mBank S.A. (MBK) Earnings Call Transcript & Summary

Good afternoon, and welcome. I have the pleasure to open this Annual General Meeting under Article 409 of the Code of Commercial Companies and Paragraph 6-1 of the Rules of the General Meeting. May I ask the notary public who will keep the minutes of this meeting to please introduce yourself? Thank you. And now we have technicians responsible for the voting system who will introduce you to the system and how to use it.

Good afternoon. Let me remind you how to use the tablets you have received when you signed the attendance list. On the tablets, there are 2 buttons, Your Data and Documents. When you press Your Data, you can check the data of the shareholder whom you represent. If you press Documents, you will see a list of documents published by the company on the website for this general meeting, and you can browse the documents at any time. Concerning the voting system, when a vote is opened, your tablets will display buttons: Yes/No/Abstention. You can vote by pressing the relevant button, and then in the next screen, confirm. I hope this will be practical for you. If you have any questions of technical nature, we are here for you throughout the meeting with instructions and technical assistance. Thank you.

Thank you very much. We can now proceed. Let's start by testing the system by electing Chair of this Annual General Meeting. Are there any candidates proposed?

I would like to propose Mr. Gabriel Wujek as candidate for Chair.

I accept.

Thank you for accepting to stand for election. Let's proceed with a vote unless there are other candidates proposed. Let's vote. [Voting]

This will be a secret ballot. I understand that the system is working. I understand that the votes have been counted even though the process seems to be digital. Thank you. On the election of the Chair, it was a secret ballot, 36,529,070 valid votes were cast out of 39,529,070 shares, representing 86.184% of the share capital. In favor of election, there were 34,956,070 votes cast. No votes against. Abstentions, 1,573,000 votes. In total, 36,529,070 valid votes were cast. Congratulations, Mr. Wujek, on your election. Will you please join us at the top table and take over as Chair?

Thank you very much to all shareholders for your election. I will make best efforts to make sure that this annual general meeting proceeds smoothly. Let me start by asking for a moment of your patience because I need to check and sign the attendance list and make sure that all other formal requirements have been met. A minute of your patience. If I may start with the formal and technical issues. This annual general meeting, the 35th Annual General Meeting was announced in a stock exchange report and published on the website of the bank on the third of March. At this time, there are shareholders present who jointly represent 36,529,170 shares, which is equal to 86.18%. As you have seen, the notary public [ Thomas Segan ] introduced himself. He is here to take minutes of the resolutions to be tabled and voted. All the formal legal requirements have been met, and this annual general meeting is legal and capable of passing valid resolutions. We may now proceed with the agenda. Let me first remind you that this meeting is being broadcast live online. The recording will later be available on the bank's website. And please put your mobile phones on silent to make sure that this meeting is not disturbed. Now we need to elect the Ballot Counting Committee to ensure that the votes proceed legally. According to the standing rules, the Chair of the general meeting has the authority to propose candidates for members of the Ballot Counting Committee. There are 3 openings on the committee. I propose the following candidates for election to the Ballot Counting Committee. May I ask the candidates to confirm that they are ready to stand for election? Marta Zbikowska-Michalik, Dominik Szepietowski, [ Mihail Veinzicker ]. Are there any other candidates proposed by the shareholders for the Ballot Counting Committee? Anyone? I cannot see any. Given that the number of candidates proposed is equal to the number of mandates on the Ballot Counting Committee, I propose that we vote in a single vote on all candidates proposed in secret ballot. The vote is open. [Voting]

If everyone has cast a vote, I close the vote. May I have the results of the vote on the election of the Ballot Counting Committee, please? The results are being displayed on your tablets. There were 34,956,170, yes; no, nays, 1,573,000; votes abstained. The Ballot Counting Committee has been elected. May I ask the members of the Ballot Counting Committee to please take their seats? And we may now proceed with the agenda for the day. The next item on the agenda is and addressed by the President of the Management Board, who will present the activity report of mBank and mBank Group in 2021, including a presentation of the financial statements, both separate and consolidated of the group for 2021. Mr. Cezary Stypulkowski, CEO.

