One of the best-digitalized banks in Poland. Good franchise and ample operating cost efficiency. Strong capitalization buffer, supported by strict regulatory requirements toward dividend payouts. High exposure to legacy foreign currency-denominated mortgages and related litigation risks. Increased economic risks resulting from the COVID-19 pandemic, combined with pressures on the profitability of the banking sector in Poland. Uncertainties on future possible organizational changes, given strategic deliberations of mBank's Germany-based controlling investor, Commerzbank AG. S&P Global Ratings' negative outlook on mBank reflects our view that the current COVID-19-related economic recession in Poland could undermine mBank's risk-return profile, adding to elevated tail risk from legacy Swiss franc-denominated mortgage loans. We could downgrade mBank if we perceived a significant increase in economic or industry
