#1m Bank Hipoteczny Covered Bonds Investor Presentation#2Investment Highlights MBANK GROUP & mBANK HIPOTECZNY mBank Group - 4th largest banking group in Poland (in terms of assets). Well capitalized & liquid universal bank, recognized domestically and internationally as a mobile-banking icon. mBank Hipoteczny - longest (20 years) track record of covered bond issuance in the Polish capital market with the equivalent of ca. EUR 1.8bln of covered bonds already outstanding placed on local and international market. Mortgage covered bonds - rated „Aa3" by Moody's Investors Service: 3 notches above the Polish sovereign rating & 5 notches above the issuer rating. The covered bonds will offer a pick-up against Polish EUR Government curve as well as Western European covered bond issuers and regional peers. Covered bonds as a part of mBank Group Green Bonds Framework - refinancing tool for green residential mortgages. The covered bonds from International Programme are expected to feature: ECB eligibility, Level 2A classification for LCR purposes, and English language documentation. POLISH ECONOMY & REAL ESTATE MARKET Poland - one of EU's most resilient economies with profitable, well-capitalized and attractive banking sector. Growing, high standard real estate market with attractive prospects for lending growth. ✓ Strong covered bond legal framework: updated in 2016 with the objective of implementing best in class market practices for the benefit of covered bonds investors. Growing covered bond market, offering European investors diversification and access to attractive exposures. m 2#3Agenda mBank Group mBank Hipoteczny Covered bonds 。 mBank Group overview and key performance mBank Hipoteczny role in mBank Group Strategy 。 Financial results and asset and liability structure o mBank Hipoteczny issuances track record and Polish Covered Bond Market 。 Mortgage Covered Bond Programme 。 Credit risk and other statistics Cover Pool 。 Distribution by real estate type, currency, interest rate and geographical o Polish economy fundamentals Polish Economy 。 Banking sector stability Real estate market 。 Stable and growing residential market in Poland 。 Commercial real estate and activity of residential developers m Legislation o Legal consideration of Polish Covered Bonds 3#4mBank Group in a snapshot General description Poland's 4th largest universal banking group in terms of total assets as of 2019 Well-capitalised, liquid bank with a strong funding profile Among Poland's most efficient banking platform built on the principles of organic growth ■ A well balanced business mix with leadership positions in both retail and corporate banking segments attracting continued inflows of new clients ■ Credit-rated by Fitch (BBB-/F3) and Standard & Poor's (BBB/A-2) ■ Listed on the Warsaw Stock Exchange since 1992 a member of WIG-20 blue chip index since its inception in 1994 and RESPECT index; Key financial mBank Group data (PLN milion) Equity Total Assets Net loans Deposits 2017 2018 131,424 145,750 84,476 94,723 91,496 102,009 116,661 2019 158,720 2019 H1 2020 H1 152,433 182,943 103,203 100,422 108,773 110,341 139,623 14,292 15,216 16,151 15,681 16,913 Total income Net profit 4,454 5,059 5,524 2,591 2,904 1,092 1,316 1,010 496 0,178 Cost/Income ratio 45.9% 42.8% 42.2% 48.4% 45.0% Cost of risk 0.61% 0.78% 0.79% 0.90% 1.28% Return on Equity 8.3% 9.5% 6.6% 6.6% 2.2% (ROE) (net) Tier 1 ratio 18.3% 17.5% 16.51% 16.7% 16.4% Total Capital Ratio 21.0% NPL ratio 20.7% 19.5% 19.7% 19.3% 5.2% 4.8% 4.5% 4.8% 4.9% NPL coverage ratio 59.2% 62.8% 60.7% 61.3% 58.8% Market shares as of 1H 2020 Key product lines as of 2020 H1 Retail Banking A wide range of modern financial services for mass market, affluent and private banking clients as well as entrepreneurs Poland Czech Republic and Slovakia 5,672 thou. clients ■ Corporates and Financial Markets Fully fledged offering: Corporate banking Transactional banking Investment banking " 7.2% 7.5 % 7.6% 11.4% Brokerage Leasing Factoring 27,725 thou. clients Retail ML (balances) Retail Deposits Corporate Loans Corporate Deposits Source: IFRS Consolidated Financial Statements of mBank Group m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 4 Legislation#5mBank Group's unique story of successful organic growth Number of retail customers (thou.) Retail loans: PLN 63.07B Retail deposits: PLN 89.82B Brief history 1986 mBank CZSK Poland +3% 5,342 Favourable demographics of customer base: 5,051 5,685 924 5,670 5,539 1999 979 905 945 869 ca. 50% of retail clients are under the age of 35 and are expected to reach their highest personal income levels in the future, 2000 4,182 4,437 4,761 4,590 4,691 mBank's mortgage clients 2001 predominantly live in urban areas and large cities of more than 100 thou. residents 2016 2017 2018 2019 2020 H1 2007 Founding of Bank Rozwoju Eksportu (Export Development Bank) as a joint-stock company RHEINHYP-BRE Bank Hipoteczny SA setup (later mBank Hipoteczny) as a joint venture of BRE Bank S.A. and RHEINHYP Rheinische Hypothekenbank AG. Bank starts operations in the retail banking segment, launching, in just 100 days, mBank the first Internet Bank in Poland - Bank launches its second retail arm, MultiBank bank aimed at servicing demanding and affluent clients Foreign expansion of bank's retail operations, first outlets in the Czech Republic and Slovakia Number of corporate customers (thou.) 2012 Corporate loans: PLN 29.28B Corporate deposits: PLN 45.65B +7% 22,048 20,940 26,476 23,706 2,319 2,193 27,725 2,384 2013 The announcement of "One Bank" Strategy for 2012- 2016; the establishment of Euro Medium Term Note Programme (EMTN) Launch of New mBank transactional platform; rebranding of the Group under mBank name Corporate customers split: 2,093 8,553 2,123 8,211 K1 annual sales 7,520 2016 over PLN 500 M and non-banking financial institutions annual sales 6,067 7,088 The announcement of new mBank Group's strategy ("mobile Bank") for 2016-2020 K2 PLN 30 M to PLN 500 M 12,750 12,867 7 13,993 15,946 16,788 2017 K3 annual sales below 30 M 2018 2016 2017 2018 2019 2020 H1 Source: IFRS Consolidated Financial Statements of mBank Group m Establishment of mAccelerator - a fund aimed to invest in FinTech start-ups Launch of e-commerce services via mElements, Strategic partnership with WOŚP mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 5 Legislation#6mBank Group support for clients amid COVID-19 pandemic Solutions and offer for retail clients Loan moratoria mBank was the first bank in Poland which offered a loan repayment moratorium to its individual and SME clients on 16.03.2020. Under unified rules within the banking sector, clients can apply for deferring the repayment of the capital part of their instalments or the full instalment up to 6 months, with the simultaneous possibility of extending the loan period by the duration of the moratorium. Disbursed suspensions of monthly payments individual clients as of 30.06.2020 (PLN million) by loan type exposure & percentage of respective portfolio 13.8% total loans non-mortgage by residual maturity New digital solutions Opening an individual account via smartphone B M=month 6,296 900 expired Online mortgage loan process 6,296 1,283 10.7% loans 3,182 19.5% FX mortgage loans 4,701 X ≤ 3M 1,831 10.4% PLN mortgage loans 695 3M < X ≤ 6M Legislative moratoria amounted to PLN 1.9 million, equivalent of 0.03% of gross volume of total loan moratoria provided by the Group. A possibility to open an account from home. Neither visit to the branch nor a meeting with a courier who delivers documents are required. To complete this fully remote process, retail clients need only a smartphone, ID card and a short video ■ Customers can accept the agreement with a text message and an account is active after maximum one day Payment card can be used immediately mBank introduced a safe online mortgage process with only one visit in the branch needed. All the files are exchanged via special application. All the operations are performed from home via the phone and a dedicated application to send the documents ■ E-mails to the client are additionally secured with a password sent to the registered phone number The customer has to visit the branch only to sign the loan contract m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation#7mBank Group support for clients amid COVID-19 pandemic Solutions and offer for microfirms and corporate clients The PFR financial shield Aid package for enterprises Starting from 29.04.2020, Polish enterprises employing from 1 to 249 people can submit applications for funds from the PFR Financial Shield assistance program through mBank's transactional systems. Till 30.06.2020, 37,790 of mBank's clients received PLN 5.52 billion of subsidies from the Polish Development Fund, out of PLN 54.80 billion transferred in total to microfirms and SMEs. Loan moratorium For large corporations, mBank Group has offered a suspension of the capital part of their instalments for a period of maximum 6 months, with the option of extending the loan period by the duration of the moratorium. As of 30.06.2020, loan moratoria granted to the Group's corporate customers (including leasing) amounted to PLN 9.55 billion, of which PLN 8.95 billion was active. SME comprised a half of this volume. Guarantees provided by the BGK Under the governmental aid package for the firms, mBank provides liquidity loans to micro-, small- and medium-sized enterprises combined with the de minimis guarantee from Bank Gospodarstwa Krajowego (BGK). In H1 2020, mBank granted PLN 127 million of new financing covered by the public guarantee programs (BGK) aimed at stabili- zing the liquidity situation of corporates amid COVID-19 pandemic. Remote onboarding of corporate clients Support in e-transformation of the business EKSKLUZYWNAK MOKA EXPRESS 6 BIALETT mBank P VISA DOLL New digital solutions Fully digital process includes opening of a bank account and obtaining an access to the advanced transactional system mBank CompanyNet. ■ All the necessary documents are signed with the use of the qualified electronic signature by both sides ■ No printouts and in-person contact ■ On each stage of the process clients are supported by an advisor via e-mail or telephone mBank facilitates convenient opening of an e-shop for its corporate clients, providing a set of tools helping to start doing business online. Building and hosting of an e-shop on popular platforms RedCart or Shoplo ■ A free fastest online payment platform Paynow, designed for e-commerce Automatic tools supporting sales and client retention prepared by Samito A solution for sales in the social media, offered by 1koszyk m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 7 Legislation#8mBank Group's Strategy for 2020-2023 We will... 