mBank Aktie

Good afternoon, ladies and gentlemen, and welcome to mBank Group's quarterly results conference call after the first quarter of 2026. Thank you for joining us today. My name is Joanna Filipkowska, Investor Relations. And joining me today are Pascal Ruhland, Chief Financial Officer; Marek Lusztyn, 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, Asia. Hello and also welcome from my side. Let me start with a brief overview of the key highlights for the first quarter. In Q1, we delivered 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 PLN 131 billion to almost PLN 146 billion, so representing maybe 11% growth. At the same time, we saw very strong momentum on the liability side. with our deposit base rising from PLN 201 billion to PLN 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 PLN 1.5 billion compared with PLN 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, but 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 loan 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 a very strong level, 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 our strategic key products.

Let me now briefly walk you through the key P&L developments. Total income reached PLN 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 rate cards, 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 exposures.

Net fee and commission income developed very well, rising by 6% quarter-on-quarter and almost 15% year-over-year, so fully in line with our expectations. Net trading and other income was supported by much stronger trading income as well as gains on non-trading financial assets mandatorily measured at fair value.

Turning to costs. Total costs, excluding competitor company infusion declined by 11% quarter-on-quarter, reflecting the absence of several year-end items. On a year-on-year basis, Costs increased by 8.4%, mainly driven by higher personnel 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 a very healthy 30.8% well within our strategic threshold. Credit quality remains very strong for cost of risk of only 30 basis points, and Marek will elaborate in a moment. As expected, legal risk costs related to FX loans continued to decline materially. And as a result, operating profit increased significantly, and profit before tax reached this record of PLN 1.5 billion the highest pretax result in our history.

Net profit amounted to PLN 953 million, and this quarter-on-quarter 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, ROTE, as mentioned, was very strong and reached 20%. Overall, Q1 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 own into. And Marek and I would like to highlight a few concrete examples of the last months. And let me start on the left side with smartTerminal. A smartphone becomes a payments terminal for our corporate customers. No external hardware, no intermediaries and fully integrated in our mBank 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 clients.

Please follow me to the right-hand side of the slide for a second example. Our fully digital mLeasing platform, which redefines leasing execution. It offers end-to-end online processing, qualified e-signature, 24/7 availability and full omnichannel capability. So more or less delivering faster paperless frictionless service with really minimal formalities. Taken together, these 2 initiatives as example, this underlines our consistent focus on digital, client-centric solutions for enhancing the convenience for our customers. And here we reinforced our competitive edge to be a frontrunner in a digital game.

And with that, Marek, I hand over to you.

Thank you, Pascal. So on the following slide, let me turn now to the 2 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 6 priority areas with clear ambition to double the 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 PLN 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 1 PLN million delivering credit decisions 3, 4x faster than the traditional past 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% finance through simplified credit processes. Progress is already visible today. In Q1 2026, 7% of K3 credit clients were processed via the smart lending path. Overall, Q1 was a very strong quarter for the lending activity in the corporate banking. The core loan portfolio increased in volume by PLN 2.8 billion, clearly confirming the effectiveness of our strategic focus.

Pascal, over to you.

Thank you, Marek. And following up on that, let me briefly walk you through the new lending activity. In Q1, we delivered very strong loan production across all segments. Mortgage sales reached a record of PLN 4.5 billion, almost doubling year-on-year, confirming our strong position in the Polish zloty mortgage market. We continue to focus on fixed rate mortgages, which still account for more than half of the new production and 55% of the total mortgage loan portfolio of the PLN. Non-mortgage retail lending also reached a record PLN 3.7 billion, demonstrating sustained client demand. Corporate loan sales remained solid at nearly PLN 12 billion. While lower than peak quarters, the mix improved with clean new lending increased both quarter-on-quarter and year-on-year, so fully aligned with our ambition.

This strong sales momentum translates directly into portfolio growth. Retail loans were the key driver. Mortgage loans to individuals continued their strong upward trend, supported by stable growth in non-mortgage retail lending. As a result, our core retail loan portfolio, excluding FX mortgages grew by over 14% year-over-year, and we further gained market share. Our share in household loans rose to 8.1%, while in the PLN mortgages, it increased significantly to 9.1%. Corporate lending also rebounded strongly excluding repo [ type ] transactions, the corporate loan book grew nearly 5% quarter-on-quarter, as Marek was mentioning, so fully consistent with our growth ambitions in this segment.

Turning now to deposits. Customer deposits reached PLN 237 billion, up 18% year-on-year, reflecting the continued strong client trust in our capabilities and in our brands. Growth was well balanced. Retail current and saving accounts remain the main engine, while property deposits also increased at solid pace. This translates also here into market share gains. Our share of wholesale deposits increased by 0.2 percentage points while in corporate deposits, we reached already 10.5 percentage points, comfortably above our strategic target of 10%. In addition, clients are increasingly investing through mBank. Investment funds distributed to customers reached PLN 16.8 billion. And despite market volatility, mTFI so our asset manager, continues to grow strongly. And let me briefly now move to income and margins. Despite a lower interest rate environment, total income increased slightly, both quarter-on-quarter and year-on-year, highlighting the resilience of our revenue model.

Net interest income declined and net interest margin fell to 3.5%, reflecting the rate cuts and asset repricing. Importantly, this pressure was more than offset by noninterest income. Net fee and commission income increased by almost 15% year-over-year, driven by higher client activity, brokerage and debt issuance fees. Also, we delivered strong trading and other income, including FX performance and a positive revaluation of our stake in BLIK.

On the next slide, a brief word on cost and efficiency. Reported costs increased quarter-on-quarter due to one-off regulatory contributions fully recognized in Q1. Excluding these effects, our underlying cost fines declined, reflecting disciplined cost control. Personal material costs were well managed, while investment focused primarily on IT and strategic capabilities. And as a result, our normalized cost income ratio stood at around 30%, so clearly within our threshold of 35% and confirming that we at mBank remain one of the most efficient banks in the market.

With the point of efficiency, I'm handing back to you, Marek.

Okay. So the next one is on the credit losses and cost of risk and going to our cost of risk. As you can see on the left-hand side, impairment losses and fair value changes on loans declined significantly in Q1 2026, both from quarter-on-quarter and year-over-year perspective. total impairment losses fell to PLN 104 million, almost 60% down quarter-on-quarter. And this improvement in the cost of risk was mainly driven by the corporate segment where we have recorded sizable provision releases on 3 individual cases from commercial real estate.

And already answering one of the questions from the Q&A that was directly related to that. This is basically driven to those single name events that were primarily repaid, 1 was reclassified back to the stage 1. At the same time, we maintained a prudent and forward-looking stance given the geopolitical environment following the update of our macroeconomic forecast. So we have adjusted the weights of the macroeconomic scenarios used in our credit risk models. And this resulted in precautionary overlays of around PLN 80 million. These charges were not linked to any specific deterioration in portfolio quality, but rather reflected a conservative calibration to higher external uncertainty with respect to the geopolitical and macro environment.

In retail banking, impairment charges declined by 22% quarter-on-quarter and 5% year-on-year despite growing portfolio. And that was primarily suffer by the nonperforming loans inside. Overall, credit performance across retail products remain stable and solid. As the result of all of those developments, our cost of risk dropped to 30 basis points in Q1 compared to 77 basis points in the previous quarter and remains clearly below our to-the-cycle and strategic assumptions.

Looking ahead at 2026, we continue to expect the cost of risk at around 70 basis points by the year-end. Going forward, loan portfolio quality. Overall, asset quality remains very solid and well controlled, and this is clearly confirmed by all key risk metrics, which are displayed on this slide. As you can see, starting with the entire loan portfolio, we see that the total balance is broadly stable year-on-year under PLN 5 billion at the end of March. Quarter-on-quarter increase was driven mainly by the methodological changes and not the portfolio quality as such. That's namely introduction of the group definition of default with slight movements over the quarters, mainly reflecting portfolio management actions, including the earlier mentioned sale of the impact loans.

NPL ratio of mBank Group remained stable at Q1 at around 3.4%, which is one of the lowest in the product sector. that confirms that credit risk remains under control despite the challenging macro environment. Polish zloty mortgage portfolio remains particularly strong with the NPL ratio falling below 1 percentage point, confirming the very high quality of this focus.

Next, coverage ratio remains prudent, about 70% with the decline versus Q4 driven mainly those above mentioned events in the corporate portfolio, single line related. Looking ahead, we expect a stable payment discipline in retail with slight improvement versus 2025, supported by raising real wages, solid GDP growth and stable interest rates. And Marcin will comment more on that in a minute. For corporate, we expect overall stability in key credit risk parameters with the matter environment continuing to support portfolio quality despite ongoing geopolitical uncertainty.

And with that, Pascal, back to you.

Thank you very much. So let's turn now to our new slide, profitability. Net profit rose strongly to PLN 953 million and is up year-on-year despite the higher regulatory and tax burdens. Lower net interest income, as you have seen, was more than offset by strong fee growth, trading income, lower provisions and a sharp decline in FX legal costs, partly absorbed by the higher fiscal charges. And as a result, our profitability, and this is shown on this slide, is very strong ROE at 17.5% and return on tangible equity higher than 20%.

Following up with our capital position. As shown on the slide, we continue to operate with comfortable capital buffers, so well above the regulatory minimum, supported by profit retention. Total risk-weighted assets increased to PLN 135 billion at the end of March, so up by around PLN 9 billion since December 25. This increase was mostly driven by growing business volumes with some additional impact of regulatory changes as expected, including the implementation of group definition of default. With group definition of default concluded, we do not expect significant negative regulatory changes in RWA in the following quarters.

And all in all, our capital ratios remained sound with a CET1 ratio of 13% and a total capital ratio of nearly 16%, providing buffers of around 4 to 4.5 percentage points above the regulatory minimum and this gives us enough firepower to pursue our growth ambition.

To sum up, Q1 confirms that mBank is delivering strong growth, defending profitability and a lower interest rate environment and maintain exceptional efficiency. And let me conclude from our side with our outlook. And I would like to start with today's announcement. This morning, we launched a tender offer of up to EUR 500 million across our 2 bonds totaling EUR 1.25 billion. This transaction further optimizes our liability profile and underlines our proactive approach to balance sheet management. And at the same time, let me remind especially our debt investors that for 2026, we expect to issue a benchmark size green non-preferred senior bond. So something we really like you to not miss out.

Turning now to the business outlook. We expect total revenues to remain broadly stable year-on-year despite pressure on net interest income from lower interest rates. Which is supported by an active balance sheet growth and solid fee income. We will remain very committed to cost discipline. The cost-to-income ratio is expected to stay below our strategic target of 35%, while we will continue to invest selectively in our growth and transformation. FX related legal risk should not longer be a significant burden supported by the shrinking Swiss franc portfolio, fewer cost bases and improving legal clarity. So overall, this outlook confirms that our confidence and our strategy will be executed. Continued market share gains should follow stable revenues despite rate cuts, strong efficiency, disciplined legacy risks and proactive capital management.

And with that, Marcin, over to you for our economic view.

Thank you, Pascal. So economic situation right now is, I would say, favorable, but at the same time, mixed. Without the conflict in Iran, we would have said that the stellar growth in 2026 is ahead of us. But recent rises in oil prices and also some problems with shipping other goods, I would say, puts some clouds over this very optimistic scenario. Right now, we expect that the GDP growth in 2026 will be a little below 4%, namely 3.7%. And why? First of all, the first quarter was rather weak. It was mostly related to weather effects and low temperatures in January and February.

Going forward, we expect that there will be some fallout due to higher oil prices. Our modeling suggests that it's going to shave off some percentage points from GDP growth. That's why we decided to lower growth perspective from 4.2% to 3.7% that I mentioned before. At the same time, the economy seems to be well balanced as the shock hits. Unemployment rate is low, consumer moods are staying high and inflation hovers around the target. Recent number from today is 3.2% so that's why the situation is very comfortable for MPC to keep rates on hold. But of course, if inflation goes up further, there will be some discussions within the MPC whether to high grades or not. We think that the bar for hikes is set very high. But yes, at this time, we are analyzing closely the pass-through of oil prices to the whole economy. Right now, we think it's very limited and will be limited due to the fact that overall demand conditions in the economy are rather moderate then high.

Turning to monetary aggregates. We are seeing a full upswing here. The economy is firing on all cylinders and so are loans and deposits, both in corporate and household sector. We are seeing, I would say, meaningful upswing here. As far as the financial markets are concerned, we've recently seen some bond yield increases that was globally driven. From that point, we moved down a bit, but still bond yields remain elevated. It's mostly connected with the overall impression that the inflation in the global economy would be higher for some time. And there is a risk that central banks would react with higher rates.

We think that the most -- the most probable direction of yields is rather to the downside from now. But of course, we remain very alert. As for the currency, it remained exceptionally stable in this very volatile environment. Although we see some minor zloty depreciation over the next quarters, mostly over the uncertainty regarding the fiscal policy, we think that the zloty would be rather stable and stay below PLN 4.30 with respect to the euro. Thank you.

Thank you very much, gentlemen. Now let's start the Q&A session. So the first question is on fee and commission income. The growth -- fee and commission income growth is strong. At the last conference, you guided for stable year-on-year fee and commission income. It is still valid after a strong Q1.

I'm taking the question. And thanks for the question because our signal was every time sending an increased net and fee commission income development on a year-on-year basis. So we expect that the net fee and commission income on a year-on-year basis has significant growth.

Second question on costs. Do you plan to maintain cost discipline in the upcoming quarters?

We -- as you know, that we are very cost cautious in this respect so we every time I think before we invest if this is worthwhile. Nevertheless, what we have in our strategy is further investment in IT capabilities and also to deliver our products to our clients. So the cost base is expected if you explain this one-off of BFG resolution fund to be increased but we will maintain the cost discipline internally in every single investments we are taking.

Thank you. Volume growth does not seem to offset the decline in net interest income. What is the sensitivity of NII to 100 bps decrease of -- in interest rates.

You're right that we see pressure on our NII due to the rate cuts. In this slide, you see that we have now an interest rate environment if we compare it to last year, which was already a record year for us at mBank that we are today working in 225 basis points lower interest rate environment, which obviously has in our profitability scheme a drag on NII contribution. So it will be offset on a significant portion by our volume gains we are having in terms of going faster on the loan side than our competitors and also maintain momentum on the deposit side, but it will be not 100% compensated, from today's perspective.

On the data and sensitivity of 100 basis points rate cuts, we have barely moved since the last quarters. So it's short of PLN 700 million. And I want to remind everyone that we are working in different currencies because we are also active in Czech krona and Slovakia and also our corporate customers demand significant euro and U.S. dollar. And out of this PLN 700 million which would be a total sensitivity of around 7%. If you take the overall NII contribution of the house, it would be a bit more than 50% on the Polish zloty if it would move, and here, we are talking then about something around PLN 450 million.

What share of new mortgage originations is related to refinancing?

So that is not yet the main driver of our sales. Therefore, this is something we are looking at, but we are not yet need to be worried about.

Outcome FX result in the sector is declining despite growing import sector.

For the question, we're seeing strong momentum on the FX result on the group as well as, especially in our corporate business. So we actually see that we can -- with our customers on this further trade volumes also on the FX result and on the sector, I cannot comment.

What is the share of risk-weighted assets growth not related to organic growth in Q1? And can you please remind us what to expect from previously indicated extraordinary effects in 2026?

So in general, if you look into our RWA growth, which was now on a quarter-on-quarter basis, driven by PLN 9 billion you can say that the regulatory effect is 1/3 about that. And the rest 2/3 is driven by pure volume growth on our corporate and retail side. Forward-looking, we do not expect any significant RWA increase is related to regulatory environment because as we have said the last year with GDD, the group definition of default, we have concluded successfully the last big package, which is no. We have some technical -- exactly -- the mic is away.

Okay. So while we are having a bit of a clinical issue here in the room. I will take over some of the writers from Asia. So there is a next question on -- can you comment on the dividend ambitions and the potential payout ratios?

So it's clear that this year, so with the profit of 2026, we want to return as regular dividend company. And we set ourselves also communicated to the market a dividend policy, and we aim for starting with 30% of the net profit of this year. That is also already included in our capital projection because we take away the 30% in every net earnings we are today generating and not adding it up into our capital stack. So that is the clear ambition that next year to pay to the shareholders 30% dividend distribution.

Thank you, Pascal. Can you elaborate more on the Stage 3 increase? What sectors was the rise in? Do you see a need to increase coverage?

There is not a specific sector-driven reclassification. And we do not see a specific need for a coverage increase. As you can see from historical charts, it's hovering around 75% and we expect this to stay at these levels.

Thank you very much, gentlemen. I think we covered all the questions that were asked today. So thank you very much for the attention and for your -- for joining our conference, and have a nice afternoon.

Thank you so much.

Thank you.

See you soon.

[indiscernible] Conference call covering Q4 and full year 2025 results. Joining us for the presentation are Cezary Kocik, Chief Executive Officer; and Pascal Ruhland, 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 Lusztyn, Chief Risk Officer; and Marcin Mazurek, Chief Economist.

So now I would now -- I would like to hand over to Cezary Kocik, CEO of mBank.

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. While Pascal will discuss the results for the fourth quarter and outlook for 2026.

2025 was a year of a strong performance across all key dimensions. Our 4 major developments that I would like to focus on, we achieved faster than the market growth of business volume, which allow us to further strengthen our market position. The expansion of the Loan portfolio was driven mainly by a very strong acceleration in Loans, Mortgage Loans sales. While on the liability side, we recorded a significant increase in deposits, supported by a stable interest to transactional accounts.

As a result, both loans and the deposit base increased a double-digit rate, 10% for loans and 14% for deposits, clearly outpacing the market and translating into market sales gain.

