PLN 82.8 million in the period under review. Contributions and transfers to the Bank Guarantee Fund stood at PLN 146.8 million, a decrease by PLN 35.0 million year on year.
The above-mentioned development of income and expenses resulted in a year-on-year decrease of the Cost/Income ratio, which stood at 28.2% (vs 28.5% in 2023). The normalised Cost/Income ratio (excluding the effect of the “credit holidays” and one-off income from recovered receivables) stood at 28.3% vs 28.6% in 2023.
Impairment on and change in the fair value of loans and advances
In 2024, net impairment losses and fair value change on loans and advances of mBank Group (calculated as the sum of two items: impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss) stood at PLN -585.5 million. Compared with 2023, it decreased by PLN 520.0 million or 47.0%.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss is related to the part of the portfolio of loans and advances measured at amortised cost. The item “gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss” is related to the credit risk of the portfolio of loans and advances measured with the use of that method.
As a result, the cost of risk in 2024 stood at 49 bps, compared with 93 bps in 2023.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
64
PLN million
2023
2024
Change
in PLN M
Change
in %
Retail Banking
-892.3
-412.8
479.6
-53.7%
Corporate and Investment Banking
-228.5
-223.9
4.6
-2.0%
FX Mortgage Loans
17.9
53.1
35.2
196.6%
Treasury and Other
-2.6
-2.0
0.6
-24.0%
Net impairment losses and fair value change on loans and advances
-1,105.5
-585.5
520.0
-47.0%
Cost of risk in the Retail Banking segment decreased by PLN 479.6 million compared to the previous year. This decline is due to improved payment discipline among customers and the favourable impact of the macroeconomic environment. An additional factor shaping the results was the positive impact of the sale of non-performing loans. In 2023, cost of risk was negatively affected by one-off factors, including the implementation of an additional trigger classifying exposures to Stage 2 (the so-called threefold PD backstop indicator).
In the Corporate and Investment Banking segment cost of risk decreased slightly by PLN 4.6 million. The similar level of loan loss provisions results from the stable quality of the corporate portfolio and the positive impact of the sale of non-performing loans.
4.2. Changes in the consolidated statement of financial position of mBank Group
Changes in the assets of mBank Group
Group assets stood at PLN 245,957.4 million as at December 31, 2024. During 2024 their value grew by PLN 18,976.8 million (+8.4%).
The table below presents changes in particular items of mBank Group assets.
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Cash and cash equivalents
36,702.4
36,680.9
-21.5
-0.1%
Loans and advances to banks
7,119.1
9,738.5
2,619.4
36.8%
Securities held for trading and derivative instruments
1,719.5
1,797.7
78.2
4.5%
Net loans and advances to customers
113,520.8
121,418.6
7,897.8
7.0%
Investment securities
60,583.9
68,993.4
8,409.6
13.9%
Intangible assets
1,701.9
1,956.7
254.8
15.0%
Tangible assets
1,481.4
1,461.8
-19.6
-1.3%
Other assets
4,151.5
3,909.7
-241.8
-5.8%
Assets of mBank Group
226,980.5
245,957.4
18,976.8
8.4%
Net loans and advances to customers the sum of loans and advances to customers measured at amortised cost, non-trading loans and advances mandatorily measured at fair value through profit or loss, and loans and advances classified as trading assets.
Investment securities – the sum of financial assets measured at fair value through other comprehensive income, debt securities measured at amortised cost, and non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Other assets – the sum of fair value changes of the hedged items in portfolio hedge of interest rate risk, non-current assets and disposal groups classified as held for sale, investment properties, current income tax assets, deferred income tax assets and other assets.
Loans and advances to customers remained the largest asset category of mBank Group at the end of 2024. As at December 31, 2024, they accounted for 49.4% of the balance sheet total compared with 50.0% at the end of 2023. The net volume of loans and advances to customers increased by PLN 7,897.8 million (7.0%) compared with the end of 2023.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
65
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Loans and advances to individuals
66,260.1
70,589.1
4,329.0
6.5%
Loans and advances to corporate entities
50,836.0
54,251.1
3,415.1
6.7%
Loans and advances to public sector
132.9
144.8
12.0
9.0%
Total (gross) loans and advances to customers
117,229.0
124,985.0
7,756.0
6.6%
Provisions for loans and advances to customers
-3,708.2
-3,566.4
141.8
-3.8%
Total (net) loans and advances to customers
113,520.8
121,418.6
7,897.8
7.0%
Gross loans and advances to customers are calculated as the sum of three items: loans and advances to customers measured at amortized cost (gross carrying amount), loans and advances held for trading, and non-trading loans and advances mandatorily measured at fair value through profit or loss.
In 2024, the growth in loans and advances granted to customers was primarily driven by the increase in gross loans and advances to individual customers. The value of gross loans and advances to individual customers was up by PLN 4,329.0 million, i.e., 6.5%. The increase of volume of gross loans and advances to individual clients at mBank was higher than the dynamic observed for the entire market of loans to households. In 2024, the market of loans to households increased by 2.7% (NBP’s data). Net of the FX effect, mBank’s loans and advances to individuals grew by 7.0% in 2024. The line item remains significantly impacted by the updates of cash flow estimates related to CHF mortgage loans and the reduction of their gross carrying amount in accordance with IFRS 9, as a result of cost of legal risk related to this portolio. Excluding the portfolio of foreign currency mortgage loans and the impact of exchange rate changes, loans granted to individual customers increased by 10.2% annually.
The sales of mortgage loans increased more than 2.5 times in 2024. It amounted to PLN 10,585.4 million against PLN 4,116.4 million in the previous year. T his is the highest level of mortgage loan sales in the history of mBank Group. In 2024, mBank Group focused on selling fixed-rate loans to its own customer base. The value of sales generated in 2024 under the Safe 2% Loan program, which provides for government subsidies reducing the mortgage instalments of eligible borrowers, amounted to PLN 1.4 billion. The remaining, predominant part of sales was achieved by mBank without the support of government initiatives. In 2024, we also observed an increase in mBank’s share in the mortgage loan sales market, which peaked in August 2024 at 19.2% on a monthly basis. This is the highest market share of mBank in mortgage loan sales since 2008. In 2024, mBank was the fifth bank in the market in terms of new mortgage loan sales, with a share of 12.0%.
In 2024, mBank Group sold PLN 11,347.3 million in non-mortgage loans, which represents a 31.8% growth in sales compared with 2023. The sales volume was record-high despite the environment of persistently high interest rates, high inflation and limited consumption.
The volume of gross loans and advances to corporate clients increased by PLN 3,415.1 million (6.7%) in 2024 compared with the end of 2023. The increase of volume of gross loans and advances to corporate clients at mBank was higher than the dynamic observed for the entire corporate loans market. The volume of loans to enterprises increased by 4.5% year on year as at the end of December 2024 (NBP’s data). Excluding reverse repo/buy sell back transactions and the FX effect, the value of mBank Group’s loans to corporate entities increased by 7.1% compared to the end of 2023.
The sales of loans to corporate entities (including new sales, limit increases and renewals) reached PLN 39,951.0 million in 2024, up by 21.0% year on year. In 2024, new loans and loan renewals dominated the sales. Their volumes grew by 39.2% and by 9.6% year on year, respectively. The most popular form of financing in 2024 was structured finance, including those financing renewable energy sources, and overdraft loans. Their sales increased year on year by 29.9% and 22.8%, respectively. The volume of loan sales remained the highest in the K2 client segment, and increased year on year in all three client segments.
The volume of gross loans and advances to the public sector increased by PLN 12.0 million (+9.0%) in 2024.
Investment securities constituted mBank Group’s second largest asset category (28.1%). During 2024, their value grew by PLN 8,409.6 million (+13.9%). This growth was achieved, among other things, by investing the money deposited by clients with mBank in Treasury bonds and money bills.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
66
Loans and advances to banks increased by 2,619.4 million (+36.8% year on year) to PLN 9,738.5 million, mainly as a result of the higher value of reverse repo and buy/sell back transactions by PLN 2,310.1 million (36.5%) to PLN 8,633.4 million.
Securities held for trading and derivative instruments rose by 4.5% year on year to PLN 1,797.7 million. Their value was positively impacted by higher value of debt securities of the central and local government institutions sector, and negatively impacted by lower value of derivative instruments.
Intangible assets grew by 15.0% year on year to PLN 1,956.7 million, mainly as a result of the bank purchasing new software licenses.
Tangible assets decreased by 1.3% year on year to PLN 1,461.8 million, due to a reduction in the value of the land use right asset.
Changes in liabilities and equity
The table below presents changes in liabilities and equity of mBank Group in 2024:
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Liabilities to other banks
3,315.3
3,059.4
-255.9
-7.7%
Amounts due to customers
185,467.5
200,809.0
15,341.5
8.3%
Liabilities from debt securities in issue
11,105.2
12,130.3
1,025.2
9.2%
Subordinated liabilities
2,714.9
2,675.5
-39.4
-1.5%
Other liabilities
10,640.4
9,516.1
-1,124.4
-10.6%
Total liabilities
213,243.3
228,190.4
14,947.1
7.0%
Total equity
13,737.2
17,767.0
4,029.8
29.3%
Liabilities and equity of mBank Group
226,980.5
245,957.4
18,976.8
8.4%
Other liabilities – the sum of financial liabilities held for trading and hedging derivatives, lease liabilities measured at amortised cost, fair value changes of the hedged items in portfolio hedge of interest rate risk, liabilities included in disposal groups classified as held for sale, provisions, current income tax liabilities, deferred income tax provisions and other liabilities.
Amounts due to customers are the principal source of funding of mBank Group. Their share in the Group’s funding structure has been growing systematically over the last years and remains at a safe and high level. In 2024, mBank issued bonds as part of the EMTN program, AT1 bonds, as well as CLN bonds in connection with portfolio securitisation, which translated into the stabilization of the share of amounts due to customers in the Group’s liabilities and equity. Despite a year-on-year increase in the volume of amounts due to customers, this item accounted for 81.6% of the Group’s equity and liabilities at the end of 2024, compared with 81.7% at the end of 2023.
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Individual customers
128,412.4
142,247.6
13,835.2
10.8%
Corporate entities
56,439.0
57,719.9
1,281.0
2.3%
Public sector customers
616.2
841.4
225.3
36.6%
Total amounts due to customers
185,467.5
200,809.0
15,341.5
8.3%
Amounts due to customers grew by PLN 15,341.5 million (+8.3%) in 2024, reaching PLN 200,809.0 million at the end of the year. The bank actively managed the range of deposit products offered to clients, aiming to ensure a safe level of financial liquidity in the context of another tranche of EMTN bonds maturing in Q4 2024, remain competitive in the market, and adjust the interest rates on deposits to high inflation and to NBP’s interest rates. The bank’s actions brought about an increase of funds placed in current accounts and stabilization of term deposits. The volume of funds in current accounts grew to PLN 162,613.8 million, up by 10.1% compared with the end of December 2023. Term deposits increased by 0.2% to PLN 36,108.5 million in 2024. In 2024, amounts due to individual customers were higher in all three client segments.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
67
Amounts due to individual customers increased by PLN 13,835.2 million (+10.8%) compared with the end of 2023, reaching PLN 142,247.6 million. Deposits in current and savings accounts went up by 13.8% to PLN 117,236.2 million, whereas the volume of term deposits dropped by 1.5% year on year to PLN 24,752.7 million.
Amounts due to corporate entities grew by PLN 1,281.0 million (+2.3% year on year) to PLN 57,719.9 million. In case of the amounts due to corporate entities, the dominant part of the increase was the inflow of funds into current accounts (+1.2%; +PLN 535.0 million). At the same time, t erm deposits of corporate entities grew by 3.6% to PLN 11,291.0 million.
Amounts due to the public sector increased by PLN 225.3 million (+36.6% year on year) to PLN 841.4 million. Deposits in current and savings accounts of public sector rose by 30.7% to PLN 776.1 million. Term deposits of public sector customers grew almost threefold to PLN 64.8 million.
Amounts due to other banks decreased by PLN 255.9 million (+7.7%) to PLN 3,059.4 million compared to the end of 2023. Their volume was shaped, on the one hand, by a 67.5% increase in deposits held with mBank by other banks, which reached PLN 592.1 million, and by a 39.1% increase in repo transactions to PLN 178.3 million. On the other hand, it was affected by the liabilities from cash collateral, which dropped by 77.4% to PLN 125.9 million. At the same time, we observed a decrease in term deposits of other banks held at mBank by 46.1% to PLN 103.2 million.
The share of liabilities from debt securities in issue in mBank Group’s funding structure remained at 4.9% at the end of 2024. Their volume increased by 1,025.2 million (+9.2% year on year) to PLN 12,130.3 million. In Q4 2024, the bank redeemed one tranche of bonds issued under the EMTN program with a nominal value of CHF 125.0 million on its maturity date. In Q3 2024, the bank issued green preferred senior bonds worth EUR 500 million. In Q4 2024, the bank launched CLN bonds with a nominal value of PLN 560 million in connection with a securitisation transaction.
Subordinated liabilities decreased by PLN 39.4 million (+1.5% year on year), to PLN 2,675.5 million, primarily due to the currency effect.
Other liabilities decreased to PLN 9,516.1 million, down by PLN 1,124.4 million (+10.6% year on year). The decline was mainly attributable to a fall in other liabilities (mainly interbank settlements) by PLN 1,775.7 million (+28.1%) to PLN 4,532.5 million, and to a decrease in financial liabilities held for trading and hedging derivatives by PLN 401.7 million (-26.9%) to PLN 1,094.0 million.
Total equity grew by PLN 4,029.8 million (+29.3%) to PLN 17,767.0 million in 2024, primarily due to the increase in retained earnings, resulting from the growth of the current year’s profit by PLN 2,219.2 million, or more than 93 times year on year, to 2,243.2 million. The increase in total equity in 2024 was also influenced by the issuance of AT1 bonds with a nominal value of PLN 1,500.0 million, which the bank conducted in Q4 2024.
The share of total equity in equity and liabilities of mBank Group at the end of 2024 increased compared with the previous year to 7.2%.
Other information
A description of significant off-balance sheet items of mBank Group can be found in Note 35 to the mBank S.A. Group IFRS Consolidated Financial Statements for 2024.
A description of related party transactions can be found in Note 45 to the mBank S.A. Group IFRS Consolidated Financial Statements for 2024.
In 2024, mBank Group did not conclude any significant agreements on issuing loan repayment guarantees or sureties.
As at December 31, 2024 mBank S.A. did not have any agreements referred to in Article 141t (1) of the Banking Law Act.
In 2024, mBank signed an agreement with the National Bank of Slovakia (NBS) which allows it to obtain financing from NBS as part of open market operations organised by NBS in accordance with ECB rules.
At the end of 2024, the value of borrowers’ accounts or assets pledged as collateral meeting the requirements arising from the CRR totaled PLN 348.8 billion for mBank Group.
Information concerning proceedings pending before courts, arbitration bodies, and public administration bodies are presented in Note 33 to the mBank S.A. Group IFRS Consolidated Financial Statements for 2024.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
68
Investment spending in 2024
Similar to previous years, mBank's investment activity in 2024 focused on initiatives suppo rting customer experience. We also aimed to increase efficiency and digitize processes, as well as meet regulat ory requirements.
The Group's investment outlays in 2024 amounted to PLN 771.4 million. This represents an increase of 18.7% compared to last year, when the outlays were PLN 650.0 million. As in previous periods, the majority of mBank Group's investment outlays were in the IT area (PLN 601.7 million; 78.0%). This is also the area with the highest increase compared to last year (PLN 108.5 million).
One of the most important projects implemented in 2024 was the enhancement of the Personal Finance Manager (PFM) service with new functionalities. Responding to the needs of individual clients, we introduced changes to the “Mój Majątek” (My Assets) section. Thanks to this, clients have access to a clear summary, charts facilitating data analysis, and easier navigation to other sections of the application. Changes also included functionalities enabling retirement planning. Additionally, we adapted products and customer service processes to verify clients' PESEL status.
Furthermore, mBank's investments in 2024 were focused on the e-commerce area. Considering the development prospects of this market in Poland, we launched a joint marketplace platform with an external partner. It is available through mBank’s mobile application.
Corporate Banking Area continued to work on a customer-friendly platform for handling of credit applications. We also introduced a new electronic application for de minimis guarantees in the mBank CompanyNet electronic banking system. As part of the development of the mBank CompanyMobile mobile application, we implemented the ability to personalize the currency module according to clients’ needs. Intensive work was also carried out on introducing a number of changes in the corporate CRM. New views and functionalities were created to improve the efficiency and convenience of using the system. Utilizing new technologies (including AI solutions), we implemented tools to support corporate banking advisors in obtaining and analyzing information about companies and industries. We also provided a virtual assistant that supports advisors in best matching the offer to the needs and expectations of customers.
We introduced solutions to support the assessment of clients and transactions in terms of sustainable development, including compliance with the EU Taxonomy, mBank's ESG strategy, and corporate clients' climate awareness (climate goals and carbon footprint calculation).
In the area of risk, work focused primarily on implementing regulatory chang es in credit risk, liquidity risk, and interest rate risk. We ensured consistent management of credit default risk a t the Group level. We also implemented changes resulting from new Basel regulations regarding t he calculation of capital requirements.
In 2024, we continued work on the modernization of corporate and retail branches. We aimed to provide adequate space for clients and bank employees. Subsequent stages of activities in this area will be implemented in the coming years.
Regardless of business initiatives, mBank invested in IT technology. We aimed to maintain a high level of cybersecurity (both in the bank and its subsidiaries). Consistently, part of the investment resources was directed to ensure compliance with changing legal requirements. In addition to the mentioned regulations, we also worked on the areas of payments, reference indicators, preventing the use of the financial system for money laundering, personal data protection, tax administration requirements, etc.
Investment plans for 2025
In the Retail Banking Area, actions aimed at increasing client activity are planned. Additionally, in 2025, we will continue working on a new mortgage sales process across all distribution channels. Further intensive work will focus on increasing the credibility and usability of the marketplace platform for individual clients. We will also focus on enabling easy financing of purchases on the platform and making the platform available to SME customers. Moreover, we want to simplify the basic client path to make it shorter, faster, and more intuitive. This way, we aim to improve customer satisfaction and reduce the number of complaints. The actions taken will reduce the excessive number of contacts with employees in the Contact Center and mBank branches. We also plan to continue working on the mobile application.