血 What will mBank be like in the horizon of the strategy for 2020-2023? D E ☑ continue mBank's organic growth, based on the acquisition of young clients and dynamic companies from prospective industries. accompany our clients throughout their lifecycle and development, designing our products, platforms, access channels and service model according to their needs. remain the most convenient transactional bank by providing our customers with ease and speed of use, high security standards, advanced platform, personalisation and a bonus for loyalty. build our offer and solutions based on the mobile first paradigm, increasing the share of sales and service in the digital sphere. intensify optimisation, automation and digitalisation of internal processes what will translate into savings for the organisation and enhanced operational efficiency. be systematically improving our profitability due to rising revenues, decent cost discipline and prudent approach to risk management, while more favourable balance sheet structure will result in higher margin. m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 8#9mBank Group's Strategy for 2020-2023 In the strategy for 2020-2023, mBank Group focuses on 4 areas m Client Acquisition & long-term relations FOT Four pillars of the strategy for 2020-2023 correspond to the key components of mBank's business model SAMSUNG Witaj, Leszek 672/48131450 Platform Ecosystem & user experience 9 ق Employees & organisation culture Efficiency Operational advantage mGroup Covered bonds Cover Pool Polish Economy Real Estate Legislation Market#10mBank Group's Strategy for 2020-2023 Corporate Social Responsibility and Sustainable Development Strategy of mBank Top aim Direction guidelines mBank educates > We support the development of mathematical education and equalize educational opportunities for young people. national competitions and grant programmes m Fundacja Be among top three leaders of social responsibility in the banking sector Sustainable Development Goals (SDGs) set by the United Nations. We teach how to use online and mobile banking safely. We make customers more sensitive to cybercrime threats in the banking area. social (educational) campaigns *** mBank cares about the climate and the environment We limit our indirect impact. credit policy regarding industries relevant in the context of EU climate policy mBank in the ESG Index (GPW) WIGESG We limit our direct impact. measurement and reduction of our carbon footprint reduction of energy consumption saving water, paper and office supplies 8 For the first time, the CSR strategy has become an integral part of the document. mBank promotes prosperity > We support organisations that work for social welfare. cooperation with WOŚP wielka orkiestra Swiatecznej pomocy We are accessible to clients with disabilities (inclusive banking). We act ethically. Code of Conduct 2.0 We communicate with mBank our customers in a fair, clear and transparent way. We ensure diversity and equal opportunities. m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 10 Legislation#11mBank Group's historical performance: Profit and Loss Account Total Income & Margin (PLN M) 2.3% 2.1% NII NFC Trading and other Total Costs & C/I ratio (PLN M) Personnel Material and other BFG 2.3% 2.5% 2.7% 2.7% 2.6% 50.1% 45.7% 45.9% 42.6% 42.2% 47.9% 45.0% Starting from 2017, margin on FX transactions recognised in NFC CAGR CAGR +8% +3% 5,524 5,080 +11% 4,454 -251- 2,051 1,963 2,043 2,164 2,329 4,093 4,295 325- 68 1,271 194 685 556 1,258 136 15111, 180 180. 256. +4% 1,249 906 2,618 2,904 897 96 106 866 925 960 1,031 1,054 1,253 1,308 2,511 2,833 3,136 3,496 4,003 595 726 226 230 523 555 1,928 2,072 855 877 903 952 1,019 504 523 2015 2016 2017 2018 2019 2019 1H 2020 H1 2015 2016 2017 2018 2019 2019 H1 2020 H1 Loan Loss Provisions & Cost of Risk (PLN M) 0.54% 0.46% 0.61% 0.78% 0.79% 0.9% 1.28% CAGR +17% +106% Net Profit & Return on Equity (PLN M) 11.8% 10.1% 8.3% 9.4% 6.6% 7.1% 2.2% CAGR -28.8% -67% 794 694 761 1,301 1,219 1,303 1,092 508 1,010 421 365 369 536 178 2015 2016 2017 2018 2019 2019 H1 2020 H1 2015 2016 2017 2018 2019 2019 H1 2020 H1 Note: A drop of net profit in 2019 caused by the provisions for legal risk related to the FX mortgage loans of PLN 387.8 million. m mGroup Covered Cover Pool bonds Polish Economy Real Estate Market 11 Legislation#12mBank Group's historical performance: Balance Sheet Total Assets (PLN B) CAGR +8% Equity & Total Capital Ratio (PLN M) +15% 17.25% 20.29% 20.99% 20.69% 19.46% 19.26% CAGR +7% 182.9 123.5 133.7 145.8 158.7 131.4 +6% 12,275 13,051 14,292 15,171 16,153 16,911 2015 2016 2017 2018 2019 2020 H1 2015 2016 2017 2018 2019 2020 H1 Total Gross Loans (PLN B) CAGR +7% Total Deposits (PLN B) +11% CAGR +11% +14% 112.4 108.5 97.8 0.4 0.3 116.7 139.6 1.5 81.4 84.6 87.4 0.6 102.0 0.9 48.4 1.7- 1.5- 1.3- 47.8 48.7 91.4 91.5 81.1 0.7 44.2 0.5 38.1 1.2 33.4 34.2 37.9 0.6 35.3 37.4 34.6 34.4 89.8 46.3 48.9 48.1 52.9 60.4 63.3 77.7 65.9 46.1 53.5 55.7 2015 Individual clients 2016 2017 2018 Corporate clients 2019 2020 H1 2015 2016 2017 2018 2019 2020 H1 Public sector and other Individual clients Corporate clients Public sector m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 12 Legislation#13Balance Sheet Analysis: Assets & Liabilities Structure of Assets (PLN B) Structure of Liabilities and Equity (PLN B) 182.9 182.9 173.8 173.8 15.5 8% 16.9 9% 158.8 158.7 15.2 158.8 158.7 16.6 152.4 27% 152.4 2.6= 5.41 3% 12.5 12.0 6.0 2% 16.1 11.0 16.2 2.6= 16.4 34.7 48.4 15.7 9% 1% 5.0] 4.8] 34.8 34.3 1% 2.5= [4.4] 2.5= 18.0 2.5= 34.3 €1.6 1.9 16.7 17.4 1.9 1.5 16.6 €2.5 1.1 =0.8=1.2 1.7 1.0 m 139.6 110.9 59% 129.0 108.8 76% 104.7 105.3 110.3 116.0 116.7 100.4 3.1 06/19 4.81 09/19 [4.3; 12/19 9.5 6.9 4% 03/20 06/20 3.0; 06/19 2.5; 09/19 -1.2- 12/19 1.7; 03/20 2.0; 06/20 1% Amounts due from banks Loans and advances to customers Trading securities Derivative financial instruments Investment securities Other assets Amounts due to other banks Amounts due to customers Debt securities in issue Subordinated liabilities Other liabilities Equity (total) mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 13 Legislation#14Results of mBank Group: Key regulatory ratios Strong capital position and outstanding liquidity securing safety and operational stability mBank Group's Total Capital Ratio mBank's NSFR and LCR +4.85 bps 20.99% 20.69% 20.29% 19.46% 2.68% 19.26% 3.22% 2.97% 2.95% 2.83 18.31% 17.32% 17.47% 16.51% 16.43% 14.41% 11.63% 199% 165% 190% 169% 135% 127% 118% 114% 114% Basel III requirement ≥100% 226% 2016 2017 2018 2019 2020 H1 (PLN B) minimum requirement as of 06/20 2016 2017 2018 2019 2020 H1 65.3 68.0 76.2 84.1 87.6 Tier 1 capital ratio Tier 2 xx.x Total risk exposure amount Net Stable Funding Ratio (NSFR) Liquidity Coverage Ratio (LCR) 1 m 1 LCR for mBank Group was at 249% as of 31.03.2020 mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 14#15mBank Hipoteczny overview and role in Group strategy mBank Hipoteczny is a specialised credit institution (mortgage bank) authorised to issue covered bonds under Polish law. Corporate structure m Bank Hipoteczny mBank Immediate Parent 100% COMMERZBANK Ultimate Parent 69,33% mBank Hipoteczny has been issuing covered bonds since 2000, when it was the first bank to introduce mortgage covered bonds to the post-war Polish capital market, restoring their importance and place after 50 years of absence. Outstanding publicly traded covered bonds issued by the Bank as of 2020 H1 are PLN 8.05 bn, represent 30.3% market share in the covered bond market in Poland. mBH strategic objectives for 2019-2022 are the following: 1 Covered Bonds 2 3 Scale of assets Cost efficiency Providing long term funding for mBank Group by issue Covered Bonds to Diversify of the funding sources Improve long-term liquidity in the Group adaption to the NSFR requirements - Development of retail mortgages portfolio and CRE loans in close cooperation with mBank, i.e. assuming that origination will be executed by mBank's sales forces both in the retail (since Q2 2017) and commercial real estate (since 2019) area. The Bank's strategy assumes that the foundation of its operations will be to obtain long-term in the most cost- effective business model possible. The Bank is leveraging synergies related to IT systems and processes within the Group m mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market 15 Legislation#16mBank Hipoteczny assets origination - retail mortgages Pooling model Transfer of existing residential mortgage loan portfolio from mBank for its refinancing with mortgage Covered Bonds. Based on framework agreement on acquiring portfolios of mortgage