Moneta Money Bk

Dear ladies and gentlemen, welcome to the conference call of Monita Money Bank regarding first quarter of the year 2026 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. Thomas Sperney, Mr. Jan Frijec, Mr. Jan Novodny, and Mr. Andrew Gerber. May I now hand the call over to Mr. Thomas Sperney, who will lead you through the conference call. Sir, please go ahead.

Good morning, ladies and gentlemen. Once again, I have the pleasure of presenting our quarterly results. Let's go to the summary of key highlights of our performance for the first quarter of 2026. We've generated net profit of 1.6 billion crowns. This is an improvement against comparable period of 2025 by 8%. The result, the first quarter accounts for 24% of the guidance that we put out in late January. of this year. So I would say that we are performing according to expectations for this year. The result comes on growing operating income. We've generated 3.5 billion of operating income with a nearly 5% improvement against, again, comparable period. We enjoy stable stable cost base, which increased by 1% to a level of 1.5%. So there is really consistency of what we guided at the beginning of the year. With respect to the balance sheet of the bank, we reached $520 billion, expanding by 3.9%. This is on the basis of expanding funding base of the bank which reached $474 billion and increased by 3.9%. And we enjoy strong demand for our great products, namely from small business and SMEs. The portfolio grew 6.8% to the level of $297 billion. Here I would like to underline the fact that we are currently focusing on small business and SMEs due to favorable capital allocation and the margins which will enable us to accomplish the NII target in both in relative terms increasing it to the level of 2.1 by the end of this year. Going to capital we have capital adequacy ratio of 17.9%. This is negatively impacted by one of events which will reverse itself in during the second quarter and Jan Fritschek will give you a little bit more detail. In fact, it's in a magnitude of about 40 basis points and it should be very subtle, as I said, during the second quarter. Year 1 ratio at 13.7% and very comfortable morale position at 27%. exceeding the regulatory requirements which have been levied upon us. We have this Tuesday held a shareholder meeting and approved the dividend of 11.5 pounds per share proposed by the management. In totality this accounts for 5.9 billion pounds of Net Profit of 2025 to be distributed to our shareholders. With respect to the return on tangible equity in the first quarter, we've accomplished 21.6% return, which is 2.1 percentage points better than in a comparable period of last year. Liquidity coverage ratios to that record high 415%, this is due to one of deposits which came in at the end of the quarter and subsequently left the bank. If I summarize the shareholder meeting, we accomplished approvals of several key corporate documents and made the financial statements on both consolidated and individual basis. As I mentioned, we have approved the dividend and we have amended the remuneration policy of Moneta. The amendment concerns improvement or increase of payments to our supervisory board. That increase accounts for about 80,000 euros. annually and it had been in fees as well as the remuneration report of the bank for 2025. We enjoyed strong presence at the shareholder meeting exceeding 73% through physical presence and correspondent role. Now I would like to briefly summarize the operating environment of Czech Republic. Last year we enjoyed better GDP growth than was expected at the level of 2.6%. This year had been predicted at 2.9%. Obviously this prediction was done before the war in Persian Gulf. So we will see what impacts we will have from the higher fuel costs and related inflation pressure, unless so far Czech Republic has been in very good shape. If we go to government deficit and indebtedness, there's nothing to report on indebtedness. It actually decreased slightly. The deficit is projected for this year at $310 billion. and the first quarter had seen deficits of 27.6 billion pounds. Then the last one, unemployment. Year on year you can observe the unemployment increase by 50 basis points. So far we haven't seen any effect on NPL formation, size of NPL portfolio or defaults and such. and we will cover that in the risk section, which due to Norman's absence, I will cover later on in the presentation. If you look at inflation and interest rate environment, inflation seemed to be subdued. Annual inflation stood at 2.2% and month-on-month. at 1.9. So you can see from this that the Czech National Bank is close to the market of 2% and again it remains to be seen what will happen to the inflation due to elevated fuel costs and then the tickle down effect how it will translate into the economy as such. Nothing to report on the key benchmark today. stands at 3.5%. However, if you look at other financial instruments, the probability seems to be skewed heavily towards rate hike. I'm referring to the FI market and the probability seems to be about 70% that we might have 25 basis points rate hike in a relatively short period of time. yield curve. If you look at the yield curve, the short and stable against last year actually decreased against the comparable period of 2025, the first quarter. On the medium to long term, there is evident increase in the expectations of and the swap market the swap market reacted relatively strongly to the conflict in the Persian Gulf and here we have contributors to inflation what is most notable I would say is transport communication category and then restaurants and services seem to be continually So much for the macroeconomic environment and let me comment on our operating platform which consists of four key pillars for our operations. We have a steady situation in terms of client branches and the ATM alliance network. Unemployment against stability, very slight decrease. However, trend of decreasing front-end employees. This