In 2025, we plan to further develop internet and mobile banking systems for corporate clients as well as CRM. We will continue to automate financing processes to ensure the highest quality of service and the best corporate client experience.
Due to upcoming regulatory changes, including in the area of payments, it will be necessary to implement appropriate modifications to ensure compliance with the regulations. An important element of our investments will also be ensuring consistency with other changes in legal requirements. We will focus primarily on the areas of ESG, Basel IV, DORA, and the Web Content Accessibility Guidelines (WCAG).
To effectively support risk measurement and management, we will develop domain systems and databases that power IT tools.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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4.3. Financial position of mBank in 2024
Profit and loss account of mBank
mBank closed 2024 with a profit before tax of PLN 2,905.4 million compared with a profit before tax of PLN 897.6 million in 2023. Net profit amounted to PLN 2,235.7 million compared to PLN 29.3 million in 2023. Income tax paid by mBank amounted to PLN 669.7 million in 2024.
A summary of the financial results of mBank is presented in the table below.
PLN million
2023
2024
Change in PLN M
Change in %
Interest income
13,996.5
13,812.4
-184.1
-1.3%
Interest expense
-5,708.5
-4,764.2
944.3
-16.5%
Net interest income
8,288.0
9,048.2
760.2
9.2%
Fee and commission income
2,789.0
2,931.8
142.8
5.1%
Fee and commission expense
-975.5
-1,073.0
-97.5
10.0%
Net fee and commission income
1,813.6
1,858.9
45.3
2.5%
Core income
10,101.6
10,907.1
805.5
8.0%
Dividend income
4.9
6.7
1.7
34.9%
Net trading income
75.8
168.0
92.2
121.7%
Other income
14.4
56.1
41.7
288.8%
Other operating income
78.1
260.5
182.5
233.7%
Other operating expense
-264.0
-170.9
93.2
-35.3%
Total income
10,010.8
11,227.5
1,216.7
12.2%
Net impairment losses and fair value change on loans and advances
-975.0
-510.5
464.6
-47.6%
Costs of legal risk related to foreign currency loans
-4,908.2
-4,307.0
601.2
-12.2%
Overhead costs and depreciation
-2,745.2
-3,024.2
-279.0
10.2%
Taxes on bank balance sheet items
-719.7
-730.9
-11.2
1.6%
Share of profits (losses) of subordinated entities valued using the equity method
236.0
250.4
14.4
6.1%
Profit/loss before income tax
897.6
2,905.4
2,007.7
223.7%
Income tax
-868.3
-669.7
198.6
-22.9%
Net profit/loss
29.3
2,235.7
2,206.4
7,524.6%
Net ROA
0.0%
1.0%
Gross ROE
6.5%
19.5%
Net ROE
0.2%
15.0%
Cost/Income ratio
27.5%
27.0%
Net interest margin
4.0%
4.2%
Common Equity Tier 1 ratio
17.1%
15.0%
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
70
Tier 1 ratio
17.1%
16.7%
Total capital ratio
19.8%
18.2%
Leverage ratio
6.0%
6.4%
Core income – calculated as the sum of net interest income and net fee and commission income.
Other income – calculated as gains or losses from derecognition of financial assets and liabilities not measured at fair value through profit or loss and gains or losses from non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Total overhead costs (including deprecation) - calculated as the sum of total overhead costs and depreciation.
Net impairment losses and fair value change on loans and advances – the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.
Net ROA - calculated by dividing net profit/loss attributable to Owners of the Bank by the average total assets. The average total assets are calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Gross ROE - calculated by dividing profit/loss before income tax by the average equity attributable to Owners of the Bank net of the year’s results. The average equity is calculated on the basis of the balances as at the end of each month. Profit/loss before income tax is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Net ROE - calculated by dividing net profit/loss attributable to Owners of the Bank by the average equity attributable to Owners of the Bank, net of the year’s results. The average equity is calculated on the basis of the balances as at the end of each month. Net profit/loss attributable to Owners of the Bank is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Cost/Income ratio - calculated by dividing overhead costs and depreciation by total income (excluding tax on bank’s balance sheet items).
Net interest margin - calculated by dividing net interest income by average interest earning assets. To calculate the margin, net interest income was calculated without factoring in the result from the non-substantial modification which includes the cost of the credit holidays. Interest earning assets are the sum of cash and balances with the Central Bank, loans and advances to banks, debt securities (in all valuation methods) and loans and advances to customers (net; in all valuation methods). The average interest earning assets are calculated on the basis of the balances as at the end of each month . Net interest income is annualized based on the number of days in the analysed period (an annualization factor is calculated by dividing a number of days in the year by a number of days in the analysed period).
Income of mBank
Total income generated by mBank amounted to PLN 11,227.5 million in 2024 compared with PLN 10,010.8 million in 2023, representing an increase by PLN 1,216.7 million, i.e. 12.2%. The increase was mainly driven by improved net interest income.
Net interest income remained mBank’s largest income source in 2024 (accounting for 80.6% of total income). It stood at PLN 9,048.2 million, compared with PLN 8,288.0 million in 2023 (+9.2%). The increase in net interest income resulted mostly from active management of deposit costs, as well as the bank’s focus on the profitability of client relationships. In 2024, the bank recognised a negative impact of credit holidays on net interest income in the amount of PLN 109.7 million.
Net interest margin, calculated as the relation between net interest income and average interest-earning assets, stood at 4.2% vs 4.0% in 2023.
The average interest rates on deposits and loans with mBank are presented in the table below.
Average interest rate (mBank)
Retail Banking 1
(Poland and foreign branches)
Corporate and Investment Banking
mBank total
2022
2023
2024
2022
2023
2024
2022
2023
2024
PLN
0.95%
2.35%
1.58%
1.65%
2.40%
1.94%
1.17%
2.36%
1.68%
Deposits
FX
0.48%
1.06%
1.19%
0.10%
0.45%
0.45%
0.37%
0.87%
0.97%
PLN
9.04%
10.52%
9.21%
7.12%
8.49%
7.80%
8.40%
9.85%
8.75%
Total loans
FX
1.75%
2.91%
3.77%
2.82%
5.54%
6.11%
2.05%
3.82%
4.75%
PLN
7.00%
8.41%
7.33%
Mortgage loans
FX
1.31%
2.39%
3.11%
1 The Retail Banking data include the data of the FX mortgage loans segment.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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Interest income decreased by PLN 184.1 million or -1.3% compared to 2023. Loans and advances were the main source of the bank’s interest income. Interest income from loans and advances declined by PLN 371.1 million or 3.7% year on year, mainly due to the interest rate cuts by the Monetary Policy Council in the autumn of 2023, totaling 100 basis points. Interest income from investment securities increased by PLN 268.2 million or 9.8%.
PLN million
2023
2024
Change in PLN M
Change in %
Loans and advances
9,967.7
9,596.7
-371.1
-3.7%
Investment securities
2,727.7
2,995.9
268.2
9.8%
Cash and short-term placements
877.0
1,038.0
161.0
18.4%
Trading debt securities
70.1
59.6
-10.4
-14.9%
Interest income on derivatives classified into banking book
176.2
164.4
-11.8
-6.7%
Other
177.9
-42.1
-220.0
-123.7%
Total interest income
13,996.5
13,812.4,
-184.1
-1.3%
Loans and advances – the sum of interest income from 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 measured at fair value through other comprehensive income.
Investment securities – the sum of interest income from 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.
The decrease in interest expenses in 2024 by PLN 944.3 million or 16.5% was mainly driven by lower deposit costs (decrease by PLN 701.2 million), due to lower interest paid on deposits after int erest rate cuts.
Net fee and commission income, accounting for 16.6% of mBank’s total income, increased compared to 2023. It grew by PLN 45.3 million, i.e. 2.5% compared with the previous year.
PLN million
2023
2024
Change in PLN M
Change in %
Payment cards-related fees
685.5
766.2
80.7
11.8%
Credit-related fees and commissions
511.6
514.5
2.9
0.6%
Commissions from currency transactions
496.5
484.9
-11.5
-2.3%
Commissions for agency service regarding sale of insurance products of external financial entities
87.4
96.1
8.7
9.9%
Fees from brokerage activity and debt securities issue
163.5
165.7
2.3
1.4%
Commissions from bank accounts
286.5
311.2
24.6
8.6%
Commissions from money transfers
238.8
251.9
13.1
5.5%
Commissions due to guarantees granted and trade finance commissions
99.6
99.1
-0.5
-0.5%
Commissions for agency service regarding sale of products of external financial entities
39.7
54.2
14.5
36.6%
Commissions on trust and fiduciary activities
30.2
31.6
1.3
4.4%
Fees from portfolio management services and other management-related fees
17.9
19.8
1.8
10.2%
Fees from cash services
61.9
65.7
3.8
6.1%
Other
69.9
71.0
1.1
1.6%
Total fee and commission income
2,789.0
2,931.8
142.8
5.1%
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
72
Fee and commission income went up by PLN 142.8 million (5.1%) year on year. The largest growth was observed in payment cards-related fees (+PLN 80.7 million, i.e. 11.8%). In the period under review, the value of cashless transactions increased by 16.2%, while the number was higher by 9.9%. Simultaneously, mainly due to the changes introduced in the fee schedule for retail clients, commissions from bank accounts increased by PLN 24.6 million, i.e., 8.6% year on year.
Commission expenses grew in the period under review by PLN 97.5 million or 10.0%. The largest growth was observed in payment cards-related fees and commissions paid to external entities for sale of the bank’s products.
Dividend income amounted to PLN 6.7 million in 2024, compared with PLN 4.9 million in 2023.
Net trading income stood at PLN 168.0 million in 2024, up by PLN 92.2 million (121.7%) compared with the previous year. The largest increase was recorded in the foreign exchange result.
Other income, including gains or losses from derecognition of financial assets and liabilities not measured at fair value through profit or loss and gains or losses from non-trading equity instruments and debt securities mandatorily measured at fair value through profit or loss, amounted to PLN 56.1 million compared with PLN 14.4 million in 2023. The income arises from, among others, the revaluation of shares in companies (among others, Polski Standard Płatności Sp. z o.o., Krajowa Izba Rozliczeniowa Sp. z o.o., Biuro Informacji Kredytowej S.A.).
Net other operating income (other operating income net of other operating expenses) reached PLN 89.6 million, mainly due to PLN 164.0 million income from a recovery of receivables under a final court decision issued in the bank’s favour.
Costs of legal risk related to foreign currency loans
In 2024, costs of legal risk related to foreign currency loans decreased year on year and stood at PLN 4,307.0 million. The methodology of calculating the cost of legal risk related to this portfolio is described in detail in Note 34 to the mBank S.A. Group Consolidated Financial Statements 2024.
Costs of mBank
The total overhead costs of mBank (including depreciation) amounted to PLN 3,024.2 million, up by 10.2% compared with the previous year.
PLN milion
2023
2024
Change in PLN M
Change in %
Staff-related expenses
-1,309.1
-1,463.9
-154.9
11.8%
Material costs
-777.9
-847.2
-69.3
8.9%
Taxes and charges
-38.5
-45.1
-6.6
17.1%
Contributions and transfers to the Bank Guarantee Fund
-173.2
-139.2
34.0
-19.6%
Institutional Protection Scheme
-0.1
0.0
0.1
-100.0%
Depreciation
-434.3
-509.7
-75.5
17.4%
Costs of mBank
-2,745.2
-3,024.2
-279.0
10.2%
Cost/Income ratio
27.5%
27.0%
-
-
Employment (FTE)
6,649
6,902
254
3.8%
Cost/Income ratio – calculated by dividing overhead costs and depreciation by total income (excluding tax on bank’s balance sheet items).
In 2024, staff-related expenses increased by PLN 154.9 million or 11.8%. In the period under review, remuneration costs increased and 254 FTEs were added.
Material expenses increased by PLN 69.3 million (8.9%) in the period under review, in particular, as a result of higher IT, marketing and consulting costs.
Contributions and transfers to the Bank Guarantee Fund were lower by PLN 34.0 million year on year in 2024.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
73
Changes in the income and costs of mBank translated into a decrease in the cost/income ratio. It stood at 27.0% at the end of 2024, down from 27.5% in the previous year.
Net impairment losses and fair value change on loans and advances
In 2024, net impairment losses and fair value change on loans and advances of mBank (sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss) amounted to PLN -510.5 million, down by PLN 464.4 million or 47.6% against the prior year. The decrease was reported mainly in the Retail Banking area. The decrease of credit risk provisions in Retail Banking results mainly from the observed improvement in clients’ payment discipline and the favorable impact of the macroeconomic environment. An additional factor shaping the results was the positive impact of the sale of non-performing loans. In 2023, cost of risk was materially affected by the implementation of an additional trigger classifying exposures to Stage 2. In the Corporate and Investment Banking segment, the final amount of provisions was at similar level thanks to the stable quality of the corporate portfolio and the positive impact of the sale of non-performing loans.
4.4. Changes in the statement of financial position of mBank
Changes in assets
In 2024 mBank’s assets rose by PLN 19,849.9 million (+8.9%). Total assets stood at PLN 242,268.4 million as at December 31, 2024.
The table below presents changes in particular items of mBank assets.
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Cash and cash equivalents
36,641.4
36,601.5
-40.0
-0.1%
Loans and advances to banks
10,476.2
13,248.6
2,772.4
26.5%
Securities held for trading and derivative instruments
1,727.2
1,807.5
80.3
4.6%
Net loans and advances to customers
103,935.7
111,477.3
7,541.5
7.3%
Investment securities
61,978.3
71,073.7
9,095.4
14.7%
Intangible assets
1,513.9
1,734.8
220.9
14.6%
Tangible assets
1,165.9
1,112.1
-53.8
-4.6%
Other assets
4,979.8
5,213.1
233.3
4.7%
Total assets of mBank
222,418.5
242,268.4
19,849.9
8.9%
Net loans and advances to customers the sum of loans and advances to customers measured at amortised cost, non-trading loans and advances mandatorily measured at fair value through profit or loss, loans and advances classified as trading assets, and loans and advances measured at fair value through other comprehensive income.
Investment securities – the sum of debt securities measured at fair value through other comprehensive income, debt securities measured at amortised cost, and non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Other assets – the sum of fair value changes of the hedged items in portfolio hedge of interest rate risk, non-current assets and disposal groups classified as held for sale, investment properties, current income tax assets, deferred income tax assets and other assets.
Loans and advances to customers remained the largest asset category of mBank at the end of 2024. As at December 31, 2024, they accounted for 46.0% of total assets compared with 46.7% at the end of 2023. This year-on-year decline resulted, among others, from adjustments related to the update of cash flow estimates related to CHF mortgage loans and the reduction of their gross carrying amount in accordance with IFRS 9, as a result of cost of legal risk related to this portolio .
The volume of net loans and advances to customers grew by PLN 7,541.5 million (+7.3%) year on year.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
74
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Loans and advances to individuals
57,478.5
61,403.0
3,924.5
6.8%
Loans and advances to corporate entities
49,376.8
52,908.0
3,531.2
7.2%
Loans and advances to public sector
132.9
144.8
12.0
9.0%
Total (gross) loans and advances to customers
106,988.2
114,455.9
7,467.6
7.0%
Provisions for loans and advances to customers
-3,052.5
-2,978.6
73.9
-2.4%
Total (net) loans and advances to customers
103,935.7
111,477.3
7,541.5
7.3%
Gross loans and advances to individuals rose by PLN 3,924.5 million (6.8%) compared with the end of 2023.
At the same time, gross loans and advances to corporate entities grew by PLN 3,531.2 million (+7.2%). Gross loans and advances to the public sector increased by PLN 12.0 million (+9.0%).
Investment securities constituted mBank’s second largest asset category (29.3%). In 2024, their value grew by PLN 9,095.4 million (+14.7%).
Other assets made up 24.6% of the bank’s balance sheet total.
Changes in liabilities and equity
The table below presents changes in mBank’s equity and liabilities in 2024.
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Liabilities to other banks
3,346.2
3,085.3
-260.9
-7.8%
Amounts due to customers
185,117.1
200,775.8
15,658.6
8.5%
Liabilities from debt securities in issue
7,625.5
9,062.5
1,437.0
18.8%
Subordinated liabilities
2,714.9
2,675.5
-39.4
-1.5%
Other liabilities
9,951.8
8,905.6
-1,046.2
-10.5%
Total liabilities
208,755.5
224,504.6
15,749.1
7.5%
Total equity
13,662.9
17,763.7
4,100.8
30.0%
Total liabilities and equity of mBank
222,418.4
242,268.4
19,849.9
8.9%
Other liabilities – the sum of financial liabilities held for trading and hedging derivatives, lease liabilities measured at amortised cost, fair value changes of the hedged items in portfolio hedge of interest rate risk, liabilities included in disposal groups classified as held for sale, provisions, current income tax liabilities, deferred income tax provisions and other liabilities.
Amounts due to customers remained mBank’s principal source of funding. At the end of 2024, their share in liabilities and equity remained safe and high at 82.9% (83.2% in 2023).
Amounts due to customers rose by PLN 15,658.6 million (+8.5%) to PLN 200,775.8 million in 2024. The main growth driver were amounts due to individual customers, which grew by 10.8%. Amounts due to corporate entities went up by 2.8%, whereas amounts due to the public sector increased by 36.6%.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
75
PLN million
31.12.2023
31.12.2024
Change in PLN M
Change in %
Individual customers
128,412.3
142,247.6
13,835.2
10.8%
Corporate entities
56,088.6
57,686.7
1,598.1
2.8%
Public sector customers
616.2
841.4
225.3
36.6%
Total amounts due to customers
185,117.1
200,775.8
15,658.6
8.5%
Liabilities from debt securities in issue rose by PLN 1,437.0 million (+18.8% year on year) to PLN 9,062.5 million. In Q4 2024, the bank redeemed one tranche of bonds issued under the EMTN program with a nominal value of CHF 125.0 million on its maturity date. In Q3 2024, the bank issued green preferred senior bonds worth EUR 500 million. In Q4 2024, the bank launched CLN bonds with a nominal value of PLN 560 million in connection with a securitisation transaction.