loans, introduced in 2014 as pioneer transaction of the mortgage transfer on the Polish market. Transfer is based on comprehensive model of cooperation between mBH and mBank: Mortgage collateral Mortgage loan Borrowers Cash Flows mBank Mortgage collateral Bank Hipoteczny re-registration Mortgage loans Pooled loans portfolio origination After pooling: ✓ after-sale services, ✓ maintaining customer relationship- no changes from the customer perspective. Sale of loans portfolio Purchase price (pooling facility) Cash Flows Refinance by covered bonds Covered Bonds investors The target level of the newly originated portfolio of residential assets at mBank S.A. meeting the pooling criteria is to amount to over 90%. The inclusion of both primary and secondary market transactions in the transfer process with its cyclical nature is aimed at a systematic increase in the value of the mortgage loan portfolio of mBH. The process of transferring mortgage loans assumes transfer of assets to mBH on regular basis. m mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market 16 Legislation#17mBank Hipoteczny - commercial real estate Origination Origination model assumes of mBank Hipoteczny participate in syndicate model commercial real estate loans organised by mBank or by purchasing loan assets from mBank - commercial pooling model. Cover pool eligibility via mBank Hipoteczny acquires commercial pooling and syndicate model loans for refinancing existing, completed CRE properties. Those loans are directly cover pool. Risk Management All decisions on the bank's credit exposure will be made by mBH, based on its independent credit risk analysis. mBH will no longer grant loans to developers, which will reduce risk profile by removal of construction phase risk. Financed projects by type (as of 2020 H1) 40.9% 35.9% 9.8% Total 4.00 bn PLN Characteristics of funded projects 。 Duration of the loan for commercial real estate is up to 20 years, 。 Commercial loans denominated in EUR and PLN, o 25% of the total investment cost is the minimum own funds of the borrower, 。 Security features required by the Bank includes: • mortgage entered in the first place in the Land and Mortgage Register maintained for the financed real property - special purpose vehicle's a specially created structure dedicated to the specific project scope of its operation is limited to activities related to its ownership and management assignment of rights from insurance against fire and other perils for real estate which is the subject of credit or the registered pledge on those rights 3.9% 3.3% 3.0% 2.3% 0.9% . Shopping centre Offices Commercial Hotel premises Housing Warehouse Mixed use development Logistic property centre Other Source: Management Board Report mBank Hipoteczny mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market 17 Legislation#18mBank Hipoteczny quality of the loan portfolio mBank Hipoteczny NPL ratio significantly below the market level 2020 H1 6.83% 2.39% 4.90 3.24% -3.59 pp -1.92 pp 0.47% Polish Banks mBank Group mBank Hipoteczny Total NPL Ratio (non-fin) Mortgage NPL Ratio Characteristics of the portfolio eligible for pooling 。 Financing the purchase of real estate, 。 LtV (loan to mortgage lending value) at the transfer date does not exceed 100%, 。 First rank joint contractual ordinary mortgage on all property pledged as collateral, 。 Property located in Poland, 。 The remaining term of the loan over 3 years, 。 Suitable internal rating, PLN denominated loans, o No delays and defaults. mBank Hipoteczny NPL by business lines (%) mBank Hipoteczny Cost of Risk LLP by business lines (bps) Total NPL 3.72% 2.99% 3.59% 3.45% 3.24% Ratio (non-fin) Total Cost of Risk 26 20 19 19 32 LLP 90 8,65% 8,18% 7,62% 7,18% 6,23% CRE ML 49 50 42 38 CRE ML 0,08% 0,15% 0,31% 0,39% 0,47% 2016 2017 2018 2019 2020 H1 Source: Management Board Report mBank Hipoteczny m st 4 2 4 3 1 2016 2017 2018 2019 2020 H1 mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market 18 Legislation#19mBank Hipoteczny key financials Summary of Key Financials: Profit and Loss Accounts in PLN M 2016 2017 2018 2019 2019 H1 2020 H1 - NII Net Interest Income 130.1 156.0 176.3 186.1 91.7 83.3 Decrease in NII due to interest rate policy of NBP - NFC Net Fee & 1.5 (5,7) (2.5) (8.2) (3.4) (3.5) Commission Income Total income¹) 134.1 146.9 171.7 180.8 92.4 80.0 Total costs²) (65.7) (67.5) (63.6) (67.89) (39.6) (37.5) Cost/Income Ratio 48.96% 45.99% 36.78% 36.81% 43.83% 49.45% LLP Loan Loss Provisions (21.6) (20.2) (16.71) (20.0) (8.34) (17.57) Increase in LPP as a consequence of COVID-19 Operating result 46.9 59.2 88.3 91.3 43.0 19.9 Taxes on the balance sheet Profit before income tax (16.7) (24.4) (27.6) (32.2) (16.1) (15.5) 30.2 34.7 60.7 59.1 26.8 4.4 Net profit 23.4 27.8 41.2 37.1 17.2 1.2 Net Interest Margin (NIM) 1.37% 1.36% 1.44% 1.40% 1.38% 1.24% TCR 14.54% 15.79% 16.25% 18.23% 17.43% 18.52% Net profits impacted by LPP, balance sheet tax and lower NII Increased capitalisation due to larger share of residential low risk loans Cost of Risk LLP 0.26% 0.20% 0.19% 0.19% 0.13% 0.32% - ROE Return on Equity (gross) 3.62% 3.46% 5.85% 4.95% 4.66% 0.70% - ROA Return on Assets 0.31% 0.30% 0.49% 0.44% 0.41% 0.07% (gross) 1) total income (defined as net interest income + net fee and commission income + net trading income + other operating income - other operating expenses) 2) total cost (overhead costs + amortisation and depreciation) Source: IFRS Financial Statements of mBank Hipoteczny m mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market 19 Legislation#2020 20 COVID-19 impact on mBank Hipoteczny operations In the context of the crisis triggered by the COVID-19 pandemic, a range of assistance tools was introduced to help customers maintain their liquidity. They are consistent with the guidelines of EBA and were notified by the Polish Financial Supervision Authority. CRE Retail banking CRE Retail banking m Not statutory tools . • • Unchanged rules for qualifying borrowers for Forborne status 7 borrowers were granted Forborne status with total exposure 84.35 m PLN For instruments granted between 13 March and 30 September Exposures in the 31+ DPD delay bands, on which the Bank agreed to grant aid, will be cassified as Forbone customers can apply for a deferral of capital or capital and interest payments of a part of instalments, for a period of up to 6 months Anti-crisis shield 4.0 (statutory tool) corporate clients can suspend the repayment of the capital part of instalments for a maximum period of 6 months • possibility to suspend the repayment of entire capital and interest instalments for up to 3 months for medium-sized companies • suspension for up to 3 months the loan repayment without charging interest during the suspension period for customers who lost main source of income after 13 March mGroup Share od Cover Pool assets affected by payment holidays 2485 24.5 % 2515 9.4% Nominal (m PLN) Nominal as a % of Cover Pool Number of Loans No. of Loans as a % of Cover Pool Types of granted payment holiday as % of Cover Pool 0,28% 4 to 6 months principal deferred Covered bonds Cover Pool Polish Economy 0,10% over 6 months principal & interest deferred Real Estate Market Legislation#21Development of Revenues and Costs Development of Total Income (PLN M) Development of Total Costs (PLN M) 136 144 140 138 124 NIM (bps) 45.99% 36.78% 36.81% Cost/Income 43.83% 49.45% ratio +11.0% 171.7 180.8 3.0 146.9 -1.6% Net Interest Income 68.6 Other - including BFG 66.5 63.6 8.1 Net Fee and 7.0 -9.6% 16.9 -5.2% Staff-related Commission costs Income 89.2 34.0 39.6 30.4 37.5 80.6 25.8 Material Costs 176.3 186.1 0.9 156.0 0.8 Trading and 14.9 12.1 Other 91.7 83.3 Income 13.0 12.7 23.3 22.4 16.9 Depreciation & Amortization 8.3 8.4 (5.8).4) (2.1(2.1)- 2017 2018 -(8.2)- 2019 (3.4) (3.5) 3.2; 3.8] 6.9 3.4] 4.3] 2019 H1 2020 H1 2017 2018 2019 2019 H1 2020 H1 Core income rising twice as fast as the balance sheet size but put under pressure in 2020 H1 due to NBP monetary policy. Loan Loss Provisions (PLN M) & Cost of Risk 2020 H1 vs 2019 H1 lower cost due to decrease in BFG contribution. Net Profit (PLN M) & Return on Equity (ROE) gross 20 19 19 -0.6% 20.2 20.0 16.7 2017 2018 2019 13 32 Cost of Risk (bps) 8.3 +110.6% 17.6 2019 H1 2020 H1 Source: IFRS Financial Statements of mBank Hipoteczny m 3.46% 5.85% 4.95% +15.4% 41.2 37.1 27.8 4.66% 0.70% ROE -93.0% 17.2 1.2 2017 2018 2019 2019 H1 2020 H1 mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 21#22Assets & Liabilities growth Structure of Assets (PLN M) Structure of Liabilities (PLN M) +5.4% 12,168 12,386 1,069 13,188 240 Amounts due 12,168 12,386 13,188 237 13,123 236 13,123 from banks 234 247 236 10,649 1,268 1,284 .56 275➡ 1,222 950 10,649 1,277 -48 118 240 1,056 1,086 Loans and 43 .49 37 advances to 904 Amounts due to other banks Amounts due to customers 1,134 45 customers 7,043 7,870 8,857 Derivative 6,153 (58%) 9,412 (88%) 10,767 10,931 (88%) (88%) 11,628 (88%) 11,588 (88%) financial instruments (64%) (67%) 8,646 (66%) (58%) Debt securities in issue Investment securities 4 Equity .36 3 9 5 Other 3,317 (31%) 3,830 3,180 2,817 2,951 (31%) (26%) (21%) (22%) Other 16 19 58 2016 2017 2018 14 2019 213: 2020 H1 2016 2017 2018 2019 2020 H1 Total Gross Loans (PLN M) Balance sheet value (carrying value) Equity (PLN M) 10,767 10,931 11,628 -131- 11,588 124 14.5% 15.8% 16.2% 18.2% 18.5% TCR (%) >16.76% +2% 201 143 9,412 Corporate loans 1,268 1,284 322- 5,860 6,195 7,500 7,564 4,375 (54%) (57%) (64%) (65%) Housing loans to individual clients 1,056 1,086 904 (46%) Public-sector loans -2% 4,714 4,705 4,592 3,997 3,900 (50%) (44%) (42%) (34%) (34%) 2017 2016 Source: IFRS Financial Statements of mBank Hipoteczny 2018 2019 2020 H1 2016 