Details have been published in the documents posted on the bank's website as of the third of March. The documents include, just as the Chairman of the meeting said, the documents released. Let me just refer briefly to some of the main factors driving the bank's activity in 2021. Without going into great detail on the economic environment of our operation, including low interest rates until October, let me remind you that the rates were cut in 2020, impacting the operation of the Polish banking industry at large. In addition, we paid a bank tax based on assets, which in practice led to a loss. However, the bank did generate very good net interest income in 2021, an increase year-on-year. And the significant improvement of NFC by close to 25% helped the bank to generate total revenue of PLN 6.1 billion, the highest ever in the bank's history, despite the very unfavorable market environment. An important factor driving the activity of the bank in 2021 were the provisions set up against the legal risks of FX mortgage loans. The status of FX loans on the bank's balance sheet has been discussed on many occasions at our AGMs. Last year's cost was PLN 2.7 billion, which was the main reason why the bottom line of the bank was negative. Even though the bank paid a bank tax and an income tax, despite the positive operating profit, we posted a net loss, the first loss posted since 2004. On a personal note, I have been leading financial institutions for years and it is the first time for me to post a loss. The reasons for the Swiss franc loan-related provisions are well known. I've spoken on the issue on many occasions. If you have any specific questions, I will be happy to take them. So the low interest rates until October last year were a significant driver of the results of the bank. However, despite the low rates, our annual NII increased 2.5% year-on-year. As I've said, the bank has, over the years, generated bigger NFC and that is our intention. We have, for years, provided basic core services to retail customers at no commissions. However, recently, given the changing market conditions and additional burden on the banking sector, we have approached the commission levels charged by our peers. We have relatively low operating costs last year. The operating expenses increased by 2%. And importantly, the charges paid to the Bank Guarantee Fund in 2021 decreased compared to the previous years due to the policy pursued in the context of the pandemic and macroeconomic uncertainties. However, some of our cost items increased. Personnel costs grew 10% as we had to respond to rising inflation in the economy and wage pressures as well as the fact that we are one of few banks, maybe even the only top bank, to increase its headcount. Last year, we added 50 FTEs last year. As a result, under the circumstances, we are probably the most efficient financial institution. Our cost/income ratio is slightly more than 40%. Compared to the European benchmarks at 50%, 60%, our CI is very strong and proves that we are smartly managing our costs as related to income as a measure of efficiency of a financial institution that is a bank. Last year was quite good when it comes to the cost of risk, which was 76 basis points. The provisions were lower than we expected early in the year. While our balance sheet grew, we sold some loan portfolios which we thought to be hardly promising. The NPL ratio, the nonperforming loans ratio, fell to the lowest ever in my memory, specifically 3.9%. 2021 was not sensational when it comes to lending in the Polish banking sector for obvious reasons that I do not need to dwell upon. However, net of the FX effect, which does play a role on our balance sheet, our loans grew by more than 7.4%, protecting our market share in this segment of the banking industry. Our total loans stood at more than PLN 120 billion. The most important driver or contributor to lending were new mortgages, which were the highest reported over recent years. When it comes to the corporate loan portfolio, the situation was different, mainly because economic activity in 2021 was relatively weaker even though the economy grew year-on-year, but some trends in the economy in the enterprise sector did not manage to rebound. The bank is pursuing actively a policy to improve the profitability of its credit exposures, and we are shifting from large tickets to loans for smaller and medium-sized enterprises, which means we will have a bigger number of loans on the balance sheet but that doesn't necessarily boost our credit volumes. Over the past 2 or 3 years, our liquidity position has improved significantly. We have benefited disproportionately from the great supply of money in the Polish economy. In the past 2 years, our market share in retail grew to 8% and stands at 10% for corporate deposits. The increase in retail deposits, what we have seen over the past decade, means that we have doubled our market share in retail deposits without competing at -- with high prices. The strategy we adopted early in last decade to be a prime first-trade transactional bank seems to be working, and this means that clients are very active banking with us, so transactions, payments in accounts and payments with cards, with BLIK in all these segments, our market share is significantly stronger. As it is, when it comes to brokerage services for retail customers, our presence over the past 20 years in the retail market has become very successful. The bank's capital position remains strong. At this time, well, as at the end of last year, our Tier 1 ratio was 14.2%, whereas the total capital ratio of this year was equal to 16.6%, which suggests that we have significant buffers on top of the regulatory requirements imposed on banks, specifically with relation to the mortgage loan portfolio. Now over the past years, when it comes to the Swiss franc portfolio, we cannot pay out the dividends due to the requirements imposed by the regulator, who has defined the criteria we are unable to meet, specifically the share of the Swiss franc loan portfolio from 2007, 2008 when we were very active lending and the relatively unfavorable FX rates when customers were buying this product. This means we are unable to pay out a dividend. Now to highlight the efficiency of the bank's business model, which we believe is and remains robust and successful over the years. We started, in 2021, to present the bank split into a core bank and the reporting numbers. So we are reporting numbers net of the Swiss franc loan portfolio to give the investors and analysts a better understanding of the core business we are pursuing. This new segmentation, I believe, is useful and serves a better understanding of our balance sheet, our growth rate and our operations. In 2021, we completed the drafting of our midterm strategy by 2025, which has been presented at the prior meetings with investors and analysts. Those were dedicated meetings late last year. The strategy is called From An Icon of Mobility to an Icon of Possibility, and it is a continuation of our previous strategies. The strategy was welcomed by the investors and analysts. We have received positive feedback so I'm not going to delve into the strategy following those presentations. I will only say that when it comes to retail banking, we rely on a good understanding of the demographics of our retail customers. That is a great asset. We have great retail clients with a very positive age, educational and geographic profile, which means that we are confident that our retail business addresses well our customers' needs and the customers we have acquired previously. And we offer them attractive products. We have attractive tools to acquire new customers, especially young clients because we serve young clients. The average age of our customers is 36 years compared to the average age of Poles, 41. We have been using the brand name mBank, with its reference to an Icon of Mobility for years. We were the first mobile bank to move away from brick-and-mortar and even online banking. We now have about 3 million clients using our application in Poland, the Czech Republic and Slovakia. Our clients use mobile devices disproportionately more than do the clients of our peers, which is important both in retail and corporate banking, where we are focusing on the SME segment, where we have a very strong uncontested advantage. Many clients, especially self-employed individuals, persons running a single-person business, people running micro firms, businesses running e-commerce operations, they all believe we are an attractive partner, so they bank with us both as individuals and as businesses. The bank's digital transition is almost complete. We are at a new level. Transactionality, which was our focus over the decades, is now becoming secondary because it's an obvious requirement for all other banks to be active in the market. The challenges ahead include improving our customer relationships where we want to be responsible and transparent whenever we offer products because we believe clients will be expecting us to provide better analytics of their portfolios, their finance management, the wealth and good records of their activity, including payments and e-commerce. Another challenge faced by all of us, which extends well beyond the banking industry is ESG. When drafting our new strategy, we focused on a strategy for climate, social factors, communication with customers, protecting the finance of our clients, being responsible and loyal to the values we subscribe for. One of those values, which is central to our strategy, is stability, secrecy where we focus on these aspects whenever we develop new products. We are a leader in communicating online security requirements. Secrecy, in turn, which has been diluted by regulation over the years, remains important in the banking industry as a foundation of our responsibility to customers and clients. We want to be a responsible citizen and to be socially engaged. Some of our projects continue our prior endeavors. You can see my pin with 2 hearts, 1 for the Great Orchestra of Christmas Charity, the other 1 for the bank. The 30th edition of the Great Orchestra closed yesterday. PLN 224 million were collected through donations, including a great contribution of our clients and our institution because we offered solutions to help clients donate, and our clients are very active using the mobile devices and online banking. They contributed about PLN 16 million alone. This is an important pillar of our engagement. Another pillar of our engagement over the years has been the mathematics education. We are the key sponsor of many educational initiatives focusing on mathematics. We have published books on mathematics, and we are starting a new edition of the program to promote knowledge of mathematics, which is centered on the book we have addressed to young people. We are also running another social engagement project, m jak malarstwo, which means M stands for painting in Polish, obviously. We have invested money to promote young painters. The bank tries to be responsible socially by ensuring equal treatment on whatever grounds. We're trying to stay neutral and to create opportunities for people at the bank to grow and to feel comfortable whenever they come to us as employees or as clients. Our NPS is one of the highest in the banking industry, between 50% and 60%, and we want to improve it even further. Finally, briefly about FX loans, which are a burden for the bank. And let me be open when I speak about it. The issue, which goes back to 2005, 2008, as I've said on many occasions and written in articles, well, in the case of mBank, we financed FX loans fully with money raised by the bank from abroad. So we imported capital directly from our majority shareholder. Other banks finance their lending largely by swapping, or rather, converting zloty deposits into foreign currency to issue loans. Therefore, I am certain that the arguments we raised with our clients, with courts, whenever we speak in public, stand strong. And we will push for opinion to move in that direction. Even though the Polish judicial system suffers structural weaknesses, the case law is weak. There is no case law in this area, but we aspire to slowly help it evolve in line with the arguments we raised by being responsible to our clients without contesting contractual obligations contracted in the past. It is very important to strike a balance, which is why the bank offered late last year, to a group of customers, a pilot solution that we will discuss later on. Again, we set up provisions against legal risk last year at PLN 2.7 billion. And so the coverage ratio of the Swiss franc loan portfolio is 32.2%, which is one of the highest in the industry. I would like to thank you now and stress once again that the Management Board is positive that we managed the affairs of the bank well in 2021, which may not be reflected in the bottom line as we posted a loss. However, given the circumstances of our business, this is something that can be easily explained. And looking forward, the future looks bright. This year is going to be a record year when it comes to our revenue, another high -- historical high this year. Thank you.

