mBank Aktie

We are really happy to share our results today.

The headline message is we are not just simply growing quickly, we are growing profitably. After 9 months of '26, the evidence is there. We have gained market share across all our key products. We've delivered record earnings, and we further strengthened our capital position. I will begin with the balance sheet on Slide 4. The figures on this page illustrate the strength of our franchise on both sides of the balance sheet. On the left-hand side, gross loans increased by almost 18% year-on-year to EUR 164 billion.

This growth clearly outpaced the market and drove further gains in market share. In the third quarter alone, gross loans increased by more than EUR 10 billion. This was the highest quarterly increase in our history. The right-hand side shows equally strong momentum in customer deposits. Our deposit base grew by 19% year-on-year to EUR 255 billion, supported by sustained inflows into current and saving accounts. So overall, this demonstrates the strength of our franchise and our ability to grow the business in a balanced and sustainable way. Slide 5 shows how this balance sheet growth translates into revenues and operating efficiency. The revenue chart on the left provides the clearest starting point. Total revenues in the first 9 months reached the already strong level recorded a year ago. This was achieved despite a significant less supportive interest rate environment.

The average NBP reference rate was around 1.6 percentage points lower than in the comparable period. Strong business volumes supported us to offset the resulting pressure on net interest income. And importantly, after reaching its low point in the second quarter, our net interest margin began to recover in Q3. The chart on the right shows that we combine this revenue resilience with disciplined cost management.

The normalized cost-to-income ratio stood at 31.6% -- and the key takeaway, therefore, is the strength and scalability of our operating model allows us now to generate record revenues even in a less supportive rate environment. Slide 6 brings us to profitability.

Strong operating performance translated into record profitability. Net profit for the first 9 months reached almost CHF 3.1 billion, an increase of 24% year-over-year. And this is the best 9 months in our history. The improvement was supported by the strong underlying performance of our business and also by the significant reduction of our Swiss franc legal risk costs. At the same time, we absorbed a higher fiscal burden following the increase of the corporate income tax in Poland in 2026. But despite this headwind, return on tangible equity exceeded 21% from 20% a year earlier. And this brings me now to capital on Slide 7.

Growth only creates value if it is supported by a strong balance sheet. And who could know that better than we, we have been on a diet during our Swiss franc times. Our capital position remains solid with comfortable surpluses above regulatory requirements and ample capacity for further growth. Our capital position was supported by the inclusion of the part of the first year of the earnings and by the risk-weighted asset relief of the generated securitization we completed in August. The EUR 250 million AT1 issue completed in September was already reflected in our MREL position, but is not yet included in own funds at quarter end. Once recognized, it would increase the Tier 1 ratio by approximately to 14.5% on a pro forma basis. Overall, we remain comfortably capitalized, and this provides the capacity to fund further profitable growth and supports our intention to resume dividend payments. The commercial impact of this growth is visible on Slide 8. The market share indicators show continued gains across all our strategic product categories. The strongest progress was in household mortgages, where our share increased by 1.1 percentage points in just 1 year to 9.7%.

And these are not isolated quarterly movements. They really reflect the sustained strengthening of our competitive position and a tangible progress towards our ambition in 2030 of achieving at least 10% market share in every of our key products. And let me now move from the 9 months overview to the third quarter performance in detail. And Q3 confirms that we are not only growing rapidly, but doing so profitably, efficiently and on the foundation of our very resilient balance sheet. And with that in mind, let me now turn to the P&L on Slide 10 and explain the main drivers. Beginning with revenues, total income rose by almost 4% quarter-on-quarter to EUR 3.25 billion. Net interest income increased by 9% to a record EUR 2.7 billion. The increase was supported by strong business volumes, disciplined deposit pricing and improving asset yields. Importantly, and in line with our guidance, net interest margin recovered by 10 basis points to 3.57% after reaching its low point in the second quarter. Net fee and commission income also reached a record level, increasing by 4.4% quarter-over-quarter to EUR 594 million. Consequently, the reported cost-to-income ratio improved to 29.1%. Loan loss provision and fair value changes increased to EUR 261 million, bringing the quarterly cost of risk to 67 basis points. And this increase was primarily driven by one single corporate exposure, and I will return to this topic on Slide 16.