2017 2018 2019 2020 H1 m mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 22 22#23Well diversified and stable balance sheet Structure of Assets (PLN M) Structure of Liabilities (PLN M) Amounts due from banks 13,123 213 950 Fixed 5% Securities Derivatives Public sector loans' (7%) 124=118: Mortgage loans 7,564 (58%) CRE/RRE loans 3,900 (30%) Float 94% Other assets 254 (2% 2020 H1 .Zero 2% Source: Based on mBank Hipoteczny IFRS Financial Statement as of 2020 H1. m Fixed 31% 13,123 592 (5%) Notes PLN 74% PLN 67% 8,055 (61%) Covered Bonds EUR EUR 26% 33% Float 59% 2,951 (22%) Amounts due to other banks 236 (2%) Other liabilities and provisions Zero 10% 1,284 (10%) Total Equity 2020 H1 mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate 23 Market Legislation#24Debt securities issued Debt financial instruments by type (nominal value, PLN M) CAGR +8.7% Debt financial instruments by currency (nominal value, PLN M) 8,740 515 7,801 300 8,523 469 5.5% 7,020 501 330 6,116 768 80 94.5% 80 8,740 8,523 48.6% 7,801 7,020 6,116 4,165 3,126 4,140 2,104 2,033 Short-term notes 8,225 8,055 7,171 Long-term notes EUR PLN 6,439 Mortgage CB 5,268 (public + private offer) 4,916 4,675 4,575 4,083 4,384 51.4% 2016 2017 2018 2019 2020 H1 Maturity of debt financial instruments by type (nominal value, PLN M) EUR Mortgage Covered Bonds - PLN PLN - Mortgage Covered Bonds notes 1.450 1.000 2016 2017 2018 2019 2020 H1 2.729 555 500 536 310 200 233 134 100 100 60 111 2020 2021 2022 2023 2024 2025 Source: IFRS Financial Statements of mBank Hipoteczny; EUR/PLN NBP rate m 214 193 100 2026 2028 2029 mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real Estate Market 24 Legislation#25mBank Hipoteczny Hipoteczny - issuer track record Crucial milestones in mBank Hipoteczny issuance history RHEINHYP-BRE Bank Hipoteczny SA First issue of Mortgage Covered Bond in Poland (after 1945) 28-06-2000 СЕТО / BONDSPOT First listed Covered Bond in Poland 22-04-2003 BANK HIPOTECZNY First issue of Public Sector Covered Bonds 27-07-2007 mBank Introduction of pooling model First tranche 01-09-2014 mBH: Total Assets 2000 2001 2002 2003 2004 2005 2006 2007 2008-- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 European Bank for Reconstruction and Development JII European Investment Bank PLN bn 16 000 14 000 12 000 10 000 8 000 6 000 4000 2 000 m Bank Hipoteczny m Bank Hipoteczny m Bank Hipoteczny Bank Hipoteczny m Bank Hipoteczny EBRD invests in 3 series in USD - 15 USD 2 series in EUR - 20 EUR M EIB invests in 2 series in PLN - 300 PLN M 15Y-Covered Bonds longest maturity in Polish market history First fixed-rate Covered Bond in PLN in Polish market history 1 bn PLN biggest Covered Bonds issue in Polish market history 300 m EUR inaugural issue of Covered Bonds under International Programme 300 m EUR second issue of Covered Bonds under International Programme E 2002-2004 2007-2008 02/05-2014 28-04-2016 11-10-2017 26-04-2018 12-11-2019 mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 25 Legislation#26Covered Bond Market in Poland Polish Covered Bond Market by issuer- public issuances outstanding (PLN bn)- as of 2020 H1 Pekao BH 1.29 PKO BH Increasing share of EUR Polish Covered Bond issuess % 70 (5%) mBH 8.05 (30%) 60 50 40 26.54 bn PLN 30 0.40 (2%) 20 ING BH 10 16.80 (63%) 0 64.4% %EUR 0 T 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Outstanding Polish mortgage covered bonds currency split by issuer 26.54 16.80 EUR 16.93 (64%) 12.41 8.05 (74%) 4.14 PLN 9.61 (36%) (51%) 3.92 (49%). 4.14 Total Market mBH (26%). PKO BH 1.29 0.91 Pekao BH 0.38 0.40 ING BH • Starting from 2012 mBH is active in the primary market's EUR debt segment which is reflected in the currency structure of its issues, Issuer of 15-year mortgage covered bonds which are one of the longest maturity instruments issued by Polish commercial enterprises in history, mBH issued first PLN fixed rate Covered Bonds, ⚫ mBH issued biggest 1 bn PLN Covered Bond on Polish capital markets. First assimilation of Covered Bonds on Polish capital market Data based on NBP fx rate as of 30.06.2020. Data source: Press releases / Financial statements of ING Bank Hipoteczny, mBank Hipoteczny, Pekao Bank Hipoteczny, PKO Bank Hipoteczny m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 26 Legislation#27Issuance activity - details. Summary of Mortgage Covered Bonds public issued in 2015-2020. Data as of 2020 H1. Maturity date Amount Currency Issue date Tenor (yr) 200.0 M PLN 2015-02-20 2022-04-28 7.2 20.0 M EUR 2015-02-25 2022-02-25 7.0 250.0 M PLN 2015-04-15 2023-10-16 8.5 11.0 M EUR 2015-04-24 2025-04-24 10.0 500.0 M PLN 2015-09-17 2020-09-10 5.0 255.0 M PLN 2015-12-02 2021-09-20 5.8 300.0 M PLN 2016-03-09 2021-03-09 5.0 50.0 M EUR 2016-03-23 2021-06-21 5.2 13.0 M EUR 2016-09-28 2026-09-20 10.0 35.0 M EUR 2016-10-26 2026-09-20 9.9 24.9 M EUR 2017-02-01 2024-02-01 7.0 500.0 M PLN 2017-09-29 2022-09-10 5.0 1,000.0 M PLN 2017-10-11 2023-09-15 5.9 100.0 M EUR 2017-10-30 2022-06-22 4.6 300.0 M EUR 2018-04-26 2025-03-05 6.9 300.0 M PLN 2018-06-22 2024-06-10 6.0 10.0 M PLN 2018-10-11 2024-06-10 5.7 100.0 M PLN 2019-02-22 2028-12-20 9.8 300. M EUR 2019-11-12 2025-09-15 5.9 issued covered bonds Private placement 2016: EUR 70m and PLN 400m; 2017 PLN 300m + 400m PLN Covered Bonds Issuance 400 43 80 H1 2012 H2 2012 H1 2013 m Data as of 2020 H1 Based on EUR/PLN NBP rate mBH is a frequent issuer on EUR and PLN market (PLN M) 400 Coupon WIBOR 6M + 78bps Fixed (1.135%) MS7+5bps WIBOR 6M + 87bps Fixed (1.285%) MS+85bps WIBOR 3M + 110bps WIBOR 3M + 115bps WIBOR 3M + 120bps EURIBOR 3M + 87bps Fixed (1.18%) MS+90bps Fixed (1.183%) MS+80bps Fixed (0.94%) MS+46bps WIBOR3M + 75bps WIBOR3M +82bps Fixed (0.612%) MS+40bps Fixed (1,073%) MS+42bps WIBOR3M + 58bps WIBOR3M + 58bps WIBOR3M + 80bps Fixed (0.242%) 798 968 698 300 106 1,925 1,576 1,284 340 582 663 215 204 10 100 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 27 Legislation#28EUR 300mn short 7Y Covered Bond Security Type Issue Type Rating Size Terms and Conditions Mortgage Covered Bond, backed by Polish PLN and EUR-denominated mortgage loans Fixed Rate, Soft Bullet / Conditional Pass- Through Covered Bonds A Positive Outlook (Fitch Ratings) EUR 300mn mBank Hipoteczny successfully priced its inaugural covered bond sub-benchmark transaction with a EUR 300mn size (no grow). The deal was well prepared with an expedited three day pan-European roadshow in Frankfurt, Munich/Stuttgart, Vienna/Zurich, Amsterdam, Paris, London and Copenhagen/Helsinki. • Allocation by Region 60% • Price & Launch 19th April 2018 Settlement 26th April 2018 Maturity 5th March 2025 Tenor Short 7 years Re-offer Spread MS +42bps Coupon 1.073% Fixed, Annual, Act/Act ICMA • Law Listing Denomination EUR 100k ISIN Bookrunners Final order book Polish Law Luxembourg Stock Exchange XS1812878889 Commerzbank (B&D), Erste Group, J.P. Morgan, LBBW, SG CIB Above EUR 800mn (excluding JLM interest) Oversubscription 2.7x Number of accounts 60 • • Main Highlights The recent confirmation of the withholding tax treatment for covered bonds in Poland has enabled mBank Hipoteczny to access the EUR-denominated covered market in syndicated format for the first time, Books opened with guidance of ms+high 40s area, Strong order book momentum enabled the Issuer to revise the guidance to ms+45bps area (+/-3bps) two hours later, Final pricing was at ms+42bps, The final orderbook was characterized by a granularity of 60 investors ordering over EUR 800mn resulting in a 2.7x oversubscribed book, The pricing implies a small new issue premium in the high single digit area which results from the theoretical fair value derived from the outstanding bonds of their closest comparables, Germany Austria 15% Nordics 9% France/BeNeLux Switzerland 5% Others 5% 6% Allocation by Investor Type Banks Asset Manager Insurance Pension Funds The transaction provides a natural hedge for mBank Hipoteczny mortgage portfolio which is partially denominated in EUR. Govt/Agencies Others 1% 7% 16% 26% m 50% mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 28 Legislation#29EUR 300mn long 5Y Covered Bond Day of execution mBank Hipoteczny S.A successfully returned to the syndicated covered market with a EUR 300mn long 5-year mortgage covered transaction The final orderbook in excess of EUR 1bn was characterized by a high degree of granularity with over 70 real money investors participating. The final re-offer spread of +43bps lies inside the estimated fair value level and thus implies a negative new issue concession of around -2bps 60 50 40 30 EUR polish issuers covered bond and POLB 2019-11-06 EUR 300 B300-- -EUR 500 EUR 500 EUR 500 EUR 600 20 EUR 600- 10 EUR POLGB PKO BH Day of execution 0 2 3 4 5 6 7 Book volume (m EUR) Spread guindance MS+ bps -10 55 55 1,100 1,031 - --55-- 1,000 950 Allocation by Region Allocation by Investor Type 900 800 700 600 600 50 -12 Germany bps Nordics 500 3,4x 300 issue 3,1x 400 (no grow) 45 Austria 9% 48% AM Funds 29% Banks Insurance / Pens 8% 28% 300 2x 45 43 200 CEE 4% CB/IO 9% 100 Switzerland 3% 0 40 09:05 10:04 10:54 11:20 Others 7% 2h 15min m 55% mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 29 Legislation#30Outstanding Covered Bonds Data as of 2020 H1 (PLN M) Mortgage covered bonds All issues Mortgage CBs 8,055 PLN- 3,915 denominated EUR- 4,140 denominated WA Time to maturity 3.46 years PLN- 2.41 years denominated EUR- 4.45 years denominated Distribution by currency (all issues) Distribution by interest rate (all issues) 8,055 8,055 4,140 3,916 EUR Fixed (51%) (49%) 3,915 4,138 PLN Float (49%) (51%) mBH Mortgage covered bonds maturity profile broken down by currency (all issues PLN m) 8,000 7,655 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2019 