Moneta Money Bk

Ladies and gentlemen, welcome to the conference call of Manetta Money Bank regarding 3Q 2025 financial results. Please note that this conference call will be recorded. This event will have a live presentation followed by a Q&A session. As a reminder, all participants will be in a listen-only mode. Today's speakers are Mr. Tomasz Sperny, Mr. Karl Norman Fecht, Mr. Jan Fliczek, Mr. Jan Nowotny, and Mr. Andrew Gerber. I now hand over to Mr. Sperny who will lead you through the conference call. Sir, please go ahead.

Good morning, ladies and gentlemen. I have the honor and the pleasure of presenting the third quarter result. If I can ask you to turn to page number two, I would like to summarize our performance on a year-to-date basis. With respect to net profit, we have delivered 4.9 billion. This is 15.7% higher than in comparable period last year. The result comes on basis of revenue growth, which stands at more than 9%, and we reached 10.3 billion. We have stable cost base, operating expenses remain at level of 4.2 billion and additionally cost of risk year to date at 16 basis points. With respect to the total assets of the bank we stand at 499 billion constituting growth of 2.3% and in line with our original expectations from February 2025. If you look at the loan book The loan book grows at a level of 6.3%. This is consistent with what I commented as a target growth at the end of the second quarter and the overall loan portfolio 288 billion. Funding base increased by more than 3% to a level of 458 billion. What I guess is the most important message from today is that we stand behind the upgraded guidance in the corridor of 6.3 to 6.4 billion crowns for the full year 2025 unless something really extraordinary happens in the market or to us. If you turn page on to number three, briefly on the capital position. So at the end of September, we enjoyed overall capital-equity ratio at 20%, with an excess of capital against the management target at the relative level of 4.7%. Tier 1 at 15.2% with excess in Tier 1 of 2.7%. This translates into 4.5 billion crowns out of which we will distribute roughly 2 billion subject to positive vote on the Interim Dividend that we proposed two weeks ago. and this will obviously decrease the tier 1. We also enjoy a super strong morale ratio on the individual basis. That ratio improved by 6.9% and this improvement is driven partly by successful issuance of tier 2 capital instrument. in the amount of 100 million euro and we issued it on the 9th of September so at the end of the quarter now if I may I will turn to The positive news here is that Czech economy is growing. It is growing at 2.6%. 2.6% against initial estimates of 2-2.1% at the beginning of this year. So this is positive. For the full year, the expectations across the spectrum are 2.6% for the for the full year. With respect to government debt and government deficit, the deficit this year is projected at $241 billion. The third quarter number of the deficit amounts to $254 billion. What is also perhaps important for 2026 budget, which shows deficit of 281 billion. Nonetheless, we have change of government, so we will see what the incoming administration will do with that. The other positive news is that unemployment remains low and is stable, and this, both the economic growth, low unemployment, positively project into the NPL ratio and cost of risk of the bank. Now let's go to inflation on page 6. Currently at 2.8%. The inflation still remains above the Czech National Bank's target. and if you look at the CPI at 2.6% so it increased during the 9 months of this year from the level of last year so given the inflation, the government deficit the Czech National Bank changed its stance on the monetary policy, the key rate remained stable from May at 3.5% and through the commentaries of the Czech National Bank, one would assume they expect the rates to remain at a stable level for a longer period of time. Now if we look at it from the market yield curve, which is constructed on a short-term based on Pribor and on a medium to long-term based on the swap market, you see a remarkable shift. If you look at the dotted line, this was the expectation at September 2024, so the yield curve at the medium to long-term was fairly positive. The latest, which is the dark blue line, shows you that the short end has come down significantly. Nonetheless, the medium and long term shifted upwards. Major part of the shift happened already in 2024. Nonetheless, there is continued upward trend of the medium to long term rates, even though these have abated a bit during the month of October. So, minding that, let me move to the operating platform, which defines our business model. This is on page A. The bank enjoys a customer base of 1.6 million. The customer base is growing at a relatively slow rate of 0.5%. If you then look at the branch network, we have rationalized The branch network to a level of 122 units. 