31. Subordinated liabilities

 

 

 

SUBORDINATED LIABILITIES

Nominal
value

Currency

Terms of interest
rate (%)

Effective interest
rate (%)

Redemption
date

As at the end
of the period
(in PLN '000)

As at 31 December 2014
- Commerzbank AG 400 000 CHF 3M LIBOR + 1.2%* 1.20 08.03.2017 1 419 015
- Commerzbank AG 80 000 CHF 3M LIBOR + 1.4%** 1.35 perpetual 1) 283 683
- Commerzbank AG 70 000 CHF 3M LIBOR + 2.0%*** 2.01 18.12.2017 248 307
- Commerzbank AG 170 000 CHF 3M LIBOR + 2.2%**** 2.20 perpetual 1) 605 697
- Commerzbank AG 90 000 CHF 3M LIBOR + 2.5% 2.45 24.06.2018 319 177
- Investors not associated with
mBank S.A. Group
500 000 PLN 6M WIBOR + 2.25% 4.30 20.12.2023 500 664
- Investors not associated with
mBank S.A. Group
750 000 PLN 6M WIBOR + 2.1% 4.15 17.01.2025 751 181
4 127 724
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SUBORDINATED LIABILITIES

Nominal
value

Currency

Terms of interest
rate (%)

Effective interest
rate (%)

Redemption
date

As at the end
of the period
(in PLN '000)

As at 31 December 2013
- Commerzbank AG 400 000 CHF 3M LIBOR + 1.2%* 1.22 08.03.2017 1 366 332
- Commerzbank AG 80 000 CHF 3M LIBOR + 1.4%** 1.42 perpetual 1) 273 591
- Commerzbank AG 120 000 CHF 3M LIBOR + 2.0%*** 2.02 18.12.2017 412 355
- Commerzbank AG 170 000 CHF 3M LIBOR + 2.2%**** 2.22 perpetual 1) 584 340
- Commerzbank AG 90 000 CHF 3M LIBOR + 4.0% 4.02 perpetual 1) 313 929
- Commerzbank AG 90 000 CHF 3M LIBOR + 2.5% 2.52 24.06.2018 310 331
- Investors not associated with
mBank S.A. Group
500 000 PLN 6M WIBOR + 2.25% 4.95 20.12.2023 501 879
3 762 757
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* Margin amounting to 0.7% was in force for the period of first five years. From June 2012, margin amounting to 1.2% is in force.
** Margin amounting to 1.4% is in force up to December 2016. Within the period of next years it will be equal to 3.4%.
*** Margin amounting to 2.0% is in force from December 2012.
**** Margin amounting to 2.2% is in force up to January 2018. Within the period of next years it will be equal to 4.2%.

1) Debt securities become due on the initiative of the Bank no earlier than two years after the issue date or on the initiative of Commerzbank, not earlier than

The effective interest rate specified in the tables above is the interest rate at the inception day of the last interest period.

On 17 December 2014 the Bank issued subordinated bonds with a total nominal value of PLN 750 000 thousand, 7 500 subordinated bonds with a nominal value of PLN 100 000 each. The redemption date of the subordinated bonds is 17 January 2025. The Bank applied to the Polish Financial Supervision Authority in accordance with Article 127, item 3, point 2, letter b) of the Banking Law, for approval to subject the financial liabilities in the amount of PLN 750 000 thousand obtained from the above mentioned issue into the Bank’s supplementary capital and obtained the consent on 8 January 2015. As at 31 December 2014, these bonds were not included in the Bank's and Group’s own funds.

In 2014 and in 2013, the Group did not note any delays in repayments of interest instalments and was not in default of any other contractual provisions related to its subordinated liabilities.

Subordinated liabilities include the amount of issued subordinated debt securities with an indefinite maturity term. In the calculation of the capital adequacy ratio the funds raised through these issues were included in the Bank’s own funds calculation. The Bank received the approvals of Polish Financial Supervision Authority (KNF) for the inclusion of the funds obtained from the issues into the Group’s supplementary capital.

On 3 December 2013, the Bank issued subordinated bonds with a total nominal value of PLN 500 000 thousand. The Bank applied to the Polish Financial Supervision Authority in accordance with Article 127, item 3, point 2, letter b) of the Banking Law, for approval to subject the financial liabilities in the amount of PLN 500 000 thousand obtained from the above mentioned issue into the Group’s supplementary capital and received the consent on 14 February 2014. As at 31 December 2013, these bonds were not included in the Group's own funds.

On 24 March 2014, the bonds with undefined maturity date, issued on 24 June 2008 in the amount of CHF 90 000 thousand CHF (equivalent of PLN 310 032 thousand at the rate from 24 March 2014), was prepaid by mBank S.A. The consent for the prepayment was obtained from Polish Financial Supervision Authority (KNF). As at 31 December 2013, amount acquired from the issue according to the decision of KNF, was included in Tier2 of Bank’ own funds. The prepayment of the issue did not have significant impact on the calculation of mBank S.A. and mBank S.A. Group total capital ratio under the regulations effective from 1 January 2014 (rules based on “Basel III”).

On 18 June 2014 mBank SA made a partial repayment of the subordinated loan taken on 18 December 2007 in the amount of CHF 120 000 thousand with the maturity date on 18 December 2017. Partial payment has been made in the amount of CHF 50 000 thousand (equivalent to PLN 170 090 thousand at the exchange rate of 18 June 2014).

Movements in subordinated liabilities

 

 
  31.12.2014 31.12.2013
As at the beginning of the period 3 762 757 3 222 295
Additions (issue) 750 000 500 000
Disposals (repayment) (480 122) -
Exchange differences 133 121 (4 940)
Other changes (38 032) 45 402
Subordinated liabilities as at the end of the period 4 127 724 3 762 757
 
Short-term (up to 1 year) 6 560 50 237
Long-term (over 1 year) 4 121 164 3 712 520
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