Data as of: 2020 H1 Based on EUR/PLN NBP rate m MBH 234 100134 EUR PLN 778 223 555 1,536 536 1,000 1,450 421 111 310 2,729 214- 192 2020 2021 2022 2023 2024 2025 2026 100 2028 th 2029 mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 30 Legislation#31mBank Hipoteczny International Covered Bonds Programme Covered Bond Recognition Law & Jurisdiction Prospectus date Size Form Base Prospectus approval Authority Clearing System Listing Expected Covered Bonds Rating Maturity Interest rate Currency Denomination of Covered Bonds Involved Parties Issuer Arranger: Issuer's Counsel Dealers Counsel: Fiscal and Paying Agent: Luxembourg Listing Agent: Appointed Dealers Mortgage Covered Bond Programme by mBank Hipoteczny The Mortgage Covered Bonds shall comply with (i) the requirements of Article 52(4) of the UCITS Directive, (ii) Art. 129 of the CRR and (iii) the Polish Covered Bond legislation. T&C's: Polish Law and Polish Courts, English language legally binding Programme Agreement, Paying Agency Agreement: English Law and English Courts, English language legally binding 11th July 2019 - Supplemented 5th September, 4th October and 28th October 2019 EUR 3.0 bn New Global Note ECB repo eligible Commission de Surveillance du Secteur Financier, Luxembourg (CSSF) Clearstream Luxemburg Luxembourg Stock Exchange Moody's Investors Service Ltd -,,Aa3" Up to 30 years Fixed, floating Multi currency Minimum denomination of each Covered Bond will exceed EUR 100,000 or its equivalent amount in other currency mBank Hipoteczny Commerzbank Aktiengesellschaft Clifford Chance LLP as to Polish and English law White & Case LLP as to Polish and English law Deutsche Bank Aktiengesellschaft Deutsche Bank Luxembourg S.A. Commerzbank Aktiengesellschaft m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 31 Legislation#32Covered Bonds rating among Polish issuers Fitch Moody's / S&P Ratings as of 07.08.2020 relation to sovereign rating E mBank BBB-/-/BBB+ Stable/-/ Negative mBank Hipoteczny BBB-/Baa2/- Stable/Stable/- Pekao SA BBB+/A2/BBB+ Negative/ Stable/ Positive Pekao BH BBB+/-/- Negative Poland Long Term +5 Mortgage Covered Bonds A-/-/- 1 Negative/-/-I relation to issuer rating +3 +1 PKO Bank PKO Bank Polski Hipoteczny -/Baa1/- - /Stable/- -/A2/- - / Stable/ - +3 Country ceiling Mortgage Covered Bonds -/Aa3/- Mortgage Covered Bonds -/Aa3/- ING Bank Hipoteczny -/Baa1/- ING -/Stable / - +4 ING Bank A+/A2/- Negative/Stable / - +3 Mortgage Covered Bonds -/Aa3/- +3 Fitch BBB BBB+ A- A+ AA- AA ... Moody's Baa2 Baal A3 A2 A1 Aa3 Aa2 ... S&P BBB BBB+ A- A+ AA- AA ... Source: Rating Agencies press releases m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 32 Legislation#33m - Cover Pool highlights Strong overcollateralisation mBH strategy for the following years is to be EUR issuer. Covered by significant increase of residential PLN denominated mortgages. Which results in the necessity of hedge ccy risk by covered bond swap. EUR PLN N6 Cover pool receivables + substitute assets 10,309 M PLN 2020-06-30 - HTT report Covered bonds outstanding all issues 8,055 M PLN Overcollateralisation Actual, non-committed. ос after the sub- benchmark size issue 28.0% Regulatory minimum at 10% 19.0 22.0% 5 255 7 571 1 340 2 712 2 800 Covered bond swap characteristics: . Swap to be included into the cover pool, Swap surviving the issuer default, Swap counterparty meets all Moody's criteria for Aa3 + 3 notches leeway rating. Well diversified mixed high-quality cover pool Moody's Rating,,Aa3" 0% NPL 65.81% Residential ML WA LEMLV - 76.0% Number of loans 26,538 100% Poland located properties 100% Floating rate type Average size 0.25 m PLN 34.19% CRE loans WA LtMLV - 68.1% Number of loans 257 Average size 13.50 m PLN The best market transparency standards mBH disclosures are compliant with the ECBC Covered Bond Label Convention - Harmonised Transparency Template (HTT) and are being published via: https://www.mhipoteczny.pl/en/investor-relations/cover-pool- information/ COVERED BOND LABEL- HTT mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 33#34- Cover Pool currency and mortgage type split Increasing share of residential mortgages in cover pool bn PLN 11 10 9 CRE/REE by the type of property 8 66% 63% 7 57% 55% 56% 6 55% Residential mortgages 44% 49% 40% 5 34% 4- 22% 3 95% 2- 78% 66% 51% 60% 56% 45% 45% 44% 43%. 37% Commercial Real Estate 1- 34% 0 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 06/19 12/19 06/20 m Since 2014 the currency structure of the loan portfolio in mortgage cover pool was subject to changes resulting from a systematic growth of the portfolio of retail loans granted only in PLN. mBH strategy for the following years is to be EUR issuer covered by significant increase of residential PLN denominated mortgages. Historically mBH never granted loans denominated in CHF. Hence, there is no CHF-denominated loans in cover pool. 6% Other 3% 3% Hotel/Tourism 2% 10% Property developers Warehouse/Logistic Centre Retail 36% Office 41% Shopping malls Commercial real estate Share of EUR, USD and PLN-denominated loans in cover pool 11 bn PLN 롬 10 9 8 7 73% 68% 71% 65 65% 67% PLN 66% 57%62% 56% 4 53% 44% 3 31% 2 1 67% 4% 45% 43% 42%38% 33% 34% 33% 32% 28%26% EUR USD 0 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 06/19 12/19 06/20 mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 34#35PLN m Cover Pool - by loans value Residencial mortgages 2020-06-30 - HTT report Value Commercial loans Total (in PLN m) ≤ 0.25 Value % share Value % share 2,229.4 33.4% 0.9 0.03% Value 2,230.26 % share in cover pool 22.0% 0.25 -0.5 3,263.6 48.9% 3.6 0.1% 3,267.18 32.2% 0.5 1.0 1,053.8 15.8% 16.1 0.5% 1,069.83 10.5% 1.0 5.0 128.9 1.9% 221.3 6.4% 363.18 3.5% 5.0 10.0 275.2 7.9% 275.2 2.7% 10.0 15.0 320.6 9.2% 320.6 3.2% - 15.0 20.0 392.5 11.3% 392.5 3.9% 20.0 30.0 30.0 40.0 565.7 16.3% 565.7 5.6% 384.6 11.1% 384.6 3.8% 40.0 - 50.0 307.6 8.9% 307.6 3.0% > 50.0 980.7 28.3% 980.7 9.7% TOTAL 6,675.6 100% 3,468.7 100% 10,144.4 100% 3,500 3,000 2,500 2,000 3,264 1,500 2,229 1,000 500 0 ≤ 0.25 0.25-0.5 Based on mBH HTT report - 2020-06-30 m Residencial mortgages Commercial loans 1,054 129 221 16 0.5-1.0 275 321 392 566 385 1.0 5.0 5.0 10.0 10.0 15.0 15.0 20.0 20.0 30.0 30.0 40.0 981 308 40.0 50.0 > 50.0 mGroup Covered bonds Cover Pool Polish Economy Real Estate Legislation 35 Market#36EOY2019 Data Source: GUS - Central Statistical Office Cover Pool - residential ML regional distribution Geographical distribution negatively correlated with unemployment- strong client base portfolio % of mBH's Mortgage Cover Pool > 20% 10.0 19.9% 5.0 - 9.9% 1.0 - 4.9% < 1% - 2020-06-310 Unemployment rate > 10% 8.0 10.0% 6.0 - 7.9% 4.0 5.9% < 4% - Zachodnio- pomorskie 3.5% Pomorskie 9.0% Warmińsko-mazurskie 1.1% Kujawsko- pomorskie 2.4% Mazowieckie 39.4% Lubuskie Wielkopolskie 0.9% 7.1% Łódzkie 3.7% Dolnośląskie 11.1% Pomorskie 5.5% Podlaskie 4.6% Zachodnio- pomorskie 7.9% Kujawsko- pomorskie 8.7% Warmińsko-mazurskie 10.3% Lubuskie 6.1% Wielkopolskie 3.7% Mazowieckie 5.1% Łódzkie 5.4% Podlaskie 7.7% Lubelskie 1.9% Dolnośląskie 5.6% Lubelskie 8.1% Opolskie 0.6% Śląskie Świętokrzyskie 0.4% Opolskie 6.8% Śląskie 4.6% Świętokrzyskie 8.6% 3.3% Małopolskie 10.7% Podkarpackie 0.6% Małopolskie 5.2% Podkarpackie 9.0% Based on mBH HTT report - 2020-06-30 m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 36#37Supportive demographic profile of mBank's retail client base Distribution of Polish banks by attractiveness of customer base in terms of age and education % of customers under 30 years old Poland average · other Banks 40% Highest share of the Young (<30 years old) mBank 30% 20% 10% mBank's clients are expected to reach their highest personal income levels in the future Poland average % of customers with higher education 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% Source: mBank based on declarative answers from the syndicate survey Zoom Finance 4Q'16 by TNS, n=8.6k customers. m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 37#38Cover Pool - CRE/RRE regional distribution Geographical CRE/RRE regional distribution vs existing office stock by the cities - positive correlation % of CRE/RRE regional distribution in Mortgage Cover Pool - 2020-06-30 > 20% 10.0 19.9% 5.0-9.9% 1.0 4.9% < 1% Total office stock - Q1 2020; Data source: Knight Frank > 2 mln m² 1 mln m² - 2 mln m² 0,5 mln m² - 1 mln m² <0,5 mln m² no available data Pomorskie 5.2% Zachodnio- pomorskie 1.6% Warmińsko- mazurskie 1.6% Podlaskie 0.5% Kujawsko- pomorskie 4.1% Lubuskie 0.2% Wielkopolskie 5.3% Dolnośląskie 18.9% Łódzkie 3.3% Mazowieckie 29.8% Opolskie Śląskie 1.5% Świętokrzyskie 1.6% 5.5% Based on mBH HTT report - 2020-06-30 m Małopolskie 15.4% Lubelskie 1.3% Podkarpackie 4.0% Zachodnio- pomorskie Szczecin 0.18 m m² Pomorskie Tricity 0.84 m m² Wielkopolskie Poznań 0.58 m m² Łódzkie Łódź 0,53 m m² Mazowieckie Warszawa 5.6 m m² Dolnośląskie Wrocław 1.2 m m² Śląskie Katowice 0.7 m m² Małopolskie Kraków 1.5 mm² Lubelskie Lublin 0.19 m m² mGroup Covered bonds Cover Pool Polish Economy Real Estate Legislation 38 Market#39Poland Strengths - one of EU's most resilient economies Contributions to GDP growth 4.6 6 4.8 4.3 5.5 5.1 5.2 5.3 5.2 4.9 4.8 4.6 3.9 3.7 3.3 3.6 3.1 3.4 2.8 2.8 2.0 4- 2 0 ■ The largest economy in Central and Eastern Europe (CEE) with more than 40% of the region's gross domestic product¹ ■ Track record of steady growth despite prolonged turmoil experienced by the international financial markets ■ Growth supported by expansionary policy-mix, solid influx of EU funds under 2014-2020 framework, high cost competitiveness and key location within the huge EU market ■ Economic expansion began in 2013 and GDP growth continued to remain solid in the