is on basis of digitization and changing behavior of our customers as you will see on the digital platform commentary. And we have increase in the middle and back offices of the bank. And here I would comment that it has three components. as we are processing more transactions we need more people on the risk management side and on the back offices this is the first element second element we continually invest into cyber security and crime prevention professionals and third IT we need more analysts we need more solution architects and as we are trying to Keep up the pace on digitization of the bank. This is obviously placing strong demand on the bank in terms of these skills in those three areas. Now, going to digital platform, we have healthy growth of digital users. This namely concerns the increases, namely concerns download and usage of our mobile platform SmartBank. You also see fairly healthy growth on the daily touch points on the given day on average 725,000 touch points. Coincidentally, this is pretty close to how many visits we realized per annum throughout the branch network. Very strong growth on lending volume, plus 20%. We are very happy with how the platform performs, and this is not only SmartBank, but it's also our mortgage platform, Finanso and Refinanso, where we see an increase of interest by customers to refinance their mortgages and to originate primary mortgages through those digital platforms. Strong growth on payment transactions. We have slightly less third-party transactions, and I believe this is due to discontinuation of some auxiliary products. And strong growth on servicing transactions. Servicing transactions are very important. We've got account maintenance management. We've got liability side, balance sheet, third-party products. We are successfully moving these tasks from the realm of physical world into self-service done through the SmartBank application. Going to the branch network, here on the first line you see stability, nonetheless decreasing from office time. However, a headwind or an issue that we struggle with is all of the banks in the market is decreasing level of staffing in our branches. And the way we will deal with it is further optimization of the network in terms of coverage. That's first dimension. Second dimension concerns relocation of branches to high traffic areas. And the third improvement, which we will implement by the end of this year, we will pilot it, is an appointment setting platform in order to utilize the branches and skills residing in them for high value products. We actually already see, I would say, transition from mundane tests into high-value products. The testimony is the more than 13% growth on the sales of insurance and sales of wealth management products. You also see that the network continues to be very material to us in terms of ability to lend. we have originated more than 13 billion through the network with an increase of nearly 32% so it remains to be a strategic asset for the bank and we are very happy with the performance of the network in terms of net promoter score the satisfaction with the network exceeds 90 points and we are at the main guards of the banking sector in Czech Republic in terms of that metric. Now going to the contact center, which is the third pillar of our business model. Last year we saw declining quality and increasing traffic discontinued in the first quarter. We have increased the staff somewhat to a level of 224% which is around about 2% increase against 5% increase in traffic. The bank is seeking to find ways how to prevent calls coming in and we have already taken some measures to manage the cost structure of the contact center. On email we are successful in redirecting these queries onto the digital platform. nonetheless here we are implementing artificial intelligence in order to sort the emails to provide precise and consistent responses and you will see an impact of that project in the second half of the current year. Increasing the staff enabled us to improve the performance in terms of lowering quite substantially the abandon rate is now is at 6.6% and we decreased the average by 5.5 percentage points so we reacted to that situation which was unfavorable in our view with some marginal cost investments and we improved also the metric on answered costs quite substantially and the client satisfaction improved marginally to 82%. to 82 points on the Net Promoter Score. Now, continuing into the ATM network. On the side of the network, we have stability. As you know, we share this alliance with three competitors, which is CommerciBank, Alnit, Reddit and AirBank. The benefits are quite substantial for us. What we've accomplished with our partners through the first quarter is an expansion of the deposit taking ATMs we now have 957 machines at our disposal this is quite good because we see a rapid increase in usage of those machines in terms of deposits and it enabled Moneta to start the reduction of cashiers and cash desks throughout our network and this process will will be accomplished by the end of the year we will really have majority of the network on cashless basis so this is quite an important benefit the other thing which is worth mentioning here that not only we digitize the service transactions but also the software which is implemented on our network enables clients to perform a fairly significant number of Service Transactions, and these are growing, as you can see, by 6%. So, if I summarize the synthesis, we've generated net profit of 1.6 billion. What is important to us is that this is on the back of improving operating income, and against the background of steady operating expenses. The credit cost or cost of risk at 160 million is according to expectation and at the lower end of the guidance that we have provided. So we consider the quarter as expected and with that I will turn over I appreciate to give you more detailed view of the P&L and I will walk you through the details on that. Thank you for your attention.

