2011 Annual Report

IX. BRE Bank Group’s Retail Banking Segment

The Group’s Retail Banking business model is based on a multi-brand (mBank, MultiBank, BRE Private Banking) and multi-channel distribution approach (traditional branches, internet, telephone, mobile phones). An integrated internet platform is the central pillar of the Bank’s product and service offer. The Bank’s ability to provide different customer groups with a broad range of products and services tailored to their needs has been the key driver supporting the dynamic growth in the number of customers.

mBank and MultiBank are the Group’s two Retail Banking brands. mBank targets young, self-directed customers seeking low-cost banking alternatives, as well as micro-businesses. Multibank appeals to affluent customers and micro-businesses seeking highest-quality, seamless and personalized service.

The Retail Banking clients also include the most affluent group, i.e. the Private Banking clients. The number of private banking customers reached 4 thousand. A broad range of products and investment strategies dedicated to the most affluent clients is offered by BRE Wealth Management.

IX.1. Retail customers

Over the past several years the Bank has remained a consistent market leader in attracting new customers to its retail offer. As of December 31, 2011, the number of retail customers of the Bank reached nearly 3.9 million (+237.0 thousand, +6.5%). The graph presents the growth of the Bank’s retail customer base in the past years.

Retail customers served by the Bank in Poland include individuals as well as microenterprises. There were 409 thousand microenterprise customers at the end of December 2011. The number of microenterprise clients grew by 19.3 thousand (5.0%) during 2011.

IX.2. Product offer

The data presented in chapter IX.2. is based on internal management information of the Bank.

Deposits and Investment Products

Through the Bank’s dedicated “funds supermarket” BRE Bank’s retail customers can purchase participation units of local and foreign investment funds and a broad range of other financial products offered by a number of third party providers matching their specific investment criteria. A detailed breakdown of the development of the Bank’s deposits and investment fund balances is presented in the graph below.

At the end of December 2011, retail deposits reached PLN 26,356 million (up by PLN 1,153 million or 5.9%) while assets held in investment funds decreased by PLN 664 million to reach PLN 2,523 million, as a result of persisting turbulence on the financial markets as well as relatively attractive rates offered on bank deposits.


The value of gross loans granted to Retail Banking clients in Poland, Czech Republic and Slovakia stood at PLN 38,102 million at the end of 2011 and increased by PLN 4,959 million (+15% YoY).

At the end of December 2011, the structure of the Bank’s retail loan portfolio in Poland was as follows:

  • mortgage loans 86.4%
  • non-mortgage loans 13.6%:
    • cash loans 4.1%
    • credit line facilities and overdrafts 5.6 %
    • credit cards and charge cards 2.7%  
    • other loans 1.2%.

The growth of retail loans in 2011 was influenced by the appreciation of the CHF against PLN by 14.8% YoY. Excluding the impact of FX rates, the retail loan portfolio grew by 4.2% YoY. Moreover, in 2011 the retail loan portfolio was impacted by the sale of PLN 449.6 million of non-performing loans.  

Mortgage loans to retail customers in Poland at the end of December 2010 and 2011 had the following characteristics:

  31.12.2010 31.12.2011
Balance sheet value (PLN B) 24.8 29.0
Average maturity (years) 22.8 22.3
Average value (PLN thou.) 278.3 306.1
Average LTV (%) 82.0% 85.5%
NPL 0.84% 1.2%

In 2011, the non-mortgage loan portfolio grew by PLN 495 million or 7.8%. The fastest growth was recorded in cash loans and credit line facilities resulting from the increasing interest of existing clients in the pre-assigned global credit limits.

The following graph presents details of the development of the retail loans portfolio.


2011 marked another period of dynamic growth of issued cards, both credit and debit, driven by the demand of existing and new clients. At the end of December the number of credit cards issued reached 630.5 thousand, up by 60.0 thousand YoY.  

The number of debit cards issued by the Bank stood at 3,988.3 thousand, up by 963.5 thousand (31.9%) YoY.

The Bank continued to put strong emphasis on innovation and enhanced its card product offer. Examples of new initiatives in this area include the issuance of 30,000 prepaid cards for Korona Kielce football club and of 14,000 eMoney Cards for the participants in Poland’s largest music festival – Open’er, prepared in a co-operation with the Corporates and Institutions area.