9% of the branches were closed. And we are focusing on number one issue is relocation of branches to more attractive locations. And we strengthen our position in the product market. With respect to ATM network which we share with three other banks, this remains fairly stable at 1,942 machines. We reduced overall in the bank employment by nearly 2% to a full-time level equivalent of 2,465 and you see a relatively notable decrease of the frontline employment by 4.5% to slightly above 1,300 and you see 1.3% increase on the other functions in the bank which stood at 1,149 the end of the quarter again on a full-time equivalent basis. This is chiefly driven by expansion of the IT personnel, namely in the realm of digital development as the bank seeks to further improve digital capabilities, both introducing new products, new options and closing some of the gaps that we have between the physical and digital worlds. Now, if we turn the page, digital platform, 1.6 million users, we have four components of the digital platform, where the most important is constituted by the mobile banking platform, which we call SmartBanka, that is growing at 11% usage, and SmartBanka has 1.3 million registered users. So we have fairly solid growth in moving customers from the physical to the digital world. We have also solid growth of 5.8% on usage. This is expressed in average daily visits. And we have robust growth on the intermediation that the bank performs. servicing transactions and we have decline of loan applications on the digital platform and this is due to I would say two factors one factor one factor is the fact that we change our credit policy where people on the digital take typically smaller tickets and ended up Historically with a high number of loans we changed that to a policy that you can take maximum three loans and then if you want to adjust your lending position we consolidated and that obviously has impact on the on the number of lending transactions. With respect to sales transactions, fairly decent growth of nearly 5%. Moving on to page 10, to the branch network, I commented the rationalization of the network. If you look at it from the updates of how many people we employ, within the network, the decline is at 5.8%. And what is interesting here, as we have been closing branches and reducing the staff somewhat, we improved the Net Promoter Score of the branch network to a level of 88 points and this constitutes 7.8% improvement. Nonetheless, The bank struggles with the intensity of footfall within the branches. Visits declined by more than 17%. and this is attributable to two factors. First factor is closure of branches and second factor is lesser interest in visiting the branches. People are moving to digital and this movement is unstoppable and for our investments and for the core part of the network Distribution of third-party products lags behind our expectations in terms of growth. We have decline of 10% and this is chiefly driven by lower production on pension fund insurance. However, this is also as a result of our focus on quality and cash flow flowing into these products, and we believe we have significantly improved the cash flow flowing into the funds. Our partner, Natsunale Nederlanden, manages it. And second factor of the decline was the Liberation Day. We saw some market volatility in terms of wealth management products and we lost two months of production due to the market uncertainties and obviously this has recovered since then. Loan applications down by 7.2%. Again, it is attributable to branch closure and to the policy we instituted on consolidation for multiple borrowers. Page 11, let me comment on the contact center. We have 71% net promoter score, which we consider substandard in a view of the branch network. Henceforth, on a temporary basis, we increase staff in the call center due to the fact that we would like to improve the service ratio in terms of percentage of answered calls. Nonetheless, we have very good level of decline of email communications and this is attributable to our efforts across products and services on the digital platform. So we see decline here and we have healthy growth in terms of lifetime value of income generated by insurance sales both incoming and outgoing on the call center. Here the plan The bank plans to rationalize the employment. Nonetheless, this is going to take some time as we are deploying artificial intelligence tools in order to increase the efficiency of the compact center. and lastly very quickly on the ATM network on page 12 what is important is that we enjoy through the cooperation wide network we have an excellent market position in deposit machines and we rationalize the machines that we own in line with the market in the next two to three years we will have to we will rationalize the ATM network and the target is that we will take it down to 510 machines reducing the cost and intensity of cash transportation and maintenance of the Moneta-owned network. If you look at the performance of the network, we see fairly significant decline in cash withdrawal and digital people moving into the realm of digital payments. With respect to deposits, we see exactly the opposite trend. We have super strong growth of 20% in terms of number of deposit transactions as we enjoy the wide network of deposit machines. further improve because this year our partner, one of our partners, Make Credit Bank should join the system. Henceforth we will gain some additional machines and the network is also fairly important in terms of simple service transactions where we see healthy growth of 6.6% and if you look at the intensity of the service transactions on the ATM network. It is fairly significant. With that, we have enjoyed The best result in terms of nine months performance. We also delivered the strongest quarter in history of the bank. We also enjoy benign credit environment. On those basis I would like to reaffirm that the management targets the range of 6.3 to 6.4 billion crowns in net profit for this year. And I will hand over to my colleague, our CFO, Jan Precek, to walk you through the P&L and other components. Thank you, Tomáš.

