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Activities of subsidiaries of mBank Group

In 2017, the profit before tax generated by mBank Group subsidiaries amounted to PLN 245.5 million, compared with PLN 301.9 million in the previous year. The year-on-year drop was attributable to, among others, changes in the Group’s structure and worse performance of mFinanse and mLeasing. Two subsidiaries reported higher results in the period under review: mBank Hipoteczny and mLocum.

The loss posted in “Other” is a consequence of the settlement reached by mBank, Garbary, Tele Tech Investment (TTI) and Bank Pekao in August 2017, as a result of which, Bank Pekao waived its claims against mBank, Garbary and TTI arising from pending court proceedings in return for the payment of an agreed amount.

The table below presents the profit before tax posted by individual subsidiaries.

PLN M 2016 2017 Change
in PLN M
Change in
mFinanse (f. Aspiro) 155.4 141.4 -14.0 -9.0%
mLeasing 72.6 64.8 -7.8 -10.7%
mBank Hipoteczny 30.2 34.8 4.6 15.2%
mLocum* 18.4 22.1 3.7 20.4%
mFaktoring 15.1 14.7 -0.5 -3.0%
Dom Maklerski mBanku** 2.9
mWealth Management ** 9.0
Other*** -1.6 -32.2 -30.6 20.1x
Total gross profit of mBank’s subsidiaries 301.9 245.5 -56.3 -18.7%

* On June 2, 2017, mBank concluded a preliminary conditional agreement on the sale of mLocum shares to Archicom.

** The subsidiaries were integrated into the organisational structure of mBank as of May 20, 2016.

*** Other subsidiaries include mFinance France, mCO, BDH Development, Garbary, Tele-Tech Investments and Future Tech.

Business activity of selected subsidiaries

Q4 2017 was marked by the sale of an organised part of mFinanse, a company whose activities involved, among other things, providing insurance intermediary services in the area of group insurance.

In 2017, mFinanse recorded an increase in mortgage loan sales by 26.1% (up to PLN 1,341. million). In the period under review, mFinanse also reported an increase in cash loan sales by 8.5% (PLN 336.9 million in 2017). The subsidiary’s sales results in the area of car leasing increased by 29.7% in 2017 (up to PLN 36.6 million). In turn, the profit from selling car loans dedicated to car dealers was slightly lower year on year and stoo dat PLN 278.9 million in 2017.

In 2017, the company continued its sales network development by increasing the number of mKiosks. Additional 25 outlets were established in the analysed period and the company managed 123 mKiosks at the end of 2017. Ultimately, the aim of the project is to place new outlets in the regions with no physical presence of mBank and mFinanse

The subsidiary’s profit before tax in 2017 amounted to PLN 141.4 million compared with PLN 155.4 million a year before. The profit before tax was, to a large extent, influenced by the drop in the sales of car loans and the sale of a part of mFinanse.

The value e of contracts executed in 2017 by mleasing increased as much as 23.7%, i.e. to PLN 5.0 billion. As demand increased in 2017, the sales grew year on year, mainly driven by an increase in the vehicles sector. The value of contracts regarding movables concluded in 2017 amounted to PLN 4.6 billion (i.e. +18.5% year on year), while the value of contracts concerning real estate stood at PLN 0.3 billion (i.e. +202.3% year on year).

The profit before tax of mLeasing in 2017 was PLN 64.8 million against PLN 72.6 million in 2016, i.e. -10.7% year on year. The decrease was a consequence of the actual costs of financing.

The “Leasing in Retail” project continued in 2017. The initiative is dedicated to mBank’s business clients and enables them to conclude a leasing agreement using special leasing processes. Thanks to the combined efforts of Retail Banking and mLeasing, in 2017 mLeasing financed fixed assets obtained in cooperation with Retail Banking worth PLN 567.8 million according to their purchase price.

The chart below presents the value of leasing contracts executed under the “Leasing in Retail” project:

In 2017, mBank Hipoteczny (mBH) placed 6 issues of mortgage covered bonds in the total nominal amount of PLN 2.7 billion, including 2 private placements in the amount of PLN 700 million. The four issues denominated in PLN amounted to PLN 2.2 billion and the two issues denominated in EUR stood at EUR 124.9 million.


