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Introduction & Market Context
mBank (WSE:MBK) released its third quarter 2025 results on October 30, showing continued momentum in core business activities despite interest rate pressures. The bank’s stock price rose 1.02% following the announcement, reflecting investor confidence in its strategic direction and financial performance.
The Polish lender reported a 46.1% year-over-year increase in net profit to PLN 837 million for Q3 2025, although this represented a 13% decline from the previous quarter. Total revenues for the first nine months of 2025 grew by 5% compared to the same period in 2024, reaching PLN 9.4 billion.
Quarterly Performance Highlights
mBank’s Q3 2025 results demonstrated strong profitability despite some headwinds in net interest income. The bank achieved a return on tangible equity (ROTE) of 20.1% for the first nine months of 2025, a significant improvement of 7.1 percentage points year-over-year.
As shown in the following chart of key profitability metrics, total revenues maintained an upward trajectory while the bank maintained excellent cost efficiency:
Net interest income decreased 4.3% year-over-year to PLN 2,461.3 million in Q3 2025, with net interest margin contracting 42 basis points to 3.89%. However, this was offset by strong performance in other revenue streams, particularly net fee and commission income, which increased 16.2% year-over-year to PLN 580.2 million.
The detailed profit and loss account shows the composition of the bank’s financial performance across key metrics:
The bank maintained its excellent operational efficiency despite increased marketing spending and amortization, with the normalized cost-to-income ratio at 29.9% for the first nine months of 2025. This represents a 2.6 percentage point increase from the same period in 2024 but remains well below industry averages.
Strategic Initiatives
mBank reported significant progress on its strategic priorities for 2025, including dynamic expansion of business volumes, declining legal provisions for foreign currency mortgage loans, and a strengthened capital base.
The following chart illustrates the bank’s progress on these key strategic initiatives:
The bank’s loan portfolio grew at an impressive rate, with core gross loans increasing 11% year-over-year to PLN 133.9 billion. This growth was primarily driven by strong sales in the mortgage segment, which increased 35% compared to the previous year.
As illustrated in the lending business results, mBank outperformed in key lending categories:
The bank’s deposit base also expanded significantly, with customer deposits growing 10.6% year-over-year to PLN 214 billion. This growth was primarily fueled by steady inflows to retail transactional accounts.
The following chart shows the development of the deposit base:
Detailed Financial Analysis
mBank’s balance sheet continued to strengthen, with total assets increasing 9.6% year-over-year to PLN 261.5 billion. The loan-to-deposit ratio decreased slightly to 63.7%, indicating a conservative funding approach.
Asset quality remained strong, with the non-performing loan (NPL) ratio decreasing 0.7 percentage points year-over-year to 3.4%. The bank maintained adequate coverage ratios for its impaired loan portfolio.
The bank’s capital position remained robust, with the Tier 1 capital ratio at 14.5% and the Total Capital Ratio at 16.7%, both well above regulatory requirements. This strong capital position enables further business expansion.
The structure of the bank’s loan and deposit portfolios demonstrates a well-diversified approach across client segments and industries:
Risk Management & Legal Challenges
A significant positive development for mBank has been the continued progress in resolving legal issues related to its Swiss franc mortgage portfolio. The bank reported that costs of legal risk related to foreign currency loans decreased 51% year-over-year to PLN 1,660 million for the first nine months of 2025.
The number of settlements with borrowers has steadily increased, reaching 30,735 by September 2025, as shown in the following chart:
The bank has effectively managed the reduction of its Swiss franc mortgage portfolio, with outstanding legal provisions amounting to PLN 4,084 million as of September 2025. The cumulative value of all foreign exchange-related legal risk provisions created by mBank since Q1 2018 amounts to PLN 18.2 billion.
The following chart illustrates the effective management of the CHF portfolio:
Innovation & Sustainability
mBank highlighted several innovation achievements in its presentation, including winning Forrester’s Technology Strategy Impact Award 2025 for EMEA, recognizing its modernization of core banking systems and adoption of hybrid cloud and generative AI technologies.
The bank also became the first in the world to offer a smart payment ring with health and activity tracking features, developed in cooperation with Mastercard and NiceBoy.
On the sustainability front, mBank became the first bank in Poland with decarbonization targets validated by the Science Based Targets initiative (SBTi). The bank has set ambitious emission targets, including net-zero emissions in its own operations by 2040 and in its financed portfolio by 2050.
Forward-Looking Statements
Looking ahead, mBank expects 2025 to be its best year, with total revenues projected to exceed PLN 12 billion, assuming stable interest rates in Poland until year-end. The bank anticipates that 2025 will be the last year with material costs related to legal risk from foreign currency loans.
The bank expects business volumes to continue expanding dynamically, with both corporate loans and retail credit portfolios growing faster than the market. Capital and MREL (Minimum Requirement for Own Funds and Eligible Liabilities) buffers are expected to remain sound thanks to strong profit generation, new securitization transactions, and planned green bond issuance.
According to the earnings call, mBank plans to issue a €500 million green senior bond and expects two more interest rate cuts, bringing rates down to 4%.
The Polish macroeconomic environment is expected to remain supportive, with GDP growth forecasted to continue at a solid pace, though inflation might tick up somewhat in mid-2026.
Full presentation:
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