William Malcolm

Moneta Raises Outlook After Strong Third Quarter

Moneta Money Bank’s net profit for the three quarters of this year rose by 51.2 percent year on year to 2.897 billion crowns. The bank’s operating income adjusted for one-off effects increased by 2.9 percent to approximately CZK 8.2 billion. For the entire year, the bank expects a net profit of at least 3.6 billion crowns. Moneta Money Bank announced this in a press release today.

According to the bank, the year-on-year improvement in economic results is the result of higher interest income, strict cost management and lower risk costs.

Net fee and commission income increased by more than four percent year-on-year to almost 1.47 billion crowns. The reason was higher fees for maintaining accounts and for early repayment of loans. The bank also recorded a 2% increase in interest income, thanks to the growth of the loan portfolio and lower financing costs.

The cost of risk fell by 85.3 percent year on year to 453 million crowns. “Risk costs, which were lower than originally expected, were affected by significantly better repayment of the Moneta Group’s loan portfolios and an improved macroeconomic forecast,” the bank said. The lower cost of risk was also due to the sale of outstanding receivables, which brought the bank almost CZK 150 million before tax.

The bank’s operating costs rose by 1.2 percent to 4.11 billion crowns. Year-on-year growth was affected by higher depreciation of tangible and intangible assets and regulatory fees.

The management of the Moneta Group expects a full-year profit of at least 3.6 billion crowns for this year. Operating revenues should be at least 11 billion crowns.

“Net profit showed a significant year-on-year improvement, which was mainly due to a decrease in risk costs. However, we also see other positive operating trends, such as growth in interest income,” Cyrrus analyst Tomáš Pfeiler told ČTK. According to him, the optimistic news for shareholders is also an increase in the full-year outlook for net profit. However, the key to the development of the bank’s share price in the coming months will be the resolution of the transaction with the PPF group, he added.

Moneta Money Bank, formerly GE Money Bank, is the fourth largest bank in the Czech Republic in terms of number of clients. It is also one of the largest companies traded on the Prague Stock Exchange. Moneta’s largest shareholder is the PPF financial group. At the beginning of the year, it began negotiations with Moneta on a joint business, which would create the third largest bank in the Czech Republic by exchanging shares between the two entities. At the end of June, the General Meeting of the Bank first approved the merger with the banking part of PPF, but subsequently did not approve its financing.