next quarters Share of 2020 Q1 Nominal GDP of CEE region defined as: Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia Poland - one of the fastest growing economies in the region GDP index (Q1 2008=100) 8 -2 -4 2 +68 -6 -8 -10 -4.7 5.1 -9.0 Q1/15 Q3/15 Q1/16 Q3/16 Q1/17 Q3/17 Q1/18 Q3/18 Q1/19 Q3/19 Q1/20 Q3/20 Investment Inventories Net exports GDP YOY (%) Source: Central Statistical Office of Poland Consumption 2020 Q1 Nominal GDP share Real GDP growth 190 5.1% Poland 4.1% Romania 1.7% 170 4.8% 15,4% Hungary 3.0% 2.0% 150 43,7% 4.2% Poland 130 7,4% Slovakia 4.5% Slovakia 3.8% -1.1% 4.0% Romania 3.7% 2.7% Bulgaria 110 18,1% 3.2% Bulgaria 3.6% 10,9% -2.4% 90 Q1/08 Q1/10 Q1/12 Q1/14 Q1/16 Q1/18 Q1/20 Czech Republic 2.9% Czech Republic 2.8% -2.0% 2018 Bulgaria ⚫Poland Czech Republic Romania Hungary Hungary EU-28 1.9% 1.6% -2.5% Slovakia 2019 2020 Q1 Source: Eurostat mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 39#40Sound fundamentals for the banking business Relatively strong labour market Unemployment rate - 2020 H1 Capitalisation and Funding - the Polish banking sector 3.0% 2.6% 4.8% 4.4% TCR & Tier 1 ratio Tier 1 ratio Loan-to-deposit ratio 7.8% 7.1% 6.6% Tier 2 17.7 19.0 19.1 19.1 18.3 95.7% 94.8% 92.4% 90.2% 16.3 81.5% 15.0% 16.1 17.2 17.2 17.0 16.3 Poland Czech Hungary Bulgaria Slovakia EU-28 Republic Euro area Source: Eurostat 2015 2016 2017 2018 2019 2020 2016 2017 2018 2019 31 Q1 May 2020 Interest rate disparities (v. Germany, in basis points) are narrower PLN: the worst is over 400 4,7 350 4,5 300 4,3 250 4,1 200 3,9 150 3,7 100 3,5- 50 3,3 01/15 07/15 01/16 07/16 01/17 07/17 01/18 07/18 01/19 07/19 01/20 07/20 ⚫2Y 5Y 10Y Interest rate cuts along with QE launched by the NBP allowed for a massive drop in government bonds yields. Credit risk settled on lower levels (as expected). Interest rates to stay low for some time.. 01/15 07/15 01/16 07/16 01/17 07/17 01/18 07/18 01/19 07/19 01/20 07/20 CHF/PLN COVID-19 shock triggered fast depreciation of all EM currencies. After the initial increase EUR/PLN settled on lower levels. Return to growth will be beneficial for PLN, along with Next Generation EU transfers. EUR/PLN ⚫USD/PLN m Source: Bloomberg Source: Bloomberg Covered mGroup bonds Cover Pool Polish Economy Real Estate Market Legislation 40#41Stable growth impacted by COVID-19 Consumption is expected to decrease Labour market is affected by COVID-19 20 13% Unemployment rate % 11% 9% 15 7% 5% 10 3% 6.1% 1% 5 -1% -3% -5% 0 2009 Consumption Consumption Forecast 2015 2017 2019 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Polish unemployment rate (5,5%) in 2019 was at its lowest since early 1990s and among the lowest in Europe. Global COVID-19 pandemicic had impact on labour market and the unemployment rate reached 6.1% in 2020 H1. 2011 2013 2021 Consumption will be further supported by fiscal package (personal tax cuts, social transfers including the extended child subsidy programme) but on the other hand, it will be challenged by tendency to save in the time of uncertainity. Source: GUS, NBP Inflation rate (YoY) and the path of interest rates Source: GUS, NBP Key Polish interest rates 5% 4% 3% 2% 1% 0% 5% 4% 3% 2% 1% 0% -1% -2% 2015 2016 2017 2018 2019 2020 2021 2022 1.27 01/15 07/15 01/16 07/16 01/17 07/17 01/18 07/18 01/19 07/19 01/20 07/23 CPI inflation Core inflation forecast CPI forecast Repo rate Core inflation Repo rate forecast Inflation peaked in Q1/20. Some cost adjustments were recently passed onto consumers increasing core inflation. However, it is unlikely to last and 2021 inflation will be much lower than today. WIBOR 3M 10Y Yeld NBP base rate The lowest in history intrest rates should stimulate consumpion but put pressure on net intrest margin. Conventional monetary policy tools are ending and may not work in the future. m 0.01 Source: GUS Source: Bloomberg mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 41#42Improving risk indicators in Poland - NPL ratios by sector Asset quality trends in Poland Comparison of NPL ratios for CEE countries - 2019 13.0% 7.5% I...... 3.7% 5.2% 4.9% 13% 12% 11% 10% 9% 8% 4.8% 4.1% 7% 6% 5% 4% Czech Republic Bulgaria Slovenia Hungary Romania Poland Slovakia Source: ECB (Statistical Data Warehouse) Mortgage NPL ratio evolution in Poland 4% 3% 2% 1% Introduction of IFRS9 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 12/17 12/18 12/19 Source: Polish FSA 8.73% 6.85% 6.07% 3.49% 2.42% A conservative regulatory environment Recommendation S Introduction of a limitation on LtV: to 90%, if part of the loan exceeding the 80% limit was insured or backed by high quality collateral, and to 80% in other cases; a gradual reduction to the target levels in 2017 Recommended to retail customers repayment period no longer than 25 years for retail customers Foreign-currency mortgage loans as a niche product offered only to borrowers earning permanent income in the loan currency Recommendation T Assessment of the client's standing based on certificates of income, external databases, e.g. the Credit Information Bureau (BIK) Maximum Debt-to-Income ratio determined by the bank's management board and approved by the supervisory board FX Mortgages Total mortgages 0% 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 12/17 12/18 12/19 Source: Polish FSA m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 42#43Economic forecast and impact on mBank Group Impact of COVID-19 pandemic materializes in volumes, revenues and provisions Key economic indicators Short-term outlook for mBank 2019 2020F 2021F Net interest income & NIM (Negative) GDP growth (YoY) 4.1% -4.2% 4.6% Domestic demand (YoY) 3.5% -3.8% 4.3% Private consumption (YoY) 3.9% -2.6% ■ Reduction of interest rates by 140 bps in total will translate into lower interest income and strong pressure on margin ■ Insufficient space for deposit repricing equivalently to rate cuts 4.4% Investment (YoY) 6.9% -9.5% 5.3% Net Fee & Commission income (Slightly negative) Inflation (eop) 3.4% 2.2% MPC rate (eop) 1.50% 0.10% 1.8% 0.10% ■ Lower sales of banking products, curbed new loan production ■ A decrease in customer activity, rise of price sensitivity CHF/PLN (eop) 3.92 4.11 3.95 EUR/PLN (eop) 4.25 4.40 4.30 Total costs (Neutral) Banking sector - monetary aggregates YoY 2019 2020F 2021F Corporate loans 3.0% -6.7% 6.4% Household loans 6.1% 2.4% -0.8% Mortgage loans 6.7% 2.7% -0.9% Non-mortgage loans 5.1% 2.0% -0.5% Corporate deposits 10.0% 17.7% Household deposits 9.7% 5.6% 8.3% -1.7% Source: mBank's estimates as of 03.07.2020. Strictly-disciplined management of operating expenses ■ Rising amortisation due to ongoing investments in IT Higher contribution to the Deposit Guarantee Scheme ■ Loan Loss Provisions (Negative) ■ The financial standing of corporate and retail borrowers can worsen in the coming quarters due to the expected deterio- ration of the macroeconomic situation ■ The anti-crisis stimulus package may limit the negative impact of the recession on the asset quality mGroup Covered bonds Cover Pool Polish Economy Real Estate Market 43 Legislation#44Stable and growing residential market in Poland House price dynamics in the CEE - very low volatility in Poland index, 2015=100; % 180 14 Euro area - EA19 170 Poland Czech Republic Romania Hungary 12 160 10 8 150 20% 6 140 4 130 120 20 110 -2 100 90 80 Q1/10 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18 Q1/19 -4 Quartile 1-3 Median -6 -8 Poland Residential prices on secondary primary and market in Poland remains stable trough the years. Low volatility of house price dynamics driven by strong demand and supply offers significant potential for further growth. Euro Czech Hungary Romania Data Source: Eurostat area Republic Mortgage penetration in Poland remains low while home ownership rates are among the highest in Europe Distribution of population by tenure status in selected countries (data for 2018, in %) Dwellings per 1000 citizens 529 509 26 454 459 467 479 490 47 ■ Owner 381 % 100 12 90 80 16 26 15 21 S 8 70 21 60 21 29 21 24 45 49 50 55 ■Rental 95 40 72 76 39 3220 30 58 47 17 ■Mortgage loan 30 10 14 Romania POLAND Hungary Czech Spain Austria Denmark Republic Source: Eurostat m POLAND Hungary Denmark Czech Belgium EU 28 Germany France Republic Source: Deloitte Property Index 2018 mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real estate market Legislation 44#456 thous. PLN/m2 7 ∞ 10 Residential market in Poland - stable demand Average house price per square meter - primary market by major Polish cities. Average house price per square meter vs. average monthly wages by major Polish cities. Square meter 1,15 1,05 0,95 0,85 0,75 5 2007 2008 2009 Gdansk Lodz Warsaw 2010 2011 2012 2013 Average of 6 major cities 2018 2019 2014 2015 Cracow Poznan Wroclaw 2016 2017 Q1 2020 0,65 0,55 0,45 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Gdańsk Poznań Szczecin Kraków Warszawa Katowice Łódź Wrocław Average of 9 cities Average house prices remain stable trough the years. Increase since 2013 was offset by significant increase of average wages. purchasing power almost doubled during last 10 years. Source: GUS - Central Statistical Office; NBP - Houses mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real estate market Legislation 45 m#46Commercial Real Estate - investment volume Investment volume in Poland by sector m EUR 7000 6000 ■ Office ■Retail Warehouse ■ Others 120 1840 1457 5000 380 1 919 225 225 182 41 600 1100 4000 2 500 486 150 3000 20 2 400 100 600 1 978 100 40 200 200 700 2 150 200 450 2 228 2000 1 550 50 1 350 500 1 050 150 20 1 000 3808 180 10 500 1 150 2750 100 1000 900 1900 700 117 1800 1840 1250 1200 1200 50 1300 1300 1296 1500 950 300 650 400 0 200 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Poland - CEE leader in CRE investment volumes (%) 5% 6% 12% 55% 22% Data Source for the slide: Cushman & Wakefield Report m ■ Poland T I ■Czech Hungary ■Slovakia ■Romania I I Poland - CEE leader in CRE investment (55%). The volume of transactions concluded in 2019 on the commercial real property market amounted to approx. EUR 7.56 bn and the result was higher with that in 2018 (EUR 7.21 bn). The share of the commercial real estate market in 2019 is approx. 