Mbank Sa

Good afternoon, ladies and gentlemen, and welcome to our conference where we will discuss the results of M1 Group in the third quarter of 2023. Today we have three speakers, Mr. Cezary Stypukowski, Chief Executive Officer, Mr. Pascal Ruland, Chief Financial Officer, and Mr. Marcin Mazurek, the chief economist, who will join virtually. You can put your questions into the chat box and we will answer them after the presentation.

So let's start. Good afternoon. Well, we are in the class. We are in the routine. delivering, you know, the very strong core results. And I'm commenting on the Swiss franc sacre. Basically, that's the message, which is competing with us.

So when it comes to the performance of the bank, you know, things which we have clear impact on I have to say you know the bank is performing very well and I obviously will not go through the presentation which is accessible to yourself you know page by page what I wanted to focus on is this difference between the core bank and the it's the page page 13 if we can move to this one Because it reflects, you know, where the bank stands. So when it comes to the core business, as you see, both the net interest income is growing despite the fact that we are operating right now in the environment where the interest rates are falling down, still we've been able to increase by, I think, 3.8% quarter on quarter. So that's strong. The fees and commissions are slightly different because we are I would say it's more flattish to some extent due to the fact that the loan pool is not growing that much. To some extent, on a net basis, the cost side of fees and commissions is under the pressure for a number of reasons. We think that next year we'll be able to improve. But otherwise, if we go through ratios, the bank is performing very well with the net interest margins still being very strong, significantly above 4%, with cost income below 30% and with returns at the dream level, if I may say. So it's very difficult to complain on the on the business itself. Okay, one thing which needs to be reflected in this introductory statement is that the balance sheet expansion is obviously under certain pressure. That, in fact, is mostly on the long side. I think that the issue is, on one hand, relatively weaker demand from the market for a number of reasons, which I will try to address during the question session. And the second is obviously very tight capital management, uh which we experience due to the fact that you know there are still lots of unknowns on the uh swiss franc portfolio uh frontier all these contribute to more cautious approach to expansion you know additional factor which we cannot which is which we cannot ignore is instability of the regulatory environment in Poland, as you have heard a number of times. The government was still coming with the strange ideas of another set of credit vacations, the implementation of the new mortgage program. In the situation where a number of things are not that much clearer, make us more defensive on the expansion on this front i'm not saying that you know the bank is in a stay in waiting mode but definitely you know we believe that number of things needs to be clarified before uh more active expansion i have to admit though that you know is the some optimism which is uh in the markets post the elections and we will be listening also to margin mazurek one could expect that poland will be on the trajectory for more intense growth and obviously these opportunities needs to be exercised by the bank our capital position is relatively safe and one could say even strong we have 4.6 percent you know uh capital ratios above the regulatory requirements but in this unstable environment with lots of things around we believe that you know that level of of buffering is at least necessary as you know our strategy is to be above 2.5 but i would say i feel more comfortable with it with the current level which gives us comfort but whether this is a you know solid base for the rapid expansion i will be more cautious to declare i think that you know you are well equipped so i don't think that we need to comment that much about the other issues obviously one thing that cost income ratio to 28 is not something that will be sustainable for a long period of time we are benefiting from a variety of factors As you see, our cost base is growing, you know, more than 19% year on year, three plus, you know, the quarter on quarter. We have to be prepared for cost expansion, though we believe that we are in a good control of these factors and specifically not building up, you know, the cost base which potentially can hit us adversely in a situation where the interest rates will be falling down. So I think that, you know, as an introduction to the dialogue, I think that that will be it from my side, and now I'll pass it on to Pascal.