Second, 2025 was the best financial year in mBank's history, with a net profit of PLN 3.5 billion. We also delivered profit before the tax exceeding the level of PLN 5 billion, supported by record total revenue of PLN 12.4 billion. Importantly, the revenue grew by [ 12% ] 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. mBank's own funds increased by 19% year-on-year, which is over PLN 20 billion. This growth was driven primarily by a full earnings retention, which allow us to organically build capital to pave the way for continued growth. In 2024, we're the first bank that executed the broadly distributed 81 capital bonds out of Poland.

In 2025, were again, in the power front of the market being the first to issue euro-denominated Q2 instruments from bond. Consequently, our capital ratio remains safely above the regulatory requirement. Tier 1 ratio exceeding the minimum by 4.3 percentage points.

Finally, we made very strong progress in reducing regular risk related to Swiss franc portfolio. We continue to keep a very strong pace of settlements with Swiss franc borrowers. As this reminder, 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 will serve a consistent downward trend in the new and pending court cases. It led to a lower cost of [indiscernible] related to portfolio of PLN 2 billion, less than half of the amount booked in 2024. We are clearly on the right track to close this topic very 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 2 of them. Digital Mortgage and the Smart [indiscernible]. In 2025, we completed 2 pages of the Digital Mortgage roll out. Initially, we enable our existing clients to refinance their mortgage loans from other banks. In the second phase, the offering costs further expanded to improve 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 [indiscernible] bank globally to introduce smart payment [indiscernible]. The device was developing a cooperation with [indiscernible] and Mastercard. It combines contactless payment with health and activity to action, supporting our broader focus on clients in [indiscernible] and physical well-being.

In line with our 2026, 2030 strategy to speak ahead, we aim to achieve market shares exceeding 10% in key products by '24. In Household [indiscernible], our market share increased from 7.8% at the end of 2024, to 8% in December 2025. If we focus specifically on the Mortgage front, the increase is even more pronounced. Our share moved from 8.4% to 8.7%, even though our Asset Mortgage portfolio was shrinking faster.

In Household deposit, we also improved our position, increasing cover market sales to 8.6%. It was driven mainly by strong inflows into current accounts, as [indiscernible] truly transactional bank. Our market share in loans to enterprises remained stable year-on-year at 8.1%. Despite higher leverage 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 have set a decent level of [indiscernible] that was visible in a total engagement but has not yet converted into balance utilization.

The drop was only temporary, and the level of Corporate portfolio is already raising again in January and February. Market share in Deposits from Enterprise stabilized 10.3% remaining close to our strategic threshold.

Now looks how the sales of loans performed last year. In mortgage lending, it was another record break in [indiscernible]. The sales went up 38% year-on-year to PLN 14.7 billion. The increase was recorded in all our markets or Czech Republic and Slovak. Fixed rate mortgages dominated new production, accounting from 70% to more than 80% of the monthly sales.

At year-end, fixed-rate loans represented 54% of our outstanding PLN Mortgage portfolio. Sales of non-mortgage loans grew by 21% to PLN 13.7 billion, another record high number. Finally, in Corporate ...

[Technical Difficulty]

Ladies and gentlemen, please stay with us. The team is just reconnecting, we're having some technical difficulties.

So I would like to apologize for our technical problems, which we solved, but it took us some time. So I will continue starting from the Slide #10 because I believe that, that was the moment where we were cut it off. So coming back to our presentation. In the mortgage lending, this was another record-breaking year for mBank. The sales were up 38% year-on-year to PLN 14.7 billion. The increase was recorded in all our markets, Poland, Czech Republic and Slovakia.

Fixed rate mortgages dominated in production, accounting from 70% to more than 80% of monthly sales. As of the year-end, fixed-rate loans represented 54% of our outstanding mortgage portfolio. Sales of non-mortgage loans grew by 21% to PLN 14.7 billion , another record high number.

Finally, in corporate lending, we saw a clear acceleration with new sales up by 23% to PLN 49 billion. Growth was balanced across all client segments, supported by higher demand for working capital and investment financing, the strongest momentum coming from structured finance, particularly in the renewable energy projects, fully aligned with our strategic priority.

The results of our sales effort are reflected in the growth of loan portfolio by over 9% year-on-year. Our core retail loans, excluding FX mortgage loans expanded by over 13% driving the market share increased by 0.5 percentage points to 8.1%. Our market share in mortgage loans in [indiscernible] increased even more by 0.7 percentage points to 8.9%. At the same time, loans to corporate clients increased by over 7% year-on-year.

Now let's have a look at development of mBank deposits. Total deposit base reached PLN 229 billion, up 14% year-on-year. The main driver was continued inflows into current [indiscernible] savings, which grew by around 20% year-on-year. This reflects healthy growth in active clients and strong transactional activity, giving us a very stable, low-cost funding base. Corporate deposits also grew strongly rising nearly 10% year-on-year, supported by healthy business activity across SME and large corporate clients.

As shown on the graph, this performance translated into higher market selling Household deposits. While in Corporate deposits, our market share declined slightly in pricing optimization, but remain safely about the strategic 10% threshold.

Let's move to TPL items for 2025. Total income reached the highest level in mBank's history of almost PLN 12.5 billion, up by nearly [ 5% ] year-on-year. Net interest income rose by 4.5%, supported by higher loan and deposit volumes, a large bond portfolio and effective interest rate management. Our net interest rate margin declined to 4.05% by [ 50 basis points ] compared to 2024. The decrease reflects a lower average yields on the loan portfolio and lower rates on central bank placement, driven by interest rate reduction by 175 basis points during 2025.

Net fee and commission income increased by 12% year-on-year, driven by higher transaction volumes, a growing client base and stronger product sales as well as 2 minor one-offs. Moving on to the costs. Our operating costs increased by around 13% year-on-year. Personale costs were 10% higher year-on-year. This was a function of employment which rose by 230 FTEs, as well as salary increases introducing 2024, 2025.

Material costs increased by 11% year-on-year mainly due to a higher IT and security expenses related to the project and price increases. Marketing spending also rose because of the communication activities linked to the implementation of our new strategy. Depreciation increased by 11% year-on-year, driven by our continuous investment into IT software. Additionally, in 2025, contribution to bank guarantee found almost doubled due to end-of-relief from payments to the deposit guarantee scheme.

Turning to the right side to -- the right of the slide. Despite the higher cost, we maintain excellent efficiency level. The cost-to-income ratio reached 31%, well within our strategic threshold of 35%, showing that we continue to operate with a very efficient cost structure.

Going to our cost of risk. Our cost of risk remains low, reflecting the high quality of our Loan portfolio. Loan loss provisions were up by nearly 30% year-on-year, mainly due to the strong growth of the portfolio, defaults of the individual exposures in the Corporate portfolio and a very low base in 2024. Our cost of risk in 2025 rose by 8 basis points, but remained well below our strategic target of [ 80 basis points ].

Strong repayment discipline of our clients, supported by a favorable backdrop in macro bedrock and NPL sales contributed to a lower NPL ratio of 3.5%. On the back of all these developments, mBank profit in 2025 reached PLN 3.5 billion. This is the best ever bottom line of [indiscernible]. Losses in the noncore segments fell sharply from PLN 3.4 billion, that remains material at PLN 2 billion in 2025. Consequently, return on equity reached 70.9% and return tangible equity, 30.8% in 2025.

At the same time, royalty of the core business, excluding FX Mortgage segment amounted to 37.2%. These profitability metrics confirm strong earnings power of mBank and its ability to generate value for shareholders. Last year, again, we made a significant effort to further improve our capital position as its foundation for future growth. In June, we executed first-ever broadly distributed euro-denominated Q2 transaction from Poland, in the amount of EUR 400 million.

In October, we continue -- we concluded our 5th synthetic securitization transaction based on a portfolio of PLN 3.8 billion. We also used the ramp-up options in their previous corporate transaction. Moreover, we included our net profit for the first 3 quarters into our own funds. In 2025, our funds increased by almost 19% to PLN 20.7 billion. At the same time, [indiscernible] rose by PLN 24.5 billion, driven both by higher business volumes and turbulatory changes, including the CRR implementation.

Consequently, our capital ratio decreased with this year at 16.3%. Capital buffer remains safely above regulatory requirements with 4.7 percentage points for [indiscernible] and 4.3 percentage for Tier 1 and TCR. Finally, as we are already inform 2025 earnings will be retained to support further loan growth.

Let's now turn to the summary of legal risk related to FX Mortgage Loan portfolio. The slide shows the positive trends are continuing. First, the number of settlements rose sharply to over 32,000 at the end of 2025, an increase of [ 9,500 ] year-on-year, reflecting our continued focus on settlement as set top priority.

Second, Q4 was 8th consecutive quarter of declining in to [indiscernible], we saw declines for both [indiscernible] and to paid loans. And third, the number of pending court cases continue to fall across both active and repaid loans. The figure dropped by 63% to less than 6,000. As you can see on Slide 19, we are very successful in reducing the risk related to FX portfolio, both the value as well as the number of active contracts declined significantly.

At the end of 2025, only less than 6,000 contracting [indiscernible] act, I would like to underline that Q4 was the 8th consecutive quarter of declining legal risk costs. In 2025, we're booking total PLN 2 billion of provisions less than the half of the amount from 2024. This drove the cumulative FX rate regards cost that we booked since 2018 with a massive amount of PLN 18.6 billion.

Thanks to our continuous efforts to actively reduce the risk related to this portfolio we are optimistic about the level of provision in 2026 and they should no longer be a massively abundant for our results. Before I finish my presentation, let me briefly summarize the take aways. We deliver a very strong business growth in line with our strategic targets.

Our financial performance was outstanding with a record high revenues and profits. Our return on tangible equity of [indiscernible] clearly shows strong profitability and efficient use of Capital. We strengthened our capital position giving us the capacity to continuing growth and gaining market sales in a key product. Finally, we made a very good progress in reducing Swiss franc-related recoveries, bringing us closer to the end of this long saga. Altogether, this strong performance is a solid momentum to continue executing our full speed ahead strategy.

Now I hand over to Pascal.

Thank you so much, Kocik. And so let's move now to the fourth quarter after so many, I would say, extraordinary records. I will follow up on the Q4 because also we have delivered here the highest ever quarterly net profit and I would like to go briefly to the account lines to provide you some insights and afterwards also an outlook for 2026.

Let's start with our revenues, which remain above PLN 3 billion in the quarter. Net interest income is just slightly down, reflecting the rate cuts. Respectively, net interest margin, as you can see, is from 3.97%, down to 3.474%. The decline came mainly from interest rate and line environment and the first lower average loan yield; and second, lower yields on floating rate securities and also our Central Bank exposures.

But very important here, if you relate to the drop in NII and the net interest margin to the very steep cut of 175 basis points in 2025, you see that this is kind of modest, which confirms our effective interest rate and balance sheet [indiscernible]. Net fee and commission income remained solid in Q4. The slight decline quarter-on-quarter was entirely driven by a Q3 one-off of PLN 42 million of Mastercard. If you clean that most fee categories improved in Q4.

Net trading and other income declined by [ 60% ]. This decrease was mainly driven by a sharp drop in trading income, reflecting losses on hedge accounting and a weaker result on our equity instruments. Total costs, excluding compulsory contribution rose 9% quarter-on-quarter. And here, this is kind of seasonal and the main driver here is, as you know, personnel costs because they increased 11%, driven by year-end provisions for [indiscernible] holidays, severances, bonus accruals and also higher headcounts.

Despite that increase, cost income ratio shows a healthy 33.1%, so below our strategic thresholds. Moving to the other piece, they increased by 25% quarter-on-quarter. Despite this increase, which was mainly driven by the year-end review of the corporate exposure, our cost of risk clearly show a healthy book. The cost of legal risk related to foreign currency index loans was PLN 379 million, so down from PLN 455 million in Q3. This is the 8th consecutive quarter of decline in legal risk provisions. And Kocik already went into the details. So I just conclude the positive trend is visible.

And as a result, we delivered PLN 1.2 billion profit before tax in Q4, while the net profit exceeded PLN 1 billion. So it's more than 30% up quarter-on-quarter. The low Q4 ETR, so effective tax rate of around 14% reflected an increase in deferred tax assets, driven mainly by the revaluation of DTAs, following the corporate income tax rate changes.

Consequently, in Q4, we see a very strong profitability with an ROE of 19.5% and a return on tangible equity of 22.6%. To conclude this slide, now I would like to flag an accounting change we introduced in Q4. We adjusted the booking of FX stock transactions related to corporate clients in 2 P&L line items with NII and net trading income.

Negative swap points generated by these transactions, roughly around PLN 190 million, were reclassified from NII to net trading income, improving NII therefore and reducing net trade income. This adjustment applies only to 2025 as this product was introduced in that year. And we have obviously restated the previous quarters accordingly.

Let's move now with this message to the very important expectations of 2026. First, in '26, we will operate as everyone knows, in a lower interest rate environment following the 175 basis point cuts in 2025, with expectations of further declines. This naturally pressures our net interest income. However, we expect to offset partly this impact and therefore anticipate just a slight reduction in total revenues. Fee and commission income is expected to remain resilient supported by ongoing portfolio growth, higher client transaction activity and continued expansion of our transactional banking offering.

The pace of growth will normalize compared to the exceptionally strong 2025 base which also included approximately PLN 85 million of one-off items. Second, we expect our cost-to-income ratio to stay below our strategic threshold of 35%. In '26, cost growth will be mainly driven by higher personnel expenses, increased investments in our strategy and security projects and higher BFG contributions.

Additionally, as you know, we invest very much in our capital. So CapEx on business and regulatory initiatives will result in higher amortization. Third, we anticipate that FX-related legal risk costs will be less of a topic to talk about in 2026. The Swiss franc portfolio, as we have shown, is shrinking steadily and the number of new court cases continues to fall.

Finally, we aim to grow market share with business volumes expected to outperform the competition. Our focus will remain on mortgage lending and on corporate financing in Wealth stream segments, where we see strong potential and our clear competitive advantages. So overall, 2026 should be a year of stable financial performance, disciplined cost and risk management and sustained business call.

And now we're looking forward to your questions.

Thank you very much, Cezary and Pascal. Again, apologies for this short break. And now we can start the Q&A session. We covered them -- some of them already in our speech, but I will read all the questions we received. So the first one is about our tax. What part of the DTA of PLN 118 million created in 2025 falls on corporate income tax?

So I'm taking the question. So with respect to the corporate income tax change, we have a real valuation of the deferred tax assets which had purely on that matter, PLN 118 million effect. So everything is related to the income tax rate change. But there are 2 other positions also which currently support our Q4 number just to complete the picture so that you can get the numbers correct. We have recognition of the R&D tax relief also in Q4, which is amounts to PLN 36 million and has also a positive impact on our tax line. And also, we have hired DTAs from a larger number of settlements, which are reflected in our model, which also roughly adds up PLN 30 million. And with that, it completes the page.

Thank you. What is the level of the free loan sanction provision and provision for unauthorized transactions?

So as we normally also discussed, we're very much following as everyone else, these 2 matters. And for us, obviously, the risk which is related to those public is very much in our focus. And currently, we feel very well provisioned.

Next, we have a series of questions from Johan. So I will read them one by one. This is the end of extraordinary effects on the regulatory capital ratio? Or should we expect something in 2026?

So basically, this is largely the end of [indiscernible] we have seen in the capital. This was primarily driven by regulatory changes that we have applied at the end of 2025. As far as additional effects affecting capital ratios in 2026, we have to mention that we have received the final decision from the supervisory authorities on model changes related to the implementation of so-called definition of defaults. And the way we calculate days past the implementation of that is done for the first quarter of 2026. We can't estimate that further impact on risk-weighted assets in the range of up to 5% of the overall risk-weighted assets. And beyond that, at this moment, we see no further regulatory changes to the risk-weighted assets in 2026.

Thank you very much, [indiscernible]. What was the share of refinance loans in the new housing loan sales in Q4?

That was very low. That was a 1-digit number. So in percentage, of course. So it's that much less than 10%.

Reason for minor deceleration in corporate lending in Q4, already covered by Cezary during the speech or can we add something?

We see a very positive trend in new loan agreements. And as I mentioned, it is still not visible in balance sheet at the end of the year. But I believe that we will give you much more detail after the Q1 results because that it should be in majority affected in our balance sheet at that time.

Okay. Now the question to Marcin. Can you remind us what was the reason for a sharp downward revision of the base rate outlook by 100 bps to the terminal rate of 3% shortly after the CMD.

So thank you. Let me put some light on this because -- well, at the time of CMD, we were believing that the economy is reaccelerating, we would see a somewhat higher rate than expected by the consensus. Very shortly, we believe that with economy gaining momentum. We also believe that labor market is going to gain momentum and wages are going to stop falling in a dynamic way. So we thought that the path of inflation in 2026 would be rather upward sloping. After that, we had a series of downside surprises.

We had the new data with respect to labor demand, we had the new data of CPI regarding services and goods inflation. And we saw that the momentum is somewhere else. So basically, we've seen that -- well, the second China shock is spending over to a large extent to the trade dabbles prices. Right now, this pricing goes at around minus 5%, 7% in CPI.

And also, we saw that despite upswinging in economic activity, we are seeing the call-ups, the decrease in labor demand. So there is some kind of automation going on. So it's rather picks in favor of continuation of falling growth dynamics going forward. In this vein, we believe right now that inflation will be very, very low in 2026. Therefore, we expect rates to be at 3% at the end of the year. The consensus started the year at between [ 3.5, 3.75 ]. Right now, the market pricing is at around [ 3.25 ], so it moved to our direction.

Thank you, Marcin. And the last question of Johan, net interest margin, NII outlook for 2026. I think also all covered by Pascal during his...

