Mbank Sa

Good afternoon, ladies and gentlemen, and thank you for joining NBank's conference call covering Q4 and full year 2025 results. Joining us for the presentation are Cezary Kocik, Chief Executive Officer, and Pascal Ruland, Chief Financial Officer, who will walk you through the group's financial and business performance. Following the presentation, we will move to the Q&A session, which will be joined by Marek Rusztyn, Chief Risk Officer, and Marcin Mazurek, Chief Economist. So now I would like to hand over to Cezary Kocik, CEO of NBank.

Good afternoon, ladies and gentlemen. Welcome to our conference call for Q4 financial results. In today's presentation, I would like to walk you through our outstanding results in 2025. By Pascal, we discuss the results for the fourth quarter and outlook for 2026. 2025 was a year of a strong performance across all key dimensions. Our four major developments that I would like to focus on. First, we achieved faster-than-the-market growth of business volume, which allowed us to further strengthen our market position. The expansion of the loan portfolio was driven mainly by a very strong acceleration in mortgage loan sales. On the liability side, we recorded a significant increase in deposits, supported by a stable inflow to transactional accounts. As a result, Both loans and the deposit base increased at a double-digit rate, 10% for loans and 14% for deposits, clearly outpacing the market and translating into market shares gain. Second, 2025 was the best financial year in mBank history, with a net profit of 3.5 billion PLN. We also delivered profit before the tax, exceeding the level of 5 billion PLN, supported by record total revenue of 12.4 billion PLN. Importantly, the revenue growth by 4% was achieved thanks to higher net interest income despite interest rate cuts during the year. Net fee income also contributed positively. This was reflected in our material improvement in return on tangible equity, which increased to over 20%. It confirms the high quality and sustainability of our earnings. Third, in 2025, we continue our efforts to strengthen our capital base. NBank's own funds increased by 19% year-on-year. reaching over 20 billion PLN. This growth was driven primarily by a full earnings retention, which allows us to organically build capital to pave the way for continued growth. In 2024, we were the first bank that executed the broadly distributed 81 capital bonds out of Poland. In 2025, we were again in the forefront of the market, being the first to issue Euro-denominated key to instruments from POA. Consequently, our capital ratio remains safely above the regulatory requirement, the one ratio exceeding the minimum by 4.3 percentage points. Finally, we made a very strong progress in reducing legal risk related to Swiss Franc portfolio. We continue to keep a very strong pace of settlements with Swiss franc borrowers. As this reminded, our key priority. The number of concluded settlements increased by 31% year on year, reaching more than 32,000 cases. At the same time, we observe a consistent downward trend in the new and pending court cases. It led to a lower cost of legal risk related to SwissRank portfolio of 2 billion Polish Zloty, less than half of the amount booked in 2024. We are clearly on the right track to close this topic really soon. I'm also very proud of the progress that we are making in our digital journey. In 2025, we introduced a number of new solutions for clients. But I will mention two of them. Digital Mortgage and the Smart Payment Ring. In 2025, we completed two phases of the Digital Mortgage Rollout. Initially, we enabled our existing clients to refinance their mortgage loans from other banks. In the second phase, The offering was further expanded to include more complex scenarios, such as financing purchases on the secondary market. Importantly, the entire process is conducted end-to-end in the mobile app, with credit decisions available in only 15 minutes. Moreover, mBank was the third bank globally to introduce smart payment rings. The device was developed in cooperation with Niceboy and Mastercard. It combines contactless payment with health and activity tracking, supporting our broader focus on clients' financial and physical well-being. In line with our 2026-2030 strategy, full speed ahead, we aim to achieve market shares exceeding 10% in key products by 2025. In household loans, our market share increased from 7.8% at the end of 2024 to 8% in December 2025. If we focus specifically on the mortgage loan, the increase is even more pronounced. Our share moved from 8.4% to 8.7%. even though our FX mortgage portfolio was shrinking fast. In household deposit, we also improved our position, increasing our market shares to 8.6%. It was driven mainly by strong inflows into current accounts, as we are a truly transactional bank. Our market share in loans to enterprises remains stable year on year at 8.1%. despite higher levels during the year. The corporate portfolio decreased in December as a result of lower utilization of the current financing by our corporate clients, the trend we observe every year. What is more, in Q4, we observed a decent level of annuities that was visible in a total engagement, but has not yet converted into balanced utilization. The drop was only temporary, and the level of corporate portfolio is already raising again in January and February. Market sharing deposits from enterprises stabilized at 10.3%, remaining close to our strategic threshold. Now, look how the sales of loans performed last year. In mortgage lending, it was another record-breaking year for EMPR. the sales went up 38% year-on-year to 14.7 billion. The increase was recorded in all our markets, Poland, Czech Republic and Slovakia. Fixed-rate mortgages dominated new production, accounting from 70% to more than 80% of the monthly sales. As a year-end fixed rate loans represented 54% of our outstanding PN mortgage portfolio. Sales of non-mortgage loans grew by 21% to 13.7 billion, another record high number.

Finally, in corporate