Revision of mBank’s rating outlook to negative and affirmation of its long- and short-term ratings by S&P Global Ratings
Revision of mBank&rsquo|s rating outlook to negative and affirmation of its long- and short-term ratings by S&|P Global Ratings
Current Report | Drafted on: 27.04.2020 Current report No 25/2020 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. (&ldquo|Bank&rdquo|) informs that on April 27, 2020, S&|P Global Ratings ("|S&|P"|) affirmed the current ratings of the Bank and revised the rating outlook from &ldquo|developing&rdquo| to &ldquo|negative&rdquo|. | The Bank currently has the following S&|P ratings: Long-term issuer credit rating: "|BBB"|, rating outlook: "|negative"| Short-term issuer credit rating: "|A-2"| Stand-alone credit profile: "|bbb"| Resolution counterparty ratings (RCR) - long-term: "|BBB+"|| short-term "|A2"|. | S&|P expects that following rapid lending growth in 2018-2019, in the light of the expected recession in Poland in 2020 and other negative consequences of the COVID-19 pandemic, the Bank&rsquo|s risk costs could increase steeply. In addition, according to S&|P, mBank remains one of the most exposed banks in Poland to economic and litigation risks stemming from its Swiss franc-denominated legacy mortgage loan portfolio. | At the same time, S&|P believes that the Bank is one of the most modern and best-digitalized banks in Poland with sound cost efficiency, a relatively small branch network and the Bank&rsquo|s customers are used to remote channels, which positions the Bank well in an era of branch rationalization and investment in digital channels. | The agency assumes that under current circumstances, the sale of mBank by Commerzbank in the next 12-18 months is less likely. | S&|P assigns the long-term issuer credit ratings on the "|AAA"|, "|AA"|, "|A"|, "|BBB"|, "|BB"|, "|B"|, "|CCC"|, "|CC"|, "|SD"| and "|D"| scales with the option of adding to ratings from "|AA"| to "|CCC"| a plus (+) or minus (-) sign to show relative standing within the rating categories and the short-term issuer credit ratings on the "|A-1"|, "|A-2"|, "|A-3"|, "|B, "|C, "|SD"| and "|D"| scales. S&|P&rsquo|s rating definitions are available at www.standardandpoors.com.
SIGNATURE OF THE PERSONS REPRESENTING THE COMPANY
Vice-director for investment supervision, Compliance Department Maciej Mołdawa 27.04.2020