mBank SA (formerly BRE Bank), set up in 1986, and originally BRE – Bank Rozwoju Eksportu (Export Development Bank), is Poland's fourth largest universal banking group in terms of total assets and loans, and fifth by deposits at the end of September 2016. It offers retail, corporate and investment banking as well as other financial services such as leasing, factoring, insurance, financing of commercial real property, brokerage operations, wealth management, corporate finance and advisory in the scope of capital markets.
Since 1992, it has been listed on the Warsaw Stock Exchange. In 2007 it started its retail operations in the Czech Republic and Slovakia.
The current BRE Bank
CEO
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
is Cezary Stypułkowski.
mBank Group
mBank Group is composed of:
* mLeasing, one of Poland's leading leasing companies
* mBank Hipoteczny, Poland's largest mortgage bank
* mFaktoring, an
invoice factoring business
* mCentrum Operacji, a subsidiary providing back office services to other subsidiaries of mBank Group
* mCorporate Finance, a subsidiary specialising in investment banking services
* mLocum, a real property developer
* mFinanse (formerly Aspiro), a subsidiary providing financial advisory services
* mFinance France
* mElements, a subsidiary specialising in e-commerce and API banking solutions
History of mBank and the Group
* 1986 - founding of Bank Rozwoju Eksportu (Export Development Bank) as a joint-stock company; Krzysztof Szwarc is appointed CEO
* 1989 - BRE is granted credit lines from the World Bank and IFC; BRE Bank becomes a member of SWIFT
* 1990 - privatisation through public offering starts
* 1991 - the Group sets up its first subsidiaries: Biuro Maklerskie BRE Brokers (now mBank Dom Maklerski) and BRE Services (now mLeasing)
* 1992 - debut on the Warsaw Stock Exchange
* 1994 - an agreement on strategic partnership signed with German Commerzbank
* 1995 - the bank launches its Private Banking
* 1997 - Towarzystwo Funduszy Inwestycyjnych SKARBIEC, an investment fund company, is set up
* 1998 - merger with Polski Bank Rozwoju S.A.;
Wojciech Kostrzewa
Wojciech Kostrzewa (; born October 18, 1960) is a Polish manager and entrepreneur, CEO of Billon Group and president of the Polish Business Roundtable (Polska Rada Biznesu), an organization of owners and key managers of the largest Polish companie ...
is appointed CEO
* 1999 - PTE Skarbiec-Emerytura, a pension fund, starts its operations
* 2000 - bank starts operations in the retail banking segment, launching mBank, the first Internet bank in Poland
* 2001 - bank launches its second retail arm, MultiBank
* 2004 – iBRE, an Internet banking system for companies, is launched;
Sławomir Lachowski
Sławomir Lachowski (born 1 January 1958 in Końskie, Poland) is a Polish manager who works in the banking industry in Poland and Central and Eastern Europe.
Education
Lachowski graduated with distinction from the Foreign Trade faculty of th ...
is appointed CEO
* 2007 - foreign expansion of bank's retail operations, the first mBank outlets are set up in the Czech Republic and Slovakia
* 2008 –
Mariusz Grendowicz is appointed CEO
* 2009 – a light version of mBank's website dedicated to mobile phones is launched
* 2010 –
Cezary Stypułkowski is appointed CEO
* 2011 – a mobile version of mBank's Internet banking system for iOS and Android devices is launched
* 2012 - the announcement of "One Bank" Strategy for 2012–2016; mBank launches an NFC mobile payment service (contactless payments) in cooperation with mobile network operators; MultiBank launches a mobile version of its Internet banking system for iOS and Android devices
* 2013 - launch of New mBank transactional platform; rebranding process – the brands of MultiBank, BRE Bank and mBank are replaced by the single, strongest brand - mBank
* 2014 – cooperation with Orange starts with the launch of Orange Finanse, a mobile retail bank; New mBank is launched in the Czech Republic and Slovakia
* 2015 – mBank enters into long-term cooperation with AXA Group; customers of former MultiBank and Private Banking get access to mBank's Internet banking system (the rebranding process ends)
* 2016 – mBank's subsidiaries Dom Maklerski mBanku and mWealth Management become part of mBank; Aspiro changes to mFinanse
Solutions offered by mBank
* Electronic banking system: Since June 2013 the bank has been serving its retail customers through New mBank, a redesigned electronic banking platform. Customers have been offered a number of new solutions, including mOkazje, a discount programme giving access to personalised rebates, and the help of on-line experts available via chat, voice calls and video calls who serve clients in a way similar to brick and mortar branches.