Total equity grew by PLN 4,100.8 million (+30.0%) in 2024, primarily as a consequence of the increase in retained earnings, resulting from the growth of the current year’s profit by PLN 2,206.4 million, or more than 76 times year on year, to 2,235.7 million. The increase in total equity in 2024 was also influenced by the issuance of AT1 bonds with a nominal value of PLN 1,500.0 million, which the bank conducted in Q4 2024. The share of total equity in equity and liabilities of mBank Group at the end of 2024 increased compared with the previous year to 7.3%.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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5. mBank Group capital and funding
5.1. mBank Group capital base
Structure of own funds including Tier 1 and Tier 2 capital
The amount of capital maintained by mBank Group and mBank meets the regulatory requirements and allows for the planned business expansion at the defined risk appetite level. This is reflected in the Common Equity Tier 1 capital ratio (15.05% at the stand-alone level and 13.05% at the consolidated level at the end of 2024), the Tier 1 capital ratio (16.71% at the stand-alone level and 14.52% at the consolidated level at the end of 2024) and the total capital ratio (18.21% at the stand-alone level and 15.85% at the consolidated level at the end of 2024), which are above the minimal levels required by the Polish Financial Supervision Authority (PFSA) for CET 1, Tier 1 and TCR by 7.11 p.p., 7.61 p.p. and 7.45 p.p. respectively at the stand-alone level and by 4.76 p.p., 5.43 p.p. and 5.47 p.p. at the consolidated level. A detailed description of capital requirements for the Group and the bank as well as the factors influencing their change in 2024 is presented in chapter 9.3. “Capital adequacy”.
Regulatory capital requirements for mBank Group as of December 31, 2024, are presented below.
Countercyclical Capital Buffer is calculated as the weighted average of the countercyclical buffer rates that apply in the countries where the relevant credit exposures of the Group are located.
Systemic Risk Buffer determined at 3.0% in Poland entering into force from January 1, 2018; it replaced the previous PFSA add-on; for mBank it applies only to domestic exposures. Since March 2020, due to COVID-19 pandemic, this buffer amounts to 0% along with the decision issued by the Minister of Finance.
Other Systemically Important Institution (O-SII) Buffer imposed by an administrative decision of the PFSA, in which mBank has been identified as other systemically important institution; its level is reviewed annually.
Conservation Capital Buffer is equal for all banks in Poland as introduced by the Act on Macroprudential Supervision Over the Financial System and Crisis Management in the Financial System. Its implementation has been gradual. Since January 1, 2019 it has risen to 2.5% and was binding at this level in 2024.
CRR Regulation minimum level based on Regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012.
Consolidated own funds stood at PLN 16.2 billion at the end of 2024, out of which PLN 13.3 billion was Common Equity Tier 1 capital, whereas PLN 1.5 billion was Additional Tier 1 (AT1) capital. The main components of Tier 1 include:
capital instruments and the related share premium accounts
retained earnings from previous years,
accumulated other comprehensive income and regulator’s adjustments,
independently reviewed interim profits net of any foreseeable charge or dividend,
funds for general banking risk,
regulatory adjustments.
The Additional Tier 1 capital represents the value of mBank's issued capital bonds, included under "Additional capital items”.
Compared to the previous year, consolidated Tier 1 capital increased by PLN 2.1 billion, mainly due to the issuance of capital bonds with a nominal value of PLN 1.5 billion, classified as Additional Tier 1 capital, and the inclusion of the net profit for the first three quarters of 2024 amounting to PLN 1.3 billion. The increase was partially offset by the rise in negative regulatory adjustments for intangible assets and the shortfall of credit risk adjustments against expected losses under the IRB method, totalling PLN 586.9 million.
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Tier 2 capital stood at PLN 1.4 billion at the end of 2024, which represents a year-on-year decrease by PLN 652.0 million resulting from partial amortisation of three subordinated obligations in accordance with Article 64 of CRR (subordinated debt with a fixed maturity included in own funds is amortised on a daily basis for the last five years).
The table below presents the balances of mBank Group’s subordinated debt as at December 31, 2024.
Type
Nominal value
Currency
Maturity date
Tier 2 Capital
Loan
250 M
CHF
21.03.2028
Yes, but recognised in own funds in the amount of CHF 161.1 million (PLN 730.9 million) due to the amortisation period
Bond
750 M
PLN
17.01.2025
Yes, but recognised in own funds in the amount of PLN 7.0 million due to the amortisation period
Bond
550 M
PLN
10.10.2028
Yes, but recognised in own funds in the amount of PLN 416.8 million due to the amortisation period
Bond
200 M
PLN
10.10.2030
Yes, recognised in own funds in the full amount
More information on capital adequacy can be found in Note 48 to mBank S.A. Group Consolidated Financial Statements 2024, whereas detailed information on the dividend policy are provided below.
Dividend
The dividend policy of mBank incorporates the assumptions of the Group's strategy and risk management strategy and is conducted in accordance with the principles of prudence, ensuring that mBank and mBank Group maintain the capital ratios at a safe level. While recommending the payment of dividends, mBank's management board takes into account, among other things, business plan, the bank's financial situation and profitability, the macroeconomic and regulatory environment and – notably - recommendations of the Polish Financial Supervisory Authority (PFSA).
In July 2023, the mBank’s Management Board adopted, and the Supervisory Board approved the Capital Management Strategy of the mBank Group, which assumes no dividend payment from the profit obtained by mBank S.A. in 2024. This position on no dividend payment from the profit achieved in 2024 was maintained in the updated Capital Management Strategy of the mBank Group, approved by the Supervisory Board in December 2024. Additionally, the decision was extended to include no dividend payment from the profit generated in 2025, as informed by the Management Board in the current report in December 2024. The Bank plans to allocate the retained earnings to increase loan volumes, maintaining capital buffers above regulatory requirements and in line with the Bank's strategy. Nevertheless, mBank's long-term dividend strategy for the coming years, including 2026, assumes a dividend payment of 50% of the net profit of the mBank Group.
Minimum requirement for own funds and eligible liabilities (MREL)
On April 9, 2024, mBank received a letter from the Bank Guarantee Fund (BFG) regarding the minimum requirement for own funds and eligible liabilities (MREL). The letter notifiedthe bank of a joint decision of the resolution authorities, i.e. the Single Resolution Board (SRB) and the BFG.
The decision sets the final MREL target for the bank at a consolidated level, with the exclusion of mBank Hipoteczny in accordance with Article 97 (4a) of the Act of June 10, 2016, on the Bank Guarantee Fund, the Deposit Guarantee Scheme and Resolution (BFG Act). The total requirement is 15.36% of the total risk exposure amount (TREA), including 13.69% for own funds and subordinated eligible liabilities.
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The requirement accounts for 5.91% of the total exposure measure (TEM), including 5.26% for own funds and subordinated eligible liabilities. When settling MREL targets, the resolution authorities took into account the multiple point of entry resolution strategy adopted at the Commerzbank AG Group level.
The Common Equity Tier I (CET1) capital instruments counted by mBank towards the combined buffer requirement cannot be included in MREL-TREA.
On November 15, 2024, the BFG updated its MREL methodology. In particular, it introduced the expectation that part of the MREL target, known as the recapitalization amount, should be met with debt instruments (other than CET1).
As at December 31, 2024, mBank met the MREL target communicated in the decision received on April 9, 2024. As at December 31, 2024, MREL-TREA stood at 23.51%, including 21.91% for own funds and subordinated eligible liabilities. For MREL-TEM, the ratio is 9.10%, including 8.48% for own funds and subordinated eligible liabilities. The bank also meets the MREL target with debt instruments in an amount no lower than the recapitalization amount.
Additionally, as at December 31, 2024, mBank does not qualify as a Top-Tier Bank or a "Fished Bank," as defined in Article 97h, (1) and (3) of the BFG Act.
Detailed MREL information is provided in the Disclosures on Capital Adequacy available at https://www.mbank.pl/en/about-us/capital-adequacy-information-policy/ .
mBank Group maintains a diversified funding structure. It takes into account profitability principles and the stability of financing credit activities. mBank Group complies with regulatory requirements, including maintaining appropriate levels of financial liquidity and capital adequacy ratios.
Customer deposits represent the main funding source of the Group. Their share in the Group's funding structure has been growing systematically and as of December 31, 2024, it reached 88,0% (compared to 87,0% at the end of 2023). The growth is primarily driven by retail deposits. Thanks to the granularity of the deposit base, they constitute a stable source of funding. The loans to deposits ratio for the Group as of December 31, 2024, was 60.5% compared to 61.2% in the previous year.
Wholesale funding is an important element in the mBank Group's funding strategy. It plays a significant role in providing stable, long-term financing, ensuring the diversification of funding sources, and allowing regulatory measures to be maintained above required levels. Wholesale funding consists of issued debt securities and bilateral loans and credits taken out from other banks.
The largest share of the Group's wholesale funding comes from Eurobond issuances conducted by mBank under the EMTN Program. The total volume of outstanding Eurobonds amounted to EUR 1.75 billion at the end of 2024.
Within the Group, mBank Hipoteczny is also an issuer of debt securities. As a mortgage bank, it has the ability to issue covered bonds to finance the portfolio of retail mortgage loans.
The source of funding for the Group's operations and one of the elements of the capital management policy are also capital instruments classified as own funds: subordinated loans and bonds classified as Tier II capital and bonds classified as additional Tier I (AT1) instruments that were issued by mBank in 2024 for the first time.
Additionally, mBank is an issuer of credit-linked notes (CLNs), which are part of synthetic securitization transactions. Between 2022 and 2024, mBank conducted four such transactions. All CLN bonds are listed on the Vienna Stock Exchange.
More information about transactions conducted by mBank in 2024 can be found in chapter 1.7. "Key events and projects in the mBank Group in 2024".
The liabilities to other banks are complementary to the issuance of debt securities, but their share in the funding structure is systematically decreasing. Currently, this position includes bilateral loans taken out from the European Investment Bank amounting to CHF 427 million. In the past, loans from our strategic shareholder were a source of funding for mortgage loans in foreign currency. mBank repaid the last loan from Commerzbank in 2018.
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Currently, for the Group's foreign currency funding, we use medium-term and long-term balance sheet instruments, including issuances of unsecured bond, bilateral loans from the EIB, subordinated loans, as well as FX Swap and CIRS transactions.
Bond issued under the EMTN Program
In April 2018, mBank established the Euro Medium Term Note Program (EMTN Program) with a total nominal value of EUR 3 billion. The EMTN Program enables the issuance of debt securities in many tranches and currencies, with different interest structures and maturities.
Since the launch of the EMTN Program, mBank has conducted a total of six eurobond issuances, denominated in both CHF and EUR. The bonds have been admitted to trading on the regulated market of the Luxembourg Stock Exchange (EUR bonds) and the Zurich Stock Exchange (CHF bonds). As of the end of 2024, there are three outstanding series of EUR-denominated bonds.
The issuance of EUR 500 million in September 2021 was the first issue of non-preferred senior (NPS) bonds on the Polish capital market. In September 2023, the bank issued another NPS bonds with a nominal value of EUR 750 million. This was the largest debt securities issuance in the Group's history in terms of volume. In September 2024, the bank issued the preferred senior (PS) bonds with nominal of EUR 500 million.
The primary purpose of issuing NPS and PS bonds is to meet the MREL requirement. Due to their structure, they are also an important and stable source of long-term financing for the bank.
The table below summarizes the outstanding bond series as of the end of 2024.
Series
Bond format
Issue date
Nominal value
Maturity date
Coupon
11
non-preferred senior (NPS)
20.09.2021
EUR 500,000,000
21.09.2027
0.966%
12
non-preferred senior (NPS)
11.09.2023
EUR 750,000,000
11.09.2027
8.375%
13
preferred senior (PS)
27.09.2024
EUR 500,000,000
27.09.2030
4.034%
All outstanding Eurobonds have been issued in the green bond format. The principles for allocation of the proceeds to the bank's assets are defined by the mBank S.A. Group Green Bond Framework. According to this document, the funds raised from the issuance of green bonds will be used to finance and refinance retail mortgage loans for the purchase or construction of energy-efficient buildings, as well as onshore wind and photovoltaic farm projects.
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6. Retail Banking Area
mBank’s Retail Banking segment serves 5,714 thousand individual clients and microenterprises in Poland, the Czech Republic and Slovakia online, directly through the call centre, via mobile banking and other state-of-the-art technological solutions, as well as in a branch network. The bank offers a broad range of products and services including current and savings accounts, accounts for microenterprises, credit products, deposit products, payment cards, investment products, insurance products, brokerage services, and leasing for microenterprises.
Key financial data (at the end of 2024):
Share in total income
Pre-tax profit
Total income
62.1%
PLN 4,389.8 M
PLN 7,457.0 M
Key highlights
Another record-high profit before tax at the level of PLN 4,389.8 million (+25.3% compared to the previous year), along the increase in revenues of 9.5% year on year.
Mortgage sales reached a record level of PLN 10,585.4 million (including PLN 1.4 billion under the Safe Credit 2% program), which is an increase of 157.1% year on year. mBank's share in the zloty mortgage market increased to 8.2% compared to 7.7% in 2023.
Increase of non-mortgage loan sales by PLN 11,347.3 million (+31.8% year on year)
Growth of retail deposits by 11.3% in 2024, ensuring safe liquidity position of mBank Group
Number of mBank retail clients amounted to 5,714.5 thou., including 1,115.6 thou. clients (+1.2% year on year) in mBank foreign branches.
Value of cashless transactions increased by 16.2%, while the number increased by 9.9% on annual basis, along with rising activity of clients and increased consumption in the economy.
S hare of digital channels in the sale of non-mortgage loans (by number of pieces) levelled off at 81% in 2024 compared to 82% a year before, while the share of mobile application increased to 63.1% compared to 60.6% a year before. Share of processes in retail banking area initiated by the clients in digital channels increased to 89% in 2024, up from 87% a year before.
Marketplace mOkazje zakupy allows mBank clients to make purchases directly in mBank’s app. The project pilot started in June 2024; as of December, all adult clients can use mOkazje zakupy
Functionalities supporting the clients in managing their finance responsibly: the personal financial management (PFM) tool now features a new "My Assets" section with an intuitive interface that presents the structure of assets and liabilities. Customers also received additional features enabling budget planning, personalized summaries of income and expenses on a monthly and annual basis, and a retirement calculator that helps to build their own savings plan for retirement
Development of mobile app: expansion of the investment management section, management of payment card tokens, and changes to BLIK limits and phone numbers directly in the application; improvement of the mobile account opening process through the implementation of biometric customer verification and the extended use of the convenient mojeID verification method
As part of the expanded mobile wallet offer, customers can pay for purchases using rings, watch straps, and other wearable accessories equipped with Fidesmo Pay or Digiseq Pay software.
Companies using the Paynow payment gateway can offer deferred payments (BNPL – Buy Now, Pay Later), which increases sales and accelerates customers' purchasing decisions.
Actions for sustainable development: continued growth in the sale of loans financing properties with low energy consumption (based on the annual demand for non-renewable primary energy), which in 2024 accounted for 13.2% of total mortgage sales; as the first signatory in Poland of the Commitment to Financial Health and Inclusive Banking and the Principles for Responsible Banking, we aim for at least 50% of our clients to consider themselves financially resilient.
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6.1. Financial results
In 2024, the Retail Banking segment generated a profit before tax of PLN 4,389.8 million, which represents an increase by PLN 887.1 million, i.e. 25,3% year on year. Total income increased by 9.5% year on year. The magnitude of the increase of profit before tax results mainly from higher net interest income, which increased by PLN 567.4 million, i.e. 10.0% year on year. The foreign branches in Czechia and Slovakia in 2024 generated a profit before tax of PLN 208.9 million compared to PLN 279.7 million in 2023, which represents a decrease by 25.3% year on year.
PLN M
2023
2024
Change in PLN M
Change in %
Net interest income
5,688.2
6,255.7
567.4
10.0%
Net fee and commission income
956.9
1,035.5
78.7
8.2%
Net trading income
101.9
120.8
18.9
18.5%
Other income
52.2
58.8
6.7
12.8%
Net other operating income/expense
10.0
-13.8
-23.8
-237.6%
Total income
6,809.2
7,457.0
647.8
9.5%
Net impairment losses and fair value change on loans and advances
-892.3
-412.8
479.6
-53.7%
Total overhead costs (including deprecation)
-1,960.7
-2,178.5
-217.8
11.1%
Taxes on Group's balance sheet items
-453.5
-476.0
-22.5
5.0%
Profit/loss before tax of Retail Banking
3,502.7
4,389.8
887.1
25.3%
Other income calculated as gains or losses from derecognition of financial assets and liabilities not measured at fair value through profit or loss and gains or losses from non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Total overhead costs (including deprecation) - calculated as the sum of total overhead costs and depreciation.
Net impairment losses and fair value change on loans and advances – the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.
mBank S.A. Group
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6.2. Activity of Retail Banking Area in numbers
Refers to mBank and mBank Hipoteczny
(‘000)
31.12.2022
31.12.2023
31.12.2024
Annual change
Number of retail clients, including 1 :
5,642.8
5,716.2
5,714.5
0.0%
Poland
4,590.1
4,614.3
4,598.9
-0.3%
Foreign branches
1,052.7
1,102.0
1,115.6
1.2%
The Czech Republic
732.3
775.5
791.8
2.1%
Slovakia
320.4
326.5
323.8
-0.8%
Mobile application users
3,338.5
3,646.1
3,841.7
5.4%
Poland
2,920.0
3,167.6
3,330.2
5.1%
Foreign branches
418.5
478.5
511.5
6.9%
PLN M
Loans to retail clients, including:
71,645.1
66,512.0
70,925.1
6.6%
Poland
61,381.5
57,515.7
61,858.9
7.6%
mortgage loans
42,701.1
39,088.7
42,327.8
8.3%
non-mortgage loans
18,680.4
18,426.9
19,531.1
6.0%
Foreign branches
10,263.6
8,996.3
9,066.3
0.8%
The Czech Republic
7,114.6
6,100.7
6,019.9
-1.3%
Slovakia
3,149.0
2,895.6
3,046.4
5.2%
Deposits of retail clients, including:
122,726.8
128,291.6
142,107.4
10.8%
Poland
105,750.2
112,337.9
125,074.3
11.3%
Foreign branches
16,976.5
15,953.6
17,033.0
6.8%
The Czech Republic
12,047.8
11,547.6
12,708.5
10.1%
Slovakia
4,928.8
4,406.0
4,324.5
-1.9%
Investment assets of mBank individual clients (Poland)
18,746.0
22,396.6
27,336.8
22.1%
(‘000)
Credit cards, including
361.0
367.9
362.0
-1.6%
Poland
326.1
332.9
326.7
-1.9%
Foreign branches
34.8
35.1
35.3
0.7%
Debit cards, including:
4,851.2
5,233.9
5,421.8
3.6%
Poland
4,082.3
4,379.4
4,515.6
3.1%
Foreign branches
768.9
854.5
906.2
6.0%
Distribution network
Advisory Centres
15
15
15
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Light branches
31
31
29
mBank (f. Multibank)
84
83
82
mKiosks (incl. Partner Kiosks)
149
138
139
mFinanse Financial Centres
40
40
40
Czech Republic & Slovakia
46
47
43
1 Includes the number of Kompakt Finanse clients.
6.3. Retail Banking of mBank in Poland
Retail banking offer for individuals
In 2024, we continued to develop our product range and improve customer service quality. Amid the consistently high interest rates and inflation, we ensured that our offering remained attractive to clients and competitive in the banking market. We continued our ESG efforts and enhanced our e-commerce solutions and internal processes. Moreover, we took measures towards achieving our goals relating to Retail Banking, as described in the mBank Group Strategy for 2021-2025. In line with our strategy, we support our clients’ financial well-being, among others, by encouraging them to analyse their budget.
