mBank S.A.

Legal Proceedings Report • Jan 16, 2020

Increase in the provision for legal risk related to the mortgage andhousing loan portfolio in CHF and the impact of early repayment ofretail loans on the bank's results in Q4 2019

The Management Board of mBank S.A. ("Bank") informs that in connectionwith the decision taken on January 16, 2020 by the Bank, the portfolioprovision for legal risk related to the indexation clauses in mortgageand housing loans indexed with the CHF rate, created in Q4 2019, amountsto PLN 293 million.

At the same time, the Bank informs that in connection with the verdictof Court of Justice of the European Union regarding the consumer's rightto reduce the cost of loan in the event of early repayment of the amountdue under the loan agreement, the negative impact of early repayments ofretail loans on the Bank's gross profit in Q4 2019 amounted to PLN 78million, of which PLN 68 million reduced net interest income and PLN 10million increased other operating expenses. The majority of this amountcovers one-time effects which will not reoccur in the coming quarters.

Additionally, the Bank informs that the Group's recurrent operatingresults in Q4 2019, i.e. not including the above events, have improvedcompared to the results achieved in the previous quarters of 2019.