Moneta Money Bk

Mr. Carl Normann Vokt, now hand over to Mr. Tomas Spurny who will lead you through today's conference call.

Good morning, ladies and gentlemen. Today I have the pleasure and the honor to open today's conference regