8. Corporates and Financial Markets .

The Corporates and Financial Markets segment serves 17,787 corporate clients including large enterprises (K1 - annual sales exceeding PLN 500 million), mid-sized enterprises (K2 - annual sales of PLN 30 – 500 million) and small enterprises (K3 - annual sales below PLN 30 million) through a network of dedicated 47 branches. mBank Group’s offer of products and services for corporate clients focuses on traditional banking products and services (including corporate accounts, domestic and international money transfers, payment cards, cash services, and liquidity management products), corporate finance products, hedging instruments, equity capital market (ECM) services, debt capital market (DCM) instruments, mergers and acquisitions (M&A), leasing and factoring. The segment comprises two areas: Corporates and Investment Banking, and Financial Markets.

8.1. Corporate and Investment Banking

Summary of Corporate and Investment Banking segment activity (mBank only)






YoY change

Number of corporate clients






























Loans to corporate clients. including




















Reverse repo/buy sell back transactions










Deposits of corporate clients. including 




















Repo transactions










Distribution network





Advisory Centres within "One Network" Project





Light branches within "One Network" Project





Corporate branches





Corporated offices





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Corporate and Investment Banking segment financial results

The Corporate and Investment Banking segment generated a profit before tax of PLN 499.9 million in 2014, which represents a decrease of PLN 49.7 million, i.e., 9.0% year on year

Corporate and Investment Banking: decomposition of the profit before tax 






Change in PLN m

Change in %

Net interest income





Net fee and commission income





Dividend income 





Net trading income 





Gains less losses from investment securities. investments in subsidiaries and associates





Net other operating income





Total income





Net impairment losses on loans and advances





Overhead costs and amortization & depreciation





Profit before tax of Corporate and Investment Banking





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The profit before tax of Corporate and Investment Banking in 2014 was driven by the following factors:

  • Decrease of income by PLN 8.6 million (-0.6%) year on year to PLN 1,333.7 million. Net interest income decreased by PLN 37.8 million, i.e., 5.2% while net fee and commission income increased by PLN 46.8 million, i.e., 14.0% year on year. Dividend income decreased due to a lower dividend paid by PZU S.A.
  • Increase of operating costs (including depreciation and amortisation) to PLN 645.6 million in 2014 (increase of PLN 32.9 million, i.e., 5.4%).
  • Increase of net impairment losses on loans and advances by PLN 8.2 million, i.e., 4.6% year on year.

Activity of Corporate and Investment Banking segment in 2014

2014 was a time of moderate but stable economic recovery, which implied stronger business activity for large enterprises. On the other hand, banks had to continue their activity in an environment of record-low interest rates and reduced interchange fees. The economic situation had a positive impact on the volume of corporate loans and deposits. The corporate loan market grew by 7.4% year on year and the corporate deposit market grew by 9.1 % year on year. mBank grew at a higher rate than the market, resulting in an increase of its market shares to 6.2% in loans and 8.8% in deposits, compared to 5.9% and 8.3% in 2013, respectively.

In 2014, the Bank pursued focused sales activities, resulting in record-high acquisition of corporate clients: the corporate client base increased by 1,454 companies year on year to 17,787 clients.

Successful client acquisitions boosted the balances deposited on current accounts which stood at PLN 6,709 million at the end of 2014, representing a 13.9% increase year on year. The high volume of current deposits is a springboard for further growth of transactional banking, which is of special relevance to the Bank with respect to the growth potential and forging of closer relations with clients.

One of the key success factors in the segment of small and medium-sized enterprises (SME) is client acquisition: steady development of the client base as a potential for growth of profitable long-term relationships. 2014 was record-breaking in these terms as SME Advisers acquired 2,180 clients. The K3 client base included 10,805 clients at the end of 2014. In addition, more than 220 highly profitable clients were transferred to segments K2 and K1.

In 2014, the Bank pursued a strategy of growing its market share in the segment of small and medium-sized enterprises among others by launching a new specialised product for SME clients, called the SME Flexible Package, which provides comprehensive financial management functions and preferential terms of service in key areas relevant to the company. In addition, the Bank implemented a new simplified credit process for SME clients. mBank’s position on the SME market improved significantly owing to the 2014 online campaign “Pieniądze zawsze na czas” (Money Always On Time) addressed to SMEs. Those initiatives resulted in record-high client acquisition in this segment.

The Flexible Package includes four modules: the transactional, financial, fx, and group modules. Flexibility of the package implies not only that clients can use modules in order to create diverse variants of the offer; it also embraces price flexibility: preferential terms of money transfers for more active transactional clients, as well as preferential terms for bank accounts based on contracted volumes of activity. More than 700 clients were acquired using the package offer by the end of 2014, which means that more than one in two new K3 clients started banking with mBank using a package service.

Following the consolidation of its Corporate and Investment Banking activities in 2014, the Bank became more active on the corporate debt origination market. The low yield environment provided an additional support to market growth. Furthermore, the segment focused on closer relations with non-bank financial institutions as well as clients from the agricultural and food industry.


Transactional banking is growing further


Record acquisition and results in K3 segment


mSatisfaction – because client’s voice counts

The quality of corporate client service measured by NPS (Net Promoter Score) improved substantially in 2014. The NPS for clients who consider mBank to be their primary bank stood at 26. By comparison, the average market score was 13 points according to the GfK Polonia syndicated survey “Monitor firm 2014” (Company monitor 2014).

NPS surveys have continued since 2010 in order to gain more expertise and experience in the area. In 2014 mBank launched the mSatisfaction project which focuses on listening to the “voice of the customer” and on improving client relationships, followed by data analysis and calculation of relevant indicators to measure the level of customer experience.

The “voice of customer” surveys and employee opinions, i.e., the surveys carried out in 2014, were analysed to define 15 initiatives aiming to improve corporate customer satisfaction. It is the aspiration of the Bank to ensure that clients’ feedback sourced from satisfaction surveys helps to identify the directions of changes to internal processes, procedures, and IT functionalities.

mBank’s corporate banking was awarded in 2014 by a number of specialised respected institutions. The high-profile magazine Global Finance named mBank the best trade finance bank in Poland in view of the high quality of trade finance services on offer, the innovative product offer, the volume of transactions, and the competences of the trade finance staff. Global Finance’s annual World’s Best Internet Banks ranking named mBank CompanyNet the best transactional service for corporate banking clients in Poland (the experts also recognised the retail banking service), and mBank CompanyMobile was awarded as the best mobile application in Central and Eastern Europe. Furthermore, mBank’s transactional FX platform, mPlatforma walutowa, was awarded for the third time. Finally, a Euromoney report ranked mBank’s transactional banking in the third position in the Domestic Cash Manager Poland category, while the prepaid card “Atlas – Program Fachowiec” was named the Best Polish Loyalty Card of 2014.

Products and services on offer

Corporate loans

Loans granted to mBank’s corporate clients (excluding repo transactions) stood at PLN 26,273 million at the end of 2014, representing an increase of 11.7% year on year (PLN 23,522 million at the end of 2013).

Loans granted to enterprises (NBP category which ensures comparability of results of the banking sector) stood at PLN 17,874 million at the end of 2014, which represented an increase of 13.4% year on year (PLN 15,765 million at the end of 2013). The market of loans granted to enterprises grew by 7.4% year on year. The market share of mBank’s lending to enterprises in total lending of the sector was 6.2% at the end of 2014, compared to 5.9% at the end of 2013. The loan-to-deposit ratio of enterprises in mBank stood at 86.3% at the end of 2014, which was much below the market benchmark of 121.5%.

Loans granted to local government units stood at PLN 1,324 million at the end of 2014, compared to PLN 1,469 million at the end of 2013.

Corporate deposits

Corporate client deposits at mBank (excluding repo transactions) stood at PLN 25,807 million at the end of 2014, representing an increase of 27.3% year on year (PLN 20,265 million at the end of 2013).

Current deposits of mBank’s corporate clients stood at PLN 6,709 million at the end of 2014, an increase of 13.9% year on year (PLN 5,890 million at the end of 2013).

Deposits of enterprises (NBP category which ensures comparability of results of the banking sector) stood at PLN 20,709 million at the end of 2014, representing an increase of 15.2% year on year (PLN 17,972 million at the end of 2013). The market of deposits of enterprises grew by 9.1% in that period. The market share of deposits of enterprises at mBank in the total deposits of enterprises was 8.8% at the end of 2014, compared to 8.3% at the end of 2013.

Deposits of local government units stood at PLN 212 million at the end of 2014, compared to PLN 179 million at the end of 2013.

Structured finance, project finance, syndicated loans

As part of Corporate and Investment Banking Segment, the Bank offers structured financing, including: M&A finance, project finance and syndicated finance. In 2014, the Bank participated in 47 syndicated and bilateral products. The Bank’s total exposure under syndicated and bilateral products stood at PLN 3,689 million at the end of 2014.

European Union financing

In March and July 2014, the Bank signed new agreements with the European Investment Bank (EIB) to open new credit lines in a total amount of EUR 200 million dedicated to project finance and financing of small and medium-sized enterprises (companies which employ up to 250 people) and mid-caps (companies which employ more than 250 but less than 3 thousand people).

De minimis guarantee

In June 2014, mBank and Bank Gospodarstwa Krajowego (BGK) signed an Annex to the Portfolio Guarantee Line De Minimis (PLD) Agreement amending among others the terms of calculating de minimis assistance. The PLD Agreement had been signed in 2013 as part of the government programme “Supporting Entrepreneurship with BGK Sureties and Guarantees” which provides guarantees for working capital loans to microenterprises, as well as small and medium-sized enterprises. The guarantee limit assigned to mBank under the PLD Agreement is PLN 900 million. The amount drawn under the limit reached PLN 634 million as of December 31, 2014 (an increase of 138% year on year).

Corporate debt origination

The origination of debt issues for enterprises, local governments, and banks has been a responsibility of the Corporate and Investment Banking Line as of the beginning of 2014.

The figure below presents mBank’s non-Treasury debt market share at the end of 2014.

Outstanding bank debt arranged by mBank (excluding BGK’s “road bonds”) stood at ca. PLN 10 billion, compared to PLN 7.2 billion at the end of 2013, which makes mBank the leader with a market share of 34.3%. The largest bank debt issues arranged by mBank in 2014 included the issue of PLN 685 million bonds for BGK and PLN 515 million bonds for Getin Noble Bank. Other large transactions with the participation of the Bank included a EUR 120.5 million and PLN 500 million mBank Hipoteczny covered bond issues, a PLN 210 million Bank Pocztowy S.A. bond issue, a PLN 263 million Credit Agricole Bank Polska bond issue, and a PLN 60 million Santander Bank bond issue.

In the growing corporate bond market, mBank ranked third with a market share of 12.9%. A number of new large issues were arranged, including: Tauron S.A. (PLN 583 million), CCC S.A. (PLN 210 million), Magellan S.A. (PLN 265 million), Echo Investment S.A. (PLN 170.5 million), WB Electronics (PLN 74 million), Robyg SA (PLN 60 million), and Elemental Holding S.A. (PLN 50 million). Outstanding corporate bonds stood at ca. PLN 6.8 billion at the end of 2014, compared to PLN 5.1 billion at the end of 2013.

Development of transactional banking

Cash management is an area of Corporate Banking which offers state-of-the-art solutions to facilitate planning, monitoring and management of the most liquid assets, cash processing, as well as electronic banking. The solutions facilitate daily financial operations, enhance effective cash flow management, and optimise interest income and costs.

The balances of corporate current accounts crossed the mark of PLN 6 billion for the first time in history in 2014. The year-on-year growth rate of transactional products in 2014 was as follows:



Number of outgoing domestic transfers


Number of mass transfer transactions


Number of direct debits sent


Number of cards 


Cash service turnovers


Number of foreign and SEPA transfers sent 


Number of foreign and SEPA transfers received


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Attractive transactional products were added to mBank’s offer in 2014 including:

  • Open deposits at Poczta Polska (Polish Post) branches – a new solution which enables clients to deposit cash from the till into mBank accounts. Clients can make deposits in the extensive branch network of Poczta Polska across the country (currently some 9 thousand branches).
  • New functionalities of mBank CompanyMobile for the FX platform “mPlatforma walutowa”.
  • “Lite” version of the mBank platform which is supplementary to the services available in the mBank CompanyMobile application and provides access on mobile devices, including older phone models which are web browser enabled but do not feature an operating system for which the corporate mobile banking application is available. The service features among others account information, the history of transactions and incoming and outgoing money transfers.
  • Online deposit service where the client declares the amount to be deposited via the online electronic banking system mBank CompanyNet no later than the agreed time on a given business day when the closed deposit is to be made. The client’s account will then be credited with that amount as of such time, and the money is available as soon as the Bank confirms that the amount of the actual deposit matches the amount declared.
  • Housing Escrow Accounts combined with the Collect product in the electronic banking system. The combination allows property developers to manage cash flows for each investment project. The developer has access to information on payments of each buyer and may collect the buyer’s personal data.
  • Electronic version of the escrow account for online currency exchange platforms. This innovative solution ensures safety of currency exchange transactions for online currency exchange platforms. The Bank offers an electronic version of escrow accounts which allow clients to make safe currency exchange transactions in high volumes on currency exchange platforms. The solution allows all interested parties to authorise a currency exchange transaction through the Bank’s mobile access channels.

It is a strong proof of the quality of mBank’s transactional banking that the financial magazine Global Finance named mBank the Best Cash Management Provider in Poland in its Best Treasury & Cash Management Providers 2015 ranking. Global Finance selected the winners in a multi-step evaluation process including reader surveys, opinions of analysts, senior managers and technology experts, as well as independent research.

8.2. Financial Markets

Summary of Financial Markets segment results

The Financial Markets segment generated a profit before tax of PLN 129.5 million in 2014, compared to a loss posted in 2013.

Financial Markets: decomposition of profit before tax






Change in PLN m

Change in %

Net interest income





Net fee and commission income





Dividend income





Net trading income





Gains less losses from investment securities, investments in subsidiaries and associates





Net other operating income





Total income





Net impairment losses on loans and advances





Overhead costs and amortization & depreciation





Profit before tax of Financial Markets





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The profit before tax of Financial Markets in 2014 was driven by the following factors:

  • Increase of income by PLN 147.0 million, i.e., 186.3% year on year to PLN 225.9 million. Net interest income increased by PLN 120.0 million and net trading income increased by PLN 36.8 million.
  • Increase of operating costs (including depreciation and amortisation) to PLN 95.3 million (an increase of PLN 9.7 million, i.e., 11.3%).

Financial Markets segment activity in 2014

Since January 2014 he Financial Markets area covers:

  • Direct sale of financial market products to Corporate Banking clients
    and non-banking financial institutions (such as insurance companies, pension and investment funds and asset management companies) as well as selected Private Banking clients;
  • Management of mBank's liquidity as well as its assets and liabilities (including deposit and credit portfolio interest risk management). Liquidity management involves money market transactions, currency swaps, interest rate derivative transactions, T-bill, T-bond and NBP bill purchase transactions, repo transactions etc.;
  • Management of mBank's interest rate and currency risk, trading in FX instruments on the interbank market (spot transactions and derivatives), trading in interest rate instruments (T-bills and T-bonds, interest rate derivatives), commodity derivatives, shares, equity and stock index derivatives, trading in non-Treasury securities;
  • Offering the service of a depositary and a trustee in particular to non-banking financial institutions;
  • Supervision over brokerage house operations with regard to its cooperation with financial institutions.

Activities connected with arranging issues of debt securities for Corporate Banking clients and banks, as well as trading in and sales of these securities were transferred to the Corporate and Investment Banking Line (previously Corporates and Institutions). For more information please see section 8.1. Corporate and Investment Banking.


The highest mark from NBP


Accurate forecasts


Because it is worth to cooperate


2014 in the Financial Markets area was marked by extending product portfolio, intensive work on bond issue placements and cross-selling development in line with mBank Group’s Strategy.