Thank you. The next item on the agenda is an address by the Chairwoman of the Supervisory Board of mBank. Presenting the report of the Supervisory Board and the current situation of mBank, Madam Chairwoman?

Thank you. I will present the situation in 2021, which is the next item on the agenda. Dear shareholders, all stakeholders, all interested parties, in 2021, we faced many challenges as a Supervisory Board and a Management Board, similar to 2020, due to the ongoing COVID-19 pandemic and the accompanying uncertainty. The pandemic radically changed the world of business, the behaviors of consumers and the working style of employees. It forced us to use new technologies. Some businesses expanded while were destroyed. At the same time, access to capital was very easy. On the other hand, the pandemic augmented the erosion of trust in many institutions and the polarization in society. As a result, the relationship between the bank and its stakeholders and mutual expectations were largely redefined in this difficult environment. It is important to note that the results of the mBank Group were very good, mainly thanks to the high growth in business volumes, which increased the market share in strategic segments, specifically in housing loans and retail deposits. This boosted our revenue. As Mr. Stypulkowski said, our revenue was record high at PLN 6.1 billion. Thanks to the interest rate hikes, as of October, we generated a higher NII accompanied by an improved NFC, which grew by as much as 25%. Combined with our famous cost discipline, improved efficiency, a lower cost-to-income ratio at 40%, improved our results. Net of the FX mortgage loans, the bank generated a profit of PLN 1.6 billion, which was more -- significantly more than in 2020. However, due to an increased cost of the legal risk of the Swiss franc loan portfolio, the loss on a consolidated basis was PLN 1.2 billion. I should stress that despite the negative net loss, our capital and liquidity ratios remain safe, which means the bank can continue to grow and pursue its strategy. Mr. Stypulkowski has mentioned the strategy which was approved by the Supervisory Board in October. The strategy is called From an Icon of Mobility to an Icon of Possibility, and it aims mainly to leverage our existing competitive advantage to align even better with the changing and very competitive environment. We hope that this ambitious strategy will put us among the top leading financial institutions as before, ensuring even better value for our investors and shareholders. An important part of this strategy from an Icon of Mobility to an Icon of Possibility is the ESG agenda that Mr. Stypulkowski mentioned. This also draws particular attention of the Supervisory Board. ESG is becoming increasingly important. We believe that in the time of horizon of this strategy, ESG will be an important part of the assessment made by investors and clients who care about green transition. I'm happy to say that mBank is the first, and I understand, the only institution, financial group in Poland to sign the Responsible Banking Principles under the umbrella of the United Nations Environment Program, which shows that we understand how important environmental, social and governance factors are. They are imperative for all, including banks. The regulatory requirements and the pressure exerted by clients and investors, a drive to cost savings and efficiencies, make sustainable development crucial to a success in business. mBank will support those companies which are working to reduce their carbon footprint or transform radically their business models to become competitive and to minimize their negative impact on the environment. We want to be a leader in sustainable banking. Concerning supervisory activity, may I say that based on information we received in 2021, the Supervisory Board identified no significant irregularities in the bank's internal control system, which we consider to be aligned with the scope of activity and the complexity of the bank, its structure and risk management system. In our assessment, based on the analysis and opinion of the Audit Committee, the Supervisory Board identified strengths and areas for improvement. In our view, the control, risk management, compliance and internal audit functions performed in compliance with legal regulations, internal legislation and all the requirements of the regulator. 2021 was the second year of the term of office of the Supervisory Board, which is equipped with a very comprehensive composition aligned with the activities of the bank, which has been acknowledged both internationally and by domestic investors. The bank has been named as a good example of a company which promotes a culture of diversity, participation and corporate governance. We realize that we have a long way to go with additional initiatives supporting diversity. However, we hope we have proven that we are moving in the right direction and we will try to step up the process. In the past reporting period, the Supervisory Board, which I have had the pleasure to lead, was composed of the following members: Deputy Chairwoman as of the 1st of October 2021 was Dr. Bettina Orlopp. Until the 30th of September 2021, Mr. Jörg Hessenmüller was in that position. Members included Tomasz Bieske, Dr. Marcus Chromik, Miroslaw Godlewski, Aleksandra Gren. Until the 24th of March, Sabine Schmittroth; as of the 25th of March, Mr. Arno Walter; and as of the 25th of October, Dr. Armin Barthel. The composition of the Supervisory Board ensured adequate supervision of the nature and activity of the bank. According to applicable regulations, 1/2 of the members speak Polish and have Polish nationality as well as experience in the Polish market. They also contribute diverse rich experience, expertise and skills to reflect the business needs of mBank. I should note that the members of the Supervisory Board, especially the members of the Audit Committee, have the necessary competencies in accounting or finance. I should also stress, in line with the good practice of corporate governance, that 3 members of the Supervisory Board are now women. There were 4 women early in the year. Now women account for nearly 40% of the membership so we are ready for an amendment of the European directive on quotas expected later this year. According to the rules of the Supervisory Board, the good practice of companies listed on the Warsaw Stock Exchange and the rules of corporate governance, the criteria of independence set out in the law on auditors, audit firms and public supervision were met by the following members of the Supervisory Board: Mr. Tomasz Bieske, Miroslaw Godlewski, Aleksandra Gren and myself. In the last reporting period, we were very busy on the Supervisory Board, as I will discuss with numbers. We had 9 meetings, passed 111 resolutions, which covered different areas of the activity of mBank in line with the supervisory functions defined in the law, the recommendations of the Polish financial supervision authority, rules of corporate governance as well as the tasks of the Board defined in the bank's bylaws and the rules of the Supervisory Board. Due to the pandemic, the Supervisory Board met online. However, importantly, given the ongoing uncertainty, the Supervisory Board was in regular communication with the Management Board and monitored mBank's situation, also taking measures outside of its meetings. Last year, we discussed at our meetings, regular reports from the Management Board on the results of the mBank Group, its business divisions in the implementation of the financial plan. In accordance with the regulatory requirements, we discussed reports on risk management, IT, IT security, bancassurance, supervision of the complaints handling process, outsourcing activities. One of the key items on our agenda was the status of the FX mortgage loan portfolio. Another important item we discussed on the Board were improvements in AML sanction and CFT policies. We approved updates of the recovery plan required by the regulator, and we performed other supervisory activities in accordance with the recommendations of the Polish Financial Supervision Authority. The Supervisory Board has several standing committees, the Executive and Nominations Committee, the Risk Committee, the Audit Committee and the Revenue. Considering our position, profile and brand, we decided that the Supervisory Board should appoint an additional committee, an IT Committee. On the one hand, this is due to expanding regulation and market challenges as well as shows that shareholders, investors and the media have access to necessary information. In the opinion of the Supervisory Board, in 2021, the bank correctly performed its disclosure obligations defined in the rules of corporate governance and in line with regulations applicable to periodic and current reports. According to Article 382.3 of the Code of Commercial Companies and Paragraph 22.1 of the bylaws of mBank, having analyzed the report of the Management Board report on the activity of the mBank Group, the financial statements of mBank and the mBank Group, the reports and opinions of the Supervisory Board and its committees, having reviewed the opinion of the auditor and the audit report, we confirm that the reports are fair and comply with the formal requirements. They also present a fair picture of the position of the company and the potential of its growth. As such, the Supervisory Board recommends that this annual general meeting should approve the Management Board's activity report for 2021, the financial statements of mBank for 2021, the financial statements of the mBank Group for 2021, the assessment by the Supervisory Board of the functioning of the remuneration policy at mBank, the policy for remuneration of the Management Board and key position holders in the bank, which supports the growth and safety of the bank, and the positive opinion on the report on the remuneration of the members of the Supervisory Board and the Management Board of 2021, as well as resolutions concerning the coverage of the loss for 2021 and the division of the retained earnings for previous years as recommended by the Management Board and approved by the Supervisory Board. In conclusion, I would like to thank, on behalf of the Supervisory Board, I thank the Management Board and the employees for their constructive cooperation. I hope this year, despite great difficulties mounting ahead of us quite unexpectedly, that this year will help us to realize the full potential of the mBank Group and its employees according to the new strategy, From an Icon of Mobility to An Icon of Possibility. I wish to thank the shareholders for your trust. I hope that the different interests of different stakeholders, which are not difficult to balance under the difficult circumstances that polarize the world, can be successfully addressed. I think under the difficult conditions, it's important to have a long-term vision and pursue the ambitious objectives we have set out for ourselves in the new strategy. I am certain that this will ensure lasting value and gains to all shareholders and sustainable development for all stakeholders of the mBank Group clients, employees and the regulators. Thank you very much.