We further develop the functionalities available in the Personal Finance Manager (PFM), a tool helping clients manage and understand their finances and household budgets. PFM helps users take care of their financial well-being. The clients can set a monthly spending limit in the app and track a summary of their transactions for the month. They can also easily check on the progress bar whether it meets the activity condition for no card fees. A dditionally, in 2024, we introduced a retirement calculator in PFM, which allows customers to independently build their own retirement savings plan. mBank is the first bank in Poland to offer such a tool in a mobile application. More information about the retirement calculator can be found in chapter 1.7. “Key events and projects in mBank Group in 2024”. In 2024, the average monthly number of unique users of PFM in the mobile app and online banking reached 1.45 million.
The significance of the mobile channel continues to rise: the mobile app is currently used by 3,330.2 thou. clients in Poland, up by 5.1% compared with 2023 (3,167.6 thou. users). Share of the mobile application in the sale of non-mortgage loans increased to 63.1% at the end of 2024 compared with 60.6% in 2023 (by number of pieces). Monthly active users (MAU) increased to 3,459.4 thou. (+2.5% year on year). For more information on new mobile solutions, see chapter 1.7. “Key events and projects in mBank Group in 2024”.
In line with our strategy, we care about the financial health of our clients. In 2024, we implemented communication activities based on the 6 principles of healthy finances. They assume that a person who has healthy finances:
uses the Internet safely,
spends his or her money consciously,
has a financial cushion,
borrows for things he or she really needs,
keeps himself/herself, his/her loved ones safe and insures what he/she considers most valuable,
invests for the future.
We support clients in using our banking services conveniently. We offer them the tools to make informed financial decisions. Transparent information on bank fees allows our clients to better control their finances. We have introduced an automatic card transaction counter in the mobile application. With it, our clients can quickly and conveniently check whether they have met the card activity condition that exempts them from the card fee.
Non-mortgage loans
In 2024, we achieved a high level of non-mortgage loan sales. We granted PLN 9,028.8 million in loan volume to individuals. This represents an increase of 28.1% compared to the previous year, strengthening our position in the non-mortgage loan market. At the same time, mBank focused on maintaining the assumed profitability. Our activities are primarily focused on our active client base. Amongst them, for a subsequent year in a row, services in electronic channels were very popular.
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In 2024, the share of non-mortgage loan sales through the digital channel in the total sales volume amounted to 81% (quantity-based). We pay particular attention to the share of non-mortgage loan sales through the mobile application, which in 2024 amounted to 63.1%.
We develop new process keeping in mind the positive experience of our clients. In 2024, we introduced a simple and convenient method of deferred payments: mBank pay later. The possibility of deferred payments in mOkazje zakupy was released to clients in January 2025.
We modified the loan process to include the legislator's requirement regarding the restriction of the PESEL number. This is an important change for our clients and their financial security. In 2024, we implemented changes related to the NBP reference rate in loan agreements for newly concluded instalment and revolving loans.
Mortgage loans
The beginning of 2024 focused on disbursing loans under the Safe 2% Loan program. While the program ended at the end of 2023, significant volumes under this program were disbursed by the bank in the first half of 2024. In 2024, mBank launched PLN 1.4 billion of loans under the Safe 2% Loan program, while during the entire program period a total of PLN 2.2 billion was released.
The total value of mortgage loan sales in 2024 amounted to PLN 10,270.3 million, representing an increase o f 158.7% compared to the previous year. The share of loans based on a period ically fixed rate amounted to 69.4% of the sales volume, which is an increase of 3.5 percentage points compare d to 2023.
In 2024, we continued to sell mortgage loans financing properties which are characterized with low energy consumption. The conditions of this product are determined based on the annual demand for non- renewable primary energy indicator specified in the Energy Performance Certificate or the Designed Energy Performance Certificate. The offer was very popular among our clients – its volume accounted for 13.2% of the total sales value in 2024.
The NPL ratio for the mortgage loan portfolio for individuals in Poland increased slightly year on year and amounted to 2.1% at the end of 2024.
Deposits
At the end of 2024, the value of mBank's retail deposits in Poland was at PLN 125,074.3 million and grew by P LN 12,736.4 million, i.e. 11.3% compared to 2023. Polish deposit market was characterized with high interest rates on retail deposit offer in 2024. On such a competitive market, mBank maintained high e ffectiveness in acquisition and retention of retail deposits. Simultaneously, it improved interest margin in annual terms, and a chieved a high deposit retention rate. Such outstanding results were generated due to agile deposit offer manag ement. Clients with expiring contracts were offered products aligned with the ir needs. The target was supported by numerous sales and retention campaigns, as well as special offers.
In 2024, mBank was effectively achieving strategic objectives related to increase of its market position in the portfolio of saving and current accounts. As a result, the volume of current and savings accounts in Poland increased by 13.4% to PLN 99,328.3 million.
Investment funds for retail clients
In 2024, the balance of purchases and redemptions of investment funds for retail clients was positive. The sale of funds was supported by promotions. mBank has implemented another edition of the promotion combining investment in funds with a bank deposit. Moreover, mBank encouraged systematic investing through the “Investing regularly” promotion. As part of this promotion, mBank pays a cash bonus to clients who make regular payments to the investment fund of their choice.
In February, we refreshed the presentation of investment funds included under the SFIO Ready Strategies umbrella. The changes were introduced in the transaction system and the mobile application. We added more information about the investment itself and its composition. We want t o give our clients a greater sense of control over their money and simultaneously better understan ding of how our experts manage it.
In May, the transfer of assets, which were previously managed in the “Gotowe Strategie SFIO” fund in Skarbiec TFI, into mTowarzystwo Funduszy Inwestycyjnych S.A. (mTFI) was completed. The transfer concluded process of taking over investment funds, which were assembled for mBank by external entities and previously managed in a white-label formula.
In September, we implemented a simple and personalized tool that allows clients to independently develop a plan for making additional savings for retirement.
In November mBank has expanded its offer with “Pakiet Emerytalny” (Retirement Package). The product allows clients to open IKE account (Individual Retirement Account) or IKZE account (Individu al Retirement
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Security Account). Clients can invest on these accounts in selected cycle of life fund, which are designed to save and invest money for a retirement. mTFI S.A. is managing these funds.
Cards and accounts
We carried out numerous acquisition activities targeted at various segments:
Clients with eKonto możliwości (eAccount with possibilities) and eKonto do usług (eAccount for services) received preferential currency rates for card payments under the multi-currency service.
We prepared a promotion to encourage parents to open the first bank account for their children. Clients who opened the “eKonto Junior with pocket money” account and met the terms and conditions of the offer received up to PLN 150 of “pocket money” to their child’s account.
When it comes to mBank’s youngest clients, in 2024 we gained almost 53.0 thou. new Junior clients. Since the beginning of the offer we acquired in total over 296.0 thou. Junior account holders. This result brings mBank closer to achieve strategic goal of obtaining 300.0 thou. youngest clients.
Apart from the standard offer, for a subsequent year mBank clients could use one of the special offers for travelers. Clients from every segment: young, mature and affluent received lots of benefits and discounts for travel insurance and dedicated mOkazje (mBenefits) within assembled vacation packs. Young and mature clients could use moneyback service while making card transaction abroad, and affluent clients could use Visa World Intensive free of charge.
At the beginning of the year, mBank introduced changes to fees, among others, for ATM withdrawals. Clients who make card transactions on a daily basis will not be affected. We implemented the changes so that the cost increase is not fixed, but depends on the choice of the client, i.e, the desire to use a specific service associated with a given fee.
In April 2024 mBank enriched the core offer for individual clients with eKonto do usług (eAccount for services). New account provides active clients with an access to all ATMs in Poland for free. Clients will not be charged for ATM withdrawals if the withdrawn amount is at least PLN 300. Additionally, the account enables cash withdrawal in a store checkout for free under cash back service. The offer is available to existing mBank clients.
We have introduced many improvements to the application and website, which will ensure even greater convenience to our clients. In response to customer needs, we have made it possible to change BLIK transaction limits in the mobile application. Thanks to this new functionality, users can modify their limits at any time without logging into the website or contacting us by phone.
We have also made it possible to receive a transfer confirmation before the out going session. This functionality allows to download the transfer confirmation immediately after it is ordered, e ven before the next session starts.
In cooperation with Visa, mBank created a special card for the Łódź Summer Festival for the first time. The card was available to clients from mid-July to early August 2024. The front of the card featured a graphic referring to the city of Łódź – Jednorożec Galancik.
As part of a special campaign conducted from June to September 2024, mBank clients could take advantage of a package of summer benefits. The package included: a multi-currency service on preferential terms, free ATM withdrawals abroad, a discount on travel insurance, and additional discounts in mOkazje zakupy (mDiscounts). Additionally, up to PLN 200 could be returned to the account of a client as a percentage of payments made with debit cards abroad.
In the second half of 2024, during the Great September festival in Łódź, we once again enabled the ordering of a card with a dedicated design. The Great September cards with a limited design feature a “blind notch”. This is an indentation on the shorter edge of the plastic, which makes it easier for blind or visually impaired people to use the card. The card could also be ordered in a mobile version. The mobile card is immediately active in the mBank application and ready to use.
Since mid-2024, all mBank cards have also been operational during banking system maintenance breaks (night work). Purchase transactions in stores and cash withdrawals are available.
In 2024, the value of payment card and BLIK transactions made by mBank’s retail clients amoun ted to PLN 126.2 billion, which represents a rise by 16.2% year on year. The number of transactions made by mBank clients increased by 9.9% year on year to 1,511.9 million. The share of card transactions made by mBank cards in the total number of card transactions in Poland stood at 12.3% at the end of September 2024,
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while the share of card transactions made by mBank cards in the total value of card transactions in Poland stood at 12.7% (last available data, cumulative for the first nine months of 2024).
Additional services
In 2024 we continued to develop our mOkazje (mDiscounts) program. Participating clients receive part of the money they spent on purchases back onto their account. Last year was the best year in the entire history of the mOkazje program (mDiscounts). In 2024, clients using the mDiscounts received in total PLN 7.9 million return of funds to accounts. It is an increase of 34% to the 2023. Of the stated amount over PLN 6 million was financed by partners of the program (an increase of 54% on an annual basis).
The post-transaction discount (MoneyBack) applied to 388,000 clients, which means an increase of 38% year on year. The number of discounted transactions increased by 41% to 675 thousand. MoneyBack is not the only benefit that clients receive under the mDiscounts program. In the past year, mBank has offered over 33,000 discount vouchers through pop up notifications.
In 2024, mDiscounts have undergone a revolutionary change. In addition to the part that is offering benefits and has existed since 2013, a marketplace mOkazje zakupy has also been launched. The new feature was co-developed with Morele.net. It facilitates ordering favourite products directly from the mBank’s mobile app. More information about mOkazje zakupy is available in chapter 1.7. “Key events and projects of mBank Group in 2024”.
Offer for affluent clients
‘Intensive’ offer is our answer to the needs of affluent clients. mKonto Intensive is an account that gives access to a package of products and services. The account and card are free if a client has regular inflows or has assets at mBank. Clients have access to
free cash deposits and withdrawals (subject to meeting the required withdrawal threshold),
three express transfers per month
and a multi-currency card.
As part of the package, we offer preferential terms for loans and savings products. We provide access to premium service, a personal expert at the branch and priority service on the mLine. We offer a convenient and secure mobile application with access to a financial manager functionalities (PFM). We also offer investment products, brokerage services and an account for children.
In 2024, we increased the income threshold defining affluent clients (from PLN 7,000 to PLN 10,000 per month). We did not change the second, optional criterion included in this definition: the total sum of deposits and investments held in the bank, which remains a minimum of PLN 100,000.
To enhance the Intensive offer, we also focused on seasonal packages for traveling clients. During the summer and winter periods, clients benefited from numerous advantages and discounts as part of the prepared packages. A key aspect for us was offering the Visa Świat Intensive currency card, which clients can use not only during their travels but also in everyday life.
Brokerage operations and asset management
The Brokerage Bureau of mBank offers a broad scope of brokerage services including, but not limited to:
transactions in regulated markets in Poland and abroad as well as in the OTC (CFD) market,
investment advisory and asset portfolio management as part of wealth management services,
conducting public offerings (IPO/SPO/ABB) on capital markets, takeover bids for the sale of shares, and share buybacks.
Our clients include:
retail and private banking clients,
largest Polish institutional investors: pension funds, investment funds, and asset management companies,
issuers of securities, private equity funds,
foreign funds.
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In 2024, investor activity on the Warsaw Stock Exchange (GPW) main market increased by approximately 20% compared to the previous year. The GPW recorded a decline in the share of retail clients in GPW trading compared to the very high shares in 2020-21.
We have maintained a strong leadership position in the brokerage services segment for retail clients. According to the Central Securities Depository of Poland (KDPW), we managed over 470 thousand brokerage accounts at the end of 2024, which is by far the largest number of brokerage accounts among all Polish brokerage bureaus and houses. In terms of the increase in the number of investment accounts, mBank was the second player on the market (according to KDPW data), having opened approximately 33.7 thousand accounts.
Despite the continued concentration of clients in the Polish market, interest in the foreign markets segment is still growing, particularly in passive investment solutions (ETF instruments). At the end of 2024, foreign assets were present in the portfolios of nearly 56.4 thousand clients and accounted for approximately 14% of all retail client assets.
The modern investment tools and comprehensive range of products and services are key factors why retail investors choose mBank’s Brokerage Bureau. In 2024, we introduced a new Information Service. In the new version of the tool, clients can quickly find information about the company they are interested in and potential investment inspirations. We also made available to our clients a proprietary ETF fund search engine, which helps find the right ETF according to specified preferences, learn about its composition, and the amount of fees. Both implemented solutions are another step towards providing intuitive and simple solutions that facilitate entry into the world of investments, aligning with the observed market trend of passive investing.
We also continuously care about increasing financial awareness among our clients. In 2024, we participated in numerous industry conferences, conducted lectures, courses, and published educational articles that help start investing in foreign markets and ETF funds. Our experts participated in events such as Passive Revolution, Invest Cuffs, Wall Street, and ForFin 2024, where we acted as a strategic partner. Together with the Warsaw Stock Exchange and Beta Securities, we organized the fifth edition of the Warsaw Passive Investment Conference. Additionally, we published a series of videos (Views from the Tower) and podcasts (Everyone Knows), as well as prepared a range of publications directed to clients and employees (e.g., Expected Investment Directions and Investment Compass). We also held thematic meetings with private banking clients dedicated to financial markets. These activities were in line with mBank's declaration of supporting financial health and inclusive banking under the United Nations Environment Program Finance Initiative (UNEP-FI).
All model investment strategies managed in the Asset Management formula by the Asset Management Department at the mBank Brokerage Bureau recorded positive results. The highest returns were noted by strategies with the largest equity component (Megatrends, Dynamic Growth ESG, and Balanced ESG) due to rising stock market prices. The results of strategies with the largest bond component (Capital Protection and Income) were supported by the relatively good performance of the Polish debt market and low interest rate risk American bonds.
Assets managed by the Wealth Management Department in the Asset Management formula remained at approximately PLN 2.5 billion in 2024. Strategies with a large debt component (Income) were particularly popular among clients. The largest outflows were recorded by the Anti-Inflation strategy, largely due to the conversion of funds to the aforementioned debt strategies.
Despite the limited number of capital transactions (especially IPOs) on the Warsaw Stock Exchange in 2024, mBank’s Brokerage Bureau remained very active and participated, among others, in:
SPO of Bioceltix S.A. shares (PLN 60 million) as a global co-coordinator and joint bookrunner;
SPO of Tatry Mountain Resorts shares (EUR 120 million) with pre-emptive rights as a co-coordinator and joint bookrunner;
IPO of Żabka Group S.A. shares (PLN 6.5 billion) as a joint bookrunner;
SPO of Captor Therapeutics shares (PLN 33 million) as a global co-coordinator and joint bookrunner;
accelerated bookbuilding (ABB) offering of Shoper S.A. shares (PLN 207 million) as a global co- coordinator and joint bookrunner;
takeover bids for the sale of shares in Wojas S.A. and GI Group Poland S.A. as an agent;
buybacks of shares of Comp S.A., cyber_Folks S.A., Neuca S.A., and Oponeo S.A. as an agent;
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compulsory buyout of shares in Wojas S.A. shares as an agent.
Relations with UNIQA
In 2024 mBank continued the bancassurance cooperation with its strategic partn er UNIQA. The partnership includes sale of insurance products to mBank clients focusing on stand-alon e products including:
car insurance,
travel insurance,
home insurance,
life and health insurance.
Our clients intensively use remote channels to contact the bank. Therefore, while developing the insurance offer, mBank takes into account meeting their expectations. As a result, all standalone insurances are available in each sales channel, including mBank’s mobile application. In 2024 mBank clients purchased 47% of standalone insurances via mobile application (+5 p.p. year on year).
In 2024, mBank customers purchased 16% more travel insurance policies compared to the previous year, 63% of which were through the mobile app. Additionally, motor insurance experienced high demand in 2024. In 2024 mBank clients purchased 46% more insurances than in the previous year, including 29% of them via the mobile application.
