Czech bank Moneta's CEO sees profit on track, loan securitisations

By Jason Hovet

PRAGUE, March 16 (Reuters) - Moneta Money Bank MONET.PR expects to hit its profit target for 2026, despite the Middle East conflict as diplomacy is likely to ease the situation before it leads to lasting economic damage, the Czech lender's chief executive said.

Tomas Spurny told Reuters that Moneta, the sixth biggest Czech bank and largest without a majority foreign owner, would also decide on an extraordinary dividend this year and consider securitising between 5% and 8.5% of its loan portfolio.

Spurny said he did not think the impact of U.S. and Israeli strikes on Iran, which have led to a spike in oil and gas prices, was yet approaching the energy shock of Russia's 2022 invasion of Ukraine, while diplomacy was likely to ease the conflict.

"I trust we will have good fortune to ... exceed the minimum target as we have so far in every year," Spurny said on Friday.

Moneta expects net profit of 6.6 billion crowns ($308 million) in 2026, from 6.5 billion crowns last year, under an outlook seeing profit in the next five years rising 39% versus the previous five.

LOAN PORTFOLIO SECURITISATION

New lending volumes rose by 30% in January and February, before the Iran conflict, Spurny said, adding that Moneta would look at lending, and whether excess capital was needed, in the third quarter when deciding on an interim dividend.

Moneta is also considering synthetic securitisation, which transfers credit risk to investors without a sale of assets, for 15 billion to 25 billion crowns of its loan portfolio. If approved, implementation could be in the first quarter of 2027.

"This would enable expansion of the nominal loan portfolio," added Spurny, who took over in 2015 when the bank was part of U.S. conglomerate General Electric and needed to diversify.

CONSOLIDATION, FREE FLOAT AMBITIONS

Since a 2016 initial public offering in Prague, beginning GE's withdrawal, Moneta has generated profit of 45.5 billion crowns, distributing 93% in dividends, including an 11.50 crown-per-share proposal for next month's general meeting.

Its shares are up 28% at 182.0 crowns in the past year.

While Spurny is in favour of consolidation and thinks that Moneta would have been stronger if a deal to merge with Air Bank in 2022 had not fallen through, he said no meaningful deal talks were currently underway.

Air Bank is owned by the PPF investment group of the family of late billionaire Petr Kellner. PPF owns nearly 30% of Moneta, while Czech billionaire Pavel Tykac and investment group J&T each hold roughly 10%.

Spurny also wants to increase Moneta's free float in the future, adding that an acquisition where issued shares helped pay for a deal or shareholders deciding to redistribute shares were options, but any action was still "speculation".

"I'm simply saying what I think the bank needs in the next three years," he said, adding that increasing its free float would boost Moneta's weight on the MSCI index and the liquidity of its shares.

($1 = 21.4070 Czech crowns)

(Reporting by Jason Hovet; Editing by Alexander Smith)

((jason.hovet@thomsonreuters.com;))