Thank you, Chairwoman. The next item on the agenda from -- well, 6 and 7, 2 items, are to review the report of the Management Board and the activity of the mBank Group, including the financial statements and the report of the Supervisory Board and do a review of the consolidated financial statements of the mBank Group for 2021. As these topics are very similar, if not identical, I suggest, as usual, to hold a debate on both items jointly. Would any shareholders like to speak on the activity of the bank financial statements of the bank and the group for 2021? If you wish to speak, please introduce yourself. If you're a proxy, please tell us which shareholder you represent. I open the floor. Anyone who would like to speak?

[ Artur Ditorek ]. I am a shareholder and a client of the bank. I would be very interested to know more about ESG, which you mentioned. I'm very happy that mBank is becoming a leader in the industry. Indeed, over the years, you have taken many initiatives and strategies, which make you a likely leader, but I have some specific questions. You are no longer financing projects in coal-fired energy production or extraction of fossil fuels. But according to your strategy, your policies, are you in a position to check whether companies would invest in such projects, extraction of fossil fuels, coal-based energy production that they are not financed by you? Another question. A link between ESG factors and remuneration of the Management Board and employees. Do you have a policy in this regard? If not, are you planning to have one so you can achieve your ESG objectives linked to benefits? My third question is about the code for suppliers, which is a very valuable initiative. However, the code is quite soft in its regulations. Are you planning to add some indicators or maybe offer educational initiatives to your suppliers to cascade ESG factors and promote them among your partners, business partners? Thank you.

Thank you for these questions. Who would like to answer? Mr. Stypulkowski or anyone else?

Thank you for your questions. Thank you for acknowledging our efforts in relation to ESG. I should start by saying that as Germans like to say relating to ESG, the road is the purpose. So the existing solutions are not the final ones because awareness is rising both among our clients and our partners raises the bar. This boosts further expectations. In our credit policy and investment policy, we look at exposures against ESG criteria. Especially, in 2021, we developed credit policy-related tools to rate the risks of ESG. Our strategy clearly sets out our ambition to reduce the emissions in Scope 1, 2 and 3. Our ambition this year, to be more specific, regarding the trajectory of achieving the objectives, which are mid and long term, this is something we consider whenever we make credit decisions. On your second question concerning the integration of ESG factors into performance appraisal of our employees. As we said when we communicated the strategy, the midterm strategy late last year, the ESG factors are part of the appraisal matrix for our top 100 managers at mBank, including obviously the Management Board. As for the code of our suppliers, the starting point for us was to draft and approve a code. We understand that the code could be more restrictive but it's an evolution and we will be raising the bar for our partners in due time.

Thank you. Are there any further questions or comments? Yes, please?

Good afternoon. [ Jan Kajinsky ], a proxy of [ Jakub Grogaleski ], a minority shareholder. I have several questions, mainly relating to ESG. First, to follow up on what Mr. Lusztyn has just said, emissions, greenhouse gas emissions in Scope 3. You said you have set the trajectory and some partial reduction targets. Do you have any estimates concerning the reduction of Scope 3 emissions over the past few years? I know it's not mandatory at this point to report, but some banks are disclosing such information to a limited degree. This is relevant because Scope 3 is the biggest source of emissions in the financial sector. That's my first question. Should I ask all the questions or...

Yes, please, if all your questions are on the same topic.

Yes, so I will continue. Concerning the trajectory towards carbon-neutral targets, it's important when you define the trajectory, to consider the activity of your -- of the companies you finance with loans. So it's about your credit lending policy. Are there any criteria in your new strategy or in your credit strategy to set limitations for companies in your loan portfolio, those companies, which have not yet defined their trajectory of achieving such targets? So that's both for coal, oil and gas production. And my third question, if I may, my final question. I would like to ask about the S in ESG. You have laid off the president of your trade union in November 2021. How are you managing your reputational risk in the context of the demographics of your clients, which you mentioned?

Thank you for your questions. May we have one of the members of the Board answer those questions?