We are observing a consistent increase in the number of clients who hold at least one active standalone insurance policy not tied to a banking product (+7% year-on-year).
Products and services for small and medium-sized enterprises
In 2024, we made the application for setting up a company and a business account available in the mBank mobile app. We also introduced the promotion “Otwórz konto i firmę za 0 zł” (Open an account and a company for 0 PLN). At the same time, we promoted the account for sole proprietorships “Konto firmowe za 0 zł” (Business account for PLN 0) and for companies “Komfortowe konto dla spółki” (Comfortable account for the company). Entrepreneurs who started a business or opened a business account with us received "moneyback", which could reach up to PLN 1,500.
We listen intently to the needs of our clients – at the end of 2024 we abolished fees for internal money transfers. This decision received a positive reaction among entrepreneurs.
In 2024, together with our partner VISA, we organized the “Czas na Twój biznes” (Time for Your Business) competition, in which we were the first bank to show the transformation of an individual person into an entrepreneur. Future entrepreneurs received advice and substantive support from us during workshops. We provided the winners of the competition with funds to implement their own business ideas.
We regularly shared knowledge with entrepreneurs through direct communication and on our websites. We published industry reports, informative articles, and news about changes in tax regulations. To appreciate our entrepreneurs, in June 2024, we organized a series of webinars for "Entrepreneur's Day". This short "business series", inspired by real events and recommendations made by clients, was broadcasted from Monday to Friday. In addition to a dose of knowledge, each day our clients could enjoy specially prepared promotions for services that help them run their business, such as mKsięgowość (mAccounting), Paynow payment gateway, or POSapp phone terminal.
As part of promoting our products, we invited entrepreneurs to collaborate and talk about their companies and mBank solutions which facilitate their daily business operations on RMF FM radio. A series of short interviews was also published on RMF FM radio's social media. For the first time, we also organized a presentation by an entrepreneur using mBank services as part of the ASP workshop at the Pol'and'Rock festival.
In Q2 2024, we continued to fully support the Financial Shield 1.0 and 2.0 programs under the Polish Development Fund (PFR), carrying out a number of processes related to the settlement of funds granted through us. Our task was to provide the necessary documents and repay subsidies, conduct debt collection processes, and report results to the PFR.
In 2024, the Paynow payment gateway achieved an annual increase of 35% in transaction value. We established cooperation with new payment method providers, allowing us to offer our customers the ApplePay mobile wallet and deferred payments. We also streamlined the process of verifying our merchants' websites, enabling us to start cooperation faster.
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We offered new clients a promotional price for the mAccounting Comfort service. Thanks to the service, clients receive full accounting support from a dedicated accountant. At the same time, by using the mFinance Organizer, they have constant access to their company's financial information and can easily pay taxes and ZUS obligations, which are verified by the supporting accountant.
In the area of business financing, we achieved a sales growth rate of 12% compared to the previous year. We focused on development in two sub-segments: clients with revenu es up to PLN 1 million and mature clients. By changing our pricing approach and strengthening communicat ion and marketing campaigns directed at clients, we achieved a sales volume growth of 22% year on year in both segments. Additionally, the development of the offer for mature clients (SME+ project/Flash project) allowed for a 100% increase in available product limits.
At the same time, we continued the strategy of developing financing for limited liability companies, where we achieved a 32% year on year increase in sales volumes.
6.4. Retail Banking in the Czech Republic and Slovakia
2024 brought several changes that had an impact on the Czech banking market in particular. Despite the ongoing war in Ukraine, the situation in the Czech Republic stabilized. Inflation approached the Czech National Bank's inflation target at the beginning of the year and remained between 2-3% throughout the year. This stabilisation led to a significant and rapid decline in base interest rates in the first half of the year, with the 2W REPO rate falling from 6.75% in January to 4% in December. This significant reduction impacted the level of interest rates on savings accounts and mortgages. After several years of stable or rising rates on savings accounts, rates fell quite rapidly in 2024. In such environment mBank managed to increase the volume of deposits on an annual basis. The situation on the Slovak market was stable throughout 2024. It was shaped by ben eficial macroeconomic factors and rates in the euro area. This led to stabilization of mBank results in Slovakia. Mortgage lending remains impacted by the Polish banking tax. In 2024 mBank not only increased the balances of deposits, but also acquired 61,000 clients with personal and business accounts in the Czech Republic and Slovakia.
In addition to deposits, mBank has also focused on the sale of cash loans. Thanks to improvements in processes, risk assessment approach and sales channels, mBank achieved all-time high results in cash loan sales. Total sales grew by more than 66% year on year in the Czech Republic and more than 53% in Slovakia. The profitability improved thanks to a unique risk-based pricing approach, which is used in mBank Group in the Czech Republic and Slovakia.
mBank continued to launch innovations for small business owners, which started with the introduction of the new product offering in November 2023. One of the most significant innovations was the launch of the Entrepreneur's Advisor portal, which brought small business owners all the necessary and useful information in one place, filling the gap in information access. During 2024, these products were marketed by several communication campaigns. Thanks to this, mBank reached another milestone, namely the monthly acquisition of over 1,800 new clients in December 2024.
The most significant innovation mBank prepared in 2024, was in the area of payments. This is an area in which mBank has been a long-standing leader and has further strengthened its position. In June 2024, mBank, as the first on the Czech and Slovak market, in cooperation with its partners from Mastercard and Niceboy, introduced a revolutionary innovation in the form of a payment ring. Thanks to the fact that the payment ring does not need to be charged, is very durable and waterproof, mBank clients have a new option to pay contactless and digitally. The first edition of payment rings were introduced in both markets via nationwide communication campaign and immediately aroused great interest of media and clients, who made nearly 400,000 transactions with the payment ring within 2024. In the course of 2024, mBank further expanded its range of wearable payment devices with exclusive and designer payment bracelets and, in November, with children's wristbands that enable cashless payments for children aged 8 and older.
mBank further expanded the payment functionalities in the Czech market with the option to pay for fuel directly from the car. It introduced this innovation together with partners Mastercard and Škoda, again as the first bank, in September 2024.
With newly introduced state-of-the-art technologies, the use of mobile applications and all newly launched payment tools, the bank has decided to modify the role of its physical business locations (branches) to that of Digital Advisors. At the same time, mBank in Czech Republic and Slovakia has changed the format of some of its branches from previously kiosks located in the shopping malls to closed units that provide more privacy and discretion for clients and fulfilment of the newly defined role.
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Loans and deposits
The mBank loan portfolio in the Czech Republic and Slovakia stood at PLN 9,066.3 million as of December 31, 2024, representing an increase of 0.8% year on year. In the Czech Republic, loans decreased to PLN 6,019.9 million, down by 1.3% year on year. In Slovakia, loans grew to PLN 3,046.4 million, up by 5.2% year on year.
The non-mortgage loan portfolio of mBank’s foreign branches increased by 23.8% to PLN 3,345.2 million as of December 31, 2024. In the Czech Republic, non-mortgage loans increased to PLN 2,130.9 million, up by 21.1% year on year. In Slovakia, non-mortgage loans stood at PLN 1,214.2 million, up by 29.0% year on year. In local currencies both foreign branches also noted growth of their non-mortgage loan portfolios.
The mortgage loan portfolio of foreign branches amounted to PLN 5,721.1 million as of December 31, 2024, which was 9.1% lower than the previous year. The portfolio of mortgage loans in the Czech Republic decreased to PLN 3,888.9 million, down by 10.4% year on year. The portfolio of mortgage loans in Slovakia declined to PLN 1,832.2 million, down by 6.2% year on year.
The sale of non-mortgage loans in mBank’s foreign branches increased by 48.3% to PLN 2,318.5 million. In the Czech Republic, the sale of non-mortgage loans increased to PLN 1,576.3 million (49.1% year on year), while in Slovakia it increased to PLN 742.2 million (46.8% year on year). The increase in sales was influenced, among other things, by interest rate cuts by the Czech National Bank and the European Central Bank.
The sale of mortgage loans in foreign branches increased to PLN 315.1 million, representing an increase of 115.4% year on year. The value of the new mortgage loan portfolio in the Czech Republic increased by 260.3% year on year to PLN 193.9 million as of December 31, 2024. The sale of mortgage loans in Slovakia increased by 31.1% year on year to PLN 121.2 million. Similar to non-mortgage loans, the scored results were positively influenced by lower interest rates.
In 2024, the volume of deposits in foreign branches increased by 6.8% year on year to PLN 17,033.0 million. Deposits in the Czech Republic increased to PLN 12,708.5 million, up by 10.1% year on year. Deposits in Slovakia declined to PLN 4,324.5 million, down by 1.9% year on year. In local currencies, the deposit portfolio of the branch in the Czech Republic increased year on year, while the portfolio of the branch in Slovakia remained stable. As in the case of deposits in Polish zloty, we observed a change in their structure. Savings accounts noted an increase by 11.8% year on year to PLN 9,992.3 million in the Czech Republic and Slovakia. The growth was driven by savings accounts in the Czech Republic, which grew by 16.2% to PLN 8,481.9 million, while savings accounts in Slovakia declined by 7.7% to PLN 1,510.4 million. Non-interest-bearing current accounts in both foreign branches were at a level similar to the previous year (a change of -0.8% in the Czech Republic and 1.3% in Slovakia year on year).
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
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7. Corporate and Investment Banking Area
The Corporate and Investment Banking segment serves 36,123 corporate clients including large enterprises (K1 - annual sales exceeding PLN 1 billion), mid-sized enterprises (K2 - annual sales of PLN 50 million – PLN 1 billion) and small enterprises (K3 - annual sales below PLN 50 million, full accounting) through a network of dedicated 43 branches. mBank Group’s offer of products and services for corporate clients focuses on traditional banking products and services (including corporate accounts, domestic and international money transfers, payment cards, cash services, and liquidity management products), corporate finance products, hedging instruments, equity capital market (ECM) services, debt capital market (DCM) instruments, mergers and acquisitions (M&A), leasing and factoring.
Key financial data of Corporate and Investment Banking Area (at the end of 2024):
Share in total income
Pre-tax profit
Total income
36.0%
PLN 2,721.2 M
PLN 4,321.6 M
Key highlights
Increase in profit before tax to a record-high level of PLN 2,721.2 million, by 19.8% year on year, with an increase in total revenues by 14.4% year on year.
Sale of corporate loans increased by 21.0% year on year to PLN 40.0 billion in 2024, mainly due to the growth of "structured finance" loans (+29.9% year on year), which finance, among others, renewable energy sources (RES)
mBank’s share in the corporate loans market increased to 8.1% (by 0.1 percentage points year on year), with an increase in the market share of current financing and investment loans.
Growth of corporate loans (+6.7% year on year) and deposits (+2.3% year on year) at Group level
The number of corporate clients increased to 36,123, by 4.6% year on year, mainly due to growth in the K2 and K3 segments, thanks to the development of digital and mobile services for corporate clients and support in the field of e-commerce.
88% of clients use the digital process when opening an account at mBank, and 94% of clients have at least one user utilizing the mCompany Mobile banking.
New version of the mBank CompanyMobile app for corporations offers many attractive features that facilitate daily financial management of the company, including card-related functions such as selecting a default card, changing the PIN or limits, as well as grouping transaction history by cards and the ability to temporarily block a card.
In the Global Finance World’s Best Corporate Digital Bank 2024 competition, the mBank CompanyMobile app was awarded the title of the best corporate mobile banking app in Poland for the second year in a row and was recognized as the best in CEE for the first time.
The business expansion of Paynow, supported by strategic cooperation with mBank's subsidiary Leaselink, which provides merchants with the possibility of direct financing for their business purchases; in September, the Paynow gateway was expanded to include deferred payments, known as BNPL (Buy Now, Pay Later). The dynamic growth of volumes processed by the Paynow payment gateway (+85% year on year) is thanks to cloud architecture.
Development of ESG activities: At the end of 2024, mBank's RES portfolio amounted to PLN 4.8 billion. In 2024, mBank financed thirteen investments, including nine photovoltaic farms and four wind farm investments, allocating over PLN 1 billion for this purpose. At the end of 2024, mBank launched a new guarantee program in cooperation with KUKE, which will enable attractive financing for projects related to renewable energy sources and energy efficiency.
In January 2024, the seventh anniversary of the cooperation between the Great Orch estra of Christmas Charity (WOŚP), which played for the 32nd time this year, and mBank, the main banking p artner of the foundation, was celebrated. The foundation raised mo ney to ensure the highest standards of lung diagnostics and treatment. mBank prepared a promotion for corporate clien ts, under which account maintenance and transfer fees (from January to June) were donated to t he WOŚP foundation.
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7.1. Financial results
The Corporate and Investment Banking segment generated a profit before tax of PLN 2,721.2 million in 2024, which represents an increase by PLN 450.4 million, i.e. 19.8% year on year. The reason for record high profit before tax for another consecutive year in a row was mainly high net interest income.
PLN M
2023
2024
Change in PLN M
Change in %
Net interest income
2,508.7
2,852.3
343.6
13.7%
Net fee and commission income
1,038.7
1,024.4
-14.2
-1.4%
Net trading income
265.5
233.4
-32.1
-12.1%
Other income
1.0
1.9
0.9
89.9%
Net other operating income/expense
-35.0
209.5
244.5
+/-
Total income
3,778.9
4,321.6
542.7
14.4%
Net impairment losses and fair value change on loans and advances
-228.5
-223.9
4.6
-2.0%
Total overhead costs (including deprecation)
-1,033.9
-1,129.3
-95.4
9.2%
Taxes on Group's balance sheet items
-245.7
-247.2
-1.5
0.6%
Profit/loss before tax of Corporate and Investment Banking
2,270.8
2,721.2
450.4
19.8%
Other income calculated as gains or losses from derecognition of financial assets and liabilities not measured at fair value through profit or loss and gains or losses from non-trading equity and debt securities mandatorily measured at fair value through profit or loss.
Total income - calculated as the sum of net interest income, net fee and commission income, dividend income, net trading income, other income, other operating income and other operating expenses.
Total overhead costs (including deprecation) - calculated as the sum of total overhead costs and depreciation.
Net impairment losses and fair value change on loans and advances – the sum of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss and gains or losses from non-trading loans and advances mandatorily measured at fair value through profit or loss.
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7.2. Activity of Corporate and Investment Banking Area in numbers
Refers to mBank only
31.12.2022
31.12.2023
31.12.2024
Annual change in %
Number of corporate clients
33,025
34,546
36,123
4.6%
K1
2,218
2,379
2,436
2.4%
K2
10,329
10,607
11,029
4.0%
K3
20,478
21,560
22,658
5.1%
PLN M
Loans to corporate clients, including
32,974.8
33,038.2
35,625.8
7.8%
K1
6,578.8
6,327.7
7,396.7
16.9%
K2
21,705.5
23,082.3
24,340.1
5.4%
K3
3,079.3
2,728.9
2,859.5
4.8%
Reverse repo/buy sell back transactions
1,611.2
899.3
1,029.5
14.5%
Deposits of corporate clients, including
50,264.7
55,767.6
57,494.3
3.1%
K1
14,576.9
13,959.5
14,421.2
3.3%
K2
22,104.9
27,395.9
27,317.4
-0.3%
K3
13,273.0
14,236.8
14,825.4
4.1%
Repo transactions
309.9
175.4
930.3
430.3%
7.3. Corporate and Investment Banking of mBank
In 2024, the Corporate and Investment Banking segment focused on d elivering comprehensive financial solutions, supporting businesses in liquidity management, investment financing, ca pital raising, and energy transition. The dynamic macroeconomic and regulatory environment required mBa nk to adopt a flexible approach and innovative solutions to effectively respond t o the needs of corporate clients. The volume of newly signed corporate loan agreements reached almost PLN 40 billion – growth of 21% year on y ear. We generated increases across our customer groups – in particular in the K2 segment, representing me dium and large sized corporates. The corporate client base increased year on year by 4.6% to 36,123. Our initiatives launched so fa r have been well received by clients, which is reflected by the results of the cu stomer satisfaction survey. The NPS of the corporate and investment banking segment re ached 45 in 2024. Among the clients who declared mBank as their main bank, the NPS stood at 53.
We continued to develop digital banking services, making it easier for businesses to access modern financial tools and streamlining financial management processes. In 2024, we launched a new version of the mBank CompanyMobile app for corporate clients, featuring numerous new, convenient functions related to card management and app personalization. In order to respond to challenging market conditions, mBank has been continuously enhancing its corporate banking customer service processes and adjusting its product portfolio to client needs and the legal environment.
mBank CompanyMobile app
In 2024, we continued to intensively develop the mBank CompanyMobile app, and in the second half of the year, we released its new version.
The new version of our mobile application for corporate clients offers a range of attractive features that enable more efficient and intuitive work, including currency exchange and card management. Thanks to advanced personalization capabilities, mBank clients can customize the view and individual options to their specific needs. In 2024, we introduced, among other things, an innovative FX module with personalization options, detailed push notifications, and a new card module.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
94
During the development of new application features, we placed particular emphasis on personalization and a user-friendly interface, so that users can easily and intuitively customize this tool to their needs. For example, they can configure the dashboard in the FX module according to their preferences. They can set account balance views, favourite currency pairs, and default accounts for transactions. Thanks to the analysis function of exchange rate fluctuations over specific time intervals, the new application becomes a comprehensive tool for effective currency trading. Personalization facilitates daily cash management, and clients can quickly check the balances of their most frequently used accounts and track favourite currency pairs in real-time. We also introduced a feature that goes beyond typical currency exchange. After a successful transaction, the user can transfer funds to a business partner, and the application automatically indicates the transfer currency, account, and amount.
As part of the development of the mBank CompanyMobile app, we introduced detailed push notifications, which provide users with precise information about events such as account credits and debits, rejected orders, or orders waiting for authorization. After activating this feature, users receive notifications that include details about the company, account, amount, counterparty, or transaction title. This new functionality increases transparency, saves time and enables faster business decision-making.
In the new card module users can add one or more of their cards and manage them freely on their phone. The application offers realistic card graphics – their appearance in the application matches the actual look, making it easy to identify the cards. Additionally, in the new version of the application, we have introduced new card-related functions: card activation, PIN change, authorization limit change, temporary card block, or permanent card cancellation. The ability to cancel a card, prepared in case of loss or theft, was previously only available by contacting the bank. Furthermore, card users can conveniently check card balances, view transaction history or choose a default card in the application.
