MBank
The main one of the five logo variants of mBank, used for individual customers
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| universal bank | |
| Founded | 1986 |
| Headquarters | Poland |
| Owner | Commerzbank |
| Website | www |
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:
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.
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Wikipedia