Concerning ESG, our strategy includes a commitment to be climate-neutral in Scope 3 by 2021 when it comes to direct emissions and indirect emissions, Scope 1 and 2. By 2030, and we also say in 2022, we will set the trajectory for decarbonization and that will include intermediate targets and how we want to achieve them. As you said, different institutions set different parameters for the emission profile of the loan portfolio. Our nonfinancial report includes some information, but it is our aspiration to use science-based targets this year and present to our stakeholders the total carbon footprint of the mBank Group. We are a bank, and so we know that Scope 3 emissions are crucial in direct emissions relating to the financing we extend through loans. So Scope 3 carbon footprint is not easy to measure, given the available data, public and private available from clients. Scope of disclosures. Again, that is incomparable across the different institutions so we wanted to work with an external partner who certifies the process of calculating the carbon footprint. So we would ask our stakeholders to be patient. We hope to be able to disclose more figures next year as to where we are and where we're going. When it comes to quantitative measures, environmental awareness is part of our DNA. We were one of the first institutions to stop financing fossil fuels. If you look at the profile of our clients by sector in our loan portfolio, it is really less energy-intensive and more forward-looking businesses that are the majority. I cannot give you specific numbers right now for all the reasons I mentioned. But our starting point at mBank when it comes to Scope 1 and Scope 2, we are sitting in a very state-of-the-art building here also in Lódz and our branches are also very modern, which impact our emissions. Also for Scope 3, given the profile of our loan portfolio, we have a much better position than the average loan portfolio in the Polish banking industry. Obviously, the war in Ukraine does not help the reduction of emissions and the green transition, something we have to live with as an institution. But it doesn't change our ambition as we published it in the autumn last year. We have been discussing it over the years at our annual meetings. And I want to stress that the bank was quite quick to join the trend of fighting climate change, so our portfolio is uniquely clean under the Polish standards. Concerning your last question, to the best of my knowledge, this had nothing to do with social engagement. The problem was violation of employees' obligations. That's how we interpret it. We never wanted to restrict the activity of our employees. I think we can serve as a model. We have a Works Council. A trade union was established. We are not planning to restrict its operation. Our engagement score is one of the highest in the banking industry, so we don't feel we are to blame. These situations happen. And if you have 7,000 people, that's the kind of risk you're running. But we can assure you that we want our employees to feel comfortable at mBank, and we have taken a range of initiatives and we will continue to do so.

Thank you very much. Are there any further questions from the shareholders on Items 6 and 7? I cannot see any. If so, let's move to the next item on the agenda. Item 8, which is a [ raise ] through resolutions. We have 31 draft resolutions. Let's hope we can proceed efficiently. The first resolution approves the Management Board report on the activity of the mBank Group, including the Management Board report on the activity of mBank for 2021. Let me read out the operative part of the resolution. The management will report on the activity of the mBank Group in 2021, including the Management Board report on the activity of mBank for the period from the 1st of January 2021 to the 31st of December 2021 shall be approved. This resolution shall come into force on the date of its adoption. Whenever the system is ready, and you can see the buttons on your screens, you can start to vote. [Voting]

I understand that you have all cast your votes. I close the vote. May I have the results for the Ballot Accounting Committee, who will present the results? Vote #3, resolution 1, there were 36,484,390 yays, no nays; 44,781 abstentions, which means that resolution 1 passes. I should explain to the shareholders that one extra shareholder has joined the meeting. So the total number of shares represented has increased by one. The total is now 36,529,171 shares. Just to reassure you, if you're asking yourself why the number has changed. The next resolution on the agenda for the vote is a resolution approving the financial statements of mBank for 2021. Let me read out the operative part. The audited financial statements of mBank for 2021, including; a, profit and loss account for the financial year from the 1st of January to 31st of December 2021, showing a net loss of PLN 1,215,353,000; b, a statement of comprehensive income for the financial year from the 1st of January to 31st of December 2021, showing a total net loss of PLN [ 3,096,228,000 ]; c, a statement of financial position as of the 31st of December '21, which shows total assets as well as total equity and liabilities of PLN 191,873,819,000; d, a statement of changes in equity for the financial year from the 1st of January to 31st of December '21, showing a decrease of capital by PLN 3,085,869,000; e, statement of cash flows for the financial year from the 1st January to the 31st of December 2021, showing an increase of net cash by PLN 8,227,473,000; f, notes for the financial statements shall be approved. When you can see the buttons on your screen, you can start your vote. That's for resolution 2. [Voting]

If you have all cast your votes, I close the votes. And the results will go to the Ballot Accounting Committee to be announced. Vote for resolution 2, there were 36,484,390 yays, no nays, and 44,781 abstentions. Thank you. The resolution passes. The next resolution, #3, concerns the coverage of loss for 2021, which reads as follows: the net loss of mBank of 2021 at [ PLN 1,215,353,334.02 ] shall be covered from the bank's reserves. I open a vote. [Voting]

Shareholders have voted. I close the vote. The results will go to the Ballot Accounting Committee to be announced. Vote 5, resolution 3, there were 36,529,170 yays, no nays, 1 vote abstaining. Thank you. Resolution 3 has passed. The next resolution, #4, concerns the distribution of retained earnings reading. The General Meeting of mBank resolves not to distribute retained earnings from previous years at [ PLN 2,098,480,869.01 ]. The vote is open. Resolution 4. [Voting]

If all shareholders have voted, I close the vote. You may have the results for the Ballot Accounting Committee. Vote 6 on resolution 4, there were 36,529,170 yays, no nays, 1 abstention. Thank you. Resolution 4 has passed. Now we have a series of resolutions granting a vote of discharge of duties to those who are members of the Management Board of mBank during 2021. 6 members: Cezary Stypulkowski; Cezary Kocik; Adam Pers; Krzysztof Dabrowski; Andreas Böger; and Marek Lusztyn. As usual, unless anyone raises an objection concerning the voting procedure, I propose to vote jointly on all of these 6 resolutions. Are there any -- well, I understand this is technically possible. If not, we'll have to go one by one. I understand it is possible. So this will be a vote in secret ballot. Those members of the Management Board who are shareholders are requested to not participate in the vote if you have the right to vote and have registered unless you are a proxy for another shareholder, holding a power of attorney or a specific manner of casting the votes. These are the restrictions. Concerning the formal vote on resolutions 5 to 10, when the system is ready for a secret ballot, you may cast your votes on the vote of discharge of duties to members of the Management Board. [Voting]

If you have all cast your votes, thank you. I'll close this ballot on resolutions 5 to 10, and I ask for the results to be given to the Ballot Accounting Committee. Vote 7, resolutions 5 to 10, there were 36,478,521 yays, no nays. There were 50,650 abstentions. Thank you. As such, resolutions 5 to 10 have passed. The next 2 resolutions approve the election to the Supervisory Board of members during the financial year 2021. 2 members are concerned. According to the bylaws, if the composition of membership of the Supervisory Board changes during the year, it is possible to co-opt new members. However, the upcoming general meeting must approve such cooptation, which is why these 2 resolutions have been put on the agenda, resolutions 11 and 12. We may vote on each resolution separately. So now resolution 11, to approve -- well, following the resignation of a member of the Supervisory Board, Ms. Sabine Schmittroth, Mr. Arno Walter has been co-opted to the Supervisory Board. So this resolution approves this cooptation, and the Supervisory Board considers that Mr. Arno Walter has the knowledge, skills [Audio Gap] Vote 8, on resolution 11, there were 33,193,151 yays, there were 17,918 nays and 3,318,002 abstentions. Thank you. As such, the resolution has passed. The next resolution in the same series is resolution -- is the resolution approving the appointment as of the 25th of October of Mr. Armin Barthel as member of the Supervisory Board. And it also confirms that Mr. Barthel has the knowledge, experience and skills necessary to perform his duties as a member of the Supervisory Board and gave us the guarantee that he will perform these duties. Again, this is a secret ballot. Whenever you see the buttons on your screen, you can start to vote. [Voting]

