30.10.2020 09:18, BAAGECBA
Today, Moneta presented the result report for Q3 / 2020, which sounds neutral from our point of view. With the reported net profit, Moneta surpassed our and market estimates with a margin, which was mainly taken care of by higher non-core revenues and lower provisioning. We perceive the updated medium-term outlook mixed. Moneta slightly improved its own expectations for net profit and operating income in the following year and expects a relatively rapid return to pre-coronavirus profitability levels, however, the updated expected growth rate of the bank’s business volumes at 2020-25 (loans 6.5% CAGR, deposits 6.7% ) is weaker compared to previously communicated targets. We do not expect today’s profit and loss report to represent a significant impetus for the bank’s share price.
Total operating revenues of CZK 2.76 billion (4.4% y / y) reached slightly higher values in the third quarter compared to our and market estimates, mainly due to higher other revenues. On the other hand, net interest income, with a year-on-year growth of 1.7% to CZK 2.04 billion, lagged behind our and market estimates. The year-on-year increase in net interest income was positively affected mainly by the consolidation of Wüstenrot’s acquired assets (from Q2 / 2020). This mainly contributed to the year-on-year jump in the bank’s business volumes. Despite the announced revaluation of client deposits, Moneta’s financing costs remain above average market values and Moneta’s net interest margin continues in a downward trajectory on a quarter-on-quarter basis (2.6% in Q3 / 2020 vs. 2.7% in Q2 / 2020). Fee and commission income with stable year-on-year values at CZK 500 million benefited mainly from an increase in commission fees from the sale of investment and insurance products (26.2% y / y). On the other hand, transaction fees fell by 11% year on year.
Operating costs were reported by Moneta for Q3 / 2020 in line with our estimates, with year-on-year growth of 20% to CZK 1.38 billion. Personnel costs increased by 10% year-on-year to CZK 623 million and the announced integration costs were recorded in the amount of CZK 45 million in the past quarter. The creation of reserves and provisions reached a lower level in Q3 / 2020 compared to our and market expectations at CZK 554 million. The share of non-performing loans (NPLs) at 1.5% remains at very favorable levels due to the validity of the credit moratorium during the third quarter and government support programs.
With a reported net profit of CZK 716 million (-32% y / y), Moneta exceeded our and market estimates mainly due to higher other income and lower provisions. Moneta’s capital adequacy at 17.4% (14.4% CET1 capital ratio) remains with a significant margin above the internal management target of 14.4%.
As part of the updated medium-term outlook 2020-25, Moneta slightly increased its own expectations for operating income and net profit in 2021. In the following year, the bank’s operating income should reach min. CZK 11.2 billion (formerly CZK 10.8 billion) and a net profit of CZK 2.8 billion (formerly CZK 2.7 billion). According to the bank’s management, the growth of loans should reach a rate of 6.5% CAGR (deposits 6.7% CAGR) at the 2020-25 horizon.
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Moneta Money Bank’s financial results for Q3 / 2020 |
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|---|---|---|---|---|
| in millions of CZK |
Q3 2020 |
Consensus Q3 2020 | Wire / Q3 19 | Q3 2019 |
| Net interest income | 2 043 | 2 080 |
1,7 % |
2 009 |
| Net fees and commissions | 500 | 469 | 0,2 % | 499 |
| Other income | 218 | 59,5 % | 137 | |
| Operating revenues | 2 761 | 2 690 | 4,4 % | 2 645 |
| Operating costs | (1 383) | 19,9 % | (1 162) | |
| Operating profit | 1 378 | -7,0 % | 1 483 | |
| Risk costs | (554) | (645) |
230 % |
(168) |
| The net profit | 716 | 590 | -32,3 % | 1 058 |
Michal Křikava, Fio banka, as
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