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Q3-2025 Earnings Call
AI Summary
Earnings Call on Oct 30, 2025
Revenue Growth: mBank delivered revenues of over PLN 9.4 billion for the first nine months of 2025, up 5% year-on-year, with each quarter surpassing PLN 3 billion despite interest rate cuts.
Profitability: Net profit for Q3 was PLN 837 million, down 13% quarter-on-quarter but up 46% year-on-year; return on equity reached 16.4%.
Loan and Deposit Momentum: Core gross loans rose by 11% year-on-year, with mortgage loan sales setting a record in Q3. Deposits grew 4% quarter-on-quarter and 10.6% year-on-year.
Cost Control: Cost-to-income ratio remained below 30% despite higher contributions to the bank guarantee fund and a surge in marketing spend.
Legal Risks Declining: Swiss franc legal risk costs dropped by over 50% year-on-year and are expected to continue declining, with the Swiss franc mortgage portfolio nearly run off.
Capital Strength: The capital buffer was bolstered by bond issuance and retained earnings; CET1 ratio expected to remain well above regulatory requirements.
Sustainability Milestone: mBank published a transition plan with validated 2030 decarbonization targets, the first in Poland to align with the Paris Agreement.
Economic Outlook: Management projects robust Polish GDP growth and strong consumer conditions, with only modest inflation and gradual further rate cuts expected.
mBank reported strong revenue momentum, with over PLN 9.4 billion in the first nine months, a 5% increase year-on-year. Q3 net profit was PLN 837 million, down 13% from the previous quarter due to a higher tax rate, but up 46% year-on-year. Excluding the impact of Swiss franc loans, net profit would have been PLN 1.44 billion in Q3, highlighting underlying profitability.
Core gross loans increased by 11% year-on-year to nearly PLN 134 billion. Mortgage loan sales hit a record PLN 4.6 billion in Q3, up 24% quarter-on-quarter. Deposits rose 4% quarter-on-quarter and 10.6% year-on-year, mainly driven by retail accounts. mBank's loan and deposit growth is outpacing the broader market, supporting its strategy to increase market share.
The cost-to-income ratio remained below 30%, despite higher regulatory costs and a doubling of marketing expenses in Q3. Operating costs increased 3.3% quarter-on-quarter, mainly due to higher material and marketing costs, while personnel expenses were stable. Depreciation normalized after a spike in Q2.
Legal risk costs tied to Swiss franc mortgage loans fell by more than 50% year-on-year, reaching PLN 455 million in Q3—the lowest since Q4 2022. The active Swiss franc loan portfolio shrank markedly, and both new and pending court cases declined sharply. Management expects these risks and related costs to keep falling and become insignificant in 2026.
mBank’s capital position was strengthened by the successful PLN 400 million Tier 2 issuance and retained earnings. Own funds rose to PLN 20.2 billion at the end of Q3. The CET1 ratio is expected to stay well above regulatory minimums, even with anticipated RWA growth from business expansion and regulatory adjustments. A further bond issuance is planned before year-end.
mBank introduced a transition plan targeting net zero emissions, with science-based 2030 decarbonization goals validated by external standards. The plan sets concrete targets for reducing Scope 1 and 2 emissions by 42% by 2030 and includes sector-specific initiatives. Mortgage lending for energy-efficient properties is expected to double, and 15% of corporate loans will be allocated to sustainable finance.
mBank received recognition for its technology transformation and launched a world-first payment ring that combines payment and health tracking. The bank also introduced a fully digital mortgage transfer platform, enabling fast and seamless refinancing for clients, with a decision time of under seven minutes.
Management expects Polish GDP growth to accelerate to 4.2% in 2026, driven by strong consumer demand and EU-funded investment. Inflation is expected to move gradually higher but remain manageable, with two more policy rate cuts anticipated. The overall economic outlook is described as strong, supporting ongoing banking sector growth.
Hi, Pascal. Great to have you here.
Hi, [ Asia ], very good to be back.
We've just closed an exceptional quarter. What was special for you?
Well, this was a very special quarter as we have announced our new strategy towards 2030. And the title says it all, Full speed ahead! And we had an overwhelming interest more than 300 participants online and offline from investors, press, but also rating agencies and way more have shown high interest. We discussed how we want to accelerate our growth, how we deepen relationship with our clients and also how we want to set new standards in the banking landscape and not just in Poland, it's also beyond what we want to change.
And we discussed the financial KPIs and 3 of them stood definitely out. First was that we want to exceed 10% market share in every single of our core products. The second was that we have a return on tangible equity target, which reaches 22% in every single of our years. And also that we return as a regular dividend payer.
There was something happening after our strategy release, and that was that we received the award from Forrester. And it's less about the award. It's more about what they have acknowledged. We have replatformed our 2 core banking platforms into the latest infrastructure. And also, what we have done is an AI strategy and a cloud strategy. And the external acknowledgment we got. And our internal view that we believe that this capital stack of the IT landscape is a competitive advantage, is something we are very proud of because this will enable us to the continued success.
That's really impressive. What about financials in the third quarter?
So let me share the 4 highlights in the third quarter. First of all, we are growing our loan book, 10% year-on-year, and it's driven by both segments. And even better, we also capture market share with that.
Secondly, we have seen that our Swiss franc mortgage loan issue amounted to PLN 455 million in Q3. So it's the seventh consecutive quarter with a lower impact.
Thirdly, we further optimized our capital position. We just executed in October the fifth securitization transaction, and also we ramped up an existing one. And this will lead in Q4 to an improvement of CET1 of 0.4 percentage points. And fourth, we maintain our excellent efficiency. We show again a quarter with a cost-to-income ratio of below 30%.
That's really good. That brings me to my last question. What about the rest of the year?
Three things I want to share. For sure, first, we expect to exceed fairly the revenues of the last year. That means we're breaching PLN 12 billion of total income. And this despite a very much lower interest rate environment we are working this year in.
Secondly, we also work on our funding plans. So what you can expect from us is before end of the year that we issue a non-preferred senior in benchmark format, EUR 500 million. And thirdly, this is from us the last year with respect to a significant hit in our P&L of the Swiss franc matter, and that is a very good news.
Sounds like a homestretch of 2025 will be really dynamic. Thank you very much, Pascal, and see you in February 2026.
See you soon. Thank you very much.