* Mobile banking: In February 2014, the bank launched a new version of its mobile banking platform. The smartphone application gives access to bank accounts, cards, loans, deposits, insurance products, current share prices, currency exchange rates and investment portfolio. It also allows mobile payments (NFC contactless payments, QR code scanning, BLIK payment system) and enables customers to take out loans in 30 seconds and make money transfers using the beneficiary's phone number.
* Reorganisation of the existing network using two types of branches: ''light'' branches giving quick access to basic services, located in shopping centres, and advisory centres, bigger outlets located in office buildings.
Controversial foreign loans involvement
mBank is one of the top three Polish banks that have been granting foreign mortgage loans. Between 2002 and 2014 mBank granted more than 70,000 such loans. A great majority of them are Swiss Franc linked. As a consequence of the
financial crisis of 2007-08
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fin ...
, Swiss Franc has significantly strengthened to Polish zloty. In case of some loans granted by mBank in 2008, their value increased twofolds.
mBank marketed Swiss Franc linked loans as much cheaper to their local equivalents. Indeed, the
LIBOR
The London Inter-Bank Offered Rate is an interest-rate average calculated from estimates submitted by the leading banks in London. Each bank estimates what it would be charged were it to borrow from other banks. The resulting average rate is u ...
rate was lower than the Polish
WIBOR rate. However, when adjusted for foreign exchange effect, the cost of these loans, and especially the amount of the debt, become excessive.
mBank did not inform its clients about the full extent of the risk connected with these loans. mBank management claims it itself did not assess the risk correctly.
mBank received about 7 billion CHF in short-term loans from its parent company Commerzbank to finance its foreign mortgage loans. Initially - in 2006 and 2007 - the loans from Commerzbank were granted with a very low interest margin of 0.15%. However, the margin was increased to approximately 2.0% when they had to be renewed. Since many of the early loans granted by mBank to its customers had their margin of around 1.0%, these loans have become margin negative (i.e. unprofitable) for mBank.
For a number of years mBank was able to manage this loan unprofitability by charging debtors installment fees, so-called "spreads". These spreads were used by mBank to compensate low interest rates. However, in July 2011, the Polish banking law was amended to eliminate such additional payments.
In addition, clauses regulating linkage between Swiss Franc and Polish Zloty in the loan agreements used by mBank were found unfair and included in the unfair clauses register maintained by the Office of Competition and Consumer Protection.
Since the European Council Directive 93/13/EEC of 5 April 1993, contract terms found to be unfair should not bind consumers, the linkage between Swiss Franc and Polish Zloty present in mBank agreements was undermined.
However, mBank has not recognized the validity of this regulation. Therefore, a number of legal proceedings ensued, including a class action lawsuit started by 1,247 debtors.
One of the side effects of the raising exchange rate is growth in the
loan-to-value ratio
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
In Real estate, the term is commonly used by banks and building societies to represent the ratio of the first mo ...
of the foreign loans. Until 2008, the average LTV ratio for mBank's foreign mortgage loans was in the 60s. Later it increased to over 80% and currently stands at 82.2%. Loans with LTV over 80% are deemed more risky, especially when the changes in LTV are not related to the property value but uncontrolled by both bank and debtor factor, such as
foreign exchange rate
In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
.
As of the end of 2015, mBank held the equivalent of around 5 billion CHF of Swiss Franc linked loans and had 3 billion CHF obligations to Commerzbank.
It was announced in July 2019 that
Commerzbank
Commerzbank AG () is a major German bank operating as a universal bank, headquartered in Frankfurt am Main. In the 2019 financial year, the bank was the second largest in Germany by the total value of its balance sheet. Founded in 1870 in Hambur ...
was being investigated by the
European Central Bank
The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's Big Four (banking)#Intern ...
and
BaFin
The Federal Financial Supervisory Authority (german: Bundesanstalt für Finanzdienstleistungsaufsicht, Bundesanstalt für Finanzdienstleistungsaufsicht) better known by its abbreviation BaFin is the financial regulatory authority for Germany. It ...
for facilitating its subsidiary mBank's toxic financial product offering in
Poland
Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populous ...
, as well as for the linked potential tax evasion resulting from
Commerzbank
Commerzbank AG () is a major German bank operating as a universal bank, headquartered in Frankfurt am Main. In the 2019 financial year, the bank was the second largest in Germany by the total value of its balance sheet. Founded in 1870 in Hambur ...
's financing of mBank's CHF-linked toxic financial products.
References
External links
mBank Polish websitemBank Czech websitemBank Slovak website
{{Portal, Banks
Commerzbank
Banks of Poland
Banks established in 1986
Companies listed on the Warsaw Stock Exchange