Thank you. I close the vote. And the results will be handed to the Ballot Accounting Committee to be announced. Vote #9, on resolution #12, there were 33,061,077 yays, 150 nays and 3,318,001 abstentions. Thank you. I close the vote, and the results will be announced by the Ballot Accounting Committee. [Voting]

In vote 11, on resolution 14, there were 35,946,018 yays, 524,503 nays and 58,650 abstentions. Thank you. The resolution has passed. The next resolution grants a vote of discharge of duties to Ms. Bettina Orlopp. You can vote when you see the buttons on your screen. [Voting]

I close the vote. And the results will be announced by the Ballot Accounting Committee. Vote 12, on resolution 15, there were 36,349,009 yays, 121,512 nays and 58,650 abstentions. Thank you. The resolution has passed. The next resolution grants a vote of discharge of duties to Mr. Marcus Chromik. The vote is open. [Voting]

Thank you. I close the vote. The results will be announced by the Ballot Accounting Committee. In this vote, #13, on resolution 16, there were 36,362,012 yays, 108,509 nays and 58,650 abstentions. Thank you. The resolution has passed. The next resolution grants a vote of discharge of duties to Mr. Jörg Hessenmüller. The vote is open. [Voting]

Thank you. I close the vote. The results will be announced by the Ballot Accounting Committee. In vote, #14, on resolution #17, there were 35,946,018 yays, 524,503 nays and 58,650 abstentions. Thank you. The resolution has passed. The next resolution grants a vote of discharge of duties to Mr. Tomasz Bieske. The vote is open. [Voting]

I close the vote. The results will be announced by the Ballot Accounting Committee. In this vote, #15, on resolution #18, there were 35,946,018 yays, 524,503 nays and 58,650 abstentions. The resolution has passed. The next resolution grants a vote of discharge of duties to Mr. Miroslaw Godlewski. The vote is open. [Voting]

Thank you. I close the vote. These results will be presented by the Ballot Accounting Committee. In this vote, #16, on resolution #19, there were 35,946,018 yays, 524,503 nays and 58,650 abstentions. Thank you. The resolution has passed. The next resolution grants a vote of discharge of duties to Ms. Aleksandra Gren. The vote is open. [Voting]

Thank you. I close the vote. The results will be presented by the Ballot Accounting Committee. In this vote, #17, on resolution #20, there were 36,470,520 yays, no nays, and there were 58,650 abstentions. Thank you. The resolution has passed. The next resolution grants a vote of discharge of duties to Mr. Arno Walter. The vote is open. [Voting]

Thank you. I close the vote. The results will be presented by the Ballot Accounting Committee. In this vote, #18, on resolution #21, there were 36,470,521 yays, no nays, 58,650 votes abstained. Thank you. The resolution has passed. The next and final resolution in this series concerning the grant of the vote of discharge of duties to members of the Supervisory Board grants a vote of discharge of duties to Mr. Armin Barthel. The vote is open. [Voting]

Thank you. I close the vote. And the results will be presented by the Ballot Accounting Committee. In this vote, #19, on resolution #22, there were 36,470,520 yays, no nays, 58,651 votes abstained. Thank you. The resolution has passed. The next resolution approves the consolidated financial statements of the mBank Group for 2021. The operative part of the resolution reads as follows: The audited consolidated financial statements of the mBank Group for 2021, including: a, a consolidated profit and loss account for the financial year from the 1st of January to 31st of December 2021, showing a net loss of PLN 1,178,813,000; b, a consolidated statement of comprehensive income for the financial year from the 1st of January to 31st of December 2021, showing a total net loss of PLN 2,967,702,000; c, consolidated statement of financial position as at the 31st of December 2021, showing total assets as well as total equity and liabilities at PLN 199,538,885,000; d, the statement of changes of consolidated equity for the financial year from the 1st of January to 31st of December 2021, showing a decrease of equity by PLN 2,957,151,000; e, a consolidated statement of cash flows for the financial year from the 1st of January to the 31st of December 2021, showing an increase of net cash by PLN 8,301,202,000; f, notes to the consolidated financial statements shall be approved. I open the vote on resolution 23. [Voting]

Thank you. I close this vote. The results will be presented by the Ballot Accounting Committee. In this vote, #20, on resolution #23, there were 36,484,390 yays, no nays and 44,781 votes abstained. Thank you. The resolution has passed. The next resolution amends the bylaws. Given the length of the resolution, I'm not going to read it out, but I understand you have all received the draft. This resolution requires a qualified majority of 3/4 of votes to pass. I open the vote. [Voting]

Thank you. I close this vote. The results will be presented by the Ballot Accounting Committee. In this vote, #21, on resolution #24, there were 30,996,246 yays, 5,532,923 nays and 2 abstentions. Thank you. The yays represent 84.85% of all votes, which means that the resolution has passed. The next resolution concerns the position of the shareholders of mBank on the assessment of the functioning of the policy for remuneration of members of the Management Board and key function holders at mBank. The operative part reads as follows: Having considered the report on the assessment of the functioning of mBank's remuneration policy in 2021 presented by the Supervisory Board of mBank S.A. included in the report of the Supervisory Board of mBank of its activity of 2021, the General Meeting of Shareholders of mBank considers that the policy for remuneration of members of the Management Board and key function holders at mBank supports the growth and safety of operation of the bank. I open the vote. [Voting]

Thank you. I close this vote. The results will be presented by the Ballot Accounting Committee. In this vote, #22, on resolution #25, there were 36,484,390 yays, no nays. There were 44,781 abstentions. Thank you. The resolution has passed. The next resolution to be voted on is a resolution concerning the assessment of -- [ no, says the Chairman ]. Sorry, I have skipped one resolution. There's one resolution on approval of the policy on the assessment of the qualification suitability of appointment and dismissal of members of the bodies of mBank and the authorities of the brokerage office. It's a complicated heading and subject matter of this resolution, but the resolution is simple. It reads: The general meeting of shareholders approves the policy on the assessment of qualifications, suitability of appointment and dismissal of members of the body of the bank and authorities of the brokerage office policy. The General Meeting of mBank authorizes the Supervisory Board to amend in the period between the adjourning of the meeting of mBank and the date of the next General Meeting of mBank. Any amendment by the Supervisory Board within this authority shall be approved by the next General Meeting of mBank. I open a vote. [Voting]

Thank you. I close this vote, and the results will be presented by the Ballot Accounting Committee. In this vote, #23, resolution #26, there were 36,529,169 yays, no nays with 1 abstention. Thank you. The resolution #26 has passed. The next resolution, #27, concerns the assessment of suitability of members of the Supervisory Board and assessment of the adequacy of internal regulations of mBank concerning the functioning of the Supervisory Board and the effectiveness of the Supervisory Board. I will not read out this resolution. It's quite a tongue twister. But the heading is indicative of the subject matter of this resolution. I open a vote. [Voting]