Apart from card-related changes, the latest version of the application includes features such as:
account search and transaction history filtering,
application PIN change,
changing the application language to Polish, English, and German directly within the application.
The development of the FX module has contributed to a steady increase in the number of currency exchange transactions carried out in the mobile application throughout the year (up by 33.7% year on year). We also observe a dynamic increase in the number of FX module users (up by 23.2% compared to 2023).
Digital onboarding of corporate clients
We establish business relationships with corporate clients quickly and digitally thanks to our digital onboarding system. In 2024, over 88% of new corporate accounts were opened digitally. Digital onboarding of new corporate clients, both from the small and medium-sized enterprises segment as well as large corporations, is now a standard at mBank.
Online Assistant – Corporate Client’s Center
Digitalizing corporate client support is one of mBank's priorities. In 2024, consultants at the Corporate Client Center, as part of the Online Assistant service, handled 23,000 interactions with clients via chat and remote assistance, compared to 14,000 interactions in 2023. Clients increasingly choose this form of contact with the bank. The Online Assistant significantly speeds up obtaining answers to daily inquiries and is a convenient way of communication. In 2024, 7,400 clients used this form of contact, which is a 42% increase compared to the previous year. Consultants at the Corporate Client Center handled 87,000 incoming phone calls from corporate clients. Over 90% of calls were answered within 20 seconds of dialling the phone number.
Products and services on offer
Corporate loans
The value of loans granted by mBank to corporate clients (excluding reverse repo transactions) stood at PLN 34,596.3 million at the end of 2024, representing an increase of 7.6% year on year.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
95
PLN M
31.12.2022
31.12.2023
31.12.2024
Annual change
Loans to corporate clients 1
31,364
32,139
34,596
7.6%
Loans to enterprises 2
32,454
32,793
34,850
6.3%
Loans granted to local governments
11
49
27
-45.3%
Market of loans to enterprises
424,357
411,559
429,740
4.5%
mBank's share in the market of loans to enterprises
7.6%
8.0%
8.1%
1 The bank, excluding reverse repo transactions.
2 NBP category which ensures comparability of results of the banking sector.
Corporate deposits
The value of corporate deposits at mBank (excluding repo transactions) stood at PLN 56,564.0 million at the end of 2024, representing an increase of 1.7% year on year.
PLN M
31.12.2022
31.12.2023
31.12.2024
Annual change
Corporate deposits 1
49,955
55,592
56,564
1.7%
Deposits of enterprises 2
52,924
58,089
58,724
1.1%
Deposits of local governments
758
206
278
34.6%
,
,
Market of deposits of enterprises
490,691
528,933
546,244
3.3%
mBank's share in the total deposits of enterprises
10.8%
11.0%
10.8%
1 The bank, excluding repo transactions.
2 NBP category which ensures comparability of results of the banking sector.
Paynow payment gateway
In 2024, we dynamically developed the Paynow payment gateway in response to the equally dynamic growth of the e-commerce industry. In August 2024, the online quick payment gateway was enriched with deferred payment methods from PayPo. This was the only missing link among the most popular payment methods chosen by Poles shopping online. In 2025, we plan to further optimize the service and add new features to enhance cooperation with new clients.
Online stores that decided to use the Paynow payment gateway service gained a reliable partner that helps them grow their online business and they also increased their sales. In 2024, the value of sales processed was 85% higher than in the previous year.
Sustainable Financing
As of the end of December 2024, mBank allocated over PLN 7.6 billion for financing sustainable investments and mobilized over PLN 8.5 billion through arranging of bond issuances and taking part in consortia, totaling over PLN 16.1 billion raised for green transformation and sustainable development activities, which is significantly above the mBank Group's Strategy target for 2021-2025 of PLN 10 billion.
One of the main activities in this area is financing renewable energy sources (RES) investments. mBank consistently increases its share in financing RES projects. By introducing a credit policy for financing renewable energy installations in December 2018, it allocated PLN 500 million for this purpose. The bank consistently increased its share in financing renewable energy projects (RES). As a result, since June 2024, the limit for RES has been raised to PLN 6.4 billion. Additionally, since December 2024, mBank has modified the financing criteria for "small RES" (i.e., up to 10 MW), opening up to smaller transactions with more complex structures.
As a result, the RES portfolio at mBank reached PLN 4.8 billion at the end of December 2024. In 2024, mBank financed 13 investments, including 9 photovoltaic (PV) farms and 4 wind farm (WF) investments, allocating over PLN 1 billion for this purpose. Additionally, under the "small RES" policy, 3 photovoltaic (PV) farms were financed for over PLN 29 million.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
96
In addition to financing renewable energy sources, mBank's 2024 offer also included Sustainability Linked Loans (SLL), which are loans linked to achieving sustainable development goals, and green loans with subsidies for financing investments related to sustainable development. The green loan is subsidized by Bank Gospodarstwa Krajowego (BGK) from the so-called ecological premium. In 2024, the bank granted SLLs amounting to PLN 2.6 billion. Among these transactions, four involved new exposures in sectors such as retail, technology and IT, as well as waste management and cleaning services. Thanks to these types of loans, enterprises gain additional benefits related to margin reduction, provided they meet the conditions set out in the agreement, which contribute to the implementation of the decarbonization plan and climate goals or the achievement of sustainable development strategies. mBank was also involved in the issuance of green bonds by three clients, totalling nearly PLN 1.5 billion. In one of these issuances, it acted as the green bond structuring agent. These transactions concerned projects in the energy and real estate sectors.
More information about sustainable financing for corporate clients can be found in chapter 10.2. “Environmental information (ESRS E1, E4)”.
De minimis Guarantee
In 2024, mBank continued the implementation of the Portfolio De Minimis Guarantee Line (PLD) Agreement as part of the government program “Supporting Entrepreneurship through BGK Sureties and Guarantees”. As of December 31, 2024, the utilized limit amounted to PLN 110 million.
On June 25, 2018, mBank signed another Portfolio Guarantee Line De Minimis Agreement (PLD-KFG) as a continuation of the previous agreement (PLD). The de minimis guarantee limit granted to mBank under the PLD-KFG agreement amounts to PLN 6.8 billion. As at December 31, 2024, the utilised limit amounted to PLN 4.02 billion.
COSME Guarantee
As part of the portfolio guarantee line with the re-guarantee o f the European Investment Bank under the COSME program (European Union program for the competitiveness of enterprises for 2014–2020), the guarante e limit granted to mBank, under the agreement with BGK, was PLN 2.0 billion. The COSME guara ntee program ended on April 30, 2022. As of December 31, 2024, the value of active guarantees was PLN 14 million.
FGR Guarantee
Under the portfolio agreement for the agricultural guarantee line (FGR) concluded with BGK, the guarantee limit granted to mBank is PLN 85 million. As of December 31, 2024, the value of the utilized limit was PLN 37.5 million.
Additionally, in 2024, we continued the after-sales service of BGK guarantees:
Biznesmax Guarantee
The Operational Program Intelligent Development under the Guarantee Fund for supporting innovative enterprises (FG POIR) ended on December 31, 2023. The guarantee limit granted to mBank under the agreement with BGK amounted to PLN 750 million. As of December 31, 2024, the value of active guarantees was at PLN 383.0 million. In 2024, the guarantee service included handling (evaluation and acceptance) applications submitted by clients under the interest rate subsidy.
Liquidity Guarantee
Under the Agreement on Guarantee Line of the Liquidity Guarantee Fund (FGP), mBank received a guarantee limit of PLN 11.0 billion. The final deadline for granting liquidity guarantees expired on June 30, 2022. As part of the FGP program, as of December 31, 2024, the value of active guarantees amounted to PLN 175.7 million.
Crisis Guarantee
Following the FGP program, the guarantee under the Crisis Guarantee Fund was available until December 31, 2023. The limit granted to mBank was PLN 1.7 billion. As of December 31, 2024, the value of active guarantees amounted to PLN 987.9 million.
In 2024, we also signed three agreements under the portfolio guarantee lines with BGK:
FG FENG Guarantee
Based on the portfolio guarantee line agreement FG FENG, mBank was granted a total limit of PLN 470 million, comprising two components:
Biznesmax Plus – PLN 250 million, including PLN 100 million for guarantees securing working capital loans,
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
97
Ekomax – PLN 220 million for securing only investment loans.
The guarantee has been available for sale since April 23, 2024. As of December 31, 2024, the value of the utilized limit for the Biznesmax Plus component amounted to PLN 108.9 million. There was no active sale under the Ekomax component.
Investmax Guarantee
Based on the portfolio guarantee line agreement with the re-guarantee provided by the European Investment Fund under the InvestEU program, mBank was granted a total guarantee limit of PLN 250 million, within two instruments:
SME support instrument, intended to secure the repayment of loans for enterprises in the micro, small, and medium-sized enterprise sectors - PLN 200 million,
Microfinance instrument, intended to secure the repayment of loans exclusively for micro-enterprises - PLN 50 million.
The guarantee has been available for sale since November 13, 2024. As of December 31, 2024, the entire limit was available.
Issue of debt securities for corporate clients
2024 was characterized by material recovery of issuers and investors’ activity on the market. mBank carried out (standalone or as a consortium member) a significant number of new issues of debt securities.
mBank placed securities, among others, for: Toyota Leasing (PLN 950 million), RCI Leasing Polska sp. z o.o (PLN 850 million), Polenergia SA (PLN 750 million), Rpower SA (PLN 610 million), ARCHICOM SA (PLN 358 million), Polski Holding Nieruchomości SA (PLN 355 million), Cognor SA (PLN 240 million), Develia SA (PLN 200 million), MLP Group SA (EUR 41 million), Dom Development SA (PLN 140 million), Ghelamco Invest sp. z o.o (PLN 104 million).
In the green bonds segment, mBank carried out bond issues with a total value of more than PLN 1.46 billion.
Transactional banking
Cash Management at mBank is a platform offering modern solution s that support strategic planning, monitoring, and effective management of the most liquid financial resources. Focusing on cash processing and electronic banking, it provides innovative tools that support enterprises in their daily financial operations.
Our Cash Management solutions aim not only to increase the efficiency of cash flow management but also to optimize costs and generate interest income. The dynamically developing offer reflects our ability to adapt to the changing needs of clients, providing them with new and expanded tools.
Below are some key indicators that illustrate the dynamics of the Cash Management offer at mBank compared to the previous year:
Number of incoming foreign transfers
+5.2%
Number of outgoing foreign transfers
+7.7%
Number of mBank Company Mobile users
+19.7%
Number of mobile transactions
+53.7%
Number of active users of FX module
+33.7%
The Product Offering Development
As part of our product offering development, we introduced the option to finance contracts within a multi- product credit line. Now, clients can use revolving loans, overdraft facilities, guarantees, and letters of credit under a single agreement, along with overdrafts and other products.
ISO 20022 Project
Over the next 2 years, the formats of all types of payments will change. Ultimately, a unified international standard ISO 20022 will be in place. This will make data exchange between different systems easier, enabling precise transaction identification and automatic posting.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
98
First, foreign payments will be altered, followed by domestic payments. As a result of planned changes, clients will be required to modify the way they submit orders (both manually entered and those submitted through various interfaces). Bank statements will also change, especially electronic statements.
We continuously update and inform clients about the upcoming changes. We introduced them to our clients during live workshops, which were very popular. We trained nearly 400 of our largest clients. We created a website for clients with the most important information about the project. Clients can already make some transfers in the new format.
Digitalization and optimization of the Credit Process
In 2024, we continued our efforts to digitalize and optimize the credit process. As part of the development and improvement of the electronic credit application (EWK), we added new functionalities, such as the possibility to submit an application solely for annual review and to provide quarterly data earlier (compared to formal requirements) by the client. We also provided a converter for consolidated reports in XML format and the electronic application for de minimis guarantee (eBGK).
Digitalized Postal Transfer
In 2024, we worked on digitalizing the Postal Transfer service. Now, thanks to the connection with the Post Office via API, transaction files with postal transfers and their execution statuses are processed automatically. The digitization of this process has eliminated paper confirmations. As a result, we optimized costs for both the bank and the client. The bank no longer needs to receive printed forms from the Post Office. The client benefits from reduced fees charged by the Post Office, including the elimination of the receipt confirmation fee. We shortened the time of process handling. The client receives the final status of the transfer execution within 25 days. We also observe a lower number of complaints.
Activity of the Financial Markets Sales Department
In 2024, the Financial Markets Sales Department recorded further growth of income related to most of its products (both in the treasury area and investment area). In 2024, we continued improving key operational and control tasks in the challenging regulatory and economic environment.
Margin result on transactions concluded with corporate clients was higher by 3.1% year on year and exceeded PLN 1 billion. The increase in the result was primarily driven by deposit transactions.
We have been successfully onboarding new clients. For actively managed clients, we proactively sought areas for growth. This led to a 3.2% increase in the average monthly number of active clients.
The commodities team maintained its position as the market leader in hedging transactions for commodity price volatility, despite a decline in realized performance. The key differentiators were a wide range of offered products and high-quality service for corporate clients. The biggest challenges included operating in the challenging regulatory and economic environment, the dynamic increase in market competitiveness, and implementing changes in the bank’s policy on combating climate change.
The project team participated in over 200 projects. In 94 projects, it concluded hedging transactions. The achieved result increased by 9.0% compared to 2023. The team completed projects in the areas of CRE, renewable energy (RES), and Structured Finance. Since the middle of the year, the team has been operating under new cross-selling rules (i.e., selling a loan together with a derivative transaction to hedge interest rate or currency risk).
Increased activity of retail clients in the Dealer Service Department led to a rise in active clients across all segments (Private Banking, corporate and individual clients) and an increase in margin.
mBank’s market shares in specific financial instrument markets as of December 31, 2024, are presented below :
Treasury bills & bonds
IRS/FRA
mBank
12.30%
14.70%
Financial Institutions
As at the end of 2024, mBank had four active loans from other banks worth the equivalent of PLN 3,072 million in total. On the balance sheet, the level of debt was PLN 98 million lower than at the end of 2023 due to the strengthening of the zloty against the Swiss franc at the end of 2024.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
99
At the end of December 2024 the total value of loans granted by mBa nk to other banks amounted to the equivalent of PLN 227 million. It indicates significant increase of about PLN 139 million in comparison to 2023. mBank’s portfolio included active short and medium-term loans granted to Polish and foreign banks.
mBank maintains healthy business relationships with banking clients and renders high quality services which is confirmed by the numerous awards received by the bank in 2024 in this area. mBank maintains strong position in the field of settlements services in zloty (PLN).
Furthermore, in 2024 mBank focused its efforts on actively supporting commercial transactions concluded by Polish exporters.
Custody services
mBank provides services including:
settlement of transactions in securities registered in local and foreign markets;
safe-keeping of clients’ assets;
maintenance of securities accounts and registers of securities in non-public trading;
maintenance of asset registers of pension funds and investment funds as well as monitoring the valuation of clients’ assets;
handling benefits from securities.
mBank’s custody clients are mainly local and foreign financial institutions, in particular investment and pension funds, other banks offering custodian and investment services, insurance companies, asset management institutions and nonfinancial institutions. In 2024, the number of served investment funds decreased by 12.4% year on year.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
100
8. Activities of subsidiaries of mBank Group
8.1. Summary of financial results of mBank Group subsidiaries
In 2024, the profit before tax generated by mBank Group’s subsidiaries amounted to PLN 358.1 million. Compared with profit before tax recorded in 2023, it was higher by PLN 38.5 million, i.e. 12.1%.
The results were mainly influenced by the record-high gross profit of mLeasing, which generated 69.6% of the gross profit of mBank's consolidated subsidiaries. The gross results of mFinanse improved year on year. In 2023 it was negatively affected by the creation of a provision related to ZUS control. The result of mBank Hipoteczny was negatively impacted by the government “credit holidays” program.
The table below presents the profit before tax posted by individual subsidiaries in 2024 compared with 2023.
PLN M
2023
2024
Change in PLN M
Change in %
mFinanse
3.6
29.2
25.5
701.5%
mLeasing 1
214.8
249.4
34.6
16.1%
mBank Hipoteczny
52.7
20.8
-31.9
-60.5%
mFaktoring
41.2
34.5
-6.7
-16.2%
mTowarzystwo Funduszy Inwestycyjnych
6.3
7.8
1.5
23.3%
Other 2
1.0
16.4
15.5
1,614.8%
Total gross profit/loss of mBank's subsidiaries
319.6
358.1
38.5
12.1%
1 Includes result of Asekum Sp. z o.o. and LeaseLink Sp. z o.o.
2 “Other” subsidiaries includes mElements and Future Tech .
8.2. Business activity of selected subsidiaries
In 2024, sale of mortgage loans in mFinanse reached record high levels. The lending process has accelerated since 2023. It was a result of, among others, PFSA’s new flexible approach to calculating creditworthiness and continued installment subsidies government program "Safe 2% Loan". High dynamics of apartment sales offered by developers translated to record-high sales of the subsidiary in 2024. The volume of newly granted mortgage loans amounted to PLN 5.5 billion, and was almost twofold higher than in 2023 (PLN 3.2 billion).
In the area of cash loans, revolving loans and credit cards, the subsidiary achieved very good sales results. In 2024, the value of sales of these products increased almost twofold and amounted to PLN 1.5 billion compared to PLN 854.5 million in 2023. The main driver of this result was the sale of cash loans, which amounted to PLN 1.4 billion in 2024.
Sale of products to enterprises (credit products and leasing) was at a level comparable to 2023. It slightly decreased to PLN 653.5 million, i.e. by 3.3% in 2024.
As a result of above-described factors, mFinanse improved its profit before tax. The gross profit of the subsidiary in 2024 amounted to PLN 29.2 million, while in the previous year it was at PLN 3.6 million.
The value of contracts concluded by mLeasing in 2024 amounted to PLN 7,144.6 million, compared to PLN 7,256.6 million a year earlier. This represents a decrease by 1.5% year on year. The value of contracts concluded for movable property amounted to PLN 7,058.0 million, compared to PLN 7,090.3 million a year earlier (i.e. -0.5%). The value of contracts concluded for real estate amounted to PLN 86.7 million, compared to PLN 166.3 million in 2023 (i.e. -47.9%).