Good morning, ladies and gentlemen. I am now on page 14, and it's my pleasure to walk you through the profit and loss statements. Let me repeat the key financials. In the first nine months, Moneta delivered net profit of 4.9 billion, representing a year-on-year growth of 15%. per share reached 9.6 crowns and return on tangible equity improved to 23.1%. Operating income reached 10.3 billion in the first three quarters and this represents year-on-year growth of 9.1%. This was supported by net interest income growth of 11.6% stemming from higher lending income and reduced cost of funds. And this was accompanied by net fee and commission income growth of 12.4%, stemming from ongoing solid performance in distribution asset management products, together with reduced fee expense. On the other hand, other income line shows a decline of 24%, and this is driven by lower result of FX derivatives, together with the bond sale gain realized last year and not repeated this year. On the cost base, you can see that we managed the cost base broadly stable year-on-year. We show only marginal increase of 90 basis points. And this together with higher operating income resulted in a significant improvement of the cost-to-income ratio from 44% to 40.7% this year. On the Cost of Risk Line, we report a benign result of 342 million or 16 basis points of the Average Loan Portfolio, which is at a similar level as reported last year. Let me now continue on page 15, where we report a detailed view on Net Interest Income Development. In the third quarter, we delivered year-on-year growth of 7.9% and 2.7% improvement Drivers of this development are provided on the right side. If I start from the top, lending interest income is up by $134 million, supported by loan portfolio expansion by 6.2%. Gradual increase of the two-week repo rate resulted in lower treasury income by 622 million, 29 million year-on-year. However, this enabled us to continue with the repricing of our client deposits. And as you can see, a lower cost of funding by 677 million, more than offset reduction in treasury income. Moving forward, on page 16, we provide similar view on the Net Fee and Commission Income development. Here we delivered year-on-year growth of 13.9% and 5% improvement quarter-on-quarter. On the right, we provide key drivers of this development and as you can see, we delivered improvement across all three categories. Namely, third-party commission income is up by 46 million euro a year, mostly supported by improved performance in distribution of management products, while insurance products distribution remain broadly stable. Fee income category shows year-on-year increase of 23 million, supported by both penalty fee income improvement by 14%, together with transactional and servicing fee income improvement of 3% year-on-year. And lastly, fee expense shows year-on-year decline of 36 million, which is an improvement, supported by improved commercial terms with Visa already at the beginning of the year. On page 17, we provide a detailed view on wealth management product distribution. In the first three quarters, we generated 639 million of income in this franchise, which represents a significant improvement of 24.7% year-on-year. And this was delivered on the basis of the significant expansion of outstanding amount of distributed wealth management products by 34.6%. This year we have also expanded our network of investment specialists by 15 bankers in order to strengthen our distribution capacity going forward. Nonetheless, this year our customers invested with us $16,250,000, which is by 5%, 5.4% less than the amount invested last year. And this is mostly attributable to the drop in volume following the Liberation Day announcement in April this year. In summary, opening fee is up by 14.8%, supported by higher effective opening fee, and trail fee increased by 31.3%, supported by expansion of the outstanding ML. On page 18, we provide the detailed view on insurance product distribution. As you can see, in the first three quarters, we generated $864 million. of income in this franchise, which is just marginally better than the income delivered last year on the current basis. However, on top last year, we realized the one-off gain of $39 million, not repeated this year. In terms of number of sold insurance products, this year we distributed 143,500 of insurance policies, which is by 3.2% less comparing to same period last year. And this is mostly driven by slowdown in distribution of pension insurance products in the first half of the year. On the other hand, we improved our performance in distribution of payment protection insurance as well as Life Insurance. And we complete this section on page 19 with the Cost Based Management. As mentioned before, we managed to keep costs stable. The marginal increase of 36 million is mostly attributable to Admin Cost category, which is the only category showing an increase by 8.1% year-on-year. And out of that, the most pronounced increase is in the IT area, where we had incremental expenditures with migration to the cloud. Apart from that, regulatory charges are down by 9.7%, supported by a lower contribution to the Resolution Fund. Depreciation and amortization charge is also below last year by 4.1%, predominantly supported by extension use of life of key software applications, what we did in the first quarter this year. And we managed to keep stable personal costs year on year at 1877 million, which is a function of persisting inflation of average salaries, fully offset by a reduction in FTES by 1.9%. So this is all from the profit and loss statement section and I will now hand over to my colleague Jan Novotny for the balance sheet.