At the same time, legal risk costs related to mortgages declined to EUR 78 million. And all these together gives us a record quarter, a record net profit of EUR 1.1 billion. Having reviewed the P&L, let me now turn to the commercial engine behind it, new lending business. Starting with mortgages, the upper left chart shows the most important development on this page. Mortgage sales reached a record EUR 8.2 billion in just 1 quarter, an increase of 33% quarter-over-quarter.

Growth was driven primarily by mBank Poland, where production increased by more than 40% quarter-on-quarter and was further supported by our Czech and Slovak operations. Mortgage production reached all-time highs, both in Poland and across our international branches. The share of fixed rate mortgages continued to increase from 59% in July to 72% in September. At the end of the quarter, fixed rate products represents around 48% of our outstanding PLN retail mortgage portfolio. And moving to the left chart.

Non-mortgage sales remained strong at EUR 4 billion. Overall, retail loan production reached approximately EUR 31 billion in the first 9 months, an increase of around 47% year-over-year. On the right-hand side, corporate lending production amounted to EUR 14.2 billion in Q3. The quarter-on-quarter decline followed an exceptionally strong Q2. On a 9-month basis, production increased by 19% to EUR 41.5 billion. Production increased across all major corporate categories and all client groups.

So that confirms our growth is broad-based and scalable. And now very important, there are 2 considerations which I would like to explain when looking at this expansion. First, we are not just pursuing volume at any expense of any value. Growth is concentrated in established client relationships and in businesses that meets our return and margin requirements. And the second observation is that this growth is highly scalable. Our predominantly digital retail and corporate processes enable us to absorb this materially higher volumes without a corresponding increase in headcount. This strong production is now very clearly visible in the loan portfolio on Slide 12. If you focus on the bar chart on the left, gross loans increased by 6.5% during the quarter and are almost 18% higher year-on-year.

Mortgages were the strongest contributor, increasing by more than 10% quarter-on-quarter and by 24% year-on-year. Other retail loans also continued to grow. And as a result, our core retail portfolio, excluding the noncore book, expanded by 8% during the quarter and by almost 20% year-on-year, reaching now EUR 90 billion. The corporate loans increased by almost 5% quarter-on-quarter and by over 16% year-on-year, reaching EUR 72.8 billion. And the market share indicators on the right confirm that this growth is really creating value for us. We gained share in household loans, PLN mortgages and enterprise lending.

Slide 13 completes the balance sheet picture by showing the development of our customer deposits and investment products. The chart on the left shows that customer deposits increased by 2.5% in Q3 to almost EUR 255 billion. On a year-on-year basis, growth reached 19%. Retail current and savings accounts were once again the principal driver of growth. So these inflows support our favorable funding mix and help us maintain disciplined funding costs. And at the bottom of the page, you can also see the continued expansion of our investment offerings. Assets and investment funds distributed through mBank reached EUR 18.9 billion, including EUR 6.2 billion managed by us by our MTFI.

During the first 9 months, MTFI's assets under management increased by EUR 1.7 billion, driven by positive net inflows and also solid performance of our investments. Overall, the deposits and investment products confirm that our customer relationships are further deepening and provide a strong and diversified funding base for our continued profitable growth journey. With loans and deposits covered, Slide 14 links balance sheet expansion to revenue and margin development. So please focus on the income chart on the left.

