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 The Warsaw Stock Exchange (WSE) () is a stock exchange in Warsaw, Poland. Founded in 1817, it was located in the Saxon Palace until 1877 when it was moved to the Exchange Building at the Saxon Garden. Currently, it is located at ul. Książęca ...

. In 2007 it started its retail operations in the

Czech Republic The Czech Republic, also known as Czechia, and historically known as Bohemia, is a landlocked country in Central Europe. The country is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to the south ...

and

Slovakia Slovakia, officially the Slovak Republic, is a landlocked country in Central Europe. It is bordered by Poland to the north, Ukraine to the east, Hungary to the south, Austria to the west, and the Czech Republic to the northwest. Slovakia's m ...

. The current mBank

CEO A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

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 property developer * mFinanse (formerly Aspiro), a subsidiary providing financial advisory services * mFinance France * mElements, a subsidiary specialising in e-commerce and API banking In 2016 mBank's subsidiaries Dom Maklerski mBanku and mWealth Management become part of mBank;

Presidents

* 1986–1998: Krzysztof Szwarc * 1998–2004: Wojciech Kostrzewa * 2004–2008: Sławomir Lachowski * 2008–2010: Mariusz Grendowicz * Since 2010: Cezary Stypułkowski

History

The bank was founded in 1986 as Bank Rozwoju Eksportu (Export Development Bank), a joint-stock company. Three years later BRE Bank was granted credit lines from the World Bank and IFC and became a member of

SWIFT Swift or SWIFT most commonly refers to: * SWIFT, an international organization facilitating transactions between banks ** SWIFT code * Swift (programming language) * Swift (bird), a family of birds It may also refer to: Organizations * SWIF ...

. In 1990, BRE Bank was privatised through public offering. The BRE Group set up its first subsidiaries: Biuro Maklerskie BRE Brokers (now mBank Dom Maklerski) and BRE Services (now mLeasing). In 1995, the bank launched its Private Banking, and in 1997 Towarzystwo Funduszy Inwestycyjnych SKARBIEC, an investment fund company, was set up. In 1999, BRE established PTE Skarbiec-Emerytura, a pension fund. In 1994, it signed an agreement on strategic partnership with

Commerzbank The Commerzbank Aktiengesellschaft (shortly known as Commerzbank AG or Commerzbank ) is a European Financial institution, banking institution headquartered in Frankfurt am Main, Hesse, Germany. It offers services to private and entrepreneurial c ...

. In 1998, BRE Bank merged with Polski Bank Rozwoju S.A. In 2000, BRE bank started operations in the retail banking segment, launching mBank, the first Internet bank in Poland. In 2001 it launched its second retail arm, MultiBank. In 2013, MultiBank, BRE Bank and mBank were replaced by the single mBank brand. In 2014, mBank launched Orange Finanse, a mobile retail bank. In 2015, mBank entered into long-term cooperation with AXA Group. In September 2019 mBank's parent company Commerzbank announced they wanted to sell their 69.3 percent stake in the bank. In early 2020, Commerzbank then abandoned their plans, as they were not able to sell under favorable conditions due to the

Covid-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

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

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

, 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 (Libor ) was an interest rate average calculated from estimates submitted by the leading Bank, banks in London. Each bank estimated what it would be charged were it to borrow from other banks. It was the prim ...

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 ...

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. 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

was being investigated by the

European Central Bank The European Central Bank (ECB) is the central component of the 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)#International ...

and

BaFin The Federal Financial Supervisory Authority (), better known by its abbreviation BaFin, is Germany's integrated financial regulatory authority. Since 2014, it has been Germany's national competent authority within European Banking Supervision. It ...

for facilitating its subsidiary mBank's toxic financial product offering in Poland, as well as for the linked potential tax evasion resulting from

's financing of mBank's CHF-linked toxic financial products.

References

{{Authority control Commerzbank Banks of Poland Banks established in 1986 Companies listed on the Warsaw Stock Exchange Defunct banks of Germany