1.5 mBank Group before and after the financial crisis

The financial crisis, started with the crash on the American real estate market, changed the face of banking globally. In 2008 the banking sector in Poland was still characterised by intensive expansion on the market of housing loans denominated in foreign currencies, which widened the gap between loans and deposits as well as caused the capital adequacy ratio to fall. Banks were financing the increase in lending mainly by liabilities towards other banks, in particular to parent companies, which resulted in an increase in their sensitivity to the situation on the Polish and the global financial markets as well as in a deterioration in the structure of financing sources[1]. Following the collapse of Lehman Brothers on September 15, 2008 the confidence in financial markets dropped further and, consequently, liquidity decreased and financing costs for banks increased. A number of financial institutions in the world needed a substantial recapitalisation from the taxpayers’ money.

Five years after the crisis, the Polish and the global banking sectors have undergone a profound transformation. In particular, the crisis resulted in significant regulatory tightening, both on the European (among others, Basel III, the CRR/CRD IV package) and the national levels (recommendations of the PFSA), as well as in stricter supervision of the banking sector in the form of stress tests and asset quality reviews. Regulations and investors forced banks to strengthen their capital bases and to focus on stable sources of financing as well as to apply a more rigorous approach towards risk management.

In the years 2008-2014 the business model and, consequently, the balance sheet structure of mBank Group were modified. The current business model of mBank conforms to the existing and future regulatory requirements as well as enables effective reacting to new opportunities and challenges occurring on the market.

[1] Kotowicz, A. (ed.) (2009), Report on the condition of Polish banks in 2008, Warsaw: Office of the Polish Financial Supervision Authority, p. 47