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mBank Group funding

The “One Bank” Strategy for 2012-2016 provided for optimisation of the Bank’s balance sheet in terms of its profitability and structure by increasing the share of client deposits in funding, further diversification of the funding base, and a bigger share of high-yield assets.

The “Mobile Bank” Strategy, implemented in mid-2016, provides for the strengthening of the funding profile due to the increasing volume of covered bonds and transaction deposits and maintaining the loan-to-deposit ratio on the level of at most slightly above 100% every year (92.3% at the end of 2017).

It was reflected in the changes of the structure of mBank Group’s funding at the end of 2017.

Changes in mBank Group’s funding structure

Bond issued under the EMTN Programme

In 2017, there was one issue under the EMTN Programme. In March 2017, mFinance France issued sixyear bonds with a nominal value of CHF 200 million and 1.005% coupon. mBank continues its efforts aimed to diversify the sources of funding and to ensure stable refinancing on attractive terms.

The following table presents a summary of outstanding tranches:

Date of issue Nominal value Maturity date Coupon
05.09.2013 CHF 200 M 08.10.2018 2.500%
06.12.2013 CZK 500 M 06.12.2018 2.320%
24.03.2014 EUR 500 M 01.04.2019 2.375%
20.11.2014 EUR 500 M 26.11.2021 2.000%
26.09.2016 EUR 500 M 26.09.2020 1.398%
28.03.2017 CHF 200 M 28.03.2023 1.005%

Activity on the covered bond market

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 bond issues conducted by mBank Hipoteczny constitute an important part of mBank Group’s funding strategy The scale of mBH’s issuing activity in 2017 and the parameters of individual issues mark a significant change in the policy of the Bank, whose main function is to raise funding and refinance long-term mortgage loans through covered bond issues. The main focus is on narrowing the maturity gap between assets and liabilities, reducing the currency gap, and cutting the cost of new funding.

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

It should to be emphasized that in October 2017, mBH placed the biggest issue of covered bonds in PLN in the history of the Polish capital market in the amount of PLN 1 billion, a maturity of 6 years and interest of 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.

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 Ltd. On June 23, 2017, the rating of mortgage covered bonds was affirmed at A.


A summary of mBH activity on the public market in 2017 is presented in the following table.

Volume Currency Date of issue Maturity Tenor
(in years)
24.9 M EUR 02.02.2017 02.02.2024 7 Fixed (0.94%)
500 M PLN 29.09.2017 10.09.2022 5 WIBOR3M +0.75%
1,000 M PLN 11.10.2017 15.09.2023 5.9 WIBOR3M +0.82%
100 M EUR 30.10.2017 22.06.2022 4.6 Fixed (0.612%)