mBank (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 is Cezary Stypułkowski.
mBank Group is composed of:
mLeasing - one of Poland’s leading leasing companies
mBank Hipoteczny - Poland’s largest mortgage bank
mFaktoring - a factoring company
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
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 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 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
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.
Three Finovate Best of Show awards: in 2013 in London and New York and in 2015 in London. The award is given to the most innovative projects. mBank received it for its new on-line banking platform and light branches focused on customer acquisition.
Celent’s Model Bank Awards (in 2014 and 2015). Experts appreciated mBank’s insurance sales model and the way it used technology in banking.
In 2014 Forrester Research, a global research and advisory firm analysing banking services, hailed mBank’s Internet banking as the best in Europe. mBank’s mobile banking solutions were found to be among the world’s best.
Four Distribution & Marketing Innovation Awards from Efma and Accenture given to the best banking projects in the world (in 2013, 2014, 2015 and 2016). mBank received the awards for the discount programme mOkazje, on-line and mobile banking and mKsięgowość, a combination of accounting services and a bank account.
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, 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 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 for the Europan 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 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 a 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.