A strong focus was placed on the development of unique competences in the area of resource risk hedging and enhancing product portfolio with new categories of resources and transaction types. In collaboration with the Corporate and Investment Banking Line the number of clients using the Bank’s offer has doubled.

It is also worth to mention the re-introduction of greenhouse gas emission allowances with a cash settlement option to the transaction portfolio with first transactions already being concluded, including those with clients from the largest corporates segment (K1).

Active cooperation between the Financial Markets and Retail Banking Business Lines resulted in the launch of a foreign exchange platform addressed to SMEs. The year was also marked by further development of the foreign exchange platform for corporate clients which won Global Finance magazine’s Best Online Treasury Services award.

In 2014 mBank was ranked first in the Dealer Activity Index of the National Bank of Poland for the third time. The result achieved by the Bank enables it to conclude an agreement with the NBP on performing the function of a Money Market Dealer in 2015.

Profitability of concluded hedging transactions rose by approximately 30% against 2013, exceeding the amount of PLN 13.5 million (in nominal terms concluded transactions amounted to PLN 1.3 billion).

In nominal terms the largest hedging transactions against interest rate risk concluded in 2014 include:

  • Sukcesja Fabryka Biznesu - EUR 25.3 million,
    • Netia - PLN 162 million,
    • EXPO XXI - EUR 16.5 million,
    • Devco - EUR 16 million.

The shares of mBank in particular financial instruments markets are presented in the charts below.

Financial Institutions

Relations with financial institutions are managed by Financial Markets business line. The activities include, among others, funding from other banks and placements with other banks.

At December 31, 2014, the Bank had 19 active loans (including subordinated loans) amounting to the equivalent of PLN 21,175 million, of which PLN 15,076 million were drawn. In 2014, three loans denominated in CHF, two loans in USD and one loan in EUR, amounting to PLN 4,061 million in total, were repaid at maturity. Additionally, the Bank took out two new loans in EUR amounting to PLN 852 million in total. The Bank’s total exposure under loans from other banks was by PLN 1,627 million lower than at the end of 2013. At 2013 exchange rates the decrease would amount to PLN 327 million.

At the end of December 2014, mBank’s exposure under loans granted to other banks reached the equivalent of PLN 1.52 billion. The Bank’s portfolio included 30 short-term and medium-term active loans granted to other financial institutions from Poland and from abroad.

Main highlights of the activities of the Financial Institutions Department in 2014 include:

  • Obtaining further, considerable funding from the European Investment Bank (EIB). In 2014 the Bank was granted two loans in the amount of EUR 100 million each. Taking into account the current portfolio, mBank ranks first as EIB’s largest borrower in the Polish banking sector.
  • 2014 was also marked by further acquisition of loro accounts. The Bank managed to maintain its position as one of the leading Polish banks in handling settlements in PLN.

Moreover, in 2014 the Financial Institutions Department continued to actively support trade transactions concluded by Polish exporters by offering short-term financing to financial institutions, mainly from Belarus. At the same time, the Bank was still serving banks from the Commonwealth of Independent States and offering them medium-term loans secured with KUKE insurance policies. 

mBank’s Custody Services

mBank’s custody clients are mainly local and foreign financial institutions, banks which offer custodian and investment services, pension funds and investment funds, insurance companies, asset management institutions, and non-financial institutions.

mBank provides services including settlement of transactions in securities registered in local and foreign markets, safe-keeping of clients’ assets, maintenance of securities accounts and registers of securities in non-public trading, and processing corporate actions. As a depositary bank mBank maintains registers of pension funds’ and investment funds’ assets and monitors valuations of those assets.

As a consequence of the pension system reform at the beginning of 2014 and the resulting transfer of a part of pension funds’ assets to the Social Insurance Institution (ZUS), the value of assets kept by the Bank decreased by 17.3% in February against December 2013. This drop was, however, offset by the acquisition of new clients and rising value of the portfolio.

Finally, 2014 saw a record-high activity of clients with the number of settled transactions increasing by 16.6% against 2013.