mBank recorded PLN 317.13 million of consolidated net profit attributable to shareholders of the parent company in Q1 2021 compared to PLN 90.92 million profit a year earlier, the bank said in its report.
Net interest income amounted to PLN 946.9 million compared to PLN 1,065.46 million a year earlier. Net fee and commission income amounted to PLN 468.06 million compared with PLN 362.68 million a year earlier.
The total income of mBank Group decreased by 0.9% quarter on quarter and amounted to PLN 1,538.8 million. Basic income, ie net interest income and net fee and commission income, increased by 2.1% q / q due to higher fee and commission income and amounted to PLN 1,415 million, the report stated.
“The main source of income for mBank Group in the first quarter was the net interest income, which recorded a quarterly decline (PLN -30 million, i.e. -3.1%). The lower net interest income was a result of a shorter quarter (lower by 2 days in Q1 compared to Q4 2020) and a series of interest rate cuts by a total of 140 bp in March, April and May 2020 “- the report reads.
The net interest margin in mBank Group decreased on a quarterly basis and amounted to 2.1% in the first quarter of 2021 compared to 2.2% in the previous quarter.
The second largest item was the result on fees and commissions, which increased compared to the previous quarter (+ PLN 58.6 million, i.e. + 14.3%) and amounted to PLN 468.1 million.
The result on trading activities increased compared to the fourth quarter of 2020 by PLN 20.9 million, i.e. + 49.5% and amounted to PLN 63.2 million. The increase was mainly recorded in the FX result, thanks to the high volatility of exchange rates.
In the first quarter of 2021, mBank Group continued its efforts to further increase efficiency, as measured by the cost / income ratio. Operating expenses and depreciation in mBank Group amounted to PLN 664.7 million and increased compared to the previous quarter (by PLN 128.1 million, i.e. 23.9%) due to the booking of the annual contribution to the BFG Compulsory Restructuring Fund.
In Q1 2021, staff costs increased quarterly by PLN 19.0 million, i.e. 8.5%, which was related to higher costs of variable parts of remuneration. Employment in mBank Group decreased by 44 FTEs in the discussed period, due to ongoing employment optimization process.
Cost effectiveness as measured by the cost to income ratio decreased and amounted to 43.2% in the first quarter compared to 34.6% in the previous quarter. The normalized cost-to-income ratio in the period (containing 1/4 of the contribution to the compulsory restructuring fund) was at the level of 36.8%.
In the first quarter of 2021, the impairment and fair value change of loans and advances in mBank Group amounted to PLN 164.7 million. Compared to the previous quarter, it was lower by PLN 97.9 million, ie 37.3%.
The bank announced that the impairment and change in fair value of loans and advances in the Retail Banking segment amounted to PLN 118.9 million and was higher than in the fourth quarter of 2020 by PLN 5.9 million (5.2%).
The slight increase in the cost of risk results, among others, from the adjustment of credit risk parameter models to the requirements of the new default definition. At the same time, part of the provision for statutory moratoria established in 2020 was released in the first quarter of 2021.
The impairment and change in fair value of loans and advances in the Corporate and Investment Banking division amounted to PLN 68.8 million, which means a decrease by PLN 64.5 million quarter to quarter. Lower write-offs resulted from a conservative approach to creating provisions in 2020.
The provision for legal risk related to foreign currency loans, created in the first quarter of 2021, amounted to PLN 66.3 million, compared to PLN 633 million in the fourth quarter of 2020.
The bank’s total assets amounted to PLN 194.22 billion at the end of Q1 2021 compared to PLN 178.87 billion at the end of 2020.
On a standalone basis, the net profit in Q1 2021 was PLN 315.09 million compared to PLN 91.58 million in profit a year earlier.
MBank Group’s capital ratios in the first quarter of 2021 decreased compared to the end of 2020. The total amount of exposure to risk increased by PLN 3.7 billion, with a slight increase in own funds. The total capital ratio at the end of March 2021 was 19.2%, and the Common Equity Tier I ratio was 16.6%.
mBank is one of the leading universal commercial banks in Poland. The strategic shareholder of mBank is the German Commerzbank. The bank was listed on the WSE in 1992.
Source: mBank and ISBnews