50% for offices market, approx. 25% for market retail and approx. 19% for warehouse. I I mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real estate market Legislation 46#47Commercial Real Estate - Offices Office resources (ths. square meters) Office prime yields 1600 12000 10% 9,25% 9% 1200 10000 8% 8000 7% 800 الالسلسلة 400 6% 6000 5% 4% 4000 3% 2,65% 2,75% 2,85% 2000 2% 1% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 0 0% Annual supply Total surface resources (right axis) Source: Cresa 2019 Office resources by region (%) ■ Warsaw 5%28 11% 7% 5% 5% 15 Cracow 14 ■ Łódź 13 ■ Katowice 12 11 ■Tricity 50% 10 ■ Wrocław 9 Berlin Paris Frankfurt Stockholm Amsterdam 3,25% 3,50% 3,40% 3,90% 4,25% 2,85% Average price (EUR/m2) and Vacancy rate (%) London Milan Brussels Warsaw Source: Slavis Q1 2020 Moscow 13% ■ Poznań Lublin ■Szczecin 87 Source: Cresa, 2019 65 14% 12% 10% 8% 6% 4% 2% 0% m In Poland prime yield is the highest in Europe (4,75%). In Poland, the average rate per m²/EUR of office space is constantly growing, despite the high supply, the vacancy rate is dropping. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average price [EUR/m2] Source: Cresa 2019 mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real estate market Legislation 47#48Commercial Real Estate - Retail Retail resources (ths. square meters) Retail - Prime Yield 1000 16000 900 14000 800 12000 700 10000 600 500 8000 400 6000 300 2,00% 4000 200 2000 100 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual supply m The structure of commercial space in Poland 18% 2% 8% shopping center commercial warehouses ■retail park outlet center 72% 9,75% London 905 863 Berlin 2,70% 2,65% 2,75% 2,90% 3,15% 3,50% 3,30% Amsterdam Paris Frankfurt Madrid Brussels Average density per 1,000 inhabitants 620 582 558 555 Milan 3,50% 4,00% Stockholm Warsaw Source: Slavis Q32019 Moscow Source: Cresa 2019 In Poland prime yield is the highest in Europe - 4,00% We have stable and growing retail commercial market in Poland mostly are shopping 72%, Commercial warehouses is 18%. Retail park and outlet center are less popular Source: Cresa 2019 Wroclaw Poznan Warsaw Cracow Lodz Gorny Slask PL 306 262 208 142 Western Europe Central Europe Eastern Europe Madrid 490 450 444 420 258 Paris mBank Hipoteczny Covered bonds Cover Pool Polish Economy Real estate Legislation 48 market Budapest Berlin Prague Source: Cresa, H1 2018#49Commercial Real Estate - Warehouses 20 000 Warehouses - Prime Yield Warehouse resources (thous. m2) 3000 2500 2000 1500 1000 500 0 2006 2007 2008 2009 Annual supply 2010 2011 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2012 2013 2014 2015 2016 2017 2018 2019 Forecast Total surface resources (right axis) Werehouses resources by region (%) 4% 4% 4% 20% 5% Source: Colliers, JLL Warsaw - Around ■Gorny Slask Central Poland ■Dolny Slask Poznan ■Warsaw City E 12% 13% 19% 19% ■Szczecin ■Tricity East Poland Source: Cresa 2019 In Poland prime yield is the highest in Europe (6,50%) Warehouse resources are constantly growing. Structure of warehouses by regions over 50% for Warsaw - Around, Gorny Slask and Poznan. Vacancy ratio on low level differentiate by region. 3,50% 3,90% 3,90% 4,20% 4,50% 4,75% 5,00% 5,30% 5,25% 6,50% London Berlin Frankfurt msterdam Paris Stockholm Madrid Milan Brussels Warsaw Warehouse space resources and vacancy rate 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 11,75% Moscow Source: JLL Q2 2019 Warsaw Around Gorny Slask Central Poland Dolny Slask mBank Hipoteczny Covered bonds Cover Pool Polish Economy Poznan Warsaw - City Szczecin ■Warehouse resources (thous.m2) ◆ Vacancy rate (%) Real estate market Tricity East Poland Cracow 14% 12% 10% 8% 6% 4% 2% 0% Source: Cresa 2019 Legislation 49#50Positive changes in Polish Covered Bonds Law Legal framework for Polish Covered Bonds ☐ The Act on Covered Bonds and Mortgage Banks (Ustawa o listach zastawnych i bankach hipotecznych) of August 29, 1997 as amended The Bankruptcy Law (Prawo upadłościowe) of February 28, 2003, Bankruptcy proceedings for mortgage banks, Article 442-450a Mortgage Bank Specialised bank (mortgage bank) with the supervision of Polish Financial Supervision Authority (KNF) Mortgage bank is a joint stock company with a legal personality (not a branch) with several licences e.a.: banking licence and a consent to start operating activity, both granted by the KNF A covered bond issuer may issue mortgage or public covered bond Specific license for each covered bond type is required before the issuer may start to issue covered bonds Fundamental changes in 2016 revision of the Act on Covered Bonds and Mortgage Banks - in line with the best market practices and with recommendations of the European Central Bank (ECB) and credit rating agencies Improvements: Increase of credibility and safety of covered bonds ✓ Extension of covered bond supply ✓ Extension of demand for covered bonds • • soft bullet / pass-through - maturity of the covered bonds obligations extended automatically by 12 months and if asset coverage or liquidity test were negative - pass through case of mortgage bank's insolvency (details on the next slide) Regulatory status - Compliance with: Covered Bonds Programme Domestic International - in CRR art 129 ✓ ✓ UCITS 52 (4) ✓ ✓ BRRD ✓ ✓ Credit quality step LCR Delegated Act (HQLA) 2 2 mandatory liquidity reserve covering at least 6 months of interest due on the covered bonds outstanding minimum legal overcollateralization requirement (OC) - 10% increase refinancing limit for mortgage covered bonds for residential mortgage loans to 80% from 60% introduce investment limit for Pension Funds 5% of portfolio per issuer of covered bonds income from interest or discounts on the covered bonds earned by foreign investors is exempt from withholding tax (WHT) ECB Repo Expected category III NBP Repo CBPP/LTRO ✓ × E mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 50#51Covered Bonds repayment in case of issuer bankruptcy issuer bankruptcy event Coverage and liquidity tests performs initially 3 months after insolvency and subsequently every 3 months - liquidity test and 6 months coverage test - Coverage test* passed Liquidity test* passed Coverage test passed Liquidity test failed Coverage test failed or Maturity of outstanding covered bonds Covered bonds repaid according to terms and conditions of the covered bonds, with 12 M maturity extension 2/3 majority covered bondholders may adopt a resolution to sell the separate bankruptcy asset pool to another bank. Extended to longest dated cover asset maturity plus 3Y, distinct rules for pro-rata repayment before extended maturity date (fixed to floating) 2/3 majority covered bondholders may adopt a resolution to disapply maturity extension or • . sell cover assets to another bank or non-bank *details on the next slides m Soft bullet Pass through mGroup Covered bonds Cover Pool Polish Economy Real Estate Legislation 51 Market#52Obligatory cover pool tests Coverage Test Verifies at the day of test whether the value of the assets in the cover pool allows for outstanding covered bonds claims. Cover pool Core assets + Substitute assets + Liquidity buffer + Hedging instruments CB claims Outstanding covered bonds (principal) + Due and unpaid interest from CB + > 1 Cost of liquidating asset pool in case of insolvency Test calculated also under stressed conditions: +/- 20% FX rate or highest year change in previous 12 M Tests performed min. once a 6M Liquidity Test Verifies at the day of test whether the value of the assets in the cover pool allows for outstanding covered bonds claims even in extended maturity in case of issuer insolvency. Separately for 6M and 12M horizon Cover pool Substitute assets + Liquidity buffer Net cash flows from hedging instruments in time horizon Additionally for 12 M horizon: Interest under receivables in the cover pool for the next 12 months Obligations towards holders (principal + interest) that became due but were not paid before the date of hypothetical insolvency E Interest payable in time horizon CB claims Principal amount that fall in time horizon Cost of liquidating asset pool in case of insolvency in time horizon > O 0 Test calculated also under stressed conditions: • +/- 20% FX rate or highest year change in previous 12 M • +/- 400bps shift of interest rate curves Tests performed min. once a 3M mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 52#53Polish Covered Bonds Law vs German Pfandbriefe Law Special Covered Bonds Law Special bank principle Mortgage Valuation concept Loan to Value (LtV) cap Mortgage value refinancing limit (consider as OC) Geographical scope for mortgage assets Repayment structure Legal framework for bankruptcy Bankruptcy remoteness Recourse upon cover pool default Minimum Mandatory Overcollateralization CRR, UCITS compliant Source: European Covered Bond Council Poland Hipoteczne Listy Zastawne (HLZ) YES Germany Mortgages Pfandbriefe (Hypfe) YES NO Mortgage lending value ΝΟ YES Mortgage lending value 100% Residential: 80% Commercial: 60% PL Soft-bullet and CPT Specific legal framework superseding the general insolvency law Preferential claim by law Specific cover pool administration Yes, pari passu with unsecured creditors 