Thank you Jan and good morning ladies and gentlemen. I have the pleasure to walk you together with my colleague Andrew Gerber to the next section of today's presentation. Please let me move to the slide number 21 showing the whole portfolio and funding base evolution. We have continued our growth in lending portfolio by more than 6% year on year, while at the same time we were successful in keeping a broadly stable funding base despite a continued decline in the cost of funding from 2.7% in Q3 2024 to 2.08% at the end of Q3 this year. Now moving to the next page, page 22, where we are reporting the balance sheet development and its components. We have a very solid growth of 2.3% year-on-year with the fastest growing categories of investments in securities with plus 17.4% year-on-year and net customer loans with plus 6.2% year-on-year growth. You can also see the slowdown in balance sheet growth on liability side caused by decrease in deposit during September 2025 partially offset by tier 2 bond issuance. I would like to comment further on the key category which is growth on lending side and this is shown on the page 23. And we are very successful in this effort. Year on year increase of the new production is almost 30% from 42.5 billion in 2024 to 55 billion in 2025 comparing the same period of the year. What is also very positive is that the growth comes from all product lines. Mainline mortgages with 51.2% increase, small business by almost 40%, SME with 28.5% and consumer loans with 15% growth year on year. This is a really outstanding sales result and it translates directly to the loan portfolio growth on page number 24. Our lending book has grown by more than 6% year-on-year and ended up at the level of 287.8 billion check rounds. If you look on the right side of the slide, you can see the split of the growth per segment, plus 8.2% on SME, plus 24.8% on small business and almost 4% on resale. And talking about the retail portfolio growth, please let me hand over to my colleague Andrew, who will walk you through the more detailed split per product category on page number 25.

Thank you, Jan, and good morning, ladies and gentlemen. So on page 25, we present the development of the retail loan portfolio in a bit more detail. Overall, the portfolio grew 3.8% with the two major product categories contributing to the growth. The mortgage portfolio was up 5.1% year over year, and the consumer loan portfolio up 4.5%. In both cases, I would say it was driven by significantly better new business origination as Jan mentioned, and also supported by broadly stable retention performance. Going forward in mortgages in particular, we face significantly higher refixations actually starting this month. So this will continue to be an area of focus for us making sure that we're able to maintain the level of retention in the face of significantly higher volumes coming through refixation. To briefly touch on the other loan category, which declined 11.8%, the predominant part of this portfolio is the bridging loan product, which was distributed by Moneta Building Savings Entity. This is effectively a run-off portfolio, which explains the decline there. I'll hand over to Jan now, who will take you through the remaining part of the asset presentation.

Thank you very much, Andrew. Now, please, let me show you a similar overview for the commercial lending group. The portfolio for the first time in history surpassed 100 billion check rounds at the end of Q3 2025, with the key growth in small business loans and investment loans was 24.9% and 15.8% respectively. Let me also mention one thing that I've already highlighted at the last investor calls. There was a change in geography of the categorization of one large exposure in Q4 2024, which moved due to refinancing from working capital line to investment loan line. However, this credit was fully repaid in Q3 this year, and despite this, we have still managed to deliver the growth of the investment loans by half a billion in Q3 compared with the Q2. Now on the next page, we are showing the evolution of the loan portfolio for the whole lending pool. We ended at the end of Q3 at the level of 4.8%, which is practically the same level as a year ago. This is driven mainly by the retail portfolio, with year-on-year growth of yield by 0.2%, while commercial went down from 6.1% to 5.8% due to the part of the portfolio on floating rates, as those are, especially in the beginning of 2025, going down as this is linked to the private. And that was the last slide about the loan hook evolution, and now let's move to the deposit side of the business, and for that, please let me hand over back to Andrew.