Total income increased by nearly 4% to a record EUR 3.25 billion. The main driver was net interest income, which increased by 9% quarter-on-quarter to an all-time high. The most important development, as I already highlighted 2 times, is visible in the margin chart on the right. Net interest margin recovered to 3.57%, reversing the downward trend of the previous quarters. The improvement was supported by higher average yields on loans and debt securities together with a higher share of loans and interest-earning assets. Net fee and commission income also reached a new quarterly record, up 4.4% from Q2. Payment card fees were the main contributor, supported by higher card usage during the holiday season.

Net trading and other income was negative, mainly because of the special items related to customer protection. In Q3, we recognized along EUR 112 million of customer protection related costs and closed with those bookings open risk in the field. This amount includes EUR 65 million related to the UOKiK proceedings concerning modification costs. We did not receive a fine yet, but based on fines in the sector recently received, we derived our expectations.

Furthermore, we included EUR 14 million relating to unauthorized transactions in which we found an active agreement with UOKiK in Q3. So both cases are expected to be economically closed. We also recognized EUR 33 million of legal risk provision related to free loan sanction. And as this is a broadly debated risk in the sector, allow me now to provide our color of the risk assessment. Free loan sanction remain a source of concern for us and for the banking sector, and everyone is watching it very closely. However, our exposure is significantly lower than that of many of our peers. The loan portfolio that we potentially see affected represents today less than 1% of our total retail book. And there are a few reasons, but 2 I would like to mention why this is the case. The first one, we stopped originating the product in question in 2023, and we were among the first banks doing that. Second, our presence in the non-mortgage lending segment is smaller than our overall retail market share.

And it is also important to look at the litigation track record. To date, we have won the vast majority of the lawsuits filed against us. Nevertheless, we have built legal provisions for potentially future negative rulings. And now difficult to move away from this special topic to the central message back on the slide. We have seen in Q3 record net interest income, record fee income and a recovery of net interest margin. And let me now turn from revenues to the cost base on Slide 15.

Our priority remains here every time unchanged to fund growth and innovation while preserving the tight control of our cost base. And in Q3, operating costs remained broadly stable quarter-on-quarter despite our continued investment in the franchise. And looking at the main cost categories, there are 2 things noteworthy. First, our personnel expenses declined by 4.5% quarter-on-quarter, mainly due to the release of provisions for outstanding holiday entitlements, so a clearly one-off driven effect. Second, our amortization by contrast increased by 14.6%, reflecting faster amortization of selected systems. For the first 9 months, total costs increased by 7.5% or if you exclude BFG contribution by 7%, and this mainly reflects higher personnel expenses and continued investments in technology and security.

Our strong revenue generation, combined with this disciplined cost management resulted in a cost-to-income ratio of 29.1% in Q3. And for Q4, we expect a seasonal cost increase, and we positively update our guidance of the cost-to-income ratio. We expect to stay below 33% cost-to-income ratio in the full year. From efficiency, let me now turn to credit risk on Slide 16.

In Q3, impairment losses increased to EUR 261 million, so 67 basis points cost of risk. And this increase was driven primarily by a significant provision for a single defaulted corporate exposure in the construction sector. So no broader deterioration in the portfolio quality. And as a result, the cost of risk in the corporate segment increased to 89 basis points. Excluding provisions related to this single exposure, the group's cost of risk would have been approximately 40 basis points in Q3, while the corporate segment's quarterly cost of risk would have been remained below the Q2 level. On a 9-month basis, the group's cost of risk would have been around 10 basis points below the reported figure. The retail portfolio continues to perform very well with cost of risk remaining at 50 basis points despite sustained loan growth. So overall, despite the increase in Q3, the cost of risk remains below our through-the-cycle assumptions, and we, therefore, reiterate our full year '26 guidance of approximately 55 basis points cost of risk.

This sound underlying risk profile is also visible in the portfolio quality indicators on Slide 17. Across the page, the indicators point in the same direction. The group's NPL ratio improved to 2.9%, supported by portfolio growth and the sale of impairment loans. Asset quality improved in both major business segments and the Polish zloty mortgage portfolio continued to perform particularly well. The NPL ratio for individual mortgages declined further. Coverage levels remained prudent. Total coverage, including Stage 1 and Stage 2 provisions increased, while the coverage of defaulted exposures remained close to 50%.