Thank you so much. Good morning, ladies and gentlemen. I am now on page 15 and it's my pleasure to walk you through the profits and losses statement section. Let me repeat the key financials. In the first quarter of the year, Moneta delivered net profit of nearly 1.6 billion. representing a year-on-year improvement of 8%. Earnings per share stood at 3.1 crowns and return on tangible equity improved by 2.1%, which goes to 21.6%. Improved profitability was driven by higher operating income. The growth reached 4.8% and the balance generated student 3.5 billion. The improvement was driven by higher net interest income by 7.7% up year-on-year stemming from improved net interest margin by 10 basis points and higher lending income. Net PN commission income line improved by 1.8% supported by ongoing strong performance Cost base came at 1.5 billion, only marginally up year-on-year by 1%, and this amount includes annual contribution into the Deposit Insurance Fund and Resolution and Recovery Fund of 209 million. Broadly stable cost base accompanied by operating income growth of 4.8% resulted in a significant improvement of the cost-to-income ratio, to 38.3% against 40% reported in the first quarter of last year. Credit cost line came at 160 million, or 22 basis points of the average portfolio, which is a low result at the bottom of our guided range between 20 to 35 basis points, and was enabled by persisting benign risk environment, supporting cloud delinquencies, and low NPL costs. Moving forward, on page 16, we report development of the debt interest income line. In the first quarter, we delivered 7.7% growth year-on-year, and as I said, this is a function of increased debt interest margin by 10 basis points, and also supported by higher lending income by 7.3%. which was supported by the loan portfolio expansion of 6.8% accompanied by positive rate pricing within the mortgage book and Andrew will provide you with more details on this in the budget section later. 25 basis points decline of the 2 week repo rate also resulted in lower treasury income partially mitigated by cost of funds reduction. Moving forward on page 17 we provide development on net fee and commission income in detail. In the first quarter we delivered year on year improvement of 1.8% which is a combination of third-party products by 40 million up and as you can see this was mostly supported by nearly 20% growth of the commissions generated in the wealth management product distribution franchise accompanied by probably stable results in the insurance products distribution franchise. Free income category shows year-on-year improvement of 25 million, supported by both categories higher penalties by 4.1% and higher transactional and servicing fees by 6%. And lastly, free expense line shows an increase year-on-year due to an extraordinary bonus analyzed last year. On page 18 we provide further details about performance in the Health Management Product Distribution franchise as you can see in the 162 million up by 20% year-on-year due to higher trailer fee by 34% reaching 172 million in the first quarter and this was delivered on the basis of the rapid growth of the outstanding amount of distributed wealth management product of 29% reaching 81.4% In the first quarter of this year, our customers invested with us 5.7 billion, which is nearly the same volume as invested a year ago. And this is reflected in the broader stable opening fee, reaching 19 million in the first quarter. Moving forward, on page 19, we provide a detailed view on the performance in the insurance product distribution franchise. In the first quarter we generated 293 million here and this is nearly the same result as delivered last year. And this is also reflected by number of sold insurance products being 45.2 thousand of new insurance policies sold this year against 45 thousand policies sold last year. On the right side of the page you can see that in two areas out of three reported we delivered improvement, we strengthened the performance, namely payment protection insurance went up by 9% expressed gross return premium and also pension insurance performance improved by 12.9% in terms of number of units sold in the first quarter this year against the last year. On the other hand, in the first quarter we suffered a slowdown in the distribution of life insurance by nearly 10%. On page 20, we can continue with the cost base development. As mentioned before, the cost base length at 1.5 billion in the first quarter, only marginally up year on year. And two out of four categories show a cost reduction, namely depreciation and amortization charge is down by 9.2%. resulting from a regular revision of remaining use life of fixed assets, accompanied by 6% reduction in the admin and other cost categories. On the other hand, regular affiliate charges went up by 7.2% year-on-year. This is in line, is broadly in line with the deposit-based expansion. And personal costs are up by 8.5% year-on-year, which is a combination of a higher average salary accompanied by a higher performance driven variable compensation to the front office and to the management. On page 21, we provide further detail to the personal costs. As you can see from the chart, on the recurrent basis, we report 4.9% increase year-on-year, and this is attributable to the 6% increase of the average salary, which is still below the average wage inflation in the Czech Republic, being at 7%. And this is only marginally mitigated by small 0.3% FTEs reduction here. The reported growth of 8.5% is also driven by higher one-offs in the first quarter this year. And this is a combination of higher performance driven annual variable compensation for the management Partially offset by a release of provision for annual vacation and severance. And on page 22, we complete this section with a detailed view on the administrative and other expensive development. As mentioned before, we record a cost reduction in this category of 6%. And this is a combination of lower IT costs stemming from a near completion of the cloud migration in 2025. Together with 24% reduction in other cost subcategories, the most significant saving within this area was achieved in the first stage. On the other hand, in the first quarter, we spent more on the marketing by 15.6% to support the business development. And Andrew will give you more detail on that on the balance sheet section. I hand over now to Andrew Weber. Thank you.