Mbank Sa

Good afternoon, ladies and gentlemen, and welcome to NBank Group's quarterly results conference call after the first quarter of 2026. Thank you for joining us today. My name is Joanna Filipkowska in Investor Relations, and joining me today are Pascal Ruland, Chief Financial Officer, Marek Rusztyn, Chief Risk Officer, and Marcin Mazurek, Chief Economist. As usual, the presentation materials are available on our Investor Relations website and today's call is being recorded. With that, let me hand over to Pascal to present the highlights of the first quarter.

Thank you, Asha. Hello, also welcome from my side. Let me start with a brief overview of the key highlights for the first quarter. In Q1, we developed strong, well-balanced growth while continuing to operate from a very solid capital base. On the asset side, gross loans of the group increased year on year from 131 billion to almost 146 billion, so representing maybe 11% growth. At the same time, we saw very strong momentum in the liability science, with our deposit base rising from 201 to 237 billion, so an increase of 18% year over year. Importantly, this growth was achieved without compromising our balance sheet strength. Our Tier 1 capital ratio stood at 14.1%, which is well above the regulatory requirement of 10%. This gives us comfortable capital buffer and the flexibility to pursue our growth ambition. Turning now to the profitability and efficiency. Despite a challenging market environment, Q1 marked a milestone quarter for us. We delivered the highest gross profit in our history, driven by growing revenues, excellent cost discipline, very low risk costs, and a decline in legal risk provisions. Our normalized cost-to-income ratio came in at 30.8%, confirming that operating efficiency remains a key strength, even as we scale our business and continue to invest to support future growth. As a result, gross profit increased by 54% year-on-year, reaching a record 1.5 billion compared with 990 million a year ago. This translated directly into shareholder returns with a return on tangible equity improving to 20.5%. This level of profitability underlines both the strength and the sustainability of our business model. And finally, this performance has also been recognized externally. Standard & Poor's upgraded our outlook to positive while reaffirming our BBB rating and Fitch reaffirmed our BBB rating. So this further is strengthening our credit profile. Let me briefly touch upon our market position. Starting with households, we continue to gradually build market share across all key retail products. Retail loans, mortgages, deposits all improved versus December and are clearly up year on year, confirming the ongoing strength of our retail franchise. In the corporate segment, we also made progress quarter on quarter. Our low market share recovered after a temporary dip at the end of 25 and remained broadly stable year on year. At the same time, Our share in corporate deposits increased slightly, both quarter-on-quarter and year-on-year, and continues to stand at very strong levels, above 10%. The key takeaways here, steady momentum in retail and stability in corporates, so fully in line with our long-term ambition to exceed 10% market share in all strategic key products. Let me now briefly walk you through the key PML developments. Total income reached $3.1 billion in Q1. increasing both quarter on quarter and year on year, demonstrating very good resilience despite a more challenging interest rate environment. Net interest income declined by 3.7%, respectively 3.2% year on year, reflecting lower interest rates and pressure on asset yields. Importantly, the pace of the decline remained very well contained relative to cumulative breakouts, underlying our very effective balance sheet management. The net interest margin decreased further to 3.5%, driven mainly by lower loan yields and reduced returns on floating rate securities as well as central bank exporters. Net gain commission income developed very well, rising by 6% quarter-in-quarter and almost 15% year-over-year, so fully in line with our expectations. Net trading and other income were supported by much stronger trading income as well as gains on non-trading financial assets monetarily measured at revenue. Turning to cost. Total cost excluding competitive competition declined by 11% quarter-on-quarter, reflecting the absence of several year-end items. On a year-basis, cost increased by 8.4%, mainly driven by higher personal costs, IT-related expenses, and depreciation, so very consistent with our growth and investment priorities. The reported cost-to-income ratio reached 37.9%, impacted by the annual contribution to the BFG Resolution Fund. On a normalized basis, the ratio stood at very healthy 30.8%, well within our strategic threshold. Credit quality remains very strong, with a cost of risk of only 30 basis points, and Mark will elaborate in a moment. As expected, the risk cost related to FX loans continues to decline materially. And as a result, operating profit increased significantly. and profit before tax reached this record of 1.5 billion, the highest pre-tax result in our history. Net profit amounted to 953 million, and this quote-unquote decline was fully driven by the higher tax burden under the new corporate income tax regime for the banking sector in Poland. Despite the elevated effective tax rate, ROTI, as mentioned, was very strong and breached 20%. Overall, C1 confirms that we have a very strong underlying profitability with record high gross earnings. And now let me step for a moment away from the financials and turn to the execution of our full speed ahead strategy. Here we are clearly now moving from vision to delivery. Financial innovation and product development are key enablers of our momentum. And Mark and I would like to highlight a few concrete examples of the last months. And let me start on the left side with smart terminals. a smartphone becomes a payment terminal for our corporate customers. No external hardware, no intermediaries, and fully integrated in our end-line app. It is a first-of-a-kind solution. Your point of sale by default in our app. And importantly, it also addresses regulatory requirements and access and solves the client issue. This solution delivers immediate, tangible value to our corporate client. Please follow me to the right-hand side of the slide for the second example. Our fully digital end leasing platform, which redefines leasing execution. It offers end-to-end online processing, qualified e-signature, 24-7 availability, and full omni-channel capability. So more or less delivering faster, paperless, frictionless service with really minimal formalities. Taking together these two initiatives as examples, this underlines our consistent focus on digital, client-centric solutions for enhancing the convenience for our customers. And here we reinforce our competitive edge to be a frontrunner in the digital game. And with that, Mike, I hand over to you.

Thank you, Patka. So on the following slide, let me turn now to the two strategic initiatives that we are directly driving growth in our corporate and small and medium enterprises business. On the left-hand side, you see our strategic growth engines in the corporate segment, a core pillar of the Full Speed Ahead strategy. We are deliberately relocating capital towards six priority areas with clear ambition to double their share in the corporate loan portfolio from 20% in 2025 to 40% by 2030. This strategy is already delivering. By the end of Q1 2026, we had provided $9.6 billion in growth stream financing, lifting the share of those priority areas to 23.9% of the portfolio at the end of March, while our target for the full year is 25%. On the right, we highlight smart lending in the SME segment, where technology is fundamentally reshaping the credit delivery. We have built a fully digital end-to-end lending process for the K3 segment, covering the entire credit journey. From electronic application to remote signing to automated decisioning and disbursement, the solution supports exposures of up to million zloty, delivering credit decisions three, four times faster than the traditional tasks, and has been live since Q3 2025. This is a scalable growth model, and under our strategy, we aim to double the number of the SME credit clients by 2030, with 40% finals to simplify credit processes. Progress is already visible today. In Q1 2026, 7% of K3 credit clients were processed via the smart lending part. Overall, Q1 was a very strong quarter for the lending activity in the corporate banking. The core loan portfolio increased in volume by 2.8 billion zloty, clearly confirming the effectiveness of our strategic focus. Pascal, over to you.