Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Moneta Money Bank AS (XPRA:MONET) reported a 14% increase in net profit compared to the previous year, reaching 1.5 billion crowns.
• The bank's operating income rose by 8.4% year-on-year, driven by growth in net interest income and net fees and commissions.
• Capital adequacy improved to 19.1%, with excess capital standing at nearly 4%, translating to 6.4 billion crowns over the regulatory requirement.
• The digital platform saw significant growth, with digital penetration increasing by 8.3% year-on-year and a 24% rise in sales transactions through digital channels.
• Moneta Money Bank AS (XPRA:MONET) maintained a robust liquidity position, with a liquidity coverage ratio of 367% and a net stable funding ratio of 182%.

Negative Points

• The bank faces uncertainty due to potential impacts from US trade policies, which could affect their IFRS 9 reserving models.
• There is a risk of higher government deficit and indebtedness in the Czech Republic, which could impact the bank's operating environment.
• The cost of customer funds decreased, but the net interest margin fell back to 1.9% due to the doubling of mandatory reserves.
• The bank's wealth management product distribution faces risks from higher redemptions and market volatility.
• Competition in consumer lending is fierce, limiting growth potential in this segment to 5% for the year.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Signs with XPRA:MONET.

Q: Can you provide an overview of Moneta Money Bank's financial performance for Q1 2025? A: Mr. Thomas Spurney, CEO, reported that Moneta Money Bank generated an operating income of 3.4 billion crowns, an 8.4% increase from the previous year. The net profit for the period was 1.5 billion crowns, marking a 14% improvement. The bank's total asset base grew by 7% to 501 billion crowns, driven by a 7.8% increase in the funding base and a 4% growth in lending.

Q: How did the bank's digital platform perform in the first quarter? A: Mr. Spurney highlighted that the digital platform saw significant growth, with 1.6 million registered users and an 8.3% increase in digital penetration. The bank processed 713 daily touchpoints on average, with a 7% increase in digital interactions. Sales transactions through digital channels increased by nearly 24%.

Q: What are the key risk metrics for Moneta Money Bank in Q1 2025? A: Norman F., Chief Risk Officer, stated that the cost of risk was 22 basis points, aligning with the guidance of 15 to 35 basis points. The NPL ratio dropped by 10 basis points year over year, and the total NPL coverage was 111.1%. The bank conducted NPL sales and adjusted macro variables in their IFRS 9 models.

Q: Can you elaborate on the bank's capital position and liquidity? A: Jan Freek, CFO, explained that Moneta Money Bank maintained a robust capital position with a capital adequacy ratio of 19.1%. The liquidity coverage ratio increased to 367%, and the bank's high-quality liquid assets grew by 10.4% year over year. The bank's excess capital stood at 6.4 billion crowns.

Q: What are the strategic focuses for Moneta Money Bank moving forward? A: Mr. Spurney mentioned that the bank is focusing on small business and SME lending due to higher returns on capital. The bank aims to maintain moderate growth in mortgages and expects a 5% growth in consumer credit. The bank is cautious about the impact of US trade policies and is reinforcing its wealth management distribution staff.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.