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€19.41 -0.7  -3.5%

Last Trade - 18/09/20

Sector
Financials
Size
Large Cap
Market Cap £7.22bn
Enterprise Value £4.23bn
Revenue £7.69bn
Position in Universe 123rd / 1040

UPDATE 2-Moneta gains scale to take on foreign rivals in Czech banking deal

Mon 8th October, 2018 8:41am
* Moneta Money Bank to buy Air Bank, other assets in $883
mln deal
    * Tie-up will create 3rd largest Czech retail bank by
network
    * Gives Moneta more scale to compete against top Czech banks

 (Adds analyst comment, market details)
    By Jason Hovet
    PRAGUE, Oct 8 (Reuters) - Czech lender Moneta Money Bank
 MONET.PR  announced plans on Monday to acquire domestic peer
Air Bank and other assets in one of the largest deals in the
Czech banking sector in recent years.
    The planned 19.8 billion crown ($883 million) deal will see
Moneta buy Air Bank, which is owned by Home Credit Group - part
of tycoon Petr Kellner's PPF financial empire. Moneta will also
buy Home Credit's other Czech and Slovak consumer fiance
businesses as part of the agreement, to create the third largest
Czech retail bank by branch network.
    The tie-up will give Moneta more scale to compete with the
three biggest Czech banks by assets: KBC's  KBC.BR  CSOB bank,
Erste Group's  ERST.VI  Ceska Sporitelna and Societe Generale's
Komercni Banka  BKOM.PR . Moneta will be rebranded as Air Bank.
    Air Bank was established by PPF in 2011 as a new entrant to
the retail banking market and is a smaller player, while Home
Credit focuses on consumer finance.
    "Challenger banks have taken more than a million customers
in the last 10 years out of the large banks," Moneta Chief
Executive Tomas Spurny said. "Instead of fighting a competitive
pricing war we want to join our capabilities."
    Home Credit Group - controlled by Kellner, the richest
person in the Czech Republic - will take a 24.48 percent stake
in the expanded Moneta group, becoming its biggest shareholder.
    "It is too early to assess the benefit of the transaction
for existing shareholders but we consider it positive that the
bank will have a major shareholder and that it will be able to
compete to a bigger extent with the largest banks on the Czech
market," J&T Bank said in a research note.
    The deal values new shares to be issued at 78.5 crowns per
share, a discount to Moneta's current share price, which was
down 1 percent on Monday at 81.15 crowns.
    Moneta, the country's sixth largest bank by assets, was once
part of General Electric's financial wing before being listed by
the U.S. conglomerate in Prague in 2016.
    Home Credit Group is active in consumer lending around the
globe, including in China and Russia, its biggest markets. It is
88.6 percent owned by Kellner's PPF, and Emma Capital,
controlled by Kellner associate Jiri Smejc, owns 11.4 percent.
    PPF will then effectively own 21.7 percent of the combined
entity once the deal closes. Emma will have 2.8 percent and
Moneta's existing shareholders 75.5 percent. 
    Under the terms, Home Credit will subscribe 165.6 million
new Moneta shares. Moneta will also pay Home Credit 6.75 billion
crowns in cash. 
    Moneta said it expected the deal to increase the group's
dividend per share by at least 10 percent in the first full year
after the deal closes, which is expected by mid-2019.
    Its 2018 dividend payment - which it forecasts at 5.50
crowns per share - would not be affected by the deal and Home
Credit will not be entitled to a payment. The 2019 payout will
be lower - forecast by Moneta at 3.4 crowns per share - due to
restructuring costs from the deal, Spurny said in a telephone
interview.
    He said the 2020 dividend was forecast at 5.7 crowns a share
as the company seeks to maintain its policy of paying out 70
percent of profit.
    The deal should bring cost savings of around 1 billion
crowns a year in the medium term while adding 5 billion crowns
to operating income by 2020. 
    
    ($1 = 22.3680 Czech crowns)

 (Reporting by Jason Hovet and Michael Kahn; Editing by Jason
Neely and Susan Fenton)
 ((jason.neely@thomsonreuters.com; +44 207 542 8825 ; Reuters
Messaging: jason.neely.thomsonreuters@reuters.net))
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