William Malcolm

Moneta Money Bank Sees First Quarter Profits Decline

Moneta Money Bank’s consolidated net profit fell by 18.2 percent year-on-year to CZK 598 million in the first quarter of this year. According to the bank, the decline is due to the absence of proceeds from the sale of bonds, which were not repeated this year. Operating revenues were about eight percent lower, reaching 2.7 billion crowns.

“The decline in net income was due to the absence of a repetition of the proceeds from the sale of bonds made by the bank in the first quarter of 2020. The result supported modest growth in areas with recurring operating yields, expected cost developments, and better results in risk costs,” the bank said.

Operating income was supported by year-on-year growth in net interest income of 1.5 percent and fee and commission income of 2.7 percent. On the other hand, income from financial operations fell by 74.3 percent year on year. Additional revenues were down 38.1 percent year-on-year.

Total operating expenses increased by 185 million to 1.517 million crowns, mainly due to last year’s acquisition. Contributions to regulatory funds increased by 36.2 percent; personnel costs increased by 12.1 percent. Administrative and other expenses by 2.1 percent, and depreciation and amortization by 22.2 percent.

In the first three months of the year, despite the covid-19 pandemic and related restrictions, the bank continued to grow its lending and deposit activities. Credit growth of 43.9 percent was driven by 69.4 percent growth in retail loans and 9.4 percent growth in commercial loans. “The most significant expansion then took place in retail mortgage loans, which increased by 124.2 percent; Moneta thus increased its market share to 7.2 percent,” the bank said in a press release.

The capital adequacy ratio is at the level of 18.5 percent compared to the capital requirement of 14.4 percent. The balance sheet shows a high liquidity rate with a liquidity coverage ratio of 183.7 percent, the report said. On Wednesday, Moneta’s general meeting approved a proposal not to pay a dividend from last year’s profit and include it in its capital. The Board of Directors proposed not to pay a dividend due to the covid-19 pandemic and subsequent recommendations of the CNB and the European Systemic Risk Board. The European Central Bank also recommended these opinions. Dividend payment during the year is not excluded.

In the first quarter of this year, Moneta received a proposal from the PPF Group to repurchase up to 29 percent of Moneta’s shares through a public share repurchase proposal, along with an offer to launch Air Bank, Czech and Slovak Home Credit, and Zonky. Based on this public share repurchase proposal, the PPF Group increased its stake in Moneta to 28.37 percent as of April 20. Moneta conducted an in-depth inspection of Air Bank and its affiliates and began negotiations on the terms of a possible acquisition.

Moneta’s CEO Tomáš Spurný said on Wednesday on Czech Television that Moneta and PPF are now working on an agreement on the merger’s price. It will present this proposal to Moneta’s shareholders at an extraordinary general meeting in the coming weeks. Moneta plans to complete the process in the middle of this year, she said in a press release today.

Moneta Money Bank has been operating under its current name since 2016. At that time, the bank’s name was changed from the former GE Money Bank to its listing on the stock exchange in May of the same year. Moneta is one of the largest companies traded on the Prague Stock Exchange.