So these metrics reinforce our confidence in the quality and resilience of our overall portfolio loan book. Having covered the developments in all important account lines already, we skip the next slide and close the financial review with capital management, starting with Slide 19. And the central message is that we manage capital proactively using our broad toolkit to support growth and optimize our capital structure.

During Q3, we completed 2 landmark transactions. In August, we executed a synthetic securitization of EUR 1.1 billion commercial real estate loan portfolio. This was the first CEE transaction backed exclusively by a commercial real estate lending package. Across our 6 securitization, the cumulative reduction in risk-weighted assets reached year-to-date EUR 8.6 billion.

In September, we successfully placed our EUR 250 million AT1 transaction, and this was the first euro-denominated AT1 issuance by a Polish issuer. Demand was very strong, and we were very happy, 7x oversubscribed and very broad allocation. And we hope to have opened the market for more Polish issuer to support the growth of the Polish economy in the end. The transaction was already reflected in MREL ratio at the end of September and its recognition in Tier 1 capital remains subject to relevant approval process and is expected in Q4. The third element on the right-hand side of the planned transition of the -- on the right-hand side of the page is the planned transition to the foundation internal rating-based approach. In September, we received a non-objection from the Polish FSA and the implementation, therefore, is planned for Q4 2026 and is expected to reduce risk-weighted assets by approximately PLN 10 billion in Q4.

Collectively, these actions optimize our capital structure and expand our capacity to finance profitable growth. Turning to Slide 20. You see that our capital position remained comfortably despite the 2% countercyclical buffer comes in at the end of this quarter.

Risk-weighted assets increased only marginally during the quarter as the impact of strong business growth was largely offset by the capital relief generated by our securitization. And given the recent volatility in global and Polish government bond markets, let me also provide some context on the sensitivity of our capital position to movement in bond yields. The average duration of our treasury bond portfolio is below 2 years and shorter than the market average, which limits the impact of rising yields.

At the end of September, the negative valuation of debt securities measured at fair value through other comprehensive income amounted to only EUR 29 million and was therefore fully immaterial to our capital position. This limited sensitivity reflects the structure of the portfolio.

Approximately 90% of the bond interest rate risk managed by us in the treasury is held in portfolios classified as hold to collect, so in line with our intended investment strategy. And here, our capital base, therefore, remains very robust with ample headroom to support business expansion and our planned shareholder distributions. And now let me summarize the financial review with our 4 messages of the quarter.

First, growth. Loans increased by 18%, deposits by 19% year-on-year. In Q3 alone, the gross loan portfolio increased by more than EUR 10 billion, the highest quarterly increase in our history. This was broad-based and translated into further market share gains. Second, profitability. We delivered the highest net profit in our history, record revenues, all-time highs in both net interest income, net fee income and the rebound in the net interest margin. Third, strategy execution. We continue to develop solutions and services that enhance the client experience and simplify everyday banking while maintaining best-in-class efficiency and disciplined risk management. And fourth, capital capacity. retained earnings, securitization and the AT1 issuance provide a strong capital foundation for continued growth and future shareholder distributions. And finally, let me set these results now in the context of our full year outlook. Following our strong performance in the first 9 months, we expect full year revenues to be around 2% above the 2025 level. We expect the cost-to-income ratio to remain below 33%. We will continue to manage credit risk prudently as the business expands and expect 55 basis points cost of risk for the full year.

And we expect business volumes to continue to growing faster than the market. So to sum it up for this quarter, we enter the final quarter with record earnings and improving margin and robust capital position, and this gives us all confidence in delivering our full year objectives and continuing to create value for our shareholders. And with that, I'm now handing over to Marcin for the economic outlook. And afterwards, we are happy to take your questions.

