Impact of coronavirus spread on mBank Group operations
Impact of coronavirus spread on mBank Group operations
Current Report | Drafted on: 08.04.2020 Current report No 21/2020 Legal basis: | §| 17 Regulation (EU) No 596/2014 Of The European Parliament And Of The Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC Contents: | The Management Board of mBank S.A. ("|Bank"|) informs about the impact of the spread of the coronavirus on the mBank Group ("|Group"|) operations.
The Group conducts its operations without interruption. Customer service is carried out both in branches and remotely. Most branches remained open, while mKiosks are closed due to restrictions imposed on the operation of shopping malls. The bank encourages customers to use remote contact channels and informs about activities that do not require a visit in the branch. The Group has introduced a number of facilities for customers to limit the impact of the epidemic on their financial situation. The bank allows individual clients as well as small and medium-sized enterprises to postpone repayment of the loan installment for up to six months. The clients of mLeasing can submit an application for a significant reduction of six leasing installments.
The Group's liquidity and capital position is good. The Group's capital and liquidity ratios are high and exceed the levels required by the regulator. The decision of the Ministry of Finance to lower the systemic risk buffer to zero results in a reduction of the minimum capital requirement at the consolidated level by 2.83 p.p.
The reduction of interest rates by the Monetary Policy Council by 100 basis points in total, announced on March 18 and April 8, 2020, will have a negative impact on the Group's net interest income. The impact is currently estimated at approx. PLN 155 million in 2020, based on the assumption of a fixed balance sheet total. The final impact may differ from the current estimation depending on the macro situation, business activity and volume development.
Due to the potential deterioration of the macroeconomic situation, the Group expects the cost of risk to increase. Therefore, the Management Board informs, that net profit generated in the first quarter of 2020 is expected to be lower than net profit generated in the comparable period of last year.
SIGNATURE OF THE PERSONS REPRESENTING THE COMPANY
Vice-director for investment supervision, Compliance Department Maciej Mołdawa 08.04.2020