Maybe on the NII, as we guided lower than 2025 due to the interest rate cuts, but it will be compensated partly by our volume gains, which will then support our NII forward looking. I just want to reiterate that on the data NII, which is obviously the main driver for all of us to see how sensitive we are for further rate cuts and relates to what Marcin was saying, are we closer to the 3% as the market consensus about 3.5% that we have not moved too much by end of the year because currently, we see that NII on our side of 100 basis points rate cut on PLN 680 million.

And as you know, while we [indiscernible] in various currencies just a bit more than 50% are related to the real Polish slot. And there we're talking a bit more than PLN 400 million. So that stays on our side, which if you compare it to the overall contribution to the bank via the last 12 months, is a very digestible number. And also was shown in Q4 results, as I was mentioning it, that we are very resilient currently with respect to rate cuts.

And I would like to add anything on our current guidance for Swiss franc costs in 2026.

No, we have said that the trends are in our favor. Obviously, that is the most important thing because it's based on a model. And therefore, we are very confident that the most is behind us and that we have seen in 2025, the last significant year.

Can you explain the CET1 move quarter-on-quarter?

Yes. So that CET1 quarter-on-quarter is basically increased due to the application of the new approach to the population of risk that includes capital for the -- losses due to the [indiscernible] primarily driven by this operational risk recalculation by [ 5.5 per order ], and that was driving the common equity by PLN 0.6 billion. The increase to the operational risk calculation follow the publication of the final European parking [indiscernible] technical standards regarding the operational risk -- this impact is expected to decline in the following years. We expect this to decrease by PLN 1.5 billion in 2026 or -- but this is something that we phase out completely on the time.

A question on the tax expense, what's already covered. So another question, can you provide details why NPS increased in Q4 and what drove the increase in Stage 2 loans in Q4?

Yes, thank you for the question. So on the NPS increase are 2 drivers. The first one is we have had isolated a number of defaults in [indiscernible] portfolio, few clients from household appliances, real estate and energy industries, which we consider one-off events. And at the same time, further increasing the way we approach the credits, we have implemented a collective staging that covers some aspects of climate risk assessment. And that resulted in a transfer from Stage 1 to Stage 2 of approximately PLN 4 billion of exposure that was primarily seen within the corporation.

And the last question from Kamil Stolarski, would you reiterate revenue and cost growth guidance for 2026, given in the strategy presentation.

So in the revenues we have today more or less we guided because we said 2026 will be slightly below 2025. And on the cost, there is no major reguidance. Here, we expect, as we have seen it in our strategy presentation to continue the investment cycle, which is very important for us because we want to deliver value to our clients with state-of-the-art technology and therefore, also state-of-the-art products, and that is our major aim in spending the cost the right way.

Thank you very much. This was the last question. So thank you for the attention and questions, and see you in -- at the end of April.

Thank you so much.

Thank you.

Pascal. Nice to see you in this frosty morning.

Hello Asia, and hello to everyone from ice cold Warsaw.

Yes, it's great that we talk again as the previous year was really special for mBank and brought so many positive moments. What would you highlight as most remarkable in 2025?

Tough question as this was really a great year. But let me try. The first thing I remember is in spring, where we have been upgraded by the 3 major rating agencies, they have put us clearly into investment grade. And that's also a testament that Swiss franc is fading away and our core business gets the daylight it deserves. It was followed in summer by the first ever out of Poland successfully issued Tier 2 of mBank, and it was quite a huge success demand-wise, but also pricing-wise. And then in autumn, our new strategy was launched full speed ahead. And that combines our appetite for market share and keeping the profitability of our business model.

And overall, I need to say I'm super proud of mBank because we have been on the digital front, the first bank who ever migrated the 2 core banking platforms into the latest technology and also delivered to our clients digital products like the real digital mortgage or also the first-ever smart and payment ring, which was distributed. So quite an exciting year.

Sounds great, and we can be really proud of it. And what about financials in 2025?

Also great financials. First of all, we have been growing our loan volumes 10% year-on-year, and the deposits have grown 14%. The great thing is across both business segments, and it leads to market share as you want to have it. The second, we have maintained our very efficient business model with a cost-to-income ratio at 31%. And third, this is the best year ever. Our profitability on a net profit exceeds CHF 3.5 billion that equals more than 20% return on tangible equity, and this includes already an additional legal provisions we have built of more than CHF 2 billion for our Swiss franc legacy.

Fantastic. And now that the new year has begun, what can you tell us about the outlook for 2026?

I'm really excited about '26 because of a few things. First, you can expect us that we will gain market share. The second, we will stay very efficient and will show a cost-to-income ratio below 35%. And this also includes that we are working already in a low interest rate environment, and we expect that we can, to a large extent, compensate this interest rate drop and just saw slightly lower revenues than the previous year. And third, the Swiss franc topic is less of a topic in 2026.

So this year is shaping up to be as good as the previous one. So thank you very much, Pascal, and see you in spring, which will, I hope, come very soon.

Thank you very much, Asia, and thank you very much, and see you soon.

Good morning, ladies and gentlemen. My name is Joanna Filipkowska, Investor Relations. Today, we are presenting the results of mBank Group in the third quarter of 2025. The speakers today are Mr. Pascal Ruhland, Chief Financial Officer; Mr. Marek Lusztyn, Chief Risk Officer; and Mr. Marcin Mazurek, Chief Economist. After the presentation, we will answer the questions that you can put into the chat box.

Pascal, over to you.

Also good morning from my side, and welcome to our results presentation. And I'm really pleased to share that we continue to deliver strong volume momentum and a robust financial results. And let's begin with a few achievements we are especially proud of and let's start with Slide 4.

First, in the 9 months of '25, we generated revenues exceeding PLN 9.4 billion, a solid 5% increase year-on-year. Each quarter, revenue surpassed PLN 3 billion despite a 100 basis points drop in interest rates between May and September. Second, we maintained our best-in-class efficiency with a normalized cost-to-income ratio of below 30%, and this despite a strong increase in contribution to the bank guarantee fund. Third, our net profit reached PLN 2.5 billion, translating into a return on tangible equity of 20%. So you see we are firmly on track with our strategic priorities.

So let's continue on Slide 5. Number four, our core gross loans, excluding reverse repo and FX mortgage loans grew by 11% year-on-year, reaching nearly PLN 134 billion now by the end of September. Fifth, our active Swiss franc loan portfolio is further shrinking to 7,500. Legal risk costs related to FX mortgage loans dropped by over 50% year-on-year, totaling PLN 1.66 billion in the first 3 quarters. Both new court cases and pending lawsuits continue to decline. And sixth, thanks to our successful PLN 400 million Tier 2 issuance in Q2 and our retained earnings, give significantly bolstered our capital base creating a solid buffer for our future growth expectations.

Now moving to Slide 6. As announced at our Capital Markets Day, our ambition is to exceed 10% market share in all our key products by 2030. Since January, we have gained shares in house loans, mortgage loans, household deposits and enterprise loans. So we are growing faster than the market. In corporate deposits, we've already surpassed the 10% threshold. But for strong liquidity, we focus on client satisfaction and transactionality rather than price competition.

Let's move now to Slide 7. And here, we share 2 mBank unique topics. Starting on the left side. We are very proud that we have been recognized by Forrester's Technology Strategy Impact Awards '25 for the EMEA region. This award acknowledges the scale and impact of our recent technology transformation, and please believe us that is more than just a tech upgrade. This is the foundation of our strategy enabling us to scale, innovate and deliver even greater value to our clients. Our second topic on the right hand of the chart is our world-first innovation. We introduced the first palm payment ring that combines payment functionality with health and activity tracking. This combination of finance and health fits also perfectly to our strategic ambition.

And now I'm handing over to you, Marek who will elaborate about our recently announced transition plan.

Yes. Thank you, Pascal. Good morning, everyone. So as Pascal just highlighted, just this week, we have published our transition plan. This is the foundation of our resilient business model. It well combines our target to get to the net 0 emissions with some business target we have announced last month. And we are proud to announce that we are the first bank in Poland with decarbonization targets, validated by the science-based initiative that ensures alignment with the Paris agreement on getting to 1.5 centigrades pathway. Transition plan of mBank translates our climate ambitions into the concrete business actions, sector-specific initiatives and measurable targets. And it is fully embedded into the business strategy for 2026 and 2030.

What are our key milestones for 2030? First milestone is the absolute Scope 1 and 2 greenhouse gas insurance reduction by 42% by 2030 when compared with 2022 as a base year. And sectoral decarbonization targets are sector level are set for commercial real estate, power generation and residential real estate as well as for our assets under management and leasing. And on that, we would like also to recall how it is integrated with the business strategy that we have communicated last month. We assume that sales volume of mortgage loans for energy-efficient properties will double when compared to 2024 and 15% of corporate loan portfolio will be allocated to sustainable transition and impact finance.

And Pascal, over to you.

Thank you, Marek. So let's now turn to our Q3 financial performance on Slide 10. Total income remained nearly flat quarter-over-quarter with net interest income down 1.4% due to lower yields on loans and floating rate securities. The net interest margin declined by 23 basis points to 3.89%, reflecting the impact of rate cuts. Fee income held be steady, supported by strong payment card-related fees, and a one-off in connection to payment card company in the magnitude of PLN 42 million. Net trading and other income was nearly 17% quarter-over-quarter, driven by gains in hedge accounting and equity stake revaluation.

For Q4, we expect revenues to decline NII will be pressured by lower rates despite expected volume growth. Fee income will be impacted by year-end adjustments and the absence of any one-offs. Going to the costs. Our operating cost increased 3.3% quarter-over-quarter, mainly due to double marketing spend. Personnel costs remained stable and depreciation normalized. For Q4, we expect a moderate quarter-on-quarter cost increase. It will mainly reflect planned regulatory and business project spending. Personnel costs will rise due to higher salaries from increased headcounts. Cost of risk stood at 61 basis points below our full year guidance, and as anticipated, higher than the very low previous quarters. Marek will go later into the details, but we expect the cost of risk to remain below 65 basis points for the full year '25 and due to seasonal corporate write-offs, Q4 is likely to exceed Q3.

Legal risk related to the FX loans continued to decline, reaching PLN 455 million, the lowest since Q4 2022. So we saw now the seventh consecutive quarter to dropping impact. We clearly expect the trend to continue and guide that the next quarter is expected to be lower than Q3. As a result, net profit reached PLN 837 million, down 13% quarter-on-quarter, but up 46% year-on-year. The decline was driven by a higher effective tax rate, which rose nearly to 40%. And as you know, we calculate tax according to IAS 34 and the driver of the high tax rate are the barely tax-deductible Swiss franc-related legal risk costs. Nevertheless, we saw strong results with an ROE of 16.4% and a royalty of 18.9%.

Let me skip the balance sheet slide and we jump directly to Slide 12, our new lending business. In Q3, we continued to expand our lending volumes. Our mortgage loan sales reached a record PLN 4.6 billion, up 24% quarter-on-quarter and 37% year-on-year. Over the first 9 months, volumes were up 35% higher than in the same period last year. Fixed rate loans dominated. Over 80% of the new PLN denominated mortgages in July and August and 75% in September. This now represents 52% of our PLN mortgage loan portfolio. The new sales leads us to the top 3 in the country. News in September is our first stage of our digital mortgage, enabling active clients with mBank personal accounts to transfer mortgages from other banks. The record time to a positive decision on mortgage transfers is below 7 minutes. Nonmortgage lending remained solid at PLN 3.4 billion in Q3, up 20% year-on-year. Sales over 9 months were up 22% higher than year-on-year.

Turning now to the corporate loans. Loan sales rose 5% quarter-on-quarter with a strong growth in structured finance, especially in renewable energy, construction and district heating. Overdrafts and trade finance also increased. Looking at the 9-month period, corporate loans rose 23% year-on-year with the K1 segment, so our biggest customers, up over 60%. Structured finance accounted for 45% of the new sales, growing 34% year-on-year. The result of the sales efforts are reflecting the growth of the loan portfolio by 2.2% quarter-on-quarter and 9.6% year-on-year, visible on this Slide 13.

We are seeing strong activity across all client groups. The result is that we're gradually enhancing our market share across all key products as presented on the right-hand side of the slide. These results demonstrate that the growth of our household and corporate loan portfolio is outpacing the broader market which is and remains our strategic priority.

Now let's have a look at the group's deposit developments on the next slide. We recorded deposits growth of 4% quarter-on-quarter and 10.6% year-on-year. This was primarily driven by retail current and saving accounts. And as you can see on the left side of the slide, we've managed to improve our market share in household loan deposits while in the segment of enterprises, we observed mBank's market shares fluctuating between 10% to 11% over the past year. And as I've guided the income already before, we skip the next slide and go directly to Slide 16 and to our cost development.

In Q3 2025, the group's operating cost rose by 3.3% quarter-over-quarter primarily due to the 12% increase in material costs. The most significant driver was on marketing expense, which doubled compared to Q2, reflecting strategic initiatives such as the cybersecurity campaign and the promotion of investment products for our retail clients. Personnel expenses remained stable despite a net increase of 60 FTEs since June. This stability underscores effective cost containment amidst strategic hiring. Depreciation declined normalized after the elevated Q2 levels that had included accelerated amortization of IT systems. And this leads us to a cost/income ratio below 30%.

And with this, I'm again handing back to Marek for the risk result.

Thank you, Pascal. So on the following slide, we can see our risk results. You can see a normalization of the risk costs, along with the rise of the credit provisions, in particular, for the corporate exposures as compared with Q2 2025. When just as a reminder, Q2 results were positively impacted by a few one-offs in corporate book, so that was not a normalized cost of risk for ourselves. Overall, as Pascal alluded to earlier, we guide our cost of risk for 2025 at under 65 basis points for the entire year.

So that is a bit higher than what you have seen in Q3. But on the following slide, we would also like to point out that cost of risk led to an improved coverage ratio and coverage ratio of mBank Group improved both quarter-on-quarter and year-on-year. And overall, we have seen in Q3 improvement of the loan quality as demonstrated by decline in mBank Group impaired loan portfolio decline in mBank group nonperforming loans ratio, both year-on-year and quarter-to-quarter both in corporate and retail segments. Also going forward, as it comes to legal risk of mBank going beyond credit risk, that risk is decreasing as well.

We are happy to report that a number of settlements concluded by mBank increases quarter-on-quarter. We have concluded additional 2,000 settlements in Q3 and over 11,000 settlements between September '24 and September '25. And based on publicly available data of the peers, it shows that we have the highest share of settlements when compared to the total number of loans in the peer group. Also, looking at new court cases, we see another quarter of a steady decline. The number of new Swiss franc-related court cancers went down by 15% to just over 600 in Q3 and that is the decline of the quarterly number of new cases by 52% when compared to the Q3 of the previous year. And that leads us also to a very significant decline of loan contracts in court.

That is also the fastest drop when compared to the peer group. So the number of contracts in court declined by 62% year-on-year and 26% quarter-on-quarter. So overall, the number of court cases and number of active -- not yet certain cases, dropped below 10,000. You can see that on the following slide, and that's a massive decline compared to the starting point. Also, we are happy to report that outstanding balance sheet value of Swiss franc mortgage loans dropped almost to 0 in September 2025.

So Pascal, back to you on our net results and profitability.

Yes. Thank you. So all that development, we explained delivers us a net profit of PLN 837 million in Q3. And I just want to highlight that excluding the noncore segment, excluding the Swiss franc impact, the net profit in Q3 reached PLN 1.44 billion. As you can see, we are highly profitable for the 9 months, an ROE of 17.3% and a ROTE of 20%.

Let's now go to our capital position on the next slide. Starting on the left of the chart. At the end of Q3, consolidated own funds reached PLN 20.2 billion, so up PLN 2.3 billion versus Q2. The increase was driven by 2 factors. The first one is retrospective inclusion of our profit of Q2, so the PLN 960 million. And the second topic was the inclusion of our PLN 400 million subordinated bond issued in June, which posted Capital Tier 2 which were partly offset by a PLN 0.2 billion early repayment of other subordinated bonds and the Tier 2 amortization.

Moving now to our risk total exposure in the middle of the slide, which rose by 1.8% quarter-on-quarter and 18.3% year-to-date. This growth resulted from strong business growth and regulatory changes, including our implementation of the CRR provisions. Consequently, we show comfortable buffers above the PFSA minimum requirements. Now forward-looking. In Q4, we expect CET1 ratio remain relatively stable. RWA will increase due to further business expansion, and we might face an impact from operational risk RWA related to the Swiss franc as we're still analyzing the latest RTS. This RWA growth would be significantly offset by our securitizations, which we just issued in October. We issued our fifth securitization based on a portfolio of PLN 3.8 billion.

This was the largest project finance securitization from the CEE region with a 75% focus on wind and solar renewables. And this, plus a ramp-up of an existing portfolio leads to an improved CET1 between 0.3 and 0.4 percentage points in Q4. Therefore, at the end of 2025, we expect to remain well above our strategic target of 2.5 percentage points above the CET1 requirements. Looking ahead to '26, our new strategy, Full Speed Ahead is expected to drive further RWA growth. The pace of this increase will depend on how quickly we can expand our market share. Most of the growth will be volume driven while the remainder is linked to the implementation of the group definition of default and the calculation of this past due, the timing and impact of these changes will depend on the supervisory decision. The estimated impact is approximately 4% of today's RWA.

And let me now close my part here before I'm handing over to Marcin for the economic side, and we jump to Slide 28 for our outlook. You see here, first, we expect total income for 2025 to be fairly above PLN 12 billion, driven by our excellent performance of the business model which will result in the best year of mBank's history. Second, we maintain our view that '25 is going to be the last year with a significant cost of legal risk related to the FX mortgage loans. Third, we definitely focus further on business expansion and growing market shares. And four, we continue also our efforts to strengthen our capital and funding position. So before year-end, we plan to conduct an issuance of a nonpreferred senior in green format and a benchmark size of PLN 500 million.

And now Marcin, the floor is your for the economic view.