So we are now operating in a quite strong economy. GDP growth is hovering around 4%. We estimate that it's a little bit above the capacity of the economy, so output is positive. It is -- we are now close to the top of the cycle. So the next quarters are likely to bring a little bit less of economic growth.

We estimate that even though this year, GDP growth is going to amount to 3.9%. Next year, it will be closer to 3%. The main reason for that is slowing investment activity and also slower consumer activity. But as for now, consumer confidence indicators stay high. We are not seeing any changes in the labor market.

So labor market is very, very stable. Wage growth is amounting to 6% nominally. So it's also more or less consistent with price stability in the long term. However, recently, the economy was struck with a cost shock driven by oil prices and most likely also in the coming months, food prices. And right now, this shock is going to elevate consumer price inflation to more than 4% at the start of 2027. And this elevated growth of prices is going to last at least several months.

So there is a high chance for this to translate into broader price pressures. In that vein, we expect MP's Monetary Policy Committee to increase interest rates by 75 basis points in order to keep core inflation stable. It is now running at 3%.

Also, in this quite strong economy, we are seeing that the monetary aggregates are strong as well. Credit activity is going quite fast, deposit activity as well. But as the economy is slowing down next year, we also expect credit growth to slow down as well, but still the growth rates are going to be decent. Government bond yields have risen of late. There are at least 2 culprits for that. So first of all, higher inflation and expectations of higher rates. Secondly, we are seeing also asset swaps that have widened recently, reflecting partially higher sovereign risk.

And last but not least, we are seeing that in the international market, there is more and more competition going on for capital also from the part of enterprises involved in artificial intelligence investment. So this is also putting pressure on yields right now. In these circumstances, zloty is under slight depreciation pressure. As I'm speaking, we hit PLN 4.40 in Europe. This depreciation pressure may be kept in the next few months. So this is also one of the reasons why we think that MPC is going to decide to increase interest rates just to keep this depreciation pressure in Czech.

Thank you very much, Marcin and Pascal. And now we start our Q&A session. First, the first question on the current sensitivity of the NII to a 100 basis point change in interest rates.

Thank you for the question. So it has barely moved from our Q2 information. So we are talking about, again, PLN 700 million for 100 basis points move in all rates. And what I stress it every time as we also have operation in Czech and Slovak, plus also that our business in the corporate segment is U.S. dollar and euro heavy. There is the majority of the PLN 700 million, roughly PLN 500 million related to a Polish rate move and the other PLN 200 million roughly is attached to the other currencies we're working...

Now we have a list of questions from [indiscernible]. So I'll start with Q4 pipeline for corporate lending and -- where should we see your next quarter's level of mortgage origination after such quarter?

Yes, that's a good question. So I mean, for me, what is very important, and I stressed it when we start with the last topic, more than EUR 8 billion of new sales on mortgage loans that is extraordinary. I also said in the speech, the question which comes first is how actually you achieve that. And luckily, this counts for all our businesses, not just for mortgage loans. We're achieving that with our existing clients in the majority. So we know them, and they are taking more and more and more our services and our capacity into consideration. And secondly, how actually can you really get this on the street because obviously, normally, if you increase such strong and on the mortgage loans, it's more than 70% higher production than last year, we are running a very digital operation. So this bank is really as a platform concept built, and therefore, we can cope with that. That means for us, and you have seen that the market high single digit has grown, and we have double-digit growth. Therefore, we are capturing market share. And this is our expectation forward-looking as well. And we don't see from today's perspective, any difference in the latest prints of our new sales that this should fade away. So the conclusion is we expect to grow faster than the market. And here, it means double digit.

So given such loan growth already at this stage, what do you think about 2030 targets?

Our 2030 target is to bridge the 10% in all our core categories. And for us, we have not a clear view when it will happen, but we would definitely want to exceed it. But one other thing is also very important, that was the main message of this quarter. We are growing profitably. So for us, it is not just chasing volumes at any price. If there is not the margin attached to it, which we need to grow profitably from a shareholder perspective, then this is something we would not pursue. But luckily, we are currently seeing lots of opportunities to further profitably grow.

