MONETA lifts 2023 profit outlook after Q2 profit drops less than expected

Moneta Money Bank, A.s

27/07/2023 08:22

PRAGUE, July 27 (Reuters) - Czech lender MONETA Money
Bank  MONET.PR  raised its earnings outlook for 2023 and future
years on Thursday amid low loan provisioning risks.
    The bank, the country's sixth largest, reported a lower than
expected drop in second-quarter net profit, which fell by 20%
year on year to 1.26 billion crowns  ($58.19 million). Sales of
non-performing loans buoyed profit.
    MONETA forecast full-year 2023 net profit of 4.7 billion
crowns, up from its previous estimate of 4.3 billion crowns. 
    Net profit reached 5.2 billion crowns in 2022 as soaring
interest rates in a high-inflation environment padded earnings.
    But banks now are facing weakened loan demand and hits from
higher financing costs as clients seek higher-yielding deposits
to safeguard their money, although MONETA is facing less of a
strain than bigger banks in the latter.
    Net banking income was roughly stable year-on-year at 3.03
billion crowns in the second quarter. Net interest income rose
to 2.17 billion, and it increased on a quarterly basis for the
first time in a year.
    "In the second quarter, we brought net interest income back
to growth," MONETA Chief Executive Tomas Spurny said.
    Core deposit growth jumped by 24% in the first half of the
year, which MONETA has been parking in central bank deposits or
state government bonds, it said. 
    The Czech National Bank meets on policy next week but is
expected to leave its base rate of 7.00% unchanged. 
    Markets are pricing in a high chance the bank will quickly
cut rates later this year as inflation falls, although some
analysts see a first rate cut only next year.
    ($1 = 21.6550 Czech crowns)

 (Reporting by Jason Hovet;
Editing by Bernadette Baum)
 ((jason.hovet@thomsonreuters.com;))