Thank you, Pascal. Good morning, everyone. So I have only good news today. So with regard to Polish growth, we are heading towards much higher numbers with a 4 ahead. So the next year is going to end up 4.2%. This is a significant acceleration from this year. What is driving this growth? So consumer stays strong. The consumer moods are high. Wages are running also quite high. And well, consumer behaves much better than we could have expected a year ago. Additionally, unemployment rate stays low and well. What we are waiting for is mostly acceleration of investment activity. And it's going to happen due to the fact that we will have a huge inflow of EU funds in 2026. So we are also going to see double-digit growth in investment spending.

So with this a bit higher growth, also inflation is going to be a bit higher. And what's most important trajectory is going to be upward sloping. So with the trough at around 2% in the first quarter of 2026, we expect inflation to slowly drift towards almost 4% in the end of 2026. So it's not a big deal with respect to inflationary processes. Inflation is not going to be exactly at NDP target, but it makes its effect on interest rates. So we expect 2 more rate cuts from the NPC and they are going to end the cycle at 4%. And this is going to happen at the start of 2026. It is important to note because the markets are pricing in much lower rates at the moment and also the consensus is lower. So summing up the economic parts it seems that we are above the consensus with respect to GDP, a little above the consensus for both inflation and clearly above the consensus with regard to interest rates.

When you look at monetary aggregates, it seems that everything is firing on all cylinders. So loans are slowly accelerating. Deposit growth is holding up. So we are seeing, I would say, standard activity given the phase of the cycle, and it's going to be continued at least through 2026. As far as financial markets are concerned, we see some decrease in bond yields recently. But overall risk metrics like asset swap spread stay relatively high due to the prospects of relatively expansionary fiscal policy. As far as zloty is concerned, Polish currency is stable recently, it got appreciated towards the U.S. dollar, but it was not about the strength of the zloty, but rather the weakness of the dollar. Overall, it seems that we are having a quite rosy outlook ahead and good conditions for functioning of the banking system in 2026. Thank you very much.

Thank you very much, Marcin. Now we can start our Q&A session. The first question is regarding the tax line. Can you guide us through the tax line in the third quarter and the potential EBITDA effect in Q4?

So the tax line, as I was alluding to was elevated because we are calculating after IAS 34. So what we do is we, every time calculate the full year tax impact. And the normalized corporate income tax or the tax you could expect from us is around 25%. If you're not taking into account that we are heavily burdened from our Swiss franc-related legal provisions because they are to the vast majority, not tax deductible. And while we have now a change between the 2 quarters is because some parts of the Swiss franc-related topics, for instance, settlements are tax deductible.

But as we also see that settlements are slowing down and also the way of settlements are slightly changing, it was less favorable for us than in the previous quarter. The second question towards DTA effect or DTA revaluation in the Q4 with related to the Swiss franc, we do not expect that there is a major change in that respect.

Which portion of Q1, Q3 2025 net profit has been recognized at CET1? Can you provide any guidance on the extraordinary effect on risk-weighted assets for Q4?

Yes. So what we have already included in our capital is the Q1 and the Q2 net profits we have gained. And every time you just include it after you have the content for including from the regulator. So we also planned for Q4, obviously, that we include Q3. But in our figures, Q3 is not yet included. With respect to the RWAs, I've guided that we expect further volume growth, which will fuel our RWAs plus that in Q4, we might face an increase of RTS, which is related to the CRR and also would then impact our op risk, but this is not yet certain. And nevertheless, the bottom line is that we do not expect a big change of our capital position, and therefore, the buffers we would see from today's perspective in Q4.

Thank you, Pascal. What level of Swiss franc portfolio costs should we expect in 2026? What would you define as significant Swiss franc provisions? .

So first of all, we expect clearly the trend is going down. So every quarter to come, supposed to be lower than the quarter before hand. And we are very pleased that we are ending now, as Marek was saying it, with our active approach towards settlements, the incoming flows because we are really reducing the leftover risk. And in 2026, we expect that we less talk about the numbers, and therefore, it is less significant.

You mentioned that NII would be under pressure despite balance sheet growth. Are you concerned NII will be declining going forward?

As Marcin was from an economic point of view saying it, we expect that interest rate further to decline. And obviously, as interest rates are declining, net interest income is under pressure. From today's perspective, we don't expect that 2026 will be a harsh increase of NII further, as we have seen in the last years because the volume will partly compensate the negative impact from the interest rate environment.

Thank you, Pascal. What is the nature of PLN 43 million, actually a little bit less than PLN 33 million, PLN 41 million, Q3 '25 card one-off.

I mean that's a structural commitment from one of the payment providers, which is onetime paid towards us why we engaged with this payment provider. And as you said, it's PLN 41 million, PLN 42 million, and it's not recurring.

Then we have 2 questions that are quite detailed about our volumes of mortgage loan sales. So the first one is what was the volume of mortgages originated fully remotely? And the other one, what share of your mortgage or origination is attributed to refinancing and what's the new mortgages?

So starting on the refinancing. I mean we see this trend picking up in the Polish banking sector. I'm happy to say that the refinancing balance is favorable for mBank. mBank refinances more loans from the other brands than we lose to our competitors. And that positive net balance is in tens of millions in terms of the volume year-to-date. And most -- more than 80% of clients refinancing externally were our affluent clients.

What we actively monitor is to which banks our clients are moving to and also the key drivers of the mortgage prepayments. And on that, we clearly see that rising wages that margin was alluding to dropping interest rates and the gap between the deposit interest rates and higher loan mortgage rates, the lack of early repayment fees or fixed rate loans, which is a Polish specificity, full repayment of loans after selling the previous property are the key drivers.

Yes. And the last one, what share of your mortgage origination is attributed to the financing -- sorry, what was the volume of mortgages originated fully remotely? This one was not covered yet.

That's something we, I guess, not disclosing to the external is we are very proud that we especially started and I said it, with a really fully digital refinancing as the first from a to set in-house, walk through in a digital manner to really get the mortgage done because I believe nowadays, most of the banks giving you an online platform, which on a front end looks like that it's digital, but in the end, there are lots of manual work, and we wanted to go the route as we are known for that this is a fully digital process. And therefore, we are very proud that we have started, and we expect that this channel will grow fast.

Thank you, Pascal. It seems that we don't have any more questions. So thank you very much for your attention and for the questions, and have a nice day. Bye-bye.

Thank you very much. See you next year.

Hi, Pascal. Great to have you here.

Hi, [ Asia ], very good to be back.

We've just closed an exceptional quarter. What was special for you?

Well, this was a very special quarter as we have announced our new strategy towards 2030. And the title says it all, Full speed ahead! And we had an overwhelming interest more than 300 participants online and offline from investors, press, but also rating agencies and way more have shown high interest. We discussed how we want to accelerate our growth, how we deepen relationship with our clients and also how we want to set new standards in the banking landscape and not just in Poland, it's also beyond what we want to change.

And we discussed the financial KPIs and 3 of them stood definitely out. First was that we want to exceed 10% market share in every single of our core products. The second was that we have a return on tangible equity target, which reaches 22% in every single of our years. And also that we return as a regular dividend payer.

There was something happening after our strategy release, and that was that we received the award from Forrester. And it's less about the award. It's more about what they have acknowledged. We have replatformed our 2 core banking platforms into the latest infrastructure. And also, what we have done is an AI strategy and a cloud strategy. And the external acknowledgment we got. And our internal view that we believe that this capital stack of the IT landscape is a competitive advantage, is something we are very proud of because this will enable us to the continued success.

That's really impressive. What about financials in the third quarter?

So let me share the 4 highlights in the third quarter. First of all, we are growing our loan book, 10% year-on-year, and it's driven by both segments. And even better, we also capture market share with that.

Secondly, we have seen that our Swiss franc mortgage loan issue amounted to PLN 455 million in Q3. So it's the seventh consecutive quarter with a lower impact.

Thirdly, we further optimized our capital position. We just executed in October the fifth securitization transaction, and also we ramped up an existing one. And this will lead in Q4 to an improvement of CET1 of 0.4 percentage points. And fourth, we maintain our excellent efficiency. We show again a quarter with a cost-to-income ratio of below 30%.

That's really good. That brings me to my last question. What about the rest of the year?

Three things I want to share. For sure, first, we expect to exceed fairly the revenues of the last year. That means we're breaching PLN 12 billion of total income. And this despite a very much lower interest rate environment we are working this year in.

Secondly, we also work on our funding plans. So what you can expect from us is before end of the year that we issue a non-preferred senior in benchmark format, EUR 500 million. And thirdly, this is from us the last year with respect to a significant hit in our P&L of the Swiss franc matter, and that is a very good news.

Sounds like a homestretch of 2025 will be really dynamic. Thank you very much, Pascal, and see you in February 2026.

See you soon. Thank you very much.

Ladies and gentlemen, good morning, and welcome to the mBank Capital Markets Day. My name is Karol Prazmo, and I'm the Managing Director for Treasury and Investor Relations. Thank you for joining us here in the mBank Auditorium via remote, through your tablets, computers and TVs. This is a very important day for us. We will outline the strategy of mBank Group for the next 5 years. The CEO and members of the Management Board will outline their vision, aspirations and strategic goals for our future. The title of the strategy is Full Speed Ahead. [indiscernible] but with us for the next 2 hours as we outline the strategy that symbolizes the momentum and the strong [indiscernible].

Now let's begin. I would like to invite the President and CEO, Cezary Kocik to join the stage.

Thank you, Karol. Good morning, ladies and gentleman. Today's a very important day for us. Just in a few moments, we are going to present to you our strategy for the next 5 years. The strategy was developed by [indiscernible].

So let me introduce, Krzysztof Bratos, Head of Retail Division; Adam Pers, Head of Corporate Division; Krzysztof Dabrowski, IT and Operations; Pascal Ruhland, our CFO; Katarzyna Piwek, Deputy Head of our HR. Today Katarzyna is [indiscernible]; and Marek Lusztyn, our CRO. So let's get started.

We stand in a povital moment in mBank's history. Over the [indiscernible]. Today, I'm proud to present our strategy for 2026, 2030. This was developed in line with our mBank's [indiscernible]. We have proven that we are able to grow organically.

[Audio Gap] What powers our organization? It's our people, our brand and our technology. The digital world is our natural environment where we stay the course and set the pace. What is incredibly important is that we do this responsibly, ensuring our client safety. We are proud to have the strongest brand in Polish banking sector, not just in recognition, but in emotional connection. Our employee engagement score places us in a top quartile in Europe. And our digital-first mindset and Gen AI deployment are not just aspiration. They are a fact. This is the mBank DNA, agile, innovative and deeply human.

We have overcome challenges that once constrain us. The legal risk related to FX mortgage loans has been largely mitigated. At the end of June, we had only 10,000 active Swiss franc loans, but now it declined to only 8,000. We are now ready to navigate at a full speed with the [indiscernible] wind lifting our ambitions. Our capital base is robust with a safe buffers, giving us room to grow dynamically. We have achieved it, thanks to our effort, securitization transaction, issuance of AT1 capital and retention of profits. And our profitability is among the highest in the sector with return on tangible equity at 21% in the first half of 2025 and as much as 38.5% in the core business, excluding the impact of FX mortgage loans. Thus, we are embarking on the next chapter of mBank's growth with strength, clarity and determination.

Full speed ahead is our strategic motto. It means scaling with purpose, innovating with discipline and growing with our clients in a profitable way. It's about being smarter, more convenient and more connected in every market where we serve our clients. In the past, we have already shown our ability to dynamically extend our market shares and growing organically at the pace comparable to the one setting the strategy. In the 5-year period, before the peak of the Swiss franc saga in 2022, we increased our market shares in retail loans and deposits by 2 percentage points and in the corporate loans by nearly 1.5 percentage points. Maintaining a similar growth trajectory will be essential to delivering on our strategic ambitions by 2030.

Our key strategic target is to exceed 10% market share in 2030 in loans and deposits across both Retail and Corporate segments. This is not just about number. It is about our ambitions to be a top-tier universal bank. We have already made a significant progress. And already, we are the Poland's most successful growth story in the banking sector.

Now we are accelerating and positioning mBank for growth. We want to grow dynamically, but not only in volumes. Thus, efficiency will be our backbone. We will maintain a cost/income ratio below 35% and deliver competitive return on tangible equity above 22% during the strategic horizon. Starting from a net profit for 2026, we will resume dividend payments with a target payout ratio of 75% by 2030. Consequently, our net profit is set to triple until 2030 compared to 2024, which shows the magnitude of the future value for our shareholders. We are building a compelling investment case based on a profitable growth, resilience and shareholders' returns.

Now let's explore the pillars and that defines our strategic direction. Our purpose is simple, yet powerful, simplifying finances, helping bring goals to life. We have always believed that simplicity is the ultimate sophistication. We have shown it by solving hard problems in a way that feels easy for our customers. This is not just about banking. It is about enabling dreams, whether it is a first home, high-performing company or a secure retirement. We are here to make those journeys easier, smarter and more human.

mBank's strategy for 2026, 2030 will be based on 3 pillars. The first one is life cycle-based growth. We grow with our clients, adopting our value proposition to their life moments and evolving needs over time. The second one is customer excellence. We're simplifying financial journeys and deliver delightful experiences. The third pillar is our organizational excellence. We empower our people and leverage technology to scale impact. These 3 pillars are not isolated. They are interconnected to better drive our transformation. We integrated sustainability into everything we do, not as a checkbox, but as a core belief. Our employees are the engine of our growth. The commitment, creativity and culture make mBank exceptional.

Thank you, Cezary Kocik, for setting out the strategic version.

Ladies and gentlemen, now it will be time to learn about the upcoming journey in detail. Before we go there, I wanted to tell you more about today's event.

The presentation of the strategy will take about one hour. Then my co-host and mBank's Head of Investor Relations, Investor Relations, Joanna Filipkowska, will lead the demo session, during which we'll show you 5 examples of products and solutions that will be rolled out during the strategy and on which we have significant advancement. You will have the opportunity to ask questions, both here in the room and in front of your screens. And note to our online participants, please use the chat box within the live stream to submit your questions at any time during the event.

And without further ado, it's time to learn about the upcoming journey in detail. I would like to invite Vice President of the Management Board for Retail Banking, Krzysztof Bratos, to the stage.

Krzysztof, mBank's client base has always been unique. What is so special about our client base and what's in store for them in product terms in this strategy?

Thank you, Karol. Thank you, Karol. Our CEO talked about favorable demographics. And indeed, it's the age of our clients that makes us very special on a Polish banking map. You see we've always been loved by younger generations. And luckily, this is still the case today. 74% of our clients are still below the age of 46, and that's a very important threshold. We estimate that in between the age of 46 and 55, that falls to the so-called the peak earning period. So this is when the retail clients accumulate the most of their assets, hold most of their products and together with their banks, generate the most of the revenue.

One could say that revenue-wise, the future is still bright and is ahead of us for both of our clients and ourselves as a bank serving them. You could say that we already have clients that others need to chase. And for this very reason in this strategy, we're going to primarily focus on our existing clients. But focusing on your existing clients means that you need to serve them at different ages and serve their different needs and those needs evolve.

And this is why in this strategy, we want to evolve from being an exceptional transactional bank that we are for sure today already into a long-life partner that helps our clients with the long-term goals. This new strategy will see an introduction of more of a long-term products like savings, digital mortgages and investments from day-to-day trading up to the planning for your pension.

Krzysztof, you spoke about the client base. You spoke about the products, but how will we support the financial well-being of our clients?

And this is a very important part for us, and we treat it with a huge responsibility. We believe that the products, even if digital, simple, intuitive are not enough by themselves. We want to help our clients navigate them all, but also use them wisely. We want to help our clients take care of their financial well-being, and it's going to be an important part of our strategy. And we're going to introduce it twofold.

Firstly, we're going to help our clients take care of their day-to-day life, to make sure that they stay safe online, that they spend less than they earn, build financial cushion, keep loved ones safe and borrow responsibly. We're going to help them with that by introducing a financial health score, but also a set of contextual tips and communication and education to make sure their day-to-day life is in order. This will be a foundation of our financial health being.

And once this foundation is set, we'll help our clients with the second part. That second part will be a set of digital financial planning tools, but also support of our experts that will help our clients plan holistically all of those complex products in one cohesive plan from planning for your pension to planning for your children education to saving for your first home. We aspire for the 50% of our clients to be financially healthy in 2030.

We now understand the focus on financial health and the product offering for every stage of life. What will this mean for the growth in the number of active clients?

So here is where I need to mention our demographic premium once again. 78% of our 35 years old clients have a junior age child, but also 1.5 million of our clients, those aged 35 and 50, will soon be guiding financial decision of their parents. This creates a tremendous and valuable ecosystem, the one that we want to build on. We wanted to pay off for our clients to be here at mBank together with their children, their partners, their parents and even their friends. We want to grow through our clients and not chasing sometimes very expensive external acquisition. We believe that this will strengthen the loyalty of our clients, but also allow us to grow in a very, very efficient way.

Krzysztof, you've given us a lot of insight about the priorities for Poland. What are the strategic objectives for operations in Czechia and Slovakia?

We've created One mBank strategy, and this means we'll be doing a lot more together with Czechia and Slovakia. We believe that only an aligned platform approach is the way to build things in a scalable and efficient way, but also set a foundation for potential expansion into other foreign countries in the future. In this strategy, we'll bring to Czechia and Slovakia solutions that already exist in Poland, especially for the affluent and SMEs. What will make this Czechia and Slovakia strategy is slightly distinctive will be a bit more focused on external acquisition. As in here, we want to catch up and be the market share wise at the same stage that we are already in Poland. This should convert into having 1 million of active customers in 2030 and through them doubling our loan volumes and almost doubling our deposit volume. We believe that this approach will not only accelerate the growth of those foreign markets, but also we bring tremendous benefits as an innovation for the whole group.