On October 11, 2017, mBH placed the biggest issue of covered bonds in PLN in the history of the Polish capital market, with the total value of PLN 1 billion and a maturity of 6 years. The interest equals WIBOR 3M + 0.82% per annum.

As part of debt restructuring in 2017, the bank repurchased (on  the secondary market) three series of mortgage covered bonds issued under a private offering in the total nominal amount of PLN 700 million and EUR 70 million.

mBH is a mortgage bank with the longest track record of issuing covered bonds on the Polish capital market. As of December 31, 2017, the value of issued mortgage covered bonds amounted to PLN 6.4 billion.

Covered bonds issued by mBank Hipoteczny are characterised by low investment risk, which is a result of the statutory obligation to apply complex security mechanisms while issuing and trading in such instruments. This has been proven by the ratings of the bank’s mortgage covered bonds assigned by Fitch Ratings. On June 23, 2017, the rating of mortgage covered bonds was affirmed at A.

The gross loan portfolio of mBank Hipoteczny totalled PLN 10.9 billion at the end of 2017 (i.e. +14.1% in comparison with 2016). That change was driven mainly by a systematic rise in the retail portfolio in the first three quarters of 2017, until the retail sales were transferred from mBH to mBank. Sales in this segment reached PLN 1.8 billion in the course of the year. The result of the effective sale of commercial loans deserve attention. In 2017, the total value of new contracts reached PLN 1.8 billion.

Despite the additional burden imposed on the bank in the form of a bank tax (PLN 24.4 million), in 2017, the company reported a 15.2% increase year on year in the standalone profit before tax. The profit before tax amounted to PLN 34.8 million at the end of 2017.

mBH’s profit was driven mainly by the continuing growth in the credit portfolio. In the period under review, net interest income of mBH grew by 19.9%. A significant decrease was observed in net commission income in 2017 resulting from the fact that the BFG costs were not compensated. In addition, compared with the previous year, loan loss provisions decreased by PLN 1.4 million owing to a favourable change in impairment parameters.

On June 2, 2017, mBank concluded a preliminary conditional agreement on the sale of mLocum shares to Archicom. The subject matter of the agreement was the sale of shares accounting for 79.99% of mLocum’s share capital and voting rights at the Annual General Meeting of the company for PLN 87.6 million.

On January 3, 2018, the subsidiary changed its name to Archicom Polska S.A

In 2017, mLocum posted a profit before tax of PLN 22.1 million, which represents an increase of 20.4%.

In 2017, the company was growing dynamically, breaking new business records. Turnover (the value of purchased invoices) was historically high at PLN 13.7 billion in 2017 (an increase of 18.4% year on year). Thanks to this the company ranked eighth on the factoring market in Poland with a 7.4% market share (according to the Polish Factors Association).

The profit before tax of mFaktoring amounted to PLN 14.7 million in 2017 compared with PLN 15.1 million in the previous year. An increase in net interest income and positive net impairment losses were offset by lower fee and commission income.

In 2017, mCentum Operacji (mCO) successfully carried out a number of projects aimed at optimising processes. The company continued to enhance its cooperation with mBank’s retail banking in the automation of processes already serviced and servicing of new processes (complaint-related processes). It alsoentered into cooperation with the corporate part of the bank as regards taking over new clients for execution of domestic standing orders. In addition, mCO implemented the very first “robot” in its production environment, which registers fees and commissions for corporate clients. Other machines are under way and being tested to streamline processes.

Sales revenues in 2017 stood at PLN 33.6 million, compared with PLN 34.6 million in 2016. The reduced revenues resulted mainly from lower proceeds from servicing mBank’s corporate part connected with a decrease in the volumes serviced and from real property lease (real property sales).

The company’s profit before tax in 2017 amounted to PLN 8.1 million v. a pre-tax loss of PLN 59.6 thousand posted in 2016. The higher profit before tax in 2017 is primarily attributable to the sales of real property (excluding the real property sales, the profit before tax stood at PLN 2.5 million in 2017). The positive financial result was mainly driven by impairment losses of the value of real property owned by the company.