Thank you, Jan. Moving to page 28, we look at the development of the funding base of the bank. Overall, the funding base grew 3.1%, supported by Tier 2 bond issuance and strong growth in the commercial segment. Overall, the commercial deposit base grew 5.4% year over year, with retail growing at 1.9%. However, you can see clearly visible in the third quarter, we see decline in the Retail Deposit Portfolio for the first time in a considerable period. And this is a reflection of intensified competition in the market with a number of players offering rates significantly above the repo rates, some as high as 4%. and considering the strong liquidity position we've built, we've taken the view that we won't try to compete with those rates and rather focus on the profitability and this has affected the performance in retail deposit balances. Moving to page 29, we look at the development of the funding cost and net interest margin. And here you can see that although we show quarter on quarter improvement in the funding cost, the funding cost was effectively stable during the third quarter. And this, again, reflects the intensified competition in the market, which limited our ability to further reprice the portfolio downwards. And this is also representative Moving to page 30, we take a closer look at the development of the retail deposit portfolio. As I said, the retail deposits were up 1.9% year-over-year, and you can see the current accounts growing slightly faster at 2.8%, and the savings and terms deposits growing at 1.7%. But here you can clearly see the decline in the savings and terms deposits as a result of the competitive intensity in the market. I should also add that we continue to solicit the deposit base to transfer to the asset management portfolio. And there's something around $12 billion of balance into asset management over Moving to page 31, we take a similar view of the commercial deposit portfolio, which grew 5.4% year-over-year, with very strong performance in current accounts, up 16.2%, and decline in the savings and term deposits. And finally, on page 32, we look at the detail of the development of the funding costs of the bank. Overall, the funding costs declined 50 basis points across both retail and commercial, while wholesale funding increased 45 basis points. And when we look at the segmental view on the customer deposits, you can see we Detail cost of funding was down 74 basis points to 208 and this reflects the continued repricing of the portfolio. However, as I said, during the third quarter, we were very limited in our ability to further reprice the portfolio. And in commercial, the cost of funding decreased 53 basis points to 147. So overall, I would say it was a more challenging quarter for the deposit business. However, I think the strong liquidity position we've built for ourselves has allowed us to stay focused on profitability and weather it out. And I do believe that the pricing that our competitors are offering in order to attract these deposits away from us is not sustainable. in the medium term and I'm fairly confident we'll get an opportunity to compete for that money back in the future. And with that I will hand over to Norman who will take you through the risk metrics and asset quality.

has an overview of key risk metrics for the first nine months of this year. On the top left of the page, here we have the cost of risk, which has come in at 16 basis points, which is a drop by two basis points year over year. If you look at the loan loss provision coverage and the total NPR coverage, here we had ratios of 1.3% and 121%, respectively. And as far as the NPR ratio is concerned, Here we have seen a drop of 30 basis points from 1.4% to 1.1%, which is an all-time low. If we continue to page 34, here we have a more detailed overview on cost of risk for the last five quarters. In absolute amounts, we recorded a cost of risk of 342 million, which is on a comparable level compared to If we look at the overall elements which impacted the nine months cost of risk result this year, first of all, we had MPL sales north of 800 million, generating a positive impact on cost of risk of 78 million. Then we also had management overlay releases north of 150 million. And last but not least, we also updated our macro variables within our IFRS 9 reserving models, which supported the cost of risk line. On the next page, 36, here we have five data points each on the development of the loan portfolio, loan loss provisions, coverages, and the NPL balances. So let me start on the top left. Here, as we see, the portfolio grew by almost 6% or 16 billion. At the same time, loan loss provisions dropped by 580 million. of Provisions at 3.87 billion. We still do have 242 million management overlays. And the NPL stock on the bottom left dropped by more than 780 million, as said, with an ending ratio of 1.1% and total stock of provisions of NPLs of 3.2 billion. On the next page, page 37, If we just look at the last quarter, here we see smaller formations, stable cure rates leading to a net reduction of DMPLs of 265 million and an ending balance of 3.2 billion. And the last page on the risk section, page 38, here we show the evolution of delinquency So the bottom line message is delinquencies remain on very moderate levels and even drop further in the 30 and 60 days past due bucket. Summarizing the risk section, we can state the credit performance with 16 basis points on the cost of risk. is well on track to deliver under the full year updated guidance of 70 and a half to 22 and a half year basis points for the full year and as far as management overlays are concerned we will revisit and look at the balances towards the end of this quarter also in the light of the pertaining macro and then we'll decide what kind of adjustments will be made and with that I hand over to Jan Vlicek to walk us through the liquidity section thank you