You talked about the product offering for affluent and SME clients in Czechia and Slovakia. Can you tell us more about these 2 segments in Poland?

I started my presentation today talking about the younger people joining mBank. But truth to be told, they joined us 10, 15 or 20 years ago, and we meet them here in Poland every day. And since then, they grew, their little student account is now an affluent account. Their little start-up is the well-prospering enterprise. But then the most beautiful thing is they actually grew with us and they stayed. And we have proof for that. 73% of our affluent clients have been with us for more than 10 years. Also on the SME side, 71% of our high potential business clients have started with us as a little startup. But best of them all, 70% of our business clients are also our individual clients. It's a tremendous and valuable 2 segments that we call the super segments. There is more number standing behind it.

Our affluent clients are responsible -- or not responsible. Our affluent clients constitute only 27% of our client base, but yet generate 70% of individual revenue. The high potential business clients, we call the clients who generate EUR 1 million annual turnover, they constitute only 30% of our clients, but generate half of the SME revenue. They're valuable, loyal and high potential clients that with a little extra care, with a little appreciation that they absolutely deserve and with a little bit of additional products can flourish even further together with us. And this is why this new strategy will see the significant focus on the affluent and on the SMEs in their upper levels.

Now that we know more about these 2 segments, can you tell us about how you want to deepen the relationships with affluent and SME clients?

We strive to create the best-in-class value proposition for the modern affluent, starting with daily banking excellence through global traveler benefits, but also your lifestyle benefits that you can use here in Poland. But maybe most of all, we want to elevate their service. We want to show them that they're appreciated and they can have a fast access and fast track to some of our services. In some cases, we will even go as far as introducing a dedicated adviser to our clients. This will be new for mBank. We believe that once you get to the more complex stages of your life, you do need to speak to a person regardless of how sophisticated your digital solutions are. We want our clients, our affluent clients to feel like in a private banking, but of course, in a very digital, a very modern and a very mBank way.

We strive to serve 1.4 million of those affluent clients at the end of our strategic horizon. And we're going to do exactly the same for our SMEs, so SME plus, how we call them. We want to expand our financing solutions as their needs grew over those last 10 years. We will also introduce additional products known mostly from our corporations world like mLeasing, but then with a fully integrated version with our banking app. And similarly to affluence, we'll go as far, in some cases, introducing also dedicated advisers who will help them flourish and develop. This should convert into serving 120,000 of those high potential firms at mBank. And obviously, that is naturally before we will help them transition to the full corporations world.

Thank you, Krzysztof Bratos.

Ladies and gentlemen, now that we know the plan for the Retail segment, let's talk about our exceptional Corporate and Investment Banking business. I would like to invite Vice President of the Management Board, Adam Pers, to the stage.

Good morning.

Adam, can you tell us about the growth aspirations for your business?

Of course, thank you. Good morning once again. Today, I will be talking about the Corporate Banking strategy, but let me start shortly with the reference to our CEO, Cezary Kocik. He said that most of our bank is full speed ahead. And we decided with our team that we will translate it into Corporate Banking language, which is what you see on the slide, this is long-term business growth. And it's going to be the most important sentence in our strategy.

And the question is how we're going to deliver that. And we decided jointly with our risk colleagues that we will grow in the sustainable transition and sustainable finance. But what is important, we defined 6 perspective industries. We'll talk about that later. But we cannot forget about strengths. Strength, which means structured finance, investment banking and international banking. But what we need to deliver this growth, which at the end of the strategy should let us reach that market share in the amount of 10%, which translates into PLN 20 billion net growth. We need something that we call exceptional unique hybrid model. We need organization excellence, which is built on digitalization. But going forward with the strategy, we will add the AI component. And sorry, I used the word last but not least, is our people. Our people created the strategy and our people joining with us with the Board will deliver the strategy. So we need them motivated and highly qualified.

Adam, you referred to the best unique hybrid model, what exactly is behind this concept?

Yes. It requires explanation indeed because here, we talk about 3 pillars. The first pillar is we call them -- we call it remote but digital. The second pillar is remote, but human, and the third one is offline. This remote digital, I will talk also later on during the strategy, the presentation. We're talking about the new mBank CompanyNet, so our main gateway to the customers. And we're talking about the fine-tuning of mobile banking. And this will create something which we call virtual branch.

But customers also sometimes need the contact with the person. So if, for some reasons, the customer will not be able to self-service the digital channel, then we have dedicated contact center, which is only for corporate business. And why we are doing so? We are doing some because we want our offline channel, which means relationship manager to have enough time to talk to people, to talk about the business, talk about the transactions, et cetera. And they will be supported by top best-in-class product specialists. These all 3 pillars constitute the what we call best unique hybrid model.

Adam, and going beyond the service model and into the client base, can you tell us about the specific growth strategies for each of the 3 corporate client segments?

This slide requires a little bit of explanation because as you heard, we're a universal bank. You already listened to Krzysztof's strategy where we have different type of customers. And within the Corporate Banking, we also have relatively small and not sophisticated customers, which is the K3, and we have also large corporate, which is K1. And let me start with the latter one.

So K1 customers, this is the segment that, for some reasons, in a couple of last years, we were not so active. Now we want to come back to something, which we called bigger tickets. So we will be more present in this segment. But definitely, we offer them more sophisticated products like M&A, structured finance and all these complex products. But if you talk about the biggest engine from the volume perspective, it's definitely going to be K2, which is our midsized corporate segment. And here, we have a combination of complex product like investment banking, sustainable finance.

But at the same time, we know that a significant part of the financing in this segment is relatively small ticket. That's why we will offer so-called fast-track credit process. But as I said, this is going to be the biggest engine from the volume perspective. But from the, I would say, biggest change, it will happen in K3 segment, which is our corporate SME segment. And here are the challenges or targets. First of all, we would like to double number of active customers. Here we're talking about the active customers, not just open accounts, and it is going to be credit customers. Second thing, we want to offer them -- we call it semi-automated credit path. And if you allow me, I will, in a few sentences, elaborate how it's going to work in real terms.

Our aim is that customers start the journey in the CompanyNet system. So the application for the loan will be done in the system, then the loan will be done on a semi-automated way. And finally, signed agreement and disbursing the money will be done also in the CompanyNet system. And at the end, we are taking our end-to-end process, which means that the managing the loan going forward will be done also in this process. And what is our ambition? We are starting from 0. I think we are transparent here. And we want to reach 40% of the double number of credit customers at the end of the strategy horizon.

Thank you, Adam Pers. We'll be back with you in a moment. So please don't go anywhere. And ladies and gentlemen, I would now like to go into corporate credit risk and the industries that we want to focus on. And this, I would like to discuss with our Chief Risk Officer, Marek Lusztyn.

Good morning, everyone.

Marek, where should we expect growth in the corporate portfolio as we roll out this strategy?

So as Adam said, we have asked ourselves what will make Polish economy tick over the next 5 years. We have asked ourselves what our clients will face, how we can help them in benefiting from those trends. And we have identified 6 big trends, 6, how we call it, big shifts that Polish economy will face until 2030. And we want to support our clients in that specific shift to make sure that they are benefiting from those.

First of all, and that is not surprise to anybody, it's energy transition. Second of all, it's green economy and sustainable finance. Then we have identified localization of production, automation and robotization of production as the next big shift that Polish economy is going to face. [indiscernible] were alluding to the demographic shifts in our retail base, but these demographic shifts are not only related to our retail base, it is also something that our corporate clients are going to face, and we want to help them in that shift as well. So the help in financing, free time economy and health care is the next one that we will zoom into.

And finally, I guess this is also not a surprise to anybody, defense. I would like to highlight that it is not a new area for mBank. We are going to capitalize on existing expertise and sometimes even on us being already a clear market leader in some of those segments. When we think about quantitative KPIs that we have put in front of ourselves for our corporate portfolio, the first one is an increase of sustainable financing in an overall corporate portfolio from 11% in 2024 to 15% by 2030. And as it comes to our ambitions in supporting those big shifts, in supporting our clients in benefiting from those big shifts in the Polish economy, we would like to increase the share of financing of those from 20% at the end of last year to 40% by the end of strategy horizon.

Thank you, Marek Lusztyn. Now let's return to the strategic plans for Corporate and Investment Banking. Adam Pers, back to you. Poland is the fifth largest economy in the EU, and we're part of Commerzbank Group. What does this mean for us in terms of cross-border opportunities?

Thank you for this question, but let me top up 3 facts. First of all, Poland is the fifth biggest economy in European Union, and we probably exceed EUR 1 trillion nominal GDP. This is a very important fact. And if you look at mBank and Commerzbank, mBank is a very strong player in the Polish market. Luckily, we have a foreign investor who is very active in the most developed economy in Europe, which is Germany, but is also present internationally. I hope that you see that on the map.

And when we want to develop the growth in more sophisticated products, let me start with the presence in Poland. mBank in Corporate Banking is famous for its competence in the structured finance, both on the corporate sales side and risk area. And our aim is the following: to be market leader in structured finance, to be the bank of the first choice for the private equity, which was the case over the past few years, and finally, we want to constantly deliver new products to more sophistic customers, like we did in the past years.

But going abroad and going to the cooperation with the Commerzbank, our plan is to help our customers to go internationally. And we're going to support customers in 2 dimensions. The first dimension is the opening account and, let's say, working operationally in the foreign market using Commerzbank network. But we see that and we read in the press that going forward, our customers are more and more active buying the competitors even in the western part of Europe. And in this journey, we would like to be active, and we would like to be bank of the first choice for the customers.

The opposite direction, we would like to continue and even further strengthen the cooperation in which we invite foreign customers to Poland and we have to be, let's say, the biggest gateway for the customers that have accounts with Commerzbank, but also for the customers that are entering Polish market and want to set up the relationship with the bank.

And finally, Recently, we started quite actively the journey with Commerzbank on the treasury bond market. And in this respect, we want to grow going forward over the strategic horizon.

Thank you, Adam Pers.

Thank you.

Ladies and gentlemen, this concludes the first strategic pillar life cycle-based growth and now we move to the second strategic pillar, customer excellence. And we will again start with Retail Banking, Krzysztof Bratos, welcome back to the stage.

Krzysztof, what innovations are we planning to make mobile banking feel even more effortless and intuitive?

We believe that mBank has been setting standards in the mobile banking and digital banking for quite some time already. But truth to be told, the world doesn't stop. It changes. It evolves, not only in the banking ecosystem, but also in the fintechs that are already in Poland. Also, around 10 years ago, average banking app was providing just a few, maybe 15 products in the banking ecosystem. Today, it's actually tens of products and tens of services. It takes a fresh look on how you navigate them all and how you use them all. And we've decided to take that fresh look. And we've decided to do another just tiny uplift, but a significant upgrade on how we use our application.

We're going to introduce the 3 major innovations. Firstly, we're going to put a new application architecture, the way you find your services, the way you find your products and how you navigate it all. We'll also add high personalization. Me, my wife, my kids and my parents, we use mBank app in a completely different way as we need different products and different solutions and will allow our clients to customize it.

Secondly, we will provide more of an instant feedback by automating more of our sales processes, but also those post sales and give that client a sense of control that whatever their click is happening instantly. And then thirdly, we're going to introduce a redesigned communication system with a new graphics, emotions, even videos or even haptics, the solutions that you have seen already in the different industries and you happily use. So why not in banking? We believe those 3 innovations will contribute to creating and still having a very simple and very intuitive app, but yet the one that can handle the complex world's needs while staying modern and fresh.

But what if all of that was not enough, and you actually needed to go a step further in today's world. What if you all could actually talk to it? Ask it, how much I spent for my last trip in Barcelona? Or what is the status of my complaint? Or perhaps what can I do with my PLN 10,000? What if you could do it all in a natural language, maybe sometimes even with spelling mistakes, of course, while staying in your safe banking environment. Would that be another chatbot, assistant 2.0 or something a little bit more than that.

And here, I would love Krzysztof Dabrowski to share a few words about it.

I will be happy to do so, but I would like to also enlist a little bit of help from our guests, if I may. I will not ask you if you ever use a banking app because I can safely assume you did. But may I ask you, who of you ever used any banking chatbot or assistant? Raise your hand, please. Okay, and -- quite a bit. And who of you think this assistant was not particularly smart? Raise your hand, please. Thank you even more. That's a bit surprising. But thank you for your support. And it will not be a surprise to you probably that we do share your view.

So with the help of generative AI, we would like to take this experience in mBank to another level. So first, we -- there are 100 ways of asking for the same thing, and we don't want our customers to guess the correct question. It's our task to guess the correct answer. Second, most of those assistants that you do not find very smart are just a giant knowledge basis and not particularly even good at answering the questions. We would like to teach our assistant a lot of verbs, More than 200 of them actually, to make it very, very helpful and providing services to our customers, not only answers to the questions.

And last but not least, we will combine it with all of the data we have about our customers to provide a personalized experience. So this will not feel generic. This will feel like the assistant is there just for you to serve your needs and knowing a lot about you.

Thank you very much, Krzysztof. So not just simple questions, but definitely actions. Over 200 of them also executed through the voice. We believe that this is not another assistant, not another chatbot, but the very beginning of a new channel of how you can use your app and how you can use our bank. We believe that this is the very beginning of a conversational banking. Thank you.

Thank you, Krzysztof Bratos. Thank you, Krzysztof Dabrowski.

And now I would like to invite Adam Pers back to the stage, please.

Adam, what can you tell us about what will change in the way that you interact with customers in the Corporate and Investment Banking area?

Thank you. I have the impression that while I was describing the hybrid model, I already promised a lot. So now I will be talking about how we deliver that. And let me start with the CompanyMobile, which is definitely the application for relatively small customers. And here, we will focus on base modules, which is FX, payment, BLIK and all this, I would say, that we need on a daily basis. But what is extremely important is, we gave -- we received the feedback from our customers that in case of CompanyMobile, apart from feature, also security is as important as those features. So definitely, the second part of our, I would say, development of CompanyMobile will be the security of this application.

But the main change will happen to the CompanyNet system, so our core gateway in the digital world. And here, we will implement new modules or we modify the modules. Let me start with the so-called personal dashboard, personalized workspace. Why we are talking about this solution at first? Because as I said that we have different kind of customers, relatively small and relatively complex. And my personal experience that when I have application, not necessarily banking, but any other, and I can adjust the application going through 100 or 50 questions, it's relatively difficult to go through this. And here, we would like to build a system that almost automatically adjust to the company and adjust to the so-called personas or to the person working with the application. So it's going to be convenient, and this is the most important word.

Second thing is we'll be working on the payments module. But what is important, we will build new, we call it, liquidity module. This is something that will truly use the AI because it will be analyzing the history. It will be analyzing the current situation of liquidity of our customer, and it will give some advice. And let's imagine that the customer may need some loan in the future. I hope that having the next module, which is the expanded loan module, the customers will be able to apply for a loan and potentially sign and disburse also in the component system. I already mentioned that what we are cooperating with Commerzbank and we want to go abroad with customer and invite foreign customers to Poland. That's why we will pay special attention to FX model.

And last but not least, here, you can see our ambitious target, which is 80% of every interaction with customers done in the digital world. And what is important, this is end to end. So it is for the customer digital, but also finally, in Krzysztof Dabrowski area, operation also end up in a digital way. And we would like to deliver that by enhancing the so-called self-service via virtual branch. And the last thing, which is very important that our current CompanyNet system, which as I said, we have to rebuild, because the customer needs more perception of top 3 on the market. And our ambition target is to be at least #3 from the perspective of our customers, how they see this application.

Thank you, Adam Pers. Krzysztof Dabrowski, Adam Pers spoke about all the enhancements to mBank CompanyNet and mBank CompanyMobile. Can you tell us about what is happening on the back end to make all of this possible?

Yes. I'll be happy to say. But before I will tell you what we just did because I think a bit of a history is important here, and it is a good history.

I'm actually very blessed with the business colleagues that you've just seen in action who are very ambitious. They have -- they set themselves very high targets and they have this tendency of actually delivering them. So IT has not to be the road block, IT has to be an enabler and a helper. And one of the very important aspects of IT in banks are the core systems. And I've been on the AKF, this is the Polish gathering of all of the banking industry last year. And there was a large roundtable, around 12 participants from all of the major banks in Poland. And the question was, what do you do about the modernization of your core system?

And I was lucky because I was sitting, like, I was like the 9th. And they were -- the answers were like, we are not touching it. We are thinking. We're analyzing. That's too complex. And my answer in June was, we are going to finish it this year. And you are first to hear it that as of today, both of our core systems, the Corporate and the Retail are modernized, are taken to the modern technologies. And all of our customers are right now on the new platforms without even noticing that because we did it in parallel with the normal business growth, and we did it without stopping the bank.

Why we did it? We did it in order to do the next steps. We wanted to get rid of the legacy that we have. We are a relatively young bank in the grand scheme of things, but we also had our legacy because I would say, majority or vast majority of our employees were not even around when we implemented those core systems. But now when we migrated to the better solutions, we can do the things that we plan to ourselves in the strategy.

So the most important program in IT has a very short name. And in the spirit of saying not a lot but doing quite a bit, we are going to make our bank 24/7. In Retail, it may sound easy because Retail in our case, is already running 24/7, but the remaining problem are the technical breaks. And it will take a bit of heavy engineering to reduce it down to almost 0. But for the Corporate Banking, it's a bit of a different challenge in mBank because our Corporate Banking is not working 24/7. It's not working over the weekends, and it's not working during the night.

So we are using the opportunity that we get from the fact that we have to support European instant payments, but we want to take it to the next level in an mBank fashion. So we want to give access to our corporate customers to the majority of the important products 24/7 and to extend the availability of the rest through the weekend. We think that this will be the great basis for our business to grow further.