Thank you. I close this vote. Its results will be presented by the Ballot Accounting Committee. In this vote, #24, on resolution #27, there were 36,529,169 yays, no nays, 1 abstention. Thank you. The resolution has passed. The next resolution, #28, concerns an opinion of the general meeting concerning the report on the remuneration of members of the Management Board and the Supervisory Board, which reads: Having reviewed the report on the remuneration of the members of the Management Board and the Supervisory Board of mBank prepared by the Supervisory Board of mBank for -- I think there's a spelling error in the Polish text -- for 2021 and on the basis of Article 90G of the act audited by Ernst & Young Audyt, Polska, the general meeting issued a positive opinion on the report. The general meeting raises no comments to the report. A vote is now open. [Voting]

Thank you. I close this vote. Its results will be presented by the Ballot Accounting Committee. In this vote, #25, on resolution #28, there were 33,319,088 yays, 3,210,081 nays and 1 abstention. Thank you. The resolution has passed. The next resolution, #29, amends resolution 32 of the 33rd Annual General Meeting of mBank of the 27th of March 2020 to appoint the auditor to audit the financial statements of mBank and the consolidated financial statements of the mBank Group for 2020 to 2022. This amendment concerns the period for which Ernst & Young has been appointed as auditor. It will now end in 2021 rather than 2022 as per the original -- sorry, 2023, says the Chairman -- as per the original resolution. So this resolution shortens the mandate of Ernst & Young. This vote is now open. [Voting]

Thank you. I close this vote. The results will be presented by the Ballot Accounting Committee. In this vote, #26, on resolution #29, there were 32,414,431 yays, 1,603,237 nays and 2,511,502 votes abstaining. Thank you. The resolution has passed. The next resolution, which follows the shortening of the mandate of Ernst & Young to audit the financial statements after 2021, is the resolution appointing a new auditor to audit the financial statements of mBank and the consolidated financial statements of the mBank Group for the years 2022 and 2023. Madam Chairwoman, would you like to present the recommendation of the Supervisory Board?

Thank you. The Supervisory Board of mBank recommends that this 35th AGM of mBank elects KPMG Audit Limited as the auditor to audit the financial statements of mBank for 2022 and 2023 and the consolidated financial statements of the mBank Group for 2022 and 2023. This recommendation was published in the current report and published on the website on the date on which this general meeting was summoned that is the 3rd of March 2022. This recommendation of the Supervisory Board is consistent with the preference concerning the appointment of the auditor presented by the Audit Committee of the Supervisory Board at the meeting of the Supervisory Board of the 3rd of March. Thank you.

I would like to open a vote on resolution #30 as presented in the draft whereby the AGM of mBank appoints KPMG Audit to audit the financial statements of mBank and the consolidated financial statements of the mBank Group for the years 2022 and 2023. This vote is now open. [Voting]

Thank you. I close this vote. The results will be presented by the Ballot Accounting Committee. In this vote, #27, on resolution #30, there were 30,993,256 yays, 1,609,931 nays and 3,925,883 abstentions. Thank you. The resolution has passed. The next and final resolution concerns the rules for remuneration of members of the Supervisory Board of mBank. I will not read out the text, which includes amounts of remuneration to members in different functions. It's a technicality. I understand the shareholders have reviewed this draft. I open a vote on resolution #31. [Voting]

Thank you. I close this vote. The results will be announced by the Ballot Accounting Committee. In this vote, #28, on resolution #31, there were [ 34,952,327 ] yays [Audio Gap] loans indexed with the Swiss franc. Mr. Stypulkowski?