Brokerage and insurance

The brokerage and insurance services provided via the Retail Banking distribution channels bring considerable benefits for the Bank’s clients and constitute a growing source of income for BRE Bank Group.  

In 2011, a rise in the number of retail clients utilising the Bank’s brokerage services was registered. mBank  serviced 200.7 thousand investment accounts, up by 11.5 thousand accounts compared to 2010 whereas MultiBank serviced 32.8 thousand investment accounts up by 1.4 thousand accounts compared to the end of 2010.

In addition, Dom Inwestycyjny BRE Banku introduced a new comprehensive and highly user-friendly application designed for clients investing on the financial markets. The application provides information about the current situation on the market for instruments listed on the Warsaw Stock Exchange. All information (prices, offers, etc.) is displayed in tables which parameters can be easily modified, or presented in a graphic form thus supporting the investment decisions of clients in a modern and efficient manner. The application allows for direct submission of buy and sell orders for market instruments.

The Bank’s insurance policies (motor, tourist, real property insurance) are distributed by MultiBank’s Insurance Centre and via the mUbezpieczenia offer operated by mBank (in particular through the widely popular Car Insurance Supermarket). In addition, insurance policies are also sold by BRE Ubezpieczenia TUiR. Apart from traditional insurance, BRE Ubezpieczenia offers bancassurance products (mortgage loan insurance, insurance packages related with credit cards and current accounts) which continue to register strong interest from the Bank’s clients.

Retail offer development

The continued and dynamic growth of BRE Bank’s retail client base is the result of the Bank’s constant focus on innovation and addressing of client’s changing needs. Throughout 2011, efforts to further develop the Bank’s retail offering continued. New or strongly modified products across loans, deposits and investments as well as new processes supporting sales were introduced in both mBank and MultiBank and included:  

  • Launch of the express on-line transfer making it possible to credit the beneficiary's account held with another bank within 15 minutes, without the need to await the next interbank clearing session
  • Modification of rules for granting consumer loans, allowing clients to enter into agreements via telephone without the need to sign a Framework Credit Agreement
  • Launch of an on-line car loan and cash loan in 15 minutes  
  • Implementation of a new automatic telephone service
  • Launch of term deposits with daily capitalization of interest.

MultiBank offer enhancement

  • Launch of "PIT loan", a loan available on preferential terms to those obliged to pay a surcharge on their 2010 income tax
  • Launch of a car loan for exclusive makes such as Jaguar, Land Rover and Range Rover
  • Introduction of a special loan offer dedicated to car dealers cooperating with MultiBank for the purchase of vehicles from importers
  • Launch of Active Funds Portfolio PRO with regular premium
  • Savings Centre offer enriched with funds managed by AXA TFI
  • Second subscription of Allianz Platinium FIZ, a prestigious investment product
  • Launch of a new card in the portfolio of prestigious MultiBank cards family: MasterCard World Signia
  • Introduction of MasterCard Business card supported by PayPass technology in debit cards offer dedicated to corporate clients
  • Introduction of MasterCard Professional credit card for self-employed individuals
  • Launch of pilot Near Field Communication (NFC) mobile payments for users of iPhones
  • Addition of new partners to discount programmes.

mBank Poland offer enhancement

  • Launch of an instalment loan for purchases made in Internet stores - mBank INSTALMENTS
  • Cash payments and withdrawals made available to mBank clients in 74 MultiBank branches
  • Start of subscription for 8 new structured deposits
  • Launch of Active Funds Portfolio PLUS with a regular premium
  • Investment Funds Supermarket offer enlarged with funds managed by AXA TFI
  • Launch of mPolisolokata ensuring withdrawal of profit in the form of an insurance service, instead of interest
  • Launch of a new version of the on-line service for mobile devices: "mBank light"
  • Launch of pilot Near Field Communication mobile payments for users of iPhones
  • Launch of eKonto with free mobile Internet or tablets with Internet access  
  • Launch of a transactional application for iPads and iPhones and telephones equipped with Android system.

In February 2012, more than 300 thousand clients were using mobile banking services, including the light version of the transactional system as well as mobile applications for iPhones and iPads and Android devices.

mBank Czech Republic and Slovakia offer enhancement

Clients in both countries are now able to use services already available in Poland such as mobile banking for iPhone and iPad, light Internet banking  for smartphones, transfers from credit cards. In addition:  

  • mBank CZ introduced an overdraft for retail and business clients, click loan under a limit already granted and a new account insurance available to individuals
  • mBank SK introduced insurance policies for debit and credit cards as well as SEPA direct debit service.