The other important aspect that I'm responsible in the bank is the security. And to tell you about the security is a bit harder than to tell you about the IT because we just don't have this one grand project. In fact, we have really a couple of dozens of projects that we want to do in the time frame of the strategy, and we group them into 3 pillars. And actually, they don't change. So these are the same pillars that we were having so far. So the first one is the cybersecurity. Obviously, substantial part of the trust that customers put on us is coming from the fact that we are offering them a security. So cybersecurity in the sense of defending the bank, but also helping customers defending themselves, this is a crucial aspect, and we are going to continue investing in this area.

The other part, which is no less important, is antifraud. The fraud is, let's say, ongoing daily burden for our customers. The trends are not actually good. It's actually getting worse from the customer's perspective. So mBank is here to protect them. We will extend our anti-fraud systems, but also we will deliver more self-service to the customers. So if actually something bad happens, the customers will be able to help themselves.

And last but not least, we strongly believe that humans are the best firewall for all kind of bad things. And we are probably the first bank that's really invested in the broad communication to the Polish society about security. We've been running public campaigns aimed not only at our customers, but at all citizens of Poland because we believe that the customers who are aware of the security risks are the customers that can better protect themselves.

On the other hand, we are also investing in our own employees because they can protect the bank, but they could also protect both the customers but also their friends and their neighbors. And those 3 pillars form together our security strategy.

Krzysztof, and with that, you've brought us to the end of the second strategic pillar, which is customer excellence. And now we go into the third strategic pillar, organizational excellence. And I want to stay with you, and you spoke about AI and conversational banking earlier during the presentation. And can you tell us about the other places where you and your team will be deploying AI?

Okay. So you've heard a bit about AI from my colleague's presentation. These are the, let's say, the large business applications of the AI that we are doing together. But we are treating this concept very seriously. And on top of everything, we are also running our own incubator for those solutions because we believe that we need a deep focus and a lot of acceleration to really make it happen on a daily basis here in mBank.

I'm not going to be able to take you through all of the things that we are working on. And on the other hand, I'm not going to tell you what are we going to do 3 years down the road because on one hand, I probably don't know actually. But on the other hand, we wouldn't like to reveal too much to our competition.

So I will just explain you and show you 3 solutions, and they are at the stage that either they are already in production in mBank or they will be very soon. So I'm not going to spoil the market success.

So the first one is what we call the deep customer understanding. The banks have a lot of data about customers. And historically, we've been all very, very good in analyzing this. All of the structured data we have about customers, the transactions, the financial data, the products they are using, even how they are using the products. All of the banks know it, all of the banks analyze it, hopefully, and all of the banks know how to deal with this kind of data.

But there is a whole ocean of the data that is not structured. These are the interactions that we are having with our customers. It's voice interactions, video interactions, but even simple chat interactions. We have a lot of those. And historically, they were very hard to actually analyze. We've been analyzing them in a very, let's say, focused way, for instance, to do quality control of our conversations. But it was not really possible to do it at scale.

As of today in mBank, we are analyzing all of the interactions we have with our customers. Thanks to the generative AI, we can process all of them. We can process voice, we can process text. And on a mass scale, we can draw the conclusions. On one hand, what the customers want from us, which is very important. But on the other hand, how do we serve the customers? What is the quality of our interactions? What is the quality of our conversations? And we no longer have to sample, we can analyze all of them.

The other example is maybe very niche and technical, but it also shows the power of the technology. We call this -- internally, we call this product, Talk to Your Data. We have a lot of data in mBank. But on top of the actual size of the data, our data models are very, very large. And there is no living human being in mBank who knows it all.

So our analysts, they spend quite a lot of time before they actually start to work with the data. They spend a lot of time finding the data in our systems. So we created a tool for them that we can use and ask the questions in the natural language. So you could ask, for instance, where can I find the information about all of the retail customers, who gave the marketing consent, but didn't have the mortgage with us for the last 20 years, but are making more than 3 transactions per month. And this tool will create a database query, and we show to the analysts where this data is in our system and how to get it.

And last but not least, this is probably the toughest nut that we are trying to crack. These are the customer complaints. And why customer complaints are very tough? It's the definition of unstructured. The customers are writing us a letter, and I'm always saying this is not always a love letter to the bank. And this letter is just the pros. It describes the problem in the way the customers see fit.

So we have to analyze these pros. We have to extract what is the problem. Then based on this, we need to find out what should be the solution for this problem and create steps for the person in the bank to solve the problem. And then at the end of the day, we need to actually write the response to the customers. And this response has to maybe make sense, be written according to our standards and solve the customer problem. So all of it together creates probably the toughest automation problem, I, in my career, had to deal with. And we are solving it already with the help of generative AI, and part of the customer claims already in mBank are being processed with the help of this solution.

Krzysztof Dabrowski, thank you very much.

Ladies and gentlemen, now let's shift focus from technology to people. Katarzyna Piwek is our Deputy Director, responsible for Human Resources.

Katarzyna, what makes mBank's teams exceptional?

Well, 2 factors. Our employees are highly engaged and driven, and there are numbers that demonstrate these qualities. First, it's our engagement score. We achieved 68% of engagement during the past 2 years, while top quartile in Poland stands -- starts at 64%. Second number speaks more to our employees' motivation to grow. Our staff completed over 20,000 future skills initiatives, not to mention all the others during the past 4 years.

On the HR side, we actively support this engagement. We invest heavily in skills-based development. We care about our employees' well-being, just as Krzysztof Bratos mentioned, we care about our customers' well-being. So we provide a variety of well-being programs as well as top-tier hybrid environment. We offer competitive and transparent pay. And on the equity side, we are in a strong position.

Last year, in gender pay gap, we stood at 2.9%, and we are committed to reduce it to 2.5%. With gender balance on managerial positions, we are currently at 40%, and we aim to reach the balanced distribution between 40% and 60%. What I want to emphasize is that today, we are proud to have one of the strongest employer brands in Poland.

You spoke about our highly engaged teams. What else will we do to retain and attract the best and the brightest?

Well, we aim to be the employer of choice by building on 3 strategic pillars. First, ahead of others, through our unique culture, mBank culture really is something special. It's so special that we decided to give it a special brand, mKULTURA and culture. This culture is highly attractive to people as we are top place for those who want to develop and grow, top place for people that are willing to take responsibility and take decisions. And finally, top place for those who are -- who practice dialogue and are empathetic towards the clients and each other.

Second pillar, ahead of others through best talent. Given the demographic structure you mentioned, Krzysztof, in Poland, it's not only to attract the best, but also to retain them. In order to retain the best, we are investing in skills, but also make sure that our knowledge is at the forefront of innovation and at the highest standards of industry. We know that best talent naturally require an appropriate employee experience reflected in good working conditions and inclusive environment.

Third pillar, the digital HR, which is taking decisions based on data. We embrace logic. We base our decisions on data when it comes to remuneration, recruitment, skills and competencies. We believe that being data-driven and therefore, logic and predictable creates a secure space for our employees. We also improved our internal processes using AI in all possible use cases. For example, performance, development, recruitment. Three pillars, but all 3 serve one purpose: to have the best team to deliver on mBank's growth.

Thank you, Katarzyna Piwek.

Ladies and gentlemen, now that we have discussed the 2 business lines, technology and human resources, let's move to finance. And I would like to invite our Chief Financial Officer, Pascal Ruhland, to the stage. Pascal, welcome.

And Pascal. How will the strategic goals translate into financial performance? What do they mean in terms of balance sheet volumes, revenues and costs?

Thank you very much, Karol. And it's my pleasure to present you now our financial frame of the strategy. And let me start with our growth aspirations.

Cezary Kocik was saying it at the beginning. We are back in a growing mode. We want to exceed 10% market share in every single of our core products. That means we need to grow faster than our competitors. What you see here is our loan volume development. And in 2024 and in 2025, we have already proven that we are capable of growing faster than the competition.

And now the big question is, why do we believe this will continue? And my colleagues in the presentations beforehand gave you the answer because we, as mBank, are set up as an organic growth institution by clients, by our culture and by our infrastructure. In Retail, we can call our clients the most attractive client group of any bank in Poland by age, by purchasing power and by loan demand. To give you one fact, our clients demand for around 25% of the overall mortgage loan market in Poland. This, together with a seamless process, is the foundation for a 12% CAGR.

Coming to the Corporate side. You know us as sector experts. We are focusing on sectors which are growing faster than the average. And Marek and Adam explained to you now we're following trends, trends like the energy transition, again, faster growing. This plus an additional investment in our lending infrastructure build our basis for a 7% CAGR.

Let's move now from our loan sides to the deposit side. And here's one thing very visible. The main engine is Retail, with a 10% CAGR. And Krzysztof Bratos was in the strategy explaining how we do it. We focus on our clients. We want to remain with them. We want to increase loyalty and grow with them. In Corporate, we have a 4% CAGR on an already elevated market share as we already have in enterprises a market share of around 10%.

Now let's have a look how this turns into our P&L. What you see here is that we expect revenues to grow between 7% and 8% on a CAGR level. What you don't see is that we expect that every single year in our strategy, we will increase our revenues. NII is fueled by the volumes which we have shown. We will have a strict focus to maintain discipline in deposit management and will overcome a dropping interest rate environment.

Net fees, you see it currently in our P&L, are on a rise, and this is expected to continue. We have a broader product spectrum and we maintain growing with our clients. But obviously, there's one factor where we're decisive nowadays in banking, it's the external reference rate. We expect the NBP reference rate to drop as early as 2026 to 4%. And while I explained that we have an increased balance sheet and the rates are dropping, of course, margins are under pressure. We account for that. We expect the net interest margin to go slightly down step-by-step to 3.5% by the end of the strategy cycle.

But let me tell you one thing. We are well prepared for a dropping interest rate environment. If you look into our data NII, we have barely moved since the beginning of the year. A 100 basis point rate cut currently costs us between 6.5% to 7% of total NII. And if you compare it to 2 years ago, 2023, it's 2 percentage points less sensitive. So we did our homework from a treasury perspective to stabilize our NII and increase volumes, went into fixed rate bonds and also swaps.

Now going from the revenue side to our cost side. What you see is we expect a CAGR of 4% to 5% in the strategy cycle. The main driver is IT-related. And here, we increase the spending across all you have heard, digitization, automation, but also AI-related use cases. And as we know that you are interested in how we do that actually, we came up with the idea of the second part of today to show you the client look into our kitchen, the real use cases. And I just can encourage you to stay, it's worth it.

In 2026, you see a steeper cost growth of 11%. There are 2 main drivers. The first one is we invest further in our people. We will grow by FTEs and also, we increased wages. And we do that with a smile, as you have heard, because this is everything we can deliver is out of our people. The second topic is regulatory cost increase. We expect that the BFG contribution and also our support fund will increase or normalize, if you want to call it like that.

Now summing it up. You know us as mBank as the most efficient bank in this market, and we will maintain that with a cost-to-income ratio of at or below 35%. And this brings us in every single year in the top 3 of the country.

Pascal, allow me to briefly shift to the risk perspective, and to our Chief Risk Officer, Marek Lusztyn. What does this strategy mean in terms of expected cost of risk and risk appetite?

That's clearly a question that many of you in the audience ask yourself, how much risk does it take to deliver our strategic objectives? And let me assure you that we are going to deliver them without changing our risk appetite. And now let me explain you how we are going to do it. Our risk excellence is based on 3 pillars. First of all, we want to grow intelligently, and colleagues from business lines already elaborated on the potential that mBank client franchise has for us doing so. First of all, on Retail side, Krzysztof explained the demographics of our customer base, and that demographic is not only beneficial in terms of our revenue growth, but it's also beneficial in terms of supporting us in lending growth and supporting us in our retail credit risk.

Second of all, Adam explained at length the trends that we see in the economy. And those big shifts are going to be wins that will support us sailing to much higher growth in the Corporate space without taking unnecessary risk in the books.

Second of all, it's resilience. Over the last 5 years, mBank has proven that we are an extraordinarily resilient bank, not only by local standards, but with all that we have gone through, we are super resilient by any international standards. We are going to capitalize on that, not only leveraging on excellent liquidity position, but also on our improving capital position that will serve not only as a cushion for safety, but also that -- as we have explained at length that will support us going back into dividend payouts.

We have been exposed to the growing regulatory constraints since we are in the regulated industry. We would like to turn it into our advantage and proactively manage all the regulatory pressures that are coming in the strategic horizon. And finally, on the resilience, we are going to improve our ability to respond to nonfinancial risks since all those novel risks are the big risks that all the industry is facing.

And finally, third pillar, which is efficiency. Our CEO, in his introductory speech, said that simplification is ultimate sophistication. Krzysztof explained at length what we are going to do using AI tools. And in terms of efficiency, we would like our clients to benefit from the simplified fast credit processes. And we will make sure that credit process greatly contributes to the efficiency of the mBank overall.

So finally, this brings me to our strategic goal in terms of the risk management. We aspire our cost of risk to be around 80 basis points in the strategy horizon. And we are going to achieve this without changes to our risk appetite.

Marek Lusztyn, thank you. And returning to Pascal Ruhland. Marek spoke about the trajectory for cost of risk. You spoke about the trajectory for revenues and costs. What does all of this mean for our capital return strategy?

Yes. Before I'm going into the capital return strategy, I want to remind us all that in Poland, we have the reintroduction of the countercyclical buffer. That means 2 percentage points, 1 this year, 1 next year, which will increase the minimum requirements. And while you keep that in mind, I would like to have all your attention now to the bar chart. What you see there is our net profit expected growth rate, so the dividend potential. What we balance there is the reinvestment and the dividend distribution.

The basis of it is our high profitability. We aim for exceeding in every single year of the strategy, 22% of return on tangible equity. And we're really proud to say that we want to be back as a regular dividend payer. We start with 30%, and we go up as high as 75%. But of course, we are not working isolated. Therefore, I want now to speak about what the Minister of Finance has issued on the 21st of August, that the banking taxation would change. And yes, indeed, if you think about that, our net profit will be under pressure because if we simulate it for the next year for 2026, we would talk about an effective tax rate at mBank of around 40%, and that is massive.

But while you let that sink in, please follow me once more. Look at the bar chart because what we show you here, we expect to exceed PLN 6 billion net profit. And that should give you a good sense how resilient the strategy is set up of any external change. Now going from one strategy, the capital return strategy to our balance sheet strategy. You know us, especially from an investor perspective as the bank, which is most active in the capital markets. We are pioneers. We have issued the first AT1. We have issued first Tier 2. And also, we have made the securitization market in Poland vibrant.

But why have we done that? To most efficiently manage also regulatory environments. So we are used to leverage the full potential of our balance sheet to stay effective. And also in this strategy, we will do that. Therefore, we will more than double our issuance volumes. We will be active across the full stack from AT1 to securitizations. And also, while we see a growing mortgage loan book, we will return to covered bonds and make use of it.

But that's not the only thing which will grow. Our capital today is around PLN 20 billion. And in the due course of the strategy, we will double that. And while we carefully also listen to our investors' feedback to run the bank prudently, to have a strong capital position, we give ourselves the target of at least 2.5 percentage points on CET1 ratio as a capital buffer to show you the strength of our capital position.

Pascal, given the breadth and depth of what you have covered, can I ask you to summarize the strategic priorities for the '26 through 2030 period?

Of course, that's my pleasure. Our 6 key financial KPIs for the strategy. First, we are back in a growing mode. We will exceed 10% market share in every single of our core products. Second, we remain highly profitable and exceeded a 22% return on tangible equity in every single year. Third, you know us as one of the most efficient banks in the market, and this will stay like that for a cost-to-income ratio of at or below 35%. And this brings us in the top 3 in every single year. Fourth, a cost of risk of around 80 basis points shows a prudent credit control. Fifth, with our strong capital position, we maintain a buffer of 2.5 percentage points above the CET1 ratio minimum requirements. And sixth, we will be a regular dividend payer. We will start with 30%, and it will go up as high as 75%.

Thank you, Pascal Ruhland. And now I would like to invite our President and CEO back to the stage for the closing remarks. Cezary Kocik, the floor is yours.

I would like to highlight 3 of the most important things. First, we have overcome equity constraints mainly related to Swiss francs. And now we are ready to go ahead with a full speed gaining market share. Second one is that we are going to deliver to our shareholders exceptional profitability and efficiency, together with increasing dividend payment. And finally, demographic structure of our client and the engagement of our employees make mBank exceptional. Thank you very much.

Ladies and gentlemen, this fulfills the first of our 4 agenda points for today. And now we will move to the Q&A session, and I'll take questions both from the room and from online.

[ Joanna Kosik from CSC ]. Excellent presentation. I have one question kind of slightly obvious, you've mentioned the 10% market share increase in loan and deposits. Question to probably the CEO or whoever would like to answer. There's a lot of other banks in the market that have talked about growth prospects in Poland. Just kind of curious, who do you expect to take that market share from?

We are not competing with any specific bank. We're just competing with the whole market. And we track very carefully strategies of our competitors. And -- but just to make you a little bit more sure that it will happen, I can say that we are probably the one bank in the whole Polish market, which has grown fully in an organic way. So the Corporate started with a white paper in 1986 and the Retail in 2000. And from that time, we're permanently gaining market share, not by acquisition, just pure organic growth.

And on top of that, what I highlighted in my introduction speech is that before these problems with Swiss franc, because without equity, you can't grow, you are counting risk-weighted assets every day just to be on the safe side. But before to that time, before these constraints start to be so severe for our bank, we managed to grow in retail, as I mentioned, 2% in a 5-years horizon in Retail, in deposit and loans, and in Corporate in loans, 1.5%. This is exactly missing gap, which we need to fulfill our strategy and gain 10% market share. So it is not just a promise, which is not covered by fact, but we proved in the past that we are able to grow with such dynamic.

I don't know if it's...

Thank you, Cezary Kocik.

[indiscernible] My question is about the Corporate income tax rate. Can you quantify the impact of the higher rate for banks on your strategic goals, specifically on ROTE, net profit and dividend payout.