Thank you, Norman. I am now on page 40 and let me continue with the liquidity management section. In the third quarter, Moneta maintained robust liquidity position with a significant excess. And this is demonstrated across all ratios. Namely, loan-to-deposit ratio stood at 66% and share of high-quality liquid assets on customer deposits stood at 40%. Below that, we report the regulatory metrics both are well above 100% regulatory limit namely net stable funding ratios to that 177% remains broadly stable year on year and also liquidity coverage ratios to that 335% and also oscillating around this level during the whole year. Moving forward on page 41 we report the development of high quality liquid assets, the position at the The decline is visible in the category balances at the central bank and it has three reasons. First of all, we utilize part of the excess liquidity lending in the low portfolio expansion. Secondly, we allocated about 8 billion of liquidity to cover double term mandatory minimum reserves since the beginning of the year and the rest was reallocated With that, let me move forward to the capital management section and I will continue on page 43 with capital ratios on consolidated level. As was mentioned before, in September we successfully issued tier 2 bonds of 100 million euro. We supported our capital position and this is visible in the capital adequacy ratio improvement at the beginning of the year. And at the same time T1 capital ratio increased to 15.21% against the management target of 12.5%. The development of excess capital in absolute amount you can see in the bottom right corner. This year we expanded the excess by 41.5% reaching 7.8 billion at the end of September. And this position consists of T2 capital excess of 3.3 billion and the distributable tier 1 capital access of 4.5 billion. On page 44 we provide more detail about capital position on consolidated level. The total amount of regulatory capital increased during the year and reached 33.2 billion. I will note that tier 2 represents 7.2 billion and tier 1 capital 25.3 billion. On the right you can see an improvement of risk-weighted assets density supported by CRR3 regulation which was implemented at the beginning of the year. And also what is important in the chart in the bottom right corner we report the development of the excess capital position and this shows that Moneta maintains to accrue dividend at 90% of the consolidated net profit. And on page 45 we complete this section with capital position on individual level. The total position of regulatory capital and MREL instruments increased to 47.6 billion at the end of September, which represents MREL adequacy ratio of 2019. of 22.95%. So you can see that Moneta maintains robust capital position on both levels and this supported management to propose the interim dividend, also to keep dividend payment or dividend accrual at 90% of consolidated net profit and also provide sufficient capital for the future

Very good. I just like to reiterate something. The 90% accrual is from current earnings. The interim dividend is from retained earnings. So just to make it very clear for everyone. I'm on page 47 where we reiterate our performance against... against the guidance so the original guidance issued I suppose in February showed 6 now we are communicating that the minimum target for the bank is 6.3 and ideally we would like to land somewhere between 6.3 and 6.4 and this comes from believe that we can keep the cost stable plus we get improved operating income streams based on the current year's performance. Should we reach the minimum target, the earnings per share would be 12.8% crowns. per share and the return on tangible equity would go to 21%. This is due to the fact that the fourth quarter is heavier on cost because, for instance, the annual bonuses in the bank are accrued only in the fourth quarter, not throughout the year because we want to be certain that there is basis for payout is that at the end of the year a lot of things actually come to materialize themselves so on the page 48 we would like to again reiterate that on a cumulative basis in the next four or five years it's actually four years and one quarter remaining to the cumulative target We would like to ensure that the shareholders enjoy a cumulative profit of 33.3 billion, which if achieved at the level of, and I stress this minimum target, this would be 65.1 crowns per share. With respect to that, should we achieve it, we will seek to maintain dividend payout policy at 90%, and in the current policy that we have, we have minimum 70%. Subject to regulatory environment and our ability to meet, to comply with all of that we have to comply with. Maybe very briefly on page 49 what has changed The GDP is slightly better. We had estimate of 2.4 in our plan. The unemployment is slightly below the 3% level. I went through the presentation at 2.7. Inflation is higher. It is at 2.3. Two-week repo rate is higher at 3.5 versus 3. If you look at the second column from the left, And obviously the Pride War is better, and most notably the Czech round to Euro is currently trading at 24.3, so there is a fairly significant deviation. from what we had expected at the end of last year. If we go to page 50, for this year, on the portfolio development, this is on gross basis, we believe that we should be able to meet the target of gross portfolio of 298.8 billion. 8.6 billion. So we are on a good way to go there. If I had to make a prediction, I would say the commercial performance will be stronger. This is due to the fact that we enjoy better contractual rate on underwriting commercial transactions, namely in the small business realm and also in the SME realm. With respect to capital deployment, we have changed the strategy somewhat where a lot of focus is placed on the small business growth in order to maintain the overall yield that we enjoy from the lending activity. With respect to the Customer Deposit Development. We have here for the current year $435 billion. I believe that we still have the ability to maintain the deposits at this level. We might come a bit short and I apologize when I commented a long book I mistakenly looked at 26 so the gross portfolio 288.3 for 25 and we are already at the target so whatever comes extra over and above the 288.3 will strengthen interest income basis for the next year and we are trying to max it out Shareholder Meeting November 14, 2020 And the record date for the meeting will be 7th of November. So whoever is a shareholder until 7th will enjoy the dividend stream. The record date for dividend is on 21st. So I said it wrong. And the payment date is on 16th. I like to shorten this, but our supplier needs a month to process the dividend. And if you want to know who the partner is, it's Societe Generale. We are grateful for your participation and I would take the liberty of opening the floor to questions and answers.