I will be brief. This is a stated report. I would like to start by saying that the number of court cases has been rising year after year. In the Northwest corner of this screen, you can see that the growth rate has dropped, but the number of cases keeps on growing. I think this quarter and the next will be key for a number of reasons, mainly because there's a time lag between the time when clients get the file and when they lodge an action. So in our view, this quarter and the next is when we will see the truth of the case. And -- but the growth rate in a number of cases has been permanently decreasing as in the last quarter, down to 12%. On the other hand, our portfolio has been shrinking. It's a rather homogeneous portfolio, and it is very high quality. We have a low loss ratio in this portfolio. The only cases of default are incidental and relating to individual circumstances of the borrowers. So from the perspective of credit risk, it is the highest quality portfolio we have on our balance sheet. However, given that there's an influx of court cases, in my opinion, many borrowers are taking advantage of the suspicion of contracts containing allegedly unfair terms. There's a new business line of lawyers who are feeding on this frenzy. And the cases are decided by the courts in an inconsistent manner. The court judgments go in different directions. Some of them annul contracts, others replace indexation clauses with other provisions as a result in extreme cases. If the case law develops adversely to the bank, those borrowers would be getting their apartments at a very low price compared to Zloty borrowers, which is something I find hard to understand. I think banks are not to blame in this issue. However, this is what is happening, and this is something we have to live with, considering that the case law has not developed consistently. However, we have been losing many cases, more and more to be honest. It is not a big population given the number of pending cases, of which there are about 13,000 or 14,000 whereas [indiscernible] judgments so far in second instance whereas the Supreme Court has been paralyzed. As I said, we have set up high provisions. If you look at the second bar, in the southwest corner, we have seen an increase by almost 200% year-on-year in provisions whereas the individual cases are covered by PLN 2.7 billion of provisions. The collective action, 387,000 -- sorry, 387 million. And there are some extra provisions for the final months of the year -- more than PLN 1 billion. So in the pool of provisions, well, that pool in our view is adequate given the potential risks. Although honestly, I think I hope that the case law will become more reasonable with time. But before that happens, we have to be prepared for the worst, which is why we have set up those provisions. The coverage ratio, as I said in my address, is quite high. When it comes to recent developments, we may want to set up additional provisions, but it doesn't seem likely that the numbers will be equally high. The total amount of claims raised against the bank so far, that's the red bars at the bottom, has grown from PLN 1.8 billion to PLN 3.8 billion. Now it's a long way to go before we get those judgments. Given the different aspects of the jurisprudence, the case law, it will take time to develop. And we believe the bank is in a safe position regarding potential issues or problems. And we have adopted some assumptions, which are open for discussion, of course. Concerning the population of clients, we expect that maybe 34% of them will accept some form of settlements with the bank. Our settlements are offered on certain assumptions. More on that later. I said that the case law is not very clear. Last year, in the first quarter, in March, we were expecting the Supreme Court to address questions asked by the first President of the Supreme Court. At that time, those questions were not answered, but the civil chamber of the Supreme Court met and decided to ask additional questions, which were referred to the President -- of the Governor of the National Bank of Poland and the Chairperson of the Polish Financial Supervision Authority as well as [ 2 ] other authorities, the ombudsman -- the financial ombudsman, and for some reason, the ombudsman for the child. Their answers came in at the next session in early September. Well, at that session, the chamber -- the civil chamber eventually referred another question, which stopped the Supreme Court Civil Chamber from handling the issue anytime soon. In addition, there was a resolution issued by -- for 7 judges of the Supreme Court in May 2021 concerning an important issue, confirmation of the settlement between the parties if the contract is invalidated. The final answer to that question was no offset, but 2 mutual claims. That was the technical decision. And the Supreme Court defined a criterion for banks to take measures in case of counterclaims regarding claims for repayment of the cost of capital and the right of retention. We haven't been involved in those cases yet. No core judgments have been pronounced in that regard, but it is an important issue, which makes the bank's position stronger if banks decide to claim a repayment of the cost of use of capital. From our point of view, this is quite a deterrent for the clients. And then the Court of Justice of the European Union has issued its judgments mainly regarding the issue of invalidity of contracts and the consequences and how judgments should be passed from the perspective of relations with clients who are applicants. But the decisions of the Court of Justice of the European Union, which awards the client who is a consumer the right to decide whether or not the agreement should have been validated. Well, in our opinion, that was an interpretation going a step too far. We thought that this case law would not take root. For the time being, in Poland, in most cases recently, unfair terms of agreements are grounds for courts to invalidate agreements, long-term agreements, the longest term there is in Poland, with consumers -- between a consumer and an institution. I find it to be irresponsible, but that's the way it is. The Court of Justice of the European Union decided that the court should inform the clients of all consequences of invalidation. However, practices vary. In the absence of an opinion or the position of the Supreme Court with available opinions of the Polish Financial Supervision Authority and the government of the National Bank of Poland create a specific situation. Our regulators, the Polish Financial Supervision Authority and as banking law regulator and the Governor of the National Bank of Poland who decides about FX policy, they have answered the questions referred by the Supreme Court clearly in a way that is consistent with the position taken by the banks when they -- in their defense in courts. So the situation is now a stalemate really. I should mention in this connection the position of the Financial Stability Board issued early this week, which highlights the factors mentioned by Mr. Stypulkowski in the context of the opinions of the Polish Financial Supervision Authority and the National Bank of Poland, but that happened after we prepared this presentation for the meeting. But it's an important contribution to the debate on the issue of the case law relating to Swiss franc loans. In the opinion of the Financial Stability Board, which is available on the website of the National Bank of Poland, decisions in validating contracts and running counter to the economic grounds of such contracts are disproportionate to the contractual obligations and distort the market by creating a heavy burden for the banking industry. The Financial Stability Board enumerates the consequences for the economy as a whole from the legal [Audio Gap] the Financial Stability Board, in its opinion, recalls for the public opinion. The positions of both the National Bank of Poland and the Polish Financial Supervision Authority in relation to the questions referred by the Supreme Court. The Financial Stability Board points out that the financial system should not be ignorant of the rules of social justice and give unfair advantage to Swiss franc borrowers as compared to Zloty borrowers who wanted to avoid FX risk. The Financial Stability Board stressed that the argument of unfair terms include agreements raised by borrowers cannot be used instrumentally to challenge contracts following the materialization of FX risk. According to the rules of market economy include benefits provided for a fee, the provision of financial capital entails that should be prepaid together with remuneration at least equal to the amount of cost of capital. As a reminder, the Financial Stability Board is comprised as a [indiscernible] by the National Bank of Poland and includes the Ministry of Finance, the Polish Financial Situation Authority and the Bank Guarantee Fund. So that opinion was issued early this week. So I believe these cases will continue. We believe that the intervention of the Financial Stability Board is an expression of frustration with the lack of -- or a certain lacuna in the absence of a position by the Supreme Court and one-sided interpretations by common courts. We believe these cases will bounce back, and we will stand by our position expressed thus far. And we will continue to litigate while setting up provisions that cover the potential risks inherent in the situation. On an upside, a recent event, which took place in February, the collective action -- the biggest collective action in Poland -- sorry, 1,166 contracts were covered by that collective action. But the original court in [indiscernible] issued its judgment in line with the interpretation offered by the bank. Our contracts are not illegal. They do not violate the law of contracts. They are not contradictory to the rules of social coexistence. The indexation does not violate the nature of credit agreements or the provisions of banking law. This is yet another step in the litigation, but I think it is quite important. This judgment, which will inspire further comments, it's not a single case. It concerns many customers, now resolved in a very clear manner by the regional court in [indiscernible]. One final point. The Court of Justice of the European Union will pronounce its judgments on several further cases lodged among others, but not only in relation to banks -- sorry, claims raised against mBank. Other banks are also involved. How many cases are there? How many -- 5 cases are pending. So this impacts the case law, but it also depends on the way that the questions referred are put because the Court of Justice of the European Union, of course, a response to the questions as they referred to it. Now settlements. As I said, the settlements offered by the bank to clients starting in early December with a selected group of clients, the settlements would convert the loans to the Polish Zloty as if the loans were Zloty loans from the beginning at the -- on the market terms as at that time. And the outstanding balance would be cut by half of the difference between the loan amount in PLN, a complicated procedure. But to simplify, we want to share the consequences of the change of the FX rate between the date of disbursement and today with our clients. This is the philosophy behind it. According to the conversion formula described here, there are 8 Swiss franc -- there were 8 banks with Swiss franc loan portfolios, which have addressed the clients with some kind of settlements. Our proposal is different than what KNF initially suggested. We believe that clients signed the agreements in full awareness of the risks. However, the risk that materialized was bigger than the clients could expect or the bank could expect. So we are ready to share the consequences of that materialized risk with our clients 50-50. Now we have sent out 1,217 proposals to eligible clients. 145 settlements have been signed out of the pool sent out in December and January. We have approached another pool of clients, 1,467 clients in the second step of dialogue to sign settlements. The outcome so far is not very encouraging. We are trying to understand why. Well, the key issue is the fluctuation of the FX rate on the one hand, the recent events impacting the strength of the Polish currency. On the other hand, the expected rising cost of Zloty loans and the uncertainty concerning court judgments in Swiss franc loan cases. The law firms are working with our clients say that the case law is fully developed. We are of a different opinion. So clients are often in the dark. And some clients are fully aware -- were fully aware of the risks. Some of them were employees of our Treasury Department, and they want to take advantage of the weakness of Polish courts to buy apartments at a low price. So we will continue with the settlements in the program we are running now in the next 2 or 3 months. We hope by midyear, we can wrap it up and decide about next steps. Are there any questions? If not, thank you, President, for this report on the status of loans linked to the Swiss franc. And in this manner, we have covered the complete agenda of the 35th Annual General Meeting. I would like to thank the shareholders for your presence and participation in the general meeting. I wish to thank the notary public for taking minutes of the many resolutions. I wish to thank the interpreter for assisting us during the general meeting. And I thank [ Unicom ], the provider of the system, which has helped us to process the 31 resolutions in no time at all. Thank you so much. This 35th Annual General Meeting of mBank is adjourned.