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mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
101
Sales at mLeasing increased by 1.5% in the category of financing vehicles under 3.5 tons, but decreased by 9.3% in the category of vehicles over 3.5 tons. The remaining new business increased slightly by 0.3% year on year. In 2024, mLeasing has further strengthened its position in the area of car financing and leasing, recording sales increases, among others, on the e-commerce platform mAuto – sales increase of 75.0%.
In 2024, the consolidated gross profit of the subsidiary amounted to PLN 249.4 million, which represents an increase of 16.1% compared with 2023. Revenues in 2024 were 3.4% higher than in the previous year and amounted to PLN 480.2 million.
In 2024, the subsidiary focused on developing activities, especially in the ESG area. mLeasing adopted the decarbonization strategy, which sets intermediate goals and aims to achieve zero emissions by 2050. The subsidiary defined and separated green assets that support the energy transformation process of its clients. An important step was also the launch of the dedicated Green Transformation platform, which aims to provide knowledge, tools, and product offerings for clients seeking support in implementing their decarbonization strategies.
mLeasing continued to actively support clients' transition to electro mobility. In the category of electric vehicle registrations, it achieved a year on year increase of 80%, which is one of the h ighest growth rates and gives mLeasing the fourth place in the market. In 2024, 1,298 electric vehicle (BEVs) leasing and rental agreement s were concluded, including 835 cars with funding from the "Mój Elektryk" (My Electric Car) program. Add itionally, mLeasing became a provider of charging services (eMSP), giving the clients access to over 3,500 fast charging points in Poland, as well as convenient billing of charging costs at public and private st ations. For clients interested in reducing the emissions of their fleet, mLeasing offers a comprehensive p rogram. It comprises fleet profile analysis and carbon footprint calculation, fleet replacement planning, a nd infrastructure proposals with cost forecasts. Moreover, the subsidiary created a unique pilot prog ram for its clients, which includes a temporary installation of a home charger. During the pilot program, in addition t o testing BEV cars, the client can also test the charging service and cost billing.
mBank Hipoteczny is the longest-operating mortgage bank in Poland. As the only entity in mBank Group, it has the ability to issue covered bonds, which it places both on the domestic and international capital markets. This ensures stable and long-term financing for the portfolio of real estate-secured loans. mBank Hipoteczny's covered bonds are considered low-risk investment instruments, as confirmed by the high Aa1 rating assigned by Moody's Investors Service.
Since May 2023, the bank continues to develop its loan portfolio exclusively in the retail sector. During this time, in close cooperation with mBank, we conducted six pooling transactions totaling PLN 1.7 billion. The gross value of the retail loan portfolio at the end of 2024 amounted to PLN 9.6 billion, compared to PLN 9.1 billion at the end of 2023. The 5.8% increase in the portfolio value was partly due to the completed pooling transactions.
The financing of the loan portfolio was mainly through the issuance of mortga ge covered bonds. In 2024, mBank Hipoteczny issued three series of mortgage covered bonds in a non-prosp ectus offering with a total nominal value of PLN 1.2 billion. The total value of outstanding mortgage covere d bonds as of the reporting date was PLN 6.6 billion, representing 38.7% of the entire Polish covered bond market. In 2024, mBank Hipoteczny did not issue any bonds, nor did it hold any outstanding b onds. This was a conscious policy resulting from the high liquidity of mBank Group and a strategy focused on intra-group financing.
mBank Hipoteczny ended 2024 with a loss before tax of PLN 0.7 million. This was influenced by a decrease in net interest income, achieved under the conditions of the government's "credit holidays" program. At the same time, mBank Hipoteczny's operating costs decreased slightly. The changes in the retail portfolio model and the associated costs contributed to an increase in loan loss provisions in 2024 compared to the previous year.
In 2024, mFaktoring’s turnover, i.e., the value of aggregated invoices, reached a high level of PLN 36.6 billion. This represents an increase of 4.3% compared to 2023, i.e. a growth rate similar to the entire factoring market (+4.7%). At the end of 2024, an 7.8% market share translated into sixth position of mFaktoring in the factoring market in Poland (data of the Polish Factors Association).
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mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
102
Profit before tax of mFaktoring amounted to PLN 34.5 million, compared to PLN 41.2 million for 2023. The subsidiary did not observe significant changes in the receivables portfolio or a significant increase in risk in this area. mFaktoring monitored impact of the war in Ukraine on the receivables portfolio. No signs of significant deterioration in the payment discipline of the largest recipients in portfolio were noted.
In 2024, mFaktoring acquired 176 new clients, i.e. 12.8% more year on year. Total volume of new factoring limit contracts amounted to PLN 647.7 million.
The period for granting guarantees through the Crisis Guarantee Fund in cooperation with Bank Gospodarstwa Krajowego ended on December 31, 2023. The program was used to secure factoring limits granted to ensure the financial liquidity of our clients. Contracts covered by the program remain valid in accordance with the contract term.
2024 was a period of dynamic growth and significant changes for mTowarzystwo Funduszy Inwestycyjnych S.A. (mTFI), which strengthened its position in the investment fund market. A key achievement was the completion of the process of taking over all investment funds previously created in the "white label" formula by external entities. This strategic action enabled full integration of fund management under the mTFI brand, ensuring greater operational consistency and better control over the offered products.
The assets of the funds managed by mTFI S.A. increased from just over PLN 1.0 billion to approximately PLN 3.3 billion at the end of 2024, with nearly PLN 700 million of the increase resulting from the takeover of sub-funds managed under the Gotowe Strategie SFIO umbrella. In line with market trends, the largest inflows were recorded in debt funds, which attracted significant interest from clients due to favourable investment results achieved under the conditions of stable NBP interest rates at relatively high levels.
In 2024, in cooperation with mBank, we launched the IKZE/IKE service based on life cycle solutions under the Gotowe Strategie SFIO umbrella. This initiative aligns with our vision of systematic investing and democratizing investments, enabling clients to access modern investment solutions aimed at building long-term retirement savings.
One of the most important projects carried out in 2024 was the completion of the process of adapting all sub-funds under the Gotowe Strategie SFIO umbrella to the requirements of Article 8 of the SFDR Regulation, which means they promote environmental and social aspects. From January 1, 2025, the entire offer dedicated to mass clients significantly incorporates ESG factors, confirming our commitment to sustainable development and providing products that meet current market requirements. More information about investment standards, including information on the inclusion of ESG aspects, can be found on the website https://www.mtfi.pl/pl/esg (in Polish).
At the same time, we developed cooperation with mBank's Brokerage Office in the management of financial instrument portfolios. At the end of 2024, assets worth nearly PLN 2.5 billion were accumulated under this service, confirming the high trust in our investment solutions from private banking clients.
mTFI S.A. aims to be a leader in providing modern and sustainable investment solutions, continuing dynamic growth in line with client expectations and global market trends.
mBank S.A. Group
Management Board Report on Performance of mBank S.A. Group in 2024
103
9. Risk management
9.1. Risk management foundations
mBank Group manages risk on the basis of regulatory requirements and best market practices by developing risk management strategies, policies, and guidelines.
The risk management process is conducted at all levels of the organisational structure, starting at the levels of the Supervisory Board (including the Risk Committee of the Supervisory Board) and the bank’s Management Board, through specialised committees and organisational units responsible for risk identification, measurement, monitoring, control, and reduction, down to each business unit.
Risk management roles and responsibilities in mBank Group are organised around the three lines of defence scheme :
The first line of defence is Business (business units), whose task is to take risk and capital aspects into consideration when making all business decisions, within the risk appetite set for the Group;
The second line of defence, mainly the organisational units of the risk management area , Security, Data Protection Inspector and Compliance function , creates framework and guidelines concerning managing individual risks, supports and supervises Business in their implementation and independently analyses and assesses the risk. The second line of defence acts independently of the Business;
The third line of defence is Internal Audit , which independently assesses risk management activities performed by the first and the second lines of defence.
In the communication between organisational units in the risk management area and business lines in mBank, as well as between the bank and the Group subsidiaries, an important role is played by the Business and Risk Forum of mBank Group , which is constituted by the Retail Banking Risk Committee, Corporate and Investment Banking Risk Committee, and Financial Markets Risk Committee. The main function of these committees is to develop the principles of risk management and risk appetite in a given business line, by making decisions and issuing recommendations concerning in particular: risk policies, risk assessment processes and tools, risk limit system, assessment of the quality and profitability of the portfolio of exposures to clients, approval of introducing new products to the offer.
The management function at the strategic level and the function of control of credit, market, liquidity, and operational risks and risk of models used to quantify the aforesaid risk types are performed in the risk management area supervised by the Deputy Chairman of the Management Board, Chief Risk Officer.
The Risk management strategy of mBank Group is based on three pillars:
We support sustainable growth i.a. through dialogue with the Business, we indicate directions for acquisitions and expansion. Our goal is to build a diversified loan portfolio with a significant share of prospective and responsible sectors and segments. In our credit decisions, policies, expansion, and portfolio structure, we take into account the impact on the natural environment and the community in which we operate. We finance clients’ needs responsibly, educate them, raising awareness of sustainable development and transparently communicate the decisions. More information regarding client financing, taking into account their transformational needs, can be found in chapter 10.2. “Environmental information (ESRS E1, E4)”. We develop solutions in dialogue with the client and with care for the good quality of loan portfolio. We actively support growth by developing tools and processes designed from the client's perspective.
We pursue prudent and stable risk management , i.a. by shaping a safe and profitable balance sheet and managing risk in an integrated manner. We combine business needs, risk management principles and regulatory requirements. We maintain a stable and diversified financing structure, reducing misalignments and maintaining liquidity buffers. Thus, we ensure regulatory compliance, the safety of deposited funds and optimize the use of available capital. We monitor newly emerging risks and build the competencies of our employees in this area. We develop the ability to manage ESG and cyber risks, i.e. by continuously improving the process of our clients’ assessment in terms of environmental, social, governance, and cyber risk. We respond to changes in the macroeconomic environment and assess the impact of various events on the Group's risk profile.
We are developing the risk management area in response to the challenges of a changing world. Thanks to automation, digitization and efficient processes, we are ready for the growth of business scale. We are adapting liquidity risk management tools to adequately monitor and manage
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risks arising from the increased activity of clients using mobile applications and the growing importance of instant payments. We are developing a system of early warning indicators, including monitoring changes in the perception of the Bank and the mBank Group in mass media, including social media. We are shaping our readiness to take action if a rapid response is needed when a scenario of a dynamic outflow of customer deposits materializes. We are also conservatively adjusting the internal liquidity risk measures in response to the most current market experience.
9.2. Main risks of mBank Group’s business
The Management Board of mBank takes measures to ensure that the Group manages all material risks arising from the implementation of the adopted strategy of mBank Group, in particular, through approving strategies and processes for managing material risks in the Group.
As of December 31, 202 4, the following risks were recognized as material in the Group’s operations: credit risk, risk of foreign currency loan portfolio (related to actual or potentials threat to the bank's results and capital, arising from foreign currency mortgage loans granted to unsecured borrowers until 2012), operational risk, market risk, business risk (including strategic risk), liquidity risk, compliance risk, reputational risk, model risk, capital risk (including the risk of excessive leverage) , securitization risk and environmental risk (E, according to the horizontal materiality assessment), social risk (S) and corporate governance risk (G).
The following sections present the rules of managing credit, market, liquidity and operational risk in mBank Group.
Credit risk
The bank organises credit risk management processes in line with the principles and requirements set out in the resolutions and recommendations of the Polish Financial Supervision Authority (PFSA) (in particular Recommendation S, T and C), EBA’s guidelines on loan origination and monitoring and CRR/CRDIV, which address issues related to credit risk management.
Tools and measures
The assessment of credit risk related to the financing of mBank Group clients is carried out based on common statistical models developed for the application of the AIRB method (Advanced Internal Rating Based) and based on standardized tools. It relies on common definitions of terms and parameters used in the process of credit risk management and rating assessment. The bank ensures their cohesion at the Group level.
The Group uses different models for particular client segments. The rules governing clear assignment of clients to a system are defined in the bank and the Group subsidiaries internal regulations.
In their credit risk management process, the bank and the Group subsidiaries use the core risk measures defined under the AIRB approach:
PD – Probability of Default (%);
LGD (Loss Given Default) – estimated relative loss in case of default (%);
EAD (Exposure at Default) – estimated exposure at the time of default (amount);
EL – Expected Loss taking into account the probability of default (amount);
and related measures including:
RD (Risk Density) – relative expected loss defined as EL to EAD (%);
LAD (Loss at Default) – estimated loss (amount) in case of default (the product of EAD and LGD).
In the decision-making process, for reporting and communication with business units, PD and EL are expressed in the language of rating classes whose definitions (Masterscale) are uniform across Commerzbank Group.
In its credit risk management process, the bank also attaches great importance to the assessment of unexpected loss. For this purpose, the bank uses the RWA (Risk Weighted Assets) measure, which is applied, under the AIRB approach, to calculate regulatory capital required to cover credit risk (unexpected loss).
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In managing mortgage-secured credit exposures the Group uses the LtV ratio (Loan to Value), i.e. the value of the loan to the market value (or mortgage banking calculated value) of the real estate which secures the loan.
Stress testing is an additional tool of credit risk assessment. Stress testing of the regulatory capital and economic capital required to cover credit risk is carried out quarterly.
In addition to the tools listed above, which are applied both in the corporate and in the retail credit risk measurement, the Group uses tools specific to these areas.
For corporate credit risk the Group defines the maximum exposure to a client/group of related clients using the following credit risk mitigating measures:
MBPZO (Maximum Safe Total Exposure), which defines the maximum level of financial debt of an entity from financial institutions calculated under the bank’s methodology, approved by the bank’s competent decision-making body. An alternative measure is Borrowing Capacity (BC);
LG (General Limit), which defines the level of credit risk financial exposure to a client/group of related clients acceptable to the Group, approved by the bank’s competent decision-making body. LG includes a structured limit and products granted outside the structured limit.
In order to minimise credit risk, the Group uses a broad range of collateral for credit products, which also enable active management of the capital requirement. In the assessment of the quality of collaterals for risk products, mBank and mLeasing use the MRV ratio (Most Realistic Value) reflecting the pessimistic variant of debt recovery from the collateral through forced sale.
The level of profitability from relations with clients is taken into account in the credit decision process, so that the planned level of profitability covers at least the estimated amounts of the expected loss on bank customer involvement.
Retail credit risk measures are constructed to reflect the characteristics of this customer segment and, in the case of portfolio measures, the high granularity of the loan portfolio:
DtI (Debt-to-Income) - i.e. monthly credit payments to the net income of a household (used for individual customers);
DStI (Debt-Service-to-Income) – the ratio of actual yearly credit charges and other financial burdens to the applicant's yearly net income (ratio used only for individual customers);
DPD (Days-Past-Due) - a family of portfolio risk measures based on the number of days past due date (e.g. the share of contracts which are from 31 to 90 days past due date in the total portfolio by number or by value);
Vintage ratios, which present the quality of cohorts of loans grouped by disbursement time at a different phase of their lifetime;
CoR (Cost of risk) - cost of risk for a loan portfolio (segment), i.e. ratio of credit provisions result (or changes in valuation of contracts based on fair value approach) to the exposure;
Roll-rates, which measure the migration of contracts between days-past-due brackets (1-30, 31-60, 61-90 DPD, etc.).
Strategy
Corporate and Investment Banking
In accordance with the Corporate Credit Risk Management Strategy in mBank Group, the main goal in this area is defining a safe level of risk appetite in sales of risk-bearing products to the Group clients and use synergies by integrating the offer of the bank and Group subsidiaries. The Corporate Credit Risk Management Strategy takes into account the objectives of the mBank Group Strategy for 2021- 25, which determines the pillars of corporate and investment banking development in the coming years, including: The first-choice bank for e-commerce market participants,
Best digital corporate banking for high-potential companies,
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Technology, security and data as a source of competitive advantage.
The Corporate Risk Management Strategy is realised by credit risk policies, limits reducing the concentration risk and the principles of risk assessment of business entities applying for financing. The bank manages credit risk both at the single entity level and the consolidated level.
The Group actively manages credit risk aiming to optimise profitability taking into account the cost of risk. mBank focuses on increasing exposure to clients with low or medium PD-rating (stable financial condition) and low or medium level of risk concentration. In its current credit risk management, including concentration risk, the bank performs quarterly portfolio analyses using a Steering Matrix which incorporates PD rating and LAD. The Group strives to avoid concentration in industries and sectors where credit risk is considered excessively high. The bank uses internally defined industry limits for day-to-day management of the sector concentration risk.
The bank monitors credit portfolio on a quarterly basis including an analysis of the dynamics of change in size and structure of the credit portfolio, sectoral concentration and client risk (analysis of changes of PD rating), quality of collateral against credit exposures, the scale of change in EL, Risk Density, and default exposures.
Developing its lending activities, the Group considers its environmental, social and corporate governance impacts and incorporates ESG considerations into its credit risk processes and policies. At the same time, mBank intensifies the optimization, automation and digitization of credit processes.
In compliance with the Recommendation S of the Polish Financial Supervision Authority (PFSA), the bank has identified a mortgage-secured credit exposure portfolio in retail and corporate banking and applies the Mortgage-Secured Credit Exposure Risk Management Policy. The bank manages the mortgage- secured credit exposure portfolio risk with a focus on defining an optimised portfolio structure in terms of quality (rating), currencies, country regions, tenors, and types of properties.
mBank offers innovative investment products as part of a new integrated platform that ensures appropriate product selection and efficient use of capital.
Retail Banking
Lending in retail banking is a key segment of the Group’s business model, both in terms of the share in total assets and the contribution to its profits.
As credit exposures are highly granular (c.a. 2 million active loans), the retail banking credit risk management process is based on a portfolio approach. This is reflected in the statistical profile of risk rating models including the models which fulfil the regulatory requirements of the Advanced Internal Ratings-Based approach (AIRB). The AIRB parameters (PD, LGD and EL) are used widely in order to estimate credit requirements, to determine acceptance criteria and terms of transactions, and to report risks.
Furthermore, the Retail Banking credit risk management has the following characteristics:
high standardisation and automation of the credit process, including decision-making, both in acquisition, post-sale services, and debt collection;
little (as compared to Corporate Banking) discretionary competences in the decision-making process (e.g. no discretionary adjustment of clients’ ratings);
extensive risk reporting system based on portfolio analysis of credit exposure quality, including vintage analysis and roll-rates analysis.