Thank you. We will now begin the Q&A session. If you would like to ask a question and have joined the call via Zoom, please write it in the chat in the browser or use the raise hand function on your screen. Before starting, please make sure that your local device is unmuted. Once your question is answered, please cancel the raise hand function. If you have joined us via the phone, please press star followed by one on your telephone keypad to enter the queue. We will now take our first question from Thomas Unger. Please unmute locally and ask your question. Thomas has withdrawn his question. As a reminder, if you would like to ask a question, please use the raise hand function. Thomas, please go ahead with your question.

Yes, hello. Can you hear me now? Yes. Wonderful. Thank you very much. Thank you for taking my question. Congratulations on your Q3, on your strong Q3 results that you delivered today. I'd like to talk about your outlook for 2026, and vis-à-vis the press, you've mentioned an upside for the coming year. Can you be a bit more specific? What developments you anticipate? What is working better than you had previously anticipated? And is it the upside that you see now on income and lower expenses moving into next year as a basis for this expectation? Do you see that as sustainable? And then also your rate outlook for the coming year and your expectations for deposit and funding costs in 2026. I think you've mentioned that you don't see this competitive, strong competitive pressure on the deposit side as much. Do you see any positive effects now on your funding costs as well as the net interest margin for the coming quarters? And then lastly, maybe on risk costs also, if you could share an outlook for 26, I'd really appreciate that. And You've mentioned the management overlays, the stock remained the same or nearly stable in Q3, and then you will revisit that at the end of the year. If you just could give me your thoughts of what you think might happen and what you anticipate for the macro development in that respect. Thank you.

Right. Thomas, you asked a lot of questions, actually. And it's good to have you on the call. I think, broadly speaking, in 2026 we reaffirmed the guidance which currently stands at 6.3 billion. That's number one. With respect to upsides, we hope and we pray that we have upside on the lending activity. which is demonstrable from the fact that we have already met the guidance target of 288 billion plus at the end of third quarter. So should we continue at the same pace? Focusing on the higher contractual yield products, which are also secured. Henceforth, we should have a good basis for 2026, and we hope to continue in 2026, especially in the first and second quarter, which improves the world interest income. The second part of your question we already answered in the presentation, which was on the cost of funds. Under the current environment, we are unable to lower the cost of funds. Because you have your neighbor in Vienna, Raiffeisen Bank, paying 4% on deposits and waiving any conditions, transactional conditions. that's a regional player going, let's say, against the grain of the banking market. Then we have challenger banks such as Trinity, such as Partners Banka, such as mBank, which is again a regional or neighbor player from Poland offering and everybody is waiving any conditions. So we conscientiously decided that we will not use this predatory pricing policy to remain fair and transparent and let's see what price we pay for that. So right now we cannot comment on the lowering because there is no room for lowering. to come out for 26. So, judging from his excellency, the governor of Czech National Bank, Mr. Mikl, the rate should remain stable. So, repo rate stable, PRIBOR stable for majority of next year. The assumptions that we put into the operating plan will be at that level. With respect to the operating income upside, there are a couple of other categories which we hope to achieve. So continued growth in the asset management franchise we have solid foundation for this belief because Andrew together with our strategic partner Generali have built a structure which we call Moneta Fund it's a special vehicle registered in Ireland where instead of individual investment products we sell five fund profiles and in the first two weeks Reception since we received the Go Ahead from the Czech National Bank. We have had what I would call a spectacular result. So this is another platform apart from the 41 funds that we offer which helps Our branch people to motivate customers to invest into something which is relatively simple, transparent, and you don't have to think about which one you pick from a very long Chinese menu. Apart from that we see stability and I would say relatively decent growth across the other three categories where the negative, one negative which is FX margin and this is not driven by our inability to increase the volumes, it's more or less driven by competitive position of some other players, namely Revolut. It is unfortunate that Revolut is not properly supervised by the Czech National Bank and it's unfortunate that they are able to circumvent regulation and subsequent compliance and probably the tax regime of Czech Republic and we are working on making the relevant authorities aware of that. So there is one negative is on the FX margin. If you look at cost base, we are the only bank in the Czech Republic that has steady cost of personnel. And this is, I would say, remarkable and going forward we will seek to optimize employment in the bank and continue to manage the cost. On the administration cost, the administration cost is driven by two factors. %uh is abuse of market position from my point of view I'm not saying it's a reality but by the big tech companies from whom we procure various IT services because the inflation that we see in the asking prices is very significant and we have low negotiating power against the giants but we have other means to bring them 2 cents, and we also have, like everybody else, who rents retail space, indexation of the retail space that we procure, plus the head offices at inflation levels. So we reduce the space, nonetheless this adds to the complexity to manage the administrative administrative costs so on the cost we will do our best to fit into the corridor into reasonable corridor nonetheless I see maybe I always see an upside there because there is always room for loss weight weight weight loss weight loss And with respect to this, I will not allow Norman to answer this. We will use the standard range in the guidance and knock, knock, knock. If the economy grows and improves, which we believe will be the case under the new administration, then we will benefit from that as we have benefited from the last 12 months or rather last 9 months of the growth so being conservative we will build in some risk into the expectation of the cost of risk line but But I believe there is also room for let's say stability on that line. All in all, too early to give you anything. How big is the upside and how big is the downside and what are the probabilities? Let's have this discussion in February 2026. And thank you for a very good set of questions.