Establishment of the "Client Lab" unit

In 2011, the Bank established a research and development unit in the area of Retail Banking.  "Client Lab" develops innovative research and implements projects in the retail and SME segments emphasizing the importance of clients' opinions. The department collects information about the clients and their needs from different sources such as internal and external surveys, monitors the Polish and foreign markets and conducts analysis of client transaction data.

The initial projects of the unit focussed on the area of mobile banking, social media, modern user interfaces and integrated services of modern internet banking reflecting the growing importance of this communication channel.

IX.3. Branch network

The size and scope of the Bank’s retail branch network reflects its focus on areas with high growth potential as well as the bank’s focus and strength of other distribution channels (including internet, mobile and telephone banking) which continue to attract a rapidly growing number of client interactions effectively supporting the traditional branch based service offering.

Since July 2009, the mBank distribution network has been managed through Aspiro, a subsidiary offering a wide range of financial products of the Group as well as products of third parties. As of December 31, 2011, the mBank network covered 97 locations (25 Financial Centres, 62 mKiosks and 10 partner mKiosks) and 30 Agent Service Points across Poland.

The number of foreign mBank outlets remained unchanged compared to the end of 2010. In the Czech Republic, the network consists of 26 outlets (9 financial centres and 17 mKiosks), and 9 in Slovakia (4 financial centres and 5 mKiosks).

MultiBank operates 135 outlets (74 Financial Service Centres and 61 Partner Outlets), compared to 133 outlets at the end of 2010. The MultiBank network is focussed predominantly on larger urban areas reflecting the affluent target client group it services.

IX.4. Retail Banking Subsidiaries

Aspiro SA

As of the end of 2011, Aspiro offered products of 24 different financial services companies, including mBank and MultiBank. Currently, the offer comprises 50 products, including: mortgage loans, cash loans, insurance products, investment products, leasing and factoring.

In 2011, the sales of mortgage products of BRE Bank and third party banks grew by 18%. In Q4 2011, Aspiro reported a significant increase in sales of investment and insurance products. The company keeps developing its sales activities of car loans at dealership networks. It systematically broadens the number of contracting parties, which as of Q4 2011 reached over 214 entities across the country. The company has also started to cooperate with financial intermediaries in respect of car sales. By the end of 2011, 40 such agreements had been signed.

The company closed 2011 with a pre-tax profit of PLN 10.5 million, compared to PLN 7.9 million a year before.

BRE Wealth Management SA (BWM)

In 2011, a new business model was implemented, focusing on the offer related to investment advisory services. The new model offers advice in respect of all assets, both financial assets as well as non financial assets, with special focus on the client's business plans. Thus the target group of BRE Wealth Management has changed – currently the offer is addressed to clients with assets over PLN 1 million. The advisory services are provided by own advisory network, in which advisors are responsible for strategic allocation of active clients and for the acquisition of new clients. Since January 2011, 160 investment advisory agreements have been signed.

In 2011, the advisory service related to tax optimisation developed dynamically. The offer of BWM was extended by model portfolios managed under the formula of Insurance Capital Funds, pension fund and insurance policies combined with deposits.

At the end of 2011, the assets managed by the company amounted to PLN 3.4 billion, an increase by 25% compared to December 2010. In 2011 the company generated a pre-tax profit of PLN 10.9 million compared to PLN 10.7 million in 2010.

BRE TUiR S.A. and BRE Ubezpieczenia Sp.z o.o.

In 2011, BRE TUiR S.A. and BRE Ubezpieczenia Sp z o.o. generated the highest gross written premiums of PLN 1,204.7 million, from bancassurance activity (+91,4% compared to 2010) supported by strong sales of mortgages and cash loans. Gross written premiums related to products sold via the Internet platform reached PLN 140.8 million (up by 61.1% YoY). The company offers its own risk policies and products of other insurance companies. High sales dynamics were achieved in cooperation with BRE Leasing – gross written premiums rose by 20.1% YoY and amounted to PLN 129.6 million. In 2011, the total gross written premiums amounted to PLN 1,475.1 million which represents an increase of 79% compared to 2010.

The consolidated pre-tax profit of BRE TUiR S.A. and BRE Ubezpieczenia Sp. z o.o. for 2011 amounted to PLN 50.5 million compared to PLN 17.2 million a year earlier.