Czech lender MONETA lifts dividend as 2023 profit beats outlook (updated)

Moneta Money Bank, A.s

02/02/2024 08:33

(Adds shares in paragraph 4, CEO quote paragraph 5,
lending/deposit outlook and cost of risk details paragraphs 11,
14)
       PRAGUE, Feb 2 (Reuters) - Czech lender MONETA Money Bank
 MONETA.PR  on Friday reported net profit of 5.2 billion crowns
($228 million) in 2023, beating its full-year outlook as it
forecast similar earnings in 2024 and proposed a higher
dividend.
    Net profit was above the lender's own outlook of 5.0 billion
crowns, a level it had guided after the third quarter, boosted
by a falling effective tax rate and lower-than-expected risk
costs.
    MONETA proposed a 9 crown per share dividend for 2023, an
88% pay-out ratio and up from 8 crowns the previous year.
    Its shares rose 2%, touching a fresh record high above 100
crowns for a second day.
    "We have never been in a better position in terms of
profitability and in terms of capital availability, hence we
elected to raise the dividend payout," MONETA Chief Executive
Tomas Spurny said.
    The bank, which maintains excess capital above 4 billion
crowns, had originally expected its earnings to drop last year
after the government introduced a windfall tax.
    MONETA said on Friday its effective tax rate fell in 2023
mainly due to investments in Czech government bonds, which
generate tax-exempt income.
    The country's sixth largest expects net profit to reach at
least 5.2 billion crowns in 2024 and rise after that.
    Lending volumes decreased in 2023 amid subdued demand. 
    But high interest rates are beginning to drop as the central
bank eases policy amid slowing inflation.
    Spurny said the bank expected a slight lending rise in 2024
while deposits competition would help drive performance. 
    Clients sought higher-yielding deposits amid elevated
inflation last year, hitting financing costs for the bank.   
    Net interest income grew year-on-year in the fourth quarter,
boosting quarterly profit, which came in at 1.23 billion crowns,
above Reuters poll forecasts.
    Loan provisioning was down in the quarter, and MONETA
forecast its cost of risk - reflecting provisioning - in a range
of 10-30 basis points in 2024, versus 11 bps in 2023.
    
($1 = 22.8370 Czech crowns)

 (Reporting by Jason Hovet; Editing by Michael Perry and Emelia
Sithole-Matarise)
 ((jason.hovet@thomsonreuters.com;))