Thank you very much. I highly appreciate your answers, as always, and I'm sorry for taking so much of your time. Thank you.

As a reminder, if you would like to ask a question on the call today and you've joined us via Zoom, please write it in the chat in the browser or raise the raised hand function on your screen. Before speaking, please make sure that your local device is unmuted. If you've joined us on the phone, please press star followed by one on your telephone keypad. Our next question comes from Krishendra Dubey. Could you please discuss the deposit trends in Q3? Also, are we expecting any deposit campaigns? And could you please talk about the current offers?

So as I mentioned, what we saw in Q3 was fairly aggressive competition from a number of players that Tomasz already mentioned. And I think the primary challenge we faced was from players offering rates above 4%. As I said, these are conditional offers. And it's not clear how long they will guarantee to pay this rate to clients with the next repricing opportunity at the end of this month. So we will wait and see how it plays out. But with the repo rate of three and a half, it's my opinion that they will not be able to maintain it in the long term. That said, just to comment again on the outlook for cost of funding, with the repo outlook now stable into the latter part of next year, this is a matter of being able to stabilize the deposit base, not reprice down further. So I think what we're looking for is competitors to come back to more rational pricing, which will down further. I think for that we would need to see change in the rate outlook from the Czech National Bank. As regards the kind of offers, as I said, what we're competing with is typically offers around 4% with some conditions. Our standard offer for savings is at 2.6. We have term deposits available at 3.2 and we have a series of retention offers which we use to try and retain clients that are transferring money to other banks which go on up as high as 3.4, depending on the type of client and the bank to which they're transferring money. However, we've taken the decision not to go above that, certainly not to go above repo, in order to protect the profitability of the business.

And I think this is how we will... And I would add to that that if you look at it from net outflow, inflow basis, If I take the largest bank in Czech Republic, we are positive in terms of inflow. If you take the four suspects that I mentioned, We are negative against them, and we do not believe that they can sustain it past the end of the year, this pricing. Because if you waive the conditions, you pay the rate for at least three months, and they are already in a situation that they will pay the rates for five months because they started in mid-August, and they all have waivers on the conditions. So we have taken a conscious decision to sit it out and we will not comment anything on marketing campaigns or what propositions we will put into the market because this would not be wise on our part. However, the other The other argument is we don't need the money right now. We simply don't need it. And we manage the bank for profitability. And the last comment I would make on this, if you add up the retail deposit position with the asset management, you will see that we've gained about 12 billion, if I remember the number correctly. Asset Management because the margin that we earn on the introductory fee and on the trailer fee is far superior to the spread that we get against the short term rate.

Thank you. As a final reminder, if you would like to ask a question and you've joined us on Zoom, please use the raised hand icon or the Q&A box and type out your question. If you've dialed into the call, please press star followed by one on your telephone keypad. It looks like we have no further questions at this time, so I'll hand back over to Mr. Sperny for closing remarks.

As I said, we tremendously appreciate your participation. How many do you have registered? Fifty-one. Fifty-one, so we keep it stable. We keep it very much stable every quarter. I would like to underline that we look with confidence into the fourth quarter. of this year. We have sufficient basis for that. We look actually with confidence into 2026 because we are recalibrating the bank from operational platform point of view. We are also on a good track improving efficiency of the operations and we have good demand for our products, be it on transactional banking, be it on wealth management, be it on lending. I would say the brightest moment in the last three months was when a colleague of mine told me that he had used our digital platform to obtain mortgage. and told me it was a fantastic experience. So this was one of the good moments of my 10-year career with Moneta and thanks to Andrew we have this. I wish you the best, very good holiday season starting with Thanksgiving and progressing to all the other and we are looking forward to either meeting you in person or at the close when we disclose the full year results. On behalf of the Management Board all the best. Thank you.

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