The main point of reference in the retail banking credit risk management process is risk appetite defined in correlation with the strategy of mBank Group. The general principle underlying the lending strategy of the Group in terms of sales of retail loans is to address the offer to clients who have an established relationship with the bank or to address it to new clients for whom the loan is a product initiating a long- term relationship of highly transactional nature. Thereby, the bank continues to focus its non-mortgage loans policies on lending to existing clients with a high creditworthiness. To reduce risks associated with new clients, the bank develops its credit policy using, among others, credit testing and is actively developing its fraud prevention system.
The new acquisition in mortgage loans segment focuses on products which may be financed with the issue of mortgage bonds. Those exposures will then be transferred to mBank Hipoteczny in the pooling process to enable the issue of mortgage bonds. The conservative policy of assessing borrowers’ reliability
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and creditworthiness is applied taking into account, i.e. long-term interest rate estimates (considering buffers resulting from supervisory regulations).
In order to mitigate the risk associated with a decrease in the value of mortgage collateral in relation to the value of credit exposure, the Group’s credit offer is (and will be) directed mainly to clients who buy standard properties within large urban areas.
Quality of mBank Group loan portfolio
As of December 31, 202 4 , the share of impaired exposures in the total (gross) amount of loans and advances granted to clients (NPL) slightly decreased to 4. 1 % from 4. 2 % at the end of December 202 3 . The change of the indicator applies to both lines.
In accordance with the EBA guidelines on management of non-performing and forborne exposures, which came into force from June 30, 2019, banks are obliged to monitor and manage the NPL portfolio. Banks should strive to maintain the value of the NPL portfolio below the threshold set by the regulator at 5%. As of December 31, 2024, the NPLREG ratio (ratio calculated according to EBA guidelines) was at 3.7%.
Provisions (defined as credit risk costs for loans and advances to customers, i.e. provisions for loans and advances at amortised cost and fair value change of loans and advances mandatorily at fair value through profit or loss) decreased from PLN 3,817.7 million at the end of December 202 3 to PLN 3,636.6 million at the end of December 202 4 .
Coverage ratios of non-performing loans and advances (coverage ratio and coverage ratio including provisions for performing loans) decreased in the analysed period respectively from 54.7% and 76.8% in December 202 3 to 51.1 % and 71.4 % in December 202 4 .
The manner of identifying evidence of default is based on all available credit data of a given client and encompasses all of the client’s liabilities towards the bank.
The table below presents the quality of mBank Group loan portfolio as at the end of December 202 4 and as at the end of December 202 3 .
Loans and advances to clients
31.12.2024 (PLN (‘000))
At amortised cost
At fair value
Loans and advances, total
Gross carrying amount
124,455,194
601,175
125,056,369
Non-performing loans and advances
5,003,849
89,172
5,093,021
Non-performing loans ratio (NPL)
4.0%
14.8%
4.1%
Provisions for non-performing loans
-2,550,402
-51,544
-2,601,946
Provisions for performing loans
-1,016,016
-18,687
-1,034,703
Coverage ratio
51.0%
57.8%
51.1%
Coverage ratio, including provisions for performing loans
71.3%
78.8%
71.4%
Loans and advances to clients
31.12.2023 (PLN (‘000))
At amortised cost
At fair value
Loans and advances, total
Gross carrying amount
116,584,779
755,415
117,340,194
Non-performing loans and advances
4,835,699
138,313
4,974,012
Non-performing loans ratio (NPL)
4.1%
18.3%
4.2%
Provisions for non-performing loans
-2,634,964
-85,566
-2,720,530
Provisions for performing loans
-1,073,235
-23,927
-1,097,162
Coverage ratio
54.5%
61.9%
54.7%
Coverage ratio, including provisions for performing loans
76.7%
79.2%
76.8%
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Non-performing loans and advances - loans and advances at amortised cost with impairment (stage 3 and POCI) and loans and advances mandatorily at fair value through profit or loss in default
NPL ratio – loans and advances at amortised cost with impairment (stage 3 and POCI) and loans and advances mandatorily at fair value through profit or loss in default in the whole portfolio
Provisions for non-performing loans – provisions for loans and advances at amortised cost with impairment (stage 3 and POCI) and fair value change of loans and advances mandatorily at fair value through profit or loss in default
Provisions for performing loans – provisions for loans and advances at amortised cost without impairment (stages 1 and 2) and fair value change of non-default loans and advances mandatorily at fair value through profit or loss
Coverage ratio – coverage ratio of loans and advances related to the portfolio in default.
Market risk
In the process of organisation of the market risk management, the bank follows requirements resulting from the law and supervisory recommendations, in particular, the PFSA Recommendations (among others A, C, G and I) and the EBA guidelines, concerning market risk management.
Tools and measures
In its operations, the bank is exposed to market risk, which is defined as a risk resulting from unfavourable change of the current valuation of financial instruments in the Group’s portfolios due to changes of the market risk factors, in particular:
interest rates (IR);
foreign exchange rates (FX);
stock share prices and indices;
implied volatilities of relevant options;
credit spreads (CS) to the extent reflecting market fluctuations of debt instruments prices.
In terms of the banking book, the bank distinguishes the interest rate risk, which defines as the risk of an adverse change in both the current valuation of the banking book position and the net interest income as a result of changes in interest rates.
For the purpose of internal management, the bank quantifies exposure to market risk, both for banking and trading books, by measuring:
the Value at Risk (VaR);
expected loss under condition that this loss exceeds Value at Risk (ES – Expected Shortfall);
the Value at Risk in stressed conditions (Stressed VaR);
economic capital to cover market risk;
stress tests scenario values;
portfolio sensitivities to changes of market prices or market parameters (IR BPV – Interest Rate Basis Point Value, CS BPV – Credit Spread Basis Point Value).
For the banking book, the bank also uses the following measures:
sensitivity of the economic value of capital (∆EVE);
sensitivity of net interest income (∆NII);
sensitivity of net interest income to changes in fair value (EaR);
Strategy
The implementation of the market risk management strategy involves managing the bank’s positions in a way enabling to maintain market risk profile within the risk appetite defined by the bank.
The bank is focused on meeting customers’ business needs, while reducing trade in derivatives, as well as applying the principle of lack of commodity open positions.
The bank stabilises interest income using long-term fixed-rate assets and derivatives and assuming - for equity capital and current accounts - the maximum modelled maturity of 10 years.
The main principle stipulates separation between the market risk monitoring and control functions and the functions related to opening and maintaining open market risk positions. In addition, the bank applies the rule of organisational separation between managing banking book and trading book positions.
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Market risk measurement
The mBank’s positions constitute the main source of market risk for the mBank Group.
Value at risk
In 202 4 , the market risk exposure, as measured by the Value at Risk (VaR for a 1-day holding period, at 97.5% confidence level), was at a low level in relation to VaR limits, which was mainly caused by a decrease in market volatility over the observation horizon. The table below presents VaR and Stressed VaR for the Group’s and mBank’s portfolios ( including modelling of equity capital and current accounts) :
202 4
202 3
mBank Group
mBank
mBank Group,
mBank
PLN (‘000)
31.12.202 4
Mean
31.12.202 4
Mean
31.12.202 3
Mean
31.12.202 3
Mean
VaR IR
30,871
19,761
30,129
19,081
13,944
15,588
14,065
15,147
VaR FX
2,053
1,249
2,150
1,259
1,245
683
1,243
661
VaR CS
56,292
49,526
55,456
48,838
53,871
74,789
53,394
73,608
VaR
44,254
40,446
42,215
40,124
49,861
77,807
50,869
77,098
Stressed VaR
171,484
121,811
167,993
119,120
100,141
89,755
98,210
88,529
VaR IR – interest rate risk (without separate credit spread)
VaR FX - FX risk
VaR CS – credit spread risk
The results present an approach taking into account the modeling of stable parts of capital and current accounts.
The Value at Risk (VaR) was largely influenced by the portfolios of instruments sensitive to the interest rates and to the separate credit spread - mainly the portfolios of the Treasury bonds (in the banking and trading books) and positions resulting from interest rate swap transactions. The decrease of VaR value was mainly caused by lower volatility on the financial markets, while the increase in Stressed VaR resulted mainly from the increase of the interest rate exposure.
Sensitivities measures
The table presents the values of IR BPV and CS BPV (+1 b.p.) for the Group’s and mBank’s portfolios, broken down into the banking and trading books ( including modelling of equity capital and current accounts) :
IR BPV
CS BPV
mBank Group
mBank
mBank Group
mBank
PLN (‘000)
31.12.202 4
31.12.202 3
31.12.202 4
31.12.202 3
31.12.202 4
31.12.202 3
31.12.202 4
31.12.202 3
Banking book
-3,206
-1,501
-3,110
-1,455
-10,738
-8,481
-10,604
-8,401
Trading book
-296
-38
-296
-38
-557
-282
-557
-282
Total
-3,502
-1,539
-3,406
-1,493
-11,295
-8,763
-11,161
-8,683
The credit spread sensitivity (CS BPV) for mBank’s banking book increased in 202 4 due to gradual growth of the bond portfolio and approximately 80 % resulted from the positions in debt securities valued at amortised cost. Changes in market prices have no impact on the revaluation reserve or the income statement for these positions.
Interest rate risk sensitivity (IR BPV) has increased in 202 4 primarily due to increased purchases of treasury bonds.
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Interest rate risk of the banking book
The sensitivity of net interest income is calculated and monitored in the bank's base scenario assuming a normal situation and in different defined stress-test scenarios.
The table below presents the sensitivity of the net interest income within 12-month horizon, assuming a 100 bps change of market interest rates (parallel shift of the curves with floor on product level in decreasing interest rates scenario) and based on a stable portfolio over the period.
∆ NII*
PLN (‘000)
31.12.202 4
31.12.202 3
Sudden parallel up by 100 bp
452,024
623,075
Sudden parallel down by 100 bp
-577,735
-835,752
* The measure calculated at mBank level. More information on delta NII is included in the Condensed Consolidated Financial Statements for 2023.
The decrease in the ΔNII measure y/y resulted from actions taken to stabilize the net interest income, including concluding transactions on debt securities and derivatives, in order to adjust the revaluation dates on the assets vs liabilities, with particular focus on the short end of the curve (up to 1Y). The bank continued to hold a significant portion of funds in short-term floating rate assets that increase the sensitivity of NII to changes in interest rates, and the corresponding liabilities were insensitive to changes in interest rates in downside scenarios, i.e. current accounts, with interest at 0% (statutory floor at 0%). The remaining changes result from the increase in the total balance sheet. Additionally, the liquidity surplus at the year-end date was placed with NBP above the level of the mandatory reserve which insensitive to interest rate, which also resulted in a decrease in ∆NII as at December 31, 2024. At the same time, it is worth noting that the sensitivity of NII in relation to the Bank's annual net interest income is significantly lower than in previous years, which is caused by the increase in the duration of assets mainly due to the purchase of fixed-rate treasury bonds and due to the concluded interest rate swap transactions.
In connection with the entry into force of the EU Commission Delegated Regulation 2024/856 establishing the definition of "large reduction" for net interest income at the level of 5% of Tier 1 capital for the purposed of supervisory outlier tests ( dNII SOT), the bank calculates and monitors a new measure in accordance with the regulation. For the reporting period, the bank's sensitivity remained below the defined supervisory threshold.
This measure is calculated using specific methodological assumptions, including stable balance sheet, historical margins for renewed products and price elasticity of the deposit base, adequate in a given market situation, which means that it should not be treated as a forecast of interest income, but a measure of sensitivity to a given moment. under certain conditions.
Liquidity risk
mBank organises liquidity risk management processes in line with the requirements resulting from the law and supervisory recommendations, in particular the PFSA Recommendations (among others P, C, H and S) as well as EBA guidelines concerning liquidity risk management.
mBank Group liquidity position
In 2024, the European Central Bank began a series of interest rate cuts, justifying its decisions with falling inflation in the eurozone. At the same time, the NBP, maintained interest rates unchanged. In conditions of large excess liquidity that persisted in the Polish banking sector, banks kept deposit interest rates stable.
In 2024, the bank operated in an uncertain geopolitical and market situation. Despite unpredictable market conditions, the bank was characterized by high resistance to liquidity risk. The growth of the deposit base and the relatively low dynamics of credit development had a direct impact on the strengthening of the liquidity position.
The bank maintained high liquidity due to the high share of retail deposits in the bank's balance sheet, a large portfolio of liquid assets and low concentration of liabilities. The high level of guaranteed deposits also was important. Additionally, in 2024, an increase in the value of the Treasury bond portfolio was noted, which contributed to the increase in the liquid assets buffer.
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In December 2024, the bank successfully issued AT1 capital bonds in PLN, which were included in additional Tier 1 capital instruments, as well as green bonds in the format of senior preferred bonds (PS) in EUR under the EMTN program, which additionally positively impacted the bank's liquidity level.
In July 2024, the Polish Financial Supervision Authority introduced a recommendation regarding the Long-Term Funding Ratio (LTFR), aimed at reducing the risk associated with the current structure of mortgage loan financing, which is mostly based on retail deposits, especially current deposits. The recommendation aims to increase the financing of long-term mortgage loans with long-term debt instruments. The recommendation promotes long-term debt instruments and loans with a fixed or periodically fixed interest rate, and also contains incentives for the issuance of green debt instruments. Banks are required to meet the minimum LTFR level of 40% from the end of 2026. The LTFR is reported by mBank to the KNF from the reporting date for the end of July 2024.
Despite such volatile market conditions, mBank's liquidity measures throughout the reporting period were well above minimum regulatory levels and internal levels that determine risk appetite.
Tools and measures
In its operations, mBank is exposed to liquidity risk, i.e. the risk of losing its ability to honour its payment obligations, arising from the bank’s balance-sheet and off-balance-sheet positions, on terms favourable to the bank and at a reasonable price.
The bank has defined a set of liquidity risk measures and a system of limits, buffers and warning thresholds that protect the bank’s liquidity in the event of unfavourable internal or external conditions. Independent measurement, monitoring and controlling of liquidity risk is performed daily by the Balance Risk Management Department.
The main measures used in liquidity risk management of the bank include internal measures based on liquidity gap calculation in various scenarios in LAB methodology as well as the regulatory measures i.e. LCR and NSFR.
LAB liquidity scenarios reflect the projected future cash flow gap of assets, liabilities and off-balance- sheet commitments of the bank, which represent potential risk of being unable to meet liabilities within a specific time horizon and under a certain scenario.
The methodology for measuring the liquidity gap (LAB) includes normal conditions scenario (LAB Base Case) and stress scenarios (short-term, long-term and combined). Stress scenarios are limited. Moreover, the bank has a process of reporting and monitoring of intraday liquidity position including crisis scenario for intraday liquidity. The reverse stress scenario is the complement of the liquidity stress testing system.
In order to support the process of liquidity risk management, the bank has a system of early warning indicators (EWI) and recovery indicators. This system consists of indicators that monitor the level of utilization of regulatory and internal limits, as well as significant changes in market factors, changes in the structure of the bank's balance sheet and changes in the perception of our brand by customers and other market participants. Exceeding the threshold levels by the defined indicators may trigger the launch of the Contingency Plan or the Recovery Plan for mBank Group.
LCR calculation and reporting is carried out in accordance with the Delegated Commission Regulation (EU) 2015/61 of October 10, 2014, amended by the Commission Delegated Regulation (EU) 2018/1620 of July 13, 2018, which applies from April 30, 2020. With respect to NSFR, the bank reports to the NBP according to the Commission Implementing Regulation (EU) 2021/451 of the 17 th of December 2020 introducing the NSFR as a reporting requirement from the 28 th of June 2021, according to uniform reporting forms applicable to all institutions.
Strategy
The liquidity strategy is pursued by active management of the balance sheet structure and future cash flows as well as maintenance of liquidity reserves adequate to liquidity needs depending on the activity of the bank and the current market situation as well as funding needs of the Group subsidiaries. The bank manages liquidity risk at two levels: strategic (within committees of the bank) and operational (Treasury Department).
Liquidity risk limiting covers supervisory (LCR and NSFR) and internal measures. The liquidity risk internal limit system is based mainly on defining acceptable levels of gaps in stress conditions in specific time horizons and for different liquidity risk profiles. The bank limits also the volume of foreign currency funding of mBank with FX swaps and CIRS and monitors its term concentration. The structure of these limits reflects the bank's preferences regarding the term structure of surpluses invested in foreign currencies.
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The bank has a centralised approach to the Group’s funding management. The subsidiaries are financed by mBank through the Treasury Department. Additionally, mBank Hipoteczny raises funding in the market by issuance of covered bonds and short-term debt securities and mLeasing raises funding by issuance of short-term debt securities.
The Financing Strategy is based on the following assumptions:
Diversification of sources and terms of financing,
Maintaining safe regulatory levels and internal liquidity measures,
Stable increase in transaction deposits,
Incurring liabilities eligible for the MREL or WFD indicator or ensuring the implementation of the ESG strategy e.g. by issuing green bonds,
Maintaining the issuance capacity of mBank Hipoteczny, but with the bank's greater involvement in financing the subsidiary by purchasing its covered bonds,
Increasing financial independence from the majority shareholder.
The bank has the Contingency Plan in case of a threat of losing financial liquidity, which sets the strategy, division of roles and procedures to be implemented in the event of a situation related to the risk of losing liquidity by mBank Group and aimed at neutralising this threat. The Contingency Plan is tested annually. In 2024, as part of the Contingency Plan, a new dynamic outflow of funds scenario was tested, in which the bank considered the occurrence of a cyber incident.
Measuring liquidity risk at the consolidated and individual level
The liquidity of mBank remained at a safe, high level in 2024, as reflected in the high surplus of liquid assets over short-term liabilities in the LAB liquidity gap and in the levels of regulatory measures.
The Group’s liquidity risk measurement includes in addition mBank Hipoteczny and mLeasing. mBank monitors liquidity risk of the subsidiaries to protect liquidity also at the Group level in the event of adverse events (crises).
Liquidity measures, both internal and regulatory, throughout the entire reporting period were definitely above the current structure of limits.
The table below presents the LAB gaps for tenors up to 1M and 1Y and the regulatory measures LCR and NSFR at the end of 2023 at mBank and mBank Group level:
31.12.202 4
31.12.202 4
Measure 1