Annual Report
2017

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Short-, mid- and long-term perspective

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Short- and mid-term perspective

Finances

Net interest income & NIM (slightly positive)
Continued gradual increase of margin driven by changing structure of loan portfolio (more higher-yielding products).
No room for further reduction of funding costs.
Net Fee & Commission income (neutral)
Constantly rising client transactionality and strong acquisition in both retail and corporate segment.
Adjustment of fees difficult due to fierce competition.
Total costs (slightly negative)
Business-driven costs to be kept well-contained.
Contribution to the BFG expected to remain stable.
Rising amortisation due to ongoing investments in IT.
Loan Loss Provisions (slightly negative)
Small downside risk due to changing loan book mix.
Potential increase in provisioning due to IFRS 9.
Resilient asset quality supported by good macroeconomic situation and low unemployment.

 

Business and operations

Business and operations
  • Continuing the development of the mobile channel as the basic way of contacting the bank and managing finances on a day-to-day basis as well as enhancement of the online platform.
  • Developing mobile solutions for corporate clients.
  • Continuing the cooperation with AXA Group, especially in the stand-alone insurance segment.
  • Continuing the automation of the bank’s internal processes and development of processes based on mobile solutions.
  • Continuing the acquisition of young clients.
  • Maintaining the position of the bank of first choice in the K2 segment and ensuring dynamic business growth in the K3 segment.

We assume that in the short-term and mid-term horizon, that is until 2020, no major changes will occur in the market, competitive and regulatory environment. The macroeconomic situation will still be favourable to the industry, and the sector’s consolidation will continue. Although mBank Group does not rule out acquisition, it is consistent in pursuing organic growth.

The banking market will continue to see strong development of the mobile payment segment. mBank employs digital channels for sales and client acquisition to a greater extent than competing banks in Poland, which have historically developed a more traditional outlet-based distribution model. We stick to the rule “mobility first”, which reflects our mission to provide clients with user-friendly and multi-channel access to services. We take every effort to ensure that our clients want to stay with mBank “forever” and recommend it to their friends and family, being satisfied with its services. mBank Group will strengthen its key competitive advantage, supporting the ongoing IT and digital initiatives which streamline and automate internal processes that are important to clients.

We will also continue the digital transformation in the corporate banking business line. It will involve digitation of certain products (including limited use of hard-copy documents), further improvement of the mCompany Net application to meet clients’ expectations as well as automation and simplification of internal processes.

Long-term perspective

Finance

Finance
  • Ensuring stability of financing in the long-term and maintaining the loan/deposit ratio at ca. 100%.
  • Maintaining sustainable dividend capacity.
  • Remaining one of the efficiency leaders in the banking sector.

Business and operations

Business and operations
  • Continuing efforts to grow our client base driven by strong relationships and careful attention to the client’s satisfaction with the quality of services, customized product offer and innovative solutions.
  • Carrying on work on a product mix that caters for the needs of our clients as well as transparent and comprehensible terms and conditions of offering these products in accordance with the principles of client-centricity.
  • Strengthening the bank’s position and image of mobility icon.
  • Responding to demographic trends and changing client behaviour.
  • Observing and testing promising solutions and technologies.
  • Continuing investments in cybersecurity and the security of data, transactions and funds entrusted by clients.
  • Perfecting the multi-channel sales and customer service model with a particular emphasis on mobile banking development.
  • Actively cooperating with the public administration in the area of digital services for citizens.
  • Retaining the position of an employer attractive to the most gifted employees creating state-of-the-art solutions in the financial services sector.

We have been developing mBank’s business in a responsible and sustainable manner, combining long-term growth assumptions with efficiency measures, mainly the cost-to-income (C/I) ratio. Currently, the C/I ratio ranks mBank among the leaders of the banking sector. Moreover, mBank is one of the most efficient banks in Poland in terms of revenues and profit per employee or branch. Our long-term goal is to remain one of the efficiency leaders in the banking sector.

In 2012, after ten years, mBank resumed the payment of dividends to its shareholders; however, the 2014-2016 profit was retained in whole in accordance with regulatory recommendations. To constantly demonstrate the dividend payment capacity, despite tightening regulatory requirements, is an element of the “Mobile Bank” strategy for 2016-2020 and a long-term goal. More information about our dividend policy is available here: mBank Group’s capital base.

mBank Group expects it customer base to grow continuously. In pursuit of this goal, we foster strong relationships, pay careful attention to the client’s satisfaction with the quality of services and provide clients with customized product offer and innovative solutions. In addition, we plan to keep on perfecting the multi-channel sales and customer service model, putting a particular emphasis on mobile banking development.

In order to strengthen the bank’s position and image of mobility icon, we will continue our efforts to offer simple and comprehensible products on transparent terms and conditions, with clients’ needs underlying all our decisions.

Responding to demographic trends and changing client behaviour is a challenge the group will face in the future. In order to meet it, we have been observing and testing promising solutions and technologies. Moreover, we plan to continue our investments in cybersecurity and the security of data, transactions and funds entrusted by clients.

Since people are at the core of our vision and strategy, we plan to retain the position of an employer attractive to the most gifted employees creating state-of-the-art solutions in the financial services sector.

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