Okay. Now some more detailed questions about our results. Can you explain rising interest income from securities despite visibly lower balance in Q3 versus Q2?

Yes. So the balance of the debt securities has increased slightly between the 2 quarters. So that is actually the explanation to it. And also the NII in general is one more interest rate day in the third quarter versus the second quarter, and therefore, you also get an NII uplift.

What we see in the statements is the decrease of the balance, but the average balance.

The average balance has increased exactly slightly. And that is then maybe not visible on this chart, but it is the fact that we have on average a higher and therefore, also more supportive income based on the portfolio.

What are the costs of the latest large SRT and where are they booked?

So I mean, we are not in detail discussing obviously the cost. How do we derive actually if we do an SRT and if it makes sense for us, we every time measure RWA efficiencies. So how much does it cost us when we securitize a portfolio together with lots of investors. And in this transaction, we had a significant portfolio of investors who were interested to partner with us. And then we compare what is the average we can earn with our different client groups. And this is plenty of headroom. So it is increasing our efficiency to do currently securitization. That has changed also over time because as we started 3.5 years ago with our first securitization, the clear message was that we need to have capital relief because here, we had been under pressure of the Swiss franc legacy risk, and now we are really looking into pure efficiencies.

Can you share your view on 2027 EBIT, especially NII volume growth and cost trajectory?

So as we guided 2026 that we are 2% higher than 2025 in terms of total revenues, that is supported especially by our volume growth and therefore, full and NII trajectory. So we also expect in Q4 higher NII than in Q3. In the fees, we expect that the normally seasoned lower fee in Q4 versus Q3 is also coming in. But extrapolating that into the next year and also into the next years, we expect revenues is growing faster than our cost base. And therefore, net profit is supposed to be in the next year stronger than what we have seen this year. And that is how far we can go currently with our guidances.

Apart from securitization, were there other factors that contributed to the lack of growth in the credit risk requirement despite the increase in the portfolio?

Not other factors which would be massively mentioned. So we really saw an increase of credit risk by our business lines as they grow their customer base. So this was an increase. And on a similar magnitude, we saw the release of the securitizations compensating that.

Do you see any effects of AI adoption on your cost base?

So on AI, that's very interesting. I mean you know us as one of the most digital banks in Europe. So doing a step back from AI in general, and we invested every single year also as we have been under pressure with the Swiss franc environment heavily laying on our back, we invested every single year more in our infrastructure, more in our capabilities of delivering digital services. And that means also here that we are heavily investing also in AI AI-related use cases. We have use cases broadly implemented. We have not obviously every of those use cases entertained externally because there is a competitive edge also to it. But a few of them as we use it in complaints management or even in our finance operation that you can't ask the tool about any of these figures, which makes it very convenient for the CFO to find them in plain language your facts as a result. We are not seeing AI as an efficiency driver. We are seeing NI as an enabler for further growth. So for us, the tools and also the capabilities our colleagues in our house can use is less of reduction cost-wise driven rather than funding the further growth without adding additional colleagues to our journey.

Why did the CET1 reduced quarter-on-quarter, noting just 1% risk-weighted assets growth. What is the pro forma CET1 ratio for Q3 profit? What does the pro forma capital ratio include? And do you expect MREL supply in Q4?

Yes. Starting off with the MREL supply, we are not expecting in Q4 MREL supply, but we are conducting probably next year 2 senior nonpreferred issuances in the amount of total roughly EUR 800 million. We will probably split that in half. And the first MREL supply you could expect from us is around Q1 next year. Coming to the capital trajectory, what we've seen, and this is every time retrospective than done that we include retrospective half year's results in, obviously, our capital ratios. Therefore, the capital ratio has increased every time with a time lag. And that is the, I would say, major answer why we see a slight drop because we have applied that retrospective. If we now would pro forma next to the 1 we have announced in the speech that this would bring us to 14.5% if we pro forma include it. If you would then also on top, add up the currently net profit we have generated in this quarter, this accounts again of 0.5 percentage points.