10% YES 60% of mortgage lending value EEA, CH, US, CA, JP, AU, NZ, SG Hard Bullet Specific legal framework superseding the general insolvency law Preferential claim by law Specific cover pool administration Yes, pari passu with unsecured creditors 2% YES m mGroup Covered bonds Cover Pool Polish Economy Real Estate Market Legislation 53#54Disclaimer IMPORTANT: The following applies to this document, the oral presentation of the information in this presentation by mBank Hipoteczny S.A. (the "Bank") or any person on behalf of the Bank, and any Q&A session that follows the oral presentation (collectively, the "Presentation"). In accessing the Presentation, you agree to be bound by the following terms and conditions. The Presentation and its contents are strictly confidential and are intended for use by the recipient for information purposes only and may not be reproduced, redistributed, published or passed on to any other person, directly or indirectly, in whole or in part, for any purpose. This document may not be removed from the premises. If this document has been received in error it must be returned immediately to the Bank. The Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Presentation is not for publication, release or distribution in the United States, the United Kingdom, Australia, Canada or Japan. This document and its contents may not be viewed by persons within the United States or "U.S. Persons" (as defined in Regulation S under the Securities Act of 1933, as amended (the "Securities Act")). The covered bonds referred to herein (the "Securities") have not been registered under the Securities Act or the laws of any state or other jurisdiction of the United States and the Securities may not be offered or sold in the United States or to or for the account or benefit of U.S. Persons unless so registered, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws. The Bank does not intend to register any portion of the offering of the Securities in the United States or to conduct a public offering of the Securities in the United States. By accessing the Presentation, you represent that you are a non-U.S. Person that is outside the United States. The Presentation is made to and directed solely at: (i) persons outside the United Kingdom, (ii) persons with professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the "Order"), (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities of the Bank or any member of its group may otherwise lawfully be communicated or caused to be communicated (all such persons in (i)-(iv) above being "Relevant Persons"). Any investment activity to which the Presentation relates will only be available to and will only be engaged with Relevant Persons. Any person who is not a Relevant Person should not act or rely on the Presentation. By accessing the Presentation, you represent that you are a Relevant Person. The Presentation does not constitute or form part of, and should not be construed as an offer to sell or the solicitation or invitation of an offer to subscribe for or purchase the Securities in any jurisdiction or an inducement to enter into investment activity, and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding the Securities. The Presentation is an advertisement for the purposes of EU Directive 2003/71/EC (as amended or re-enacted) (the "Prospectus Directive"), does not constitute an offering document or listing particulars in compliance with the regulations or rules of any stock exchange and does not comprise a prospectus for the purposes of the Prospectus Directive. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of the Bank and the nature of the Securities before taking any investment decision with respect to the Securities. Full information on the Bank and definitive terms of the offer of the Securities is only available on the basis of the combination of the of Base Prospectus dated 11 July 2019, as supplemented on 5 September 2019 (the "Base Prospectus") and the final terms in relation to the relevant offering (the "Final Terms") which will be published on the Luxembourg Stock Exchange website (www.bourse.lu) and on the website of the Bank (www.mhipoteczny.pl). This Presentation may contain information different from the Base Prospectus and the Final Terms. Therefore, the Presentation is qualified in its entirety by the information in the Base Prospectus and the Final Terms for the proposed transaction on which your investment decision must be based. No part of this Presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. m 54#55Disclaimer The Presentation has been prepared by the Bank. Any dealer acting in connection with the offering of the Securities (the "Dealer") is acting exclusively for the Bank and no one else, and will not be responsible for providing advice in connection with the Presentation to any other party. Subject to applicable law, none of the Bank or the Dealer accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for the contents of the Presentation, including its accuracy, completeness, fairness or verification or for any other statement made or purported to be made in connection with the Bank, the Presentation or the Securities and nothing in this document or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. The Bank and the Dealer accordingly disclaim all and any liability (including any liability for damages for misrepresentation under the UK Misrepresentation Act 1967) whatsoever, whether arising in tort, contract or otherwise (save as referred above) which any of them might otherwise have in respect of the Presentation or any such statement. This Presentation contains certain statistical and market information relating to the banking sector in Poland, including information on the market share of certain banks and the Bank. Unless attributed exclusively to another source, such market information has been calculated based on data provided by third party sources identified herein and includes estimates, assessments, adjustments and judgments that are based on the Bank's experience and familiarity with the sector in which the Bank operates. Because such market information has been prepared in part based upon estimates, assessments, adjustments and judgments and not verified by an independent third party, such market information is, unless otherwise attributed to a third party source, to a certain degree subjective. While it is believed that such estimates, assessments, adjustments and judgments are reasonable and that the market information prepared is appropriately reflective of the sector and the markets in which the Bank operates, there is no assurance that such estimates, assessments and judgments are the most appropriate for making determinations relating to market information or that market information prepared by other sources will not differ materially from the market information included herein. The Presentation contains forward-looking statements. All statements other than statements of historical fact included in the Presentation are forward-looking statements. Any historical information is not indicative of future performance. Forward-looking statements give the Bank's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Bank's control that could cause the Bank's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Bank's present and future business strategies and the environment in which it will operate in the future. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Presentation or the opinions contained therein or the assumptions on which such opinions are based. The Presentation has not been independently verified (including review and verification of any rating agency, government entity, regulatory body or listing authority) and will not be updated. The Presentation, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Bank expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Presentation, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Presentation that may result from any change in the Bank's expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document. Market data used in the Presentation not attributed to a specific source are estimates of the Bank and have not been independently verified. This Presentation does not purport to identify all of the risks (direct or indirect) and information which may be associated with any decision relevant in respect of an offering of the Securities. Nothing in this Presentation should be construed as legal, tax, regulatory, accounting or investment advice. The distribution of this Presentation in certain jurisdictions may be restricted by law and persons into whose possession this Presentation or any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Presentation and any materials distributed in connection with this Presentation are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Bank and the Dealer do not accept any liability to any person in relation to the distribution or possession of this Presentation in or from any jurisdiction. m 55#56Contact details Frank Bock Vice-President of the Management Board, mBank Chairman of Supervisory Board, mBank Hipoteczny Piotr Cyburt Direct dial: e-mail: +48 22 829 01 16 [email protected] Direct dial: +48 22 579 74 02 President of the Management Board, mBank Hipoteczny e-mail: Karol Prażmo Head of mBank Group Treasury Direct dial: e-mail: [email protected] +48 22 829 17 12 [email protected] Krzysztof Dubejko Board Member, Head of Financial Markets mBH Direct dial: e-mail: +48 22 579 74 97 [email protected] Wojciech Zdunkiewicz Head of mBH Treasury Direct dial: e-mail: +48 22 579 75 90 [email protected] mBank Hipoteczny S.A. al. Armii Ludowej 26 00-609 Warszawa m 56