Pascal, I will direct this one to you.

Yes. I gave in the presentation an indication where we will lay -- if the tax currently as it was announced on the 21st of August. And in '26, we would assume an effective tax rate of 40%. And just let me explain why it's 40% and not 30%, which was in the Corporate income tax name because we, as a banking sector, have quite significant costs, which are not tax deductible. This is the balance sheet costs we are having, but also other regulatory contribution. Therefore, you see an elevation. We are not precisely naming how much impact it would be, but I want to direct you to a few of the colleagues. The analyst did a very good job. And if I'm reading the reports, they currently come up that this could cost around PLN 800 million to PLN 900 million, and we are now taking this 2026 as the most severe. And this is a good ballpark figure.

Fantastic. Thank you, Pascal Ruhland. I'll take one question from online. There is numerous questions online. They pertain to our international presence and potential M&A. So I'll actually start with Czechia and Slovakia, and Krzysztof Bratos, with you. Can you summarize again the strategic objectives in terms of growing the Czech and the Slovak business?

And the next question, Cezary Kocik, to yourself. In terms of the second part of that question, what can investors expect in terms of potential M&A? And are we looking at M&A opportunities?

But Krzysztof Bratos, the floor is yours.

Okay. Thank you. So I think what we've shown is the ambition for Czech and Slovakia. This is absolutely the organic growth path. And in here, we are estimating to have 1 million of active clients and doubling our loans and nearly doubling our deposits. And the main engine of that growth and the source will be this aligned platform approach that we've mentioned. So the numbers you've seen, this is the assumption on the organic growth in Czech and Slovakia through the corporation in Poland.

And I'll hand over for the second part to Cezary.

Of course, as a Management Board, we have very carefully observed the market. But for all of you who knows very well Polish market, the situation is quite complicated because almost 50% is -- there are banks with a significant stake of government. So that are rather -- and they are also big banks, so they are not potential target. And the rest have a very big financial investors. So honestly, I believe that if they are mergers in Poland, they rather trigger by the agreement between the major shareholders, not by the Management Board.

But still, we are observing it very carefully. And if we believe that something fits to our model because we also need to remember that some merger destroy value. We need somebody or a bank with a similar customer profile, a similar distribution channel that the synergy will come to life, not -- we will be stuck in a permanent integration. So we will take a decision. But as I said, there is many obstacles. It's not very probable. And this is the reason why our strategy is based on organic growth, not on mergers and acquisitions.

Thank you, Cezary Kocik.

Yes, go ahead.

Kamil Stolarski, Santander Bank Polska. Congratulations on the strategy, especially of the market gains aims. My question is on the other side of the P&L about the cost in 2026. And I wonder if you could share some comments because it seems that the cost will outgrow revenues? And how do you justify this in 2026? And then the other question is about CapEx. Does this strategy involves also higher CapEx?

Thank you for the question. I alluded in the presentation that the 11% increase on the cost side are driven especially twofold. First of all, by investing in our people. And why we grow in FTE, we are doing that twofold. First of all, business orientated, IT orientated, therefore, because we are serving our customers. And secondly, it's also compliance related. For instance, DORA as a regulation demands more from us. That is one part of the pillar.

The second part of the pillar is regulatory costs, which we also expect to increase. And that is the second driver. And if you -- because you alluded to that costs are growing faster than revenues, our expectation is that the interest rate will go down to 4% on the NBP as fast as 2026. So you will have to overcome that. We also sent the signal, I said it, that we will grow revenues despite this interest rate drop. And the cost will be adjusted. Long term, you see that our revenues from the 7% to 8% CAGR very much outperformed the 4% to 5% CAGR on the cost side.

On the CapEx, Yes, of course, we will increase our CapEx level because in the future, as the colleagues were explaining it, it's about IT capabilities. How smart can you really apply and how fast to especially increase effectiveness for your clients. So it's not about -- and we, therefore, invite you for the second session today. It's not about just applying AI, it really needs to be useful. Our CapEx is expected to grow by more than 16% in the due course of the strategy.

Thank you, Pascal Ruhland. Now I'll take another question from our online participants, and I'll direct it to Krzysztof Dabrowski. Krzysztof, the question relates to artificial intelligence. And can you give us examples of how AI will translate into operational efficiency? And can it potentially lead to lower costs?

Okay. So one of the examples of using AI to have some operational efficiency would be what we are doing in the AML area. This is a particular cost area that is growing rapidly because of the requirements that we have to fulfill. And in particular concern that we have is the analysis of the customer transactions from the perspective of money laundering. And in that area, the costs have been growing so far because we had to build the team and we had to do our obligations.

But what we've been able to do with the help of AI was to significantly mitigate this growth. So what we initially assumed would be the FTEs necessary to just cover the retail transaction monitoring, thanks to our AI solution, we've been able to also cover Corporate Banking. We have been able to cover international money transfers in SWIFT and also our Czech and Slovak branch. So that was a significant investment and significant reduction in the effort. So this is what we are doing. We are removing the effort from the system. Because the bank is growing very fast, we need also to handle the organic growth. I think the word organic was used many times in our presentation.

So our ambitious target is to keep up with this growth without increasing the cost on the operational side, and this is how we apply the AI. In many other places, the AI can be used for the things that were so far not easy target to automate. It's not the best tool to do things in a repeatable manner. If something can be done in a repeatable manner, you can do it with traditional method and you get predictability. AI is much more suited in our opinion to the things that are not easy subject to those things like, just to give you an example, comparing 2 documents, 2 scans of documents, which for the moment, require human beings and can be right now done with the AI. So you can expect us investing in this area. This is factoring in our cost base at the moment, certain assumption about the productivity gains.

Thank you, Krzysztof Dabrowski.

Pascal Ruhland, I'll take one more question from online. And I want to direct it to you. The question relates to what is embedded in our forecast with respect to GDP and interest rate forecast. And also with respect to the growth expected for total revenues, can you break it more down into NII and NFC?

Okay. So the GDP forecast, which I didn't mention specifically, but you will find it in our paper deck, which is uploaded right now, is between 3.6 and 3.8, and we expect to have GDP growth year-on-year throughout the strategy. And as I said on the interest rate, we expect that the interest rate is dropping down to 4% as early as 2026 and has then a stable state. When we then think about the revenues, and here I explained that we are growing from a CAGR level between 7% and 8%, and from today's split between NII and NFC, which is an 80-20 split, we expect that net fee and commission income is slightly faster growing than NII, but just slightly. And in the end, it will be a bit shifting the 80-20 split, but not massively.

Thank you, Pascal Ruhland. And I'll take one final question from the room here. Is there any? Okay. Then in that case, we will -- we conclude with the Q&A session, and I pass the voice over to mBank's Head of Investor Relations, Joanna Filipkowska, who will now lead the demo session.

Joanna, over to you.

Good morning, ladies and gentlemen. The purpose of this demo session is to provide you with concrete examples of some of our exciting solutions that we are implementing as part of this strategy.

Today, we will show you 5 use cases in which we already have significant advancement. First, you will see a short video, and then one of our Board members will provide further details. The session will last 20 to 25 minutes. After the end of the session, we will again have 10 minutes for Q&A. So please get your questions ready, both here in the room and online.

The session will be led by our 3 Board Members: Mr. Krzysztof Dabrowski, Mr. Adam Pers and Mr. Krzysztof Bratos.

We will start with our Gen AI program. Krzysztof Dabrowski, Vice President of the Management Board for IT and Operations, the floor is yours.

So I've been talking about 3 of the solutions that came out of our incubator, and we prepared for you a demonstration of those 3 plus 1 more as a bonus. So let's start.

[Presentation]

Okay. I hope you like what you just saw. And also, as I mentioned, this is just the things that we either already have in production or will soon have. We have so much more in the store. So keep watching us.

Thank you very much, Krzysztof.

Now we will turn to our Corporate Banking. Adam Pers, Vice President of the Management Board for Corporate and Investment Banking. Let's start.

Thank you so much. I was talking about the tools that we will see in a second in a movie, that will be a true movie. But our ambition is not just to show technology, show the tools that can bank. I think the word banking, bank as a word is something like old fashion. We like to implement the tools that will help our customers and our employees as well to use in their daily, routine daily operations, to help also to build a competitive advantage to our customers. So please enjoy.

[Presentation]

Yes. And I will not repeat what was on the movie. Just 2 closing comments. The first one is that, what Krzysztof said that some of them are already in production. The second thing is that for the time being, we are, I would say, producing only what we receive from customers, the feedback and the expectations. Thank you.

Thank you, Adam. We've shown you 2 exciting use cases from our technology and corporate banking areas. Now let's turn to Retail Banking area, where we have 3 use cases to share with you.

Krzysztof Bratos, Vice President of the Management Board for Retail Banking, the floor is yours.

Thank you. In our strategy, we plan to evolve from being an exceptional transaction bank. And in that, we promised to take care of those more complex products for our clients. But while doing so, we want to stay true to our purpose, simplifying finances, bringing goals to life. Emerging complex products in simplicity is not that easy, but we took on that challenge. And this is how we reimagine the mortgage experience.

[Presentation]

And I can say that this is definitely not just a vision. It's a solution of which first stage went live already 2 weeks ago for one of our scenarios. And that 15 minutes that we promise, we've actually managed to issue a full credit decision last week in 6 minutes and 31 seconds. That is including credit worthiness check, legal checks and the valuation of the property for the real client in the real life and most stages will follow.

Now moving to the second video. We believe that transitioning and taking care of the more complex scenarios doesn't mean that we'll forget about what is core. And in there, not everything is simplified and not everything yet is made truly, truly easy. And here is what we took on in one of our super segments, in SME, something that probably doesn't exist on the market yet.

[Presentation]

And finally, the very heart of mobile banking. Let the video speak for itself.

[Presentation]

Thank you very much, Krzysztof. Ladies and gentlemen, this completes this demo session. And at this point, I would like to open the Q&A session, which will be hosted again by Karol Prazmo.

Thank you, Joanna. So we're opening up to the questions. Please get those questions ready, and please put your hands up. And while you do that, I'll actually start with the first question from one of our online users.

Krzysztof Bratos, the question is directed to you. In terms of the digital mortgage, is this for one borrower? Is this for several borrowers? And if it's not available for several borrowers, when do you think that functionality will be available?

Okay. So I think there are digital mortgages and there are digital mortgages. There are companies that will create a mobile interface that will allow you to file a mortgage application, and that can be called digitally. We went a different path. We decided that in order to keep our efficiency operations and our costs, we invested firstly heavily in our backbone. In AI-supported valuation models for the real estate, the automated legal checks, the automated credit worthiness. And this is something that took us quite a while to build. And thanks to that, as I said, we can do that now in 6 minutes and 31 seconds. And now we are now expanding and building on that foundation to the more and more scenarios.

The scenario that we went live with is just the refinancing for the ones -- for the single borrower. But as soon as still this year, we are planning to add the new mortgages for the single borrower and the more complex scenarios like the more than one borrower are planned for 2026. So I would say most of the agenda, we should explore and most of the key scenarios in the next year to come. But the first, the foundation is there, and the first scenario is there and is fully operational.

Thank you, Krzysztof Bratos. And do I see any hands up in the room with respect to questions? Then I'll take another question from online. And Krzysztof Bratos, in terms of the phone acting as a payment terminal, is this already available to everybody today?

No. But it will be and it still be as early as this year. And we are sure that it's going to change the experience of a lot of our customers. Now when building and when thinking about the solution, the first idea actually was to try to embed our app and connect our app today external point-of-sale devices or software point-of-sale devices because those 2 exist on the market. But then we thought, while integrating, why wouldn't we can turn our app into something that is a true point of sale in one go with a fully integration of our accounting system. And therefore, this is something that we believe is very, very new. It's in a very advanced stage of development and is expected still this year.

Thank you, Krzysztof. Is there any questions here in the room? Okay.

In that case, ladies and gentlemen, this concludes today's event. We thank you very much for joining us here in the room. We also thank you very much for joining us online. And now for the participants here in the room, we invite you to lunch. Our Board members will be available for another hour. So please take the opportunity to have all those informal conversations.

Thank you, and have a great day.

Good afternoon, ladies and gentlemen. Welcome to our conference where we will present the results of mBank Group in the first half of 2025. The speakers today are Mr. Cezary Kocik, Chief Executive Officer; and Mr. Pascal Ruhland, Chief Financial Officer. For the Q&A session, we will be joined by Mr. Marek Lusztyn, Chief Risk Officer; and Mr. Marcin Mazurek, Chief Economist.

Cezary, let's start.

Good afternoon, ladies and gentlemen. Welcome to our conference call. In today's presentation, I will walk you through our results in the first half of 2025. And then Pascal will discuss our results for the second quarter.

We are very satisfied that in the first half of 2025, we achieved excellent progress in our 4 core focus areas. First, we continued the dynamic expansion of our business volume and market shares. Second, we achieved outstanding financial results driven by strong revenue streams and focus on operational efficiency. Further, we improved our capital position. In June, we executed very successful EUR 400 million issuance of Tier 2. This is the first broadly distributed euro-denominated Tier 2 out of Poland. After obtaining consent of KNF to include the issuance into our own funds, they will support our capital base and loan growth. And last but not least, the cost of legal risk related to FX loans is going down each quarter. We are successfully reducing the risk related to this portfolio. This achievement highlights the strong performance of mBank in the first half 2025. We are confident about our ability to build on this momentum going forward.

In first half 2025, we were focused on the expansion of our business volume. The sales of mortgage loans increased by 1/3 on a year-on-year basis, while on a quarterly basis, it increased by 48%. The vast majority of zloty-denominated mortgages sold in first half were fixed rated with monthly share ranging from 74% to 84%. As a result, fixed rate loans accounted for 48% of the total PLN mortgage portfolio at the end of June. Sales of non-mortgage loans in first half were higher than in the corresponding period of 2024 by 23%. In Q2, non-mortgage lending remained strong, showing an increase by nearly 5% quarter-over-quarter.

Turning to corporate loans. Sales increased by 23% year-over-year with growth observed across all customer segments. The strongest growth came from structured finance loans, particularly those related to renewable energy financing. In Q2, corporate loan sales declined by 13% quarter-over-quarter, primarily due to the drop in structured finance activity following an exceptionally strong Q1.

The results of our sales efforts are reflected in the growth of the loan portfolio by 9% year-over-year. We are seeing a strong activity across all client segments. In Q2 2025, the mBank's loan portfolio expanded by 4% also driven by both segments. In the retail segment, we saw a solid growth in both mortgage and non-mortgage loans, thanks to a strong increase in the new origination. As committed, we are steadily enhancing our market shares across all key products as presented on the right-hand side of the slide. These results clearly demonstrate that the growth of our household and corporate loans portfolio is outpacing the broader market, which is our major strategic priority.

Now let's have a look at liability side of our balance sheet. Here, we recorded a growth of 10% year-on-year. It was primarily driven by retail current and saving accounts, which climbed by PLN 15 billion or 13% year-over-year. Corporate current accounts also contributed significantly, increasing by PLN 3 billion or 8% year-over-year. Again, we proved to be the premier transactional bank. On a quarterly basis, total deposits increased by 3% with growth recorded again in above customer segments.

As shown in the chart on the right, this solid performance translated into higher market shares in household current deposits. With the loan-to-deposit ratio below 65%, we are in excellent liquidity situation. Therefore, in the area of corporate deposit, we are focused on client transactionality and satisfaction, but there is a little need for us to compete aggressively on price. For this reason, we had a small decline in the market shares in the corporate deposit this quarter.

Now let's have a look at our P&L. In first half, total revenue rose by 7.1% year-over-year. All key revenue drivers, net interest income, net fee and commission income and net trading income contributed to this increase. Net interest income in the first half rose by 3.7% year-over-year after adjusting for the impact of the credit holidays in first half of 2024. This growth was supported by higher loans and deposit volume, a larger bond portfolio and effective interest rate management. Net interest margin declined slightly to 4.12%, reflecting a sharp rise in average interest-earning assets and lower yields following a rate cut. Net fee and commission income grew by 11% year-on-year, driven by increased transaction volumes, larger client base and strong product sales. Additionally, Q2 included an upfront fee of PLN 43 million from exclusive bancassurance agreement with UNIQA.

Net trading income surged by 62% year-over-year, benefiting from strong foreign exchange results, thanks to high market volatility, higher gain on daily rates and hedge accounting. Net other operating income declined by 89% year-over-year in the first half of 2025, primarily due to one-off gain of PLN 164 million in Q2 2024 related to a refund of a loan insured by KUKE.

In first half 2025, the mBank's operating cost rose by 15% year-over-year. The main driver was a higher contribution to Bank Guarantee Fund, reflecting increased payments to the resolution fund and reinstatement of charges to the deposit guarantee scheme. Excluding BFG contribution, operating costs rose by 10.8% year-over-year. Staff-related expenses increased by nearly 12%, driven primarily by a rise in headcount along with a base salary adjustment. Material costs increased by 7% with the largest rise in IT, marketing, consulting and security. Depreciation was up by 13%, reflecting investments in ongoing and completed projects. Finally, our efficiency was excellent with the normalized cost-to-income ratio maintained below 30%.

Now let's move on to the cost of risk. As you can see, it remains low, reflecting the high quality of our loan portfolio. Our customers continue to demonstrate a good payment discipline, supported by favorable macro environment. Cost of risk after first half stood at 46 basis points. The resilience of our asset quality is confirmed by a strong decrease of our NPL ratio to 3.5%.

On the back of all these developments, the mBank net profit for first half 2025 reached PLN 1.7 billion, over 2x higher than last year. At the same time, excluding the noncore segment, the mBank's net profit reached PLN 2.8 billion. In Q2 alone, net profit rose 36% quarter-over-quarter to PLN 959 million. Consequently, the mBank's return on equity improved to 19.9% in Q2 and ROE of our core business stood at 34.1%. The mBank's return on tangible equity reached 25.3% and 22%, respectively, in Q2 and the first half of 2025.