Can you elaborate on the strong growth in retail mortgages, especially? What are we doing different versus peers, which is helping gain market share?

For us, what we've seen here is that, first of all, we are growing with our clients. And that is the first message that you don't need to entertain externally because if you have the client already in-house and also understand that there would be a demand because we are very well organized in terms of reading our data. This is, for us, the main source of generating new sales, plus that we don't have a limitation in terms of volumes because, as I said, we are working on a platform. And luckily, also the digital solutions we have built here must have a competitive edge as our clients are not complaining when they are supporting us in the transition to give us the mortgage loan even in refinance perspectives.

Can you touch upon competition you are seeing from new DG banks such as Revolut?

I mean, in general, Poland is a very competitive landscape. And the good thing is everyone is also kind of digital operating. And therefore, we have not seen for a long time really new incumbents making an impact. Now for the likes like Revolut, they obviously are here and also gaining clients. That is something we are observing. And also, we find our own solutions, but this is not different to other universal banks where we also see that they have competitive edges. And here also, we try them to find our answer, which hopefully keeps the clients then in-house because for us, the most important thing is that we generate value for our existing clients. Therefore, you see that we are broadening in the ecosystem, have built in our infrastructure, for instance, in the retail environment, something like e-commerce in that the convenience of the clients is high and that the clients stay with us next to typical banking products.

Okay. Now on net interest margin and deposit costs. What is your net interest margin outlook for Q4 '26 and 2027 at stable rates? And how much room is left for further deposit repricing?

So on the net interest margin, as we have seen rebound and this was quite a big rebound of 10 basis points quarter-over-quarter, we expect that this is not yet the end. So Q4 is supposed to be again slightly supportive. But then we are long term, feeling as comfortable between 2.5% to 2.6% of the net interest margin. It every time is an opportunity if interest rates are changing. So under the circumstance of no change, I would keep it with that. And what was the second question?

About further deposit repricing?

I mean on the deposit repricing, you know that we are not an aggressive price strategy here. So therefore, I don't see any further actions to be done on that side.

Then on tax and capital, does your tax guidance assume the bank corporate income tax rate falls to 26% in 2027? And how will you use the about PLN 10 billion risk-weighted assets relief from FIRB between growth and distributions?

Okay. So on the tax side, and this I really would like to stress. If you look into the banking sector itself, and I take our figures, we have an effective tax rate higher than 37%. And this does not include that the banking sector on top of that pays also the balance sheet tax, which is 44 basis points. If you take that together, which is the taxation of the company and you compare the financial sectors of Europe, then we are among the top taxpayers in the financial services.

And that is something where you can do on a short period of time. But if you do that too long, you obviously give a disadvantage into a certain sector and maybe then even have especially when we're talking about the banking sector, a negative effect into the economy. So this is the status quo. And therefore, for me, it is very clear that our base case is that the tax rate as intended in the law is going down and comes back to more normalized levels. So we surely expect that next year, the tax rate is going down from the 30% to the 26% as it was intended. The second topic on...

FIRB.

On FIBB, I mean this is part of our strategy and our capital planning. So there is not that you would say this is a gain we now separately move into either distribution or in volume growth. We manage the capital position in general. And here, we have the target of being on the CET1 at least 2.5 percentage points above the regulatory requirements despite that we want to capture further and further market share growth. And here, it's not changing our assumptions. So we want to further grow faster than the market. We will keep the capital on safe levels, and we intend to pay the dividend next year on the distribution of net profit 30%.

Then a question on consumer loan legal risk. What is your exposure to the CGE ruling on interest charge on noninterest loan costs? And what are the trends in free credit sanction case inflows and your win rate?

