Moneta achieved a profit of 1.3 billion crowns and is well on its way to delivering the annual goal

MONETA Money Bank announced its unaudited consolidated financial results for the first quarter of 2024. Net profit increased by 5.8 percent year-on-year to 1.3 billion crowns, which represents a return on tangible capital of 17.1 percent. Net interest income increased by 2.2 percent year-on-year to 2.1 billion crowns. Net income from fees and commissions increased by 20.1 percent year-on-year to 740 million crowns. On February 2, 2024, Moneta published its medium-term outlook for the period 2024-2028, which envisages reaching a cumulative net profit of 27.7 billion crowns, which is 32 percent more than the cumulative net profit delivered in the previous five years. In 2024, Moneta expects to achieve a net profit of 5.2 billion crowns in line with the outlook. After 1Q24, Moneta assesses that it is on track to deliver the full-year target.

“We believe that the results will be basically neutral for the development of the share price, as the bank achieved a total profit that was slightly above the consensus expectation, despite subdued loan growth,” Patria Finance analyst Michal Křikava commented on the published figures.

Financial results

Net profit increased by 5.8 percent year-on-year to 1.3 billion crowns, which represents a return on tangible capital of 17.1 percent. “This result is in line with the Bank’s expectations and was mainly influenced by a good operating profit of 3.1 billion crowns (an increase of 9.6 percent) and lower operating costs at the level of 1.5 billion crowns (a decrease of 3.8 percent) ,” said Moneta.

Net interest income increased by 2.2 percent year-on-year to 2.1 billion crowns, according to the bank, “thanks to additional liquidity and better yield from the loan portfolio. This was partially offset by higher financing costs due to the persistently competitive market environment.”

Net income from fees and commissions increased by 20.1 percent year-on-year to 740 million crowns, according to Moneta mainly due to higher commissions from the sale of third-party products, where income from fees from investment funds amounted to 145 million crowns (double compared to the first quarter of 2023) and insurance income of 322 million crowns (year-on-year increase of 14.2 percent).

“The excellent result of income from investment products was achieved thanks to higher demand for these products. Savers and investors are moving their funds from savings accounts, where there is a general decrease in interest rates following the reduction of key rates by the Czech National Bank,” Moneta noted in the report.

The bank’s operating revenues totaled 3.1 billion crowns, which represents an increase of 9.6 percent compared to the first quarter of last year. Total operating costs for the first quarter fell by 3.8 percent compared to the previous year to 1.5 billion crowns.

The cost of risk in the first quarter reached a net amount of 135 million crowns, i.e. 20 basis points of the average loan portfolio in the net amount converted for the whole year. This is in line with the outlook for 2024, the bank said. The share of non-performing loans is stable at 1.4 percent, according to the bank, the payment morale of clients remains good. The effective tax rate was 14 percent in the first quarter, again in line with expectations, according to the bank.

“I am very pleased to report good results for the first quarter of the year and I believe we will be able to maintain this momentum throughout the year. We welcomed the recovery in demand for our credit products, both in the retail and commercial segments, as this is a key part of our business. Discipline in cost management as well as our strong liquidity and capital position are the promise for a successful year,” said Tomáš Spurný, Chairman of the Board of Directors and CEO.

On track to deliver the annual goal

On February 2, 2024, Moneta published its medium-term outlook for the period 2024-2028, which envisages reaching a cumulative net profit of 27.7 billion crowns, which is 32 percent more than the cumulative net profit delivered in the previous five years. In 2024, Moneta expects to achieve a net profit of 5.2 billion crowns in line with the outlook.

After this year’s first quarter, Moneta states that “it is on track to deliver the full-year target”.

Moneta maintained its capital position in the first quarter with regulatory capital of 33.3 billion crowns and excess capital of 4.6 billion crowns above the target for Tier 1 capital. Capital adequacy stood at 19.6 percent, with the group management’s capital target at 15 .55 percent (14.55 percent plus 1 percent as a buffer set by management), including a lower countercyclical buffer of 1.75 percent effective April 1, 2024. Management’s target for Minimum Capital and Eligible Liabilities (MREL) was 22 .45 percent and as of March 31, 2024, the MREL indicator was 24 percent. “Moneta continues to retain 90 percent of its consolidated net profit for future dividend payments,” the bank notes.

According to the bank, the liquidity position remained strong as of March 31, 2024, when “high-quality liquid assets reached 164.2 billion crowns. The bank’s liquidity coverage ratio was 359 percent, which is above the European and American average.”