Annual Report
2017

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Corporates and Financial Markets

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Key financial data (at the end of 2017):

38.3 %
Share in pre-tax profit
584.7 PLN M
Pre-tax profit
1,727.5 PLN M
Total income

Key business data of the Corporates and Financial Markets segment:

2013 2014 2015 2016 2017
Clients (thousand) 16.3 17.8 19.6 20.9 22.0
Branches (pcs) 47 48 51 45 46
Loans to corporate clients (PLN M) 29,475 32,841 33,447 34,174 37,942
Deposits of corporate clients (PLN
M)		 26,753 32,237 34,424 37,383 34,590
Key highlights
  • Increase of core income by 5.2% in comparison with 2016.
  • Increase in corporate loans by 11.0% year on year.
  • Acquisition of 1.1 thousand of new corporate clients.
  • Net Promoter Score (NPS) for corporate customers who indicated mBank as their main bank, reached 42% (market average at 22%), i.e. +6 p.p. year on year*.
  • Increase in mBank’s market shares on the IRS/FRA market to 12.5% (from 11.5% in 2016).
  • Providing corporate customers with a new enhanced mCompanyNet transactional platform.
  • Implementation of mKantor and the FX platform (in Polish: mPlatforma walutowa) available 24/7 for retail banking clients.

* Source: Kantar Millward Brown, August 2017.

The contribution of Corporate and Investment Banking in the Group’s results rose to 33.1% from 30.4% a year earlier. The increase was driven by higher income (up by 6% year on year) coupled with lower operating expenses.

The Corporate and Investment Banking segment generated a profit before tax of PLN 505.6 million in 2017, which represents an increase by 1.4% year on year. Total overhead costs (including amortization) decreased by 4.9% in the analysed period. At the same time, the net impairment losses on loss and advances increased by 119.6% in 2017. The low level of provisions reported in 2016 was caused by the release of credit risk provisions related to the sale of non-performing receivables and payment of the loan insurance by KUKE (Export Credit Insurance Corporation).

PLN M

 

 2016 2017 Change
in PLN M		 Change
in %
Net interest income 750.5 832.7 82.2 11.0%
Net fee and commission income 378.8 406.3 27.5 7.3%
Dividend income 0.0 0.0 0.0 –
Net trading income 243.6 246.3 2.7 1.1%
Gains less losses from investment securities, investments in
subsidiaries and associates		 21.0 -6.1 -27.0 -/+
Net other operating income/expense 18.3 17.9 -0.4 -2.2%
Total income 1,412.3 1,497.3 85.0 6.0%
Net impairment losses on loans and advances -76.5 -168.1 -91.6 119.6%
Overhead costs and amortization -717.0 -681.8 35.2 -4.9%
Taxes on Group’s balance sheet items -120.1 -141.7 -21.6 18.0%
Profit before tax of Corporates and Investment Banking 498.6 505.6 7.0 1.4%

 

Activity of Corporate and Investment Banking segment in numbers (mBank only)

31.12.2015 31.12.2016 31.12.2017 Annual change
in %
Number of corporate clients 19,562 20,940 22,048 5.3%
K1 1,983 2,123 2,093 -1.4%
K2 5,748 6,067 7,088 16.8%
K3 11,831 12,750 12,867 0.9%
PLN M
Loans to corporate clients, including 22,102.8 20,874.0 23,01.6 10.2%
K1 6,162.6 4,999.7 5,316.9 6.3%
K2 11,837.6 12,744.8 14,529.7 14.0%
K3 3,049.6 2,957.9 2,973.0 0.5%
Reverse repo/buy sell back transactions 1,031.0 56.7 57.1 0.7%
Other 22.0 114.9 133.8 16.5%
Deposits of corporate clients, including 31,296.9 33,303.5 31,425.5 -5.6%
K1 14,019.0 12,659.0 11,999.2 -5.2%
K2 11,260.0 12,348.3 13,483.3 9.2%
K3 4,856.0 6,276.4 5,079.0 -19.1%
Repo transactions 1,093.7 1,600.5 439.6 -72.5%
Other 67.9 419.8 424.4 1.1%

Financial Markets

The Financial Markets segment generated an income of PLN 230.2 million in 2017, up by 2.9% compared to 2016. The increase is attributable mainly to higher net trading income. However, the higher income was offset by a considerable increase in overhead costs including amortization (up by 15.8% year on year). The profit before tax stood at PLN 79.1 million in 2017, which represents a decrease by 12.9% year on year.

PLN M 2016 2017 Change
in PLN M		 Change
in %
Net interest income 314.5 282.2 -32.4 -10.3%
Net fee and commission income -4.6 -7.6 -3.0 66.7%
Dividend income 0.4 0.0 -0.4 –
Net trading income -103.3 -64.9 38.4 -37.1%
Gains less losses from investment securities,
investments in subsidiaries and associates		 17.3 20.8 3.5 20.3%
Net other operating income/expense -0.7 -0.3 0.4 -60.9%
Total income 223.7 230.2 6.5 2.9%
Net impairment losses on loans and advances -1.7 2.1 3.8 +/-
Overhead costs and amortization -104.4 -120.9 -16.5 15.8%
Taxes on Group’s balance sheet items -26.8 -32.3 -5.5 20.4%
Profit before tax of Financial Markets 90.9 79.1 -11.7 -12.9%

 

 

 

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