Yes. So the win rate, I already said in our speech, the vast majority -- and if I'm talking about vast majority, I mean the vast majority of the court cases we have won. So this is actually a very good news. And the second, and this accounts for E as well as the interest-bearing on fee-related credit. This is for us in terms of risk severeness on the portfolio level, smaller than most of our peers because we stopped issuing this kind of product as one of the first banks in already 2023.

We never had as a bank in our business model, a huge exposure to this cash loan, and this is the loan which is in question-driven product. And therefore, also the impact for us is relatively small. I said that we built in the quarter, and you see it also on one page and here, Slide 14 is visible. We have built legal provisions, but please take the legal provisions as they are. They are for future potential negative rulings. It is kind of a caution instead of that this would be today's negative result.

Do you still expect some risk-weighted assets regulatory relief from the first quarter '27? And is the risk-weighted model update included in the pro forma numbers? -- questions.

So in the pro forma numbers, this EUR 10 billion PI approach is not included because this is then earliest for us implemented in Q4, and we expect to have it fully implemented in Q4, and therefore, the full EUR 10 billion supposed to be in Q4 visible. This is how we guided today. And it will be not an additional effect next year if the EUR 10 billion comes through in the fourth quarter. And on the question, what else is regulatory on the horizon, we don't see anything else currently, which would be significant on the regulatory front, neither negative nor positive on the horizon.

Now the risk costs in the corporate banking, can you talk about how you are managing the risk on the one-off corporate exposure and to avoid similar situations going forward. What were the reasons for this NPL formation? How should we think about any recoveries from this NPL?

Yes. I mean that's part of banking. I just wanted to allude that this spike of cost of risk is driven by one exposure and has nothing to do with any deterioration of any of the sectors. That is actually the core message. We're not talking about single exposures. And obviously, this can every time happen, especially when we're running such a big bank like mBank.

And here, I would not count too much on this one topic. I just wanted to position there is a very resilient portfolio we are having and even more important than the pure cost of risk, and that is how we look into the portfolio development. is that all the KPIs, which are risk-related, NPL ratio coverage ratios are actually improving. And as Martin Mazurek was saying, there's currently on the horizon, nothing from an economic point of view, which would massively deteriorate us. So that is actually very good news, and this is an isolated separate case.

And I think the last question that I see, what was the reason to issue AT1 in euro instead of lot?

So there are a few reasons for it. First of all, we made a zloty trade already, and that was very successful, and that is the vast majority. Then the consideration to go into a next AT1 is because you can fill the bucket of 1.5%. As we are growing as a company, we have the then again, some left room. Therefore, we decided to go out with an AT1.

We've seen that especially in international side, there is massive interest in Polish assets and therefore, also a very competitive pricing. And that was the consideration economically, plus that we said for Poland, it is super important that we further get international investments. And either you invest directly or you invest indirectly in these kind of structures. And that is something where we also took the challenge to do something for the first time. And it is not easy to do something for the first time because you have lots of discoveries. But that was another argument why we said, no, we want to do it because this opens the market for Poland in general.

There is one more question, which came up. What -- can you comment on payout policy?

On the payout policy, dividend policy. So on the dividend policy, we have said that we're starting with 30% and ramping it up to 75%. We have not defined how this ramp-up towards 2030 is exactly done. Here, we also have no new news for us is one thing very important. We are a listed company at the Warsaw Stock Exchange, and we want to generate shareholder value. And we want to obviously come back to normality and to shareholder value.

It is also counted with their regular dividend payments. And for us, coming back into a very strong business model we have used to have and now seeing the momentum, we will start, and we will continue paying regular dividend, and we will start, as I said, with 30% next year. And I don't see currently any objections that this will be not a possibility.

Thank you very much, Pascal. Thank you, Marcin. Thank you, ladies and gentlemen, for your attention and questions, and have a nice day.

Thank you so much.

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.