Now let's discuss our capital position. On an annual basis, our own funds increased by 17% and reached PLN 17.9 billion, driven by retained earnings and the issuance of AT1 capital. In June, we successfully issued Tier 2 bonds in the amount of EUR 400 million, which has not been included into own funds yet. After obtaining the consent from the Polish FSA, the issued subordinated bonds will improve the total capital ratio by 1.4 percentage points. At the same time, our total risk exposure amount rose by 28% to PLN 120 billion. This growth resulted from our strong business growth as well as regulatory changes, including implementation of CRR in Q1 2025. Consequently, at the end of June 2025, our CET1 reached 12.8%, Tier 1 capital ratio of 14% and the total capital ratio of 15%. These levels provide comfortable buffers above the Polish FSA minimum requirement.

Let's move to a summary of legal risk related to Swiss franc mortgage loan portfolio. Slide 12 shows the positive trends are continuing in this area. First, in Q2, we significantly -- sorry, in Q2, we signed nearly 2,700 settlements with Swiss franc borrowers, bringing the total number of settlements to over 28,700 as of the end of June and currently, we have almost 30,000 such settlements. Settlements offered to borrowers involved in the legal disputes contributed to a reduction in the number of court cases. Second, Q2 marked a sixth consecutive quarter of declining inflows of a new Swiss franc related lawsuit. This decline was driven by a lower number of cases relating to active loan contracts. The number of new cases regarding repaid loans still remained at around 500. And third, the number of pending court cases continue to decline across both active and repaid loan contracts.

In first half 2025, we managed to reduce the risk related to FX mortgage portfolio even further. As shown on the left-hand side, the balance sheet value of Swiss franc mortgage loans dropped to only PLN 127 million and the share in the loan portfolio fell to just 0.1%. At the same time, number of active contracts declined by over 88%, driven by 35,000 repaid contracts, 11,800 contracts closed after the final court rulings and 28,700 contracts settled with clients. As a result, at the end of June, the number of active Swiss franc contracts stood at 10,000. In Q2, we booked PLN 544 million legal risk provisions, bringing the total amount of FX-related risk cost since Q1 2018 to PLN 17.7 billion, roughly equal to mBank's own funds. Q2 was the sixth consecutive quarter of declining legal risk cost.

As our current strategy horizon is coming to the end, we would like to emphasize that we deliver all financial targets that we set in 2021. In September, we intend to announce a new strategy with an updated set of targets for 2026 to 2030.

Now let me summarize the key takeaways after first half of 2025. We maintained a strong momentum in both lending and deposits with annual growth of 10% for both categories. This translated into further gains in market shares. Our reported net profit increased and return on tangible equity exceeded 20%. This performance reflects our robust core revenue generation, industry-leading cost efficiency and the prudent credit risk management. The successful issuance of subordinated bonds will further strengthen our capital base, enhancing financial stability and supporting sustainable growth. We have also made steady progress in legacy Swiss franc matters. Settlements continued at a healthy pace and litigation volumes declined, enabling our gradual reduction in legal cost provision.

With this, I hand over to Pascal, who will discuss the Q2.

Thank you very much, Cezary, and a warm welcome also from my side. Let me continue with highlighting our exceptional performance in Q2 on this slide, Slide 17. mBank Group delivered its strongest quarterly results to date, and that means achieving record revenues, achieving record operating profit and a record pretax earnings. Total revenues reached PLN 3.2 billion, marking a 5.5% increase quarter-over-quarter and a 10.6% rise year-over-year. This was driven by solid growth in net interest income, which benefited from a larger loan portfolio and improved derivative results.

While the net interest margin edged down to 4.12%, our core lending and deposit activities remain resilient and continue to support our growth. Fee and commission income surged by nearly 16% quarter-over-quarter, driven in part by a one-off PLN 43 million fee from our strategic partnership with UNIQA. Excluding this, underlying fee growth was still very strong, 7%, supported by increased activities in payment cards, FX transactions and credit-related services. The net trading and other income rose by nearly PLN 30 million quarter-over-quarter, mainly due to a sale of our real estate on Królewska Street in Warsaw.

Looking ahead, revenue performance will, of course, depend on the interest rate trajectory. And currently, we assume a 50 basis points cut by year-end. Therefore, we expect now full year revenues to exceed PLN 12 billion and including then a surpass of our 2024 results.

On the cost side, we maintained discipline, keeping our cost-to-income ratio below 30%. While total costs rose 8% quarter-on-quarter, the main drivers are seasonal marketing and IT investments. In the second half, we expect further increases, particularly in personnel costs, lifted by recruitments and spending related to our strategic initiatives. Based on the 2 trends, our cost-to-income ratio is on the upward trajectory, but we will stay for the full year below 35%. Loan loss provisions declined sharply by 22%, reflecting a 50% reduction in the corporate segment provisioning. However, we keep our view as current geopolitical situation is uncertain and prepare for potential weakening. And therefore, as a result, we maintain our full year cost of risk guidance of around 70 basis points.

The legal risk costs related to FX loans continued their downward trend as said by Cezary, PLN 544 million, and this marks now the sixth consecutive quarter of declining legal risk provisions, a trend that we have announced and is expected to continue. All of this translates into a net profit of PLN 959 million and a return on tangible equity of around 25%. These results underscore the strength of our diversified business model and our ability to deliver value in a changing rate environment.

And now turning to Slide 18, and this is something we are at mBank particularly proud of. 6 months after establishing the AT1 instrument for the Polish market, we became also the first bank in Poland to conduct a public issuance of Tier 2 to international markets. The EUR 400 million issuance was met with an overwhelming demand, 9x oversubscribed with a EUR 3.6 billion order book from over 200 investors across Europe, Asia and the Middle East. This allowed us also to tighten the spread by 40 basis points versus initial guidance. It is the largest euro Tier 2 transaction from CEE region in the past 5 years. And this transaction not only strengthened our capital base, but also shows that investors have confidence in our strategy and in our financial resilience.

Finally, let's take a look at our outlook and the remainder for 2025. As I already was saying, revenues supposed to exceed PLN 12 billion and surpassing 2024 levels. Our capital position will be further reinforced by the inclusion of the Tier 2 instruments and a planned securitization for the second half of the year of our corporate loan portfolio. We expect above-market loan growth in both segments to be continued. And importantly, we believe 2025 will be the final year in which FX mortgage-related legal risk materially impacts our results.

So in summary, we are well positioned to deliver sustainable growth, maintain strong profitability and continue creating value for our shareholders. And let us together now conclude the presentation with an invitation to all of you an invitation to our Capital Markets Day on the 23rd of September in which we are presenting our next strategy cycle, and we would be delighted to host you at our event.

Thank you for the attention, and now we are looking forward to your questions.

Thank you very much, gentlemen. Let's start the Q&A session. The first question is to Marek. What was the cause of 0.5 percentage points decrease of NPL in corporate business segment?

Very good point. Thanks for that question. That decline of corporate nonperforming loans is actually driven by a number of factors. First of all, is a strong increase of the corporate portfolio to start with, that was growing by PLN 2.5 billion quarter-on-quarter that improves the denominator, but also there was an impact on nominator because we have seen a decline in impaired corporate loans by nearly PLN 300 million, which was supported by the sale of nonperforming corporate loans by over PLN 100 million combined with successful restructuring activities. So all in, we are working both on the nominator and the denominator of that figure, successfully bringing 3.5% only.

Next question, does mBank meet SOT NII and long-term funding ratio requirements?

Yes. Let me take this question. So I'm starting off with the long-term funding ratio. And as you know, we are one of the most frequent issuer into the markets also shown now recently. And I just want to announce that this is nothing of a concern for us because we already meet today the thresholds, which come into place end of 2026 on the long-term funding ratio. And a similar answer to SOT NII because also here, we meet very comfortably the thresholds. So also something which is not a concern from our perspective.

Okay. Can you give us some -- sorry, not this one. What is the outlook for net fees and commissions in upcoming quarters?

Yes. On the net fee and commissions, as we have announced since a few quarters, we now see that our business model is continuing in terms of delivering step-by-step further fees. And now we have seen a quarter which was extraordinarily good. And I also explained it was driven by a one-off. So if you would exclude this one-off of UNIQA of around PLN 40 million, we expect to exceed also the next 2 quarters, the PLN 500 million fees, and it should be then a positive contribution step by step.

And the next question, the same question about the outlook for operating expenses in upcoming quarters?

Yes. On the operating expenses, we have guided that it will further be on the rise due to especially our additional demand for colleagues who support us, especially in the IT, but also in the sales force, and that will increase the operating expenses forward-looking. Nevertheless, as we also guide that our business is very well developing, we see our cost-to-income ratio very much, I would say, competitive and keeping our very good position, and we expect that the full year will stay below 35%.

Next question from Kamil Stolarski. What is your opinion about attractiveness of Polish zloty mortgages for banks? Some banks, for example, BNP, Millennium seem less willing to originate mortgages.

So in our opinion, just being the big universal bank without offering mortgage loans, it's almost not possible. So we believe that the product itself is attractive and it's connected with a future cross-selling to our customers. But of course, we very carefully observe a legal environment because this is a Polish phenomena that we are not afraid of credit risk in terms of mortgage risk, we are only thinking about the legal risk. And -- but we still believe that the worst is behind us and Swiss franc saga is going to the end. And we also very carefully look at [indiscernible] cases.

But up to now, we believe that there is not an interest to anybody, especially country and society to causes financial crisis, and we see the full support from state, from supervisory institution. And that's why we believe that we will continue -- but if it is a core product and without offering the mortgage, we will see a huge churn. And after we spend the money for acquisition of customers, we will lose them to competitors. So for us, it's a core product in our offer, and we are going to continue.

Can you give us some details about salary adjustment mentioned before?

So just a slight increase, which still we had quite significant inflation. So it was just only -- and we always do something that we spread our increases for 2 years. We are not doing everything in one shot. So it was, I would say, punctual increases with -- just to come up with the inflation level, but not for everybody equally, but only for the most valuable employees. So this was a normal increase, which we, in some amount experience each year.

Okay. Next question about K1 volumes. Is the level of K1 volume sustainable rebound in Q1? Or was there any extraordinary effect?

In volumes, in K1, I believe that we are at the beginning because for these many years, the K1 segment was artificially reduced by us, especially the lending activities due to our equity constraints. And as we said now once we solved equity problem in our bank and also reduce the Swiss franc risk, we want to grow in terms of market shares. And this is not concentrated on a specific segment or a group of customers. We just would like to grow both and enlarge our market shares in each categories and each segment. So that I believe that we will continue.

Next question on capital impact and risk-weighted assets. Is there anything special in the second half outlook for risk-weighted asset growth for the second half of 2025?

Yes, this is the one for me. So basically, in first half of 2025, we had implemented a number of changes driven by regulatory requirements, and that was a mix of CRR III implementation that led to around PLN 3 billion increase in our risk-weighted assets. And there were also some minor changes coming into the internal models on the back of supervisory recommendations coming from both KNF and ECB. As you may recall, we are on the group-wide set of internal models for credit risk.

And as it comes to the outlook for the second half of 2025, we do not expect anything material at this stage, but also please be mindful that we remain in the decision process with authorities on some model changes related to the implementation of certain recalibrations in the definitions of default. And as typically comes with such a regulatory approval, there is some uncertainty that is related to what the regulators may ask us to do as it comes to model changes. But a part of that, we do not expect anything else than that. And at the same time, the timing and the details of that supervisory decision remain at this stage, uncertain.

Was effective tax rate a bit higher than usual in the second quarter?

I mean, if you compare it, obviously, you see that it's a bit higher. But here, I want to make 2 statements very strong. So first of all, if you would deduct the special item of Swiss franc from our side, which is very much distorting the ETR, then a fair assumption of the ETR for us is, as for most corporates around 25%. And while items we have on our P&L, especially the Swiss franc in the vast majority, not tax deductible, you see then the distortion happening in our ETR. And for sure, on our side, the biggest one is the FX loans, which are distorting. So nothing extraordinary to report on this quarter, but just an explanation why our tax rate is fluctuating and driver is Swiss franc mortgage loan legal risk.

Any other one-offs in fees in the second quarter?

No, in the fee side, we see just a trend, I would say, from all our businesses, nothing which extraordinary like we would have had with UNIQA, which was around PLN 40 million is they're repeating. It's our flow.

Can you provide a rough 2026 outlook on revenues and target loan growth?

And here, we invite you to our Strategy Day on the 23rd of September, where we also will give you then -- next to our strategic cycle together then with the strategic cycle and ambition level for the next years.

Does the bank make provisions for unauthorized customer transactions, case Millennium and provisions for [ Escaben ]? If so, how much?

Okay. This is the one I will take. So on unauthorized transactions, we have created roughly PLN 21 million of provisions for the potential refunds to the customers for past unauthorized transactions. And we are in the process of discussing with authorities with respect to the binding decision for the proceedings. As of now, this provision amount corresponds to the terms that we have included in our application to the authorities. And as it comes to the second part of that question that is free loan sanction, we are creating provisions for individual cases. As it comes to first and second quarter of 2025, we have created PLN 6.8 million of provisions in Q1 and PLN 5.8 million of provisions in Q2 for free loan sanction. And the overall amount for free loan sanction provisions stands at PLN 34 million as of now.

What is your take on outlook for savings and investment products? Deposits keep growing visibly faster than loans. What changes do you anticipate for brokerage business?

So I believe that in terms of the dynamic, the dynamics are very similar. Of course, deposits are bigger than loans in our balance sheet. So in absolute values, yes, that's right. But we are gradually shifting from this -- that we collected more deposit than loans. As we said, the last 4 years, we were in a capital constraint. So it was very difficult to grow in terms of loan book with the same speed like in terms of deposits. But now we try to change it. Of course, there is also the market, and we have to look at the macro aggregates that still deposits are growing in Poland relatively faster than loans. And this is also what we need to bear in mind.

But of course, we would like to have a little bit higher loan-to-deposit ratio than 65%, and this is what we will see in the bank in the future. In terms of brokerage business, I believe that -- in terms of the acquisition of new customers and also from activity that required on our platform, we are very satisfied. So in terms of brokerage house, we just want to continue in the same direction in we are because also the product offer is complete. So that -- we don't see any changes in front of us in terms of a brokerage hub.

Can you please comment on the profitability of your contract for difference product?

Yes. Here, we are not different than, I would say, other market participants. So with this, we would keep it.

And I think the last one, what is your view on competitive environment now? And what do you think about as a group transaction with Banco Santander. Is it going to change the landscape?

In my personal opinion, not because the Santander is because it still hasn't changed the name. So a very efficient bank. And we believe that -- as they state also a very reputable bank. So it is rather the change of heads between 2 groups. And -- but on operational level, this unit, which we still call Santander Polska will be the same efficient that it used to be in the past. So for us, it's not significant change, maybe just in terms of a small group of Spanish and German/Austria customers, there will be something which we need to look carefully. But generally, we expect that it will continue more or less as it used in the past.

Thank you. It was the last question. So thank you very much for your questions and attention. And we hope to see you in September. Have a good day.

Thank you very much.

Thank you very much.

See you soon.

Hi, Pascal. Nice to see you again, and hi to the new face at the table, Karol.

Hi to you both.

Very good to be here. And it's great to have you, Karol, with us today. Karol, who don't know him, is our Head of Treasury and Head of IR. And he and our teams just made history in the second quarter by issuing the first Tier 2 out of Poland into international markets, and that's definitely a story to share today.

Good to have you both here. So Karol, what was so special about this transaction?

So in June, we executed the first ever broadly distributed euro Tier 2 transaction out of Poland. It is also the largest euro Tier 2 from the CEE region in the last 5 years. We had an order book of EUR 3.6 billion for a EUR 400 million transaction, implying an impressive 9x oversubscription. We had the participation of more than 200 investors in the transaction, and it is great to see that the investor work that we're doing is being appreciated.

So all in all, a great success for us at mBank.

Sounds very good. And Pascal, what about the highlights of the second quarter from your point of view?

Before I go into the highlights, a huge thanks to you, Karol, and our teams. This was a tremendous effort and a great success. So thank you very much. And also thanks to all the investors who have participated and put the trust in us. This is super appreciated.

Now coming to the quarter. The 3 main observations in the quarter. First of all, we see our business is expanding. We are growing our loan book 10% year-on-year, and this is resulting into additional market shares. And that's exactly how we want to have it and therefore, really great news.

Second, with all this, we maintain our best-in-class efficiency with a normalized cost income ratio of below 30%. And last but not least, this translates into a decent profitability. We exceed 20% return on tangible equity despite additional bookings for our Swiss franc mortgage loan issue. And putting the Swiss franc mortgage loan issue into focus, we saw now the sixth consecutive quarter of lower impact than the previous quarter. So a clear sign that the risk is going down.

And what can you tell us about the second half of the year?

The second half of the year, I'm starting off with the guidance change. We improved our guidance on the total income. We expect to exceed EUR 12 billion based on our great success in our business model, which is supposed to be continued.

And then I want to focus on 3 things which we maintain. We aim for further business expansion. So we want to grow market share. Secondly, we want to strengthen our capital base further, therefore, and that means we conduct our fifth securitization in the second half. And thirdly, we expect that this is the last year of a significant P&L burden on the Swiss franc side. And to date, we have around 30,000 settlements achieved, and that's a great basis.

To conclude our second half of the year, I want to invite all of you to our Capital Markets Day on the 23rd of September. And here, we talk about our strategy, and we would really appreciate if you take the time and make the effort to join us there.

Great to hear. And thanks a lot, Karol and Pascal and see you next time.

Thank you very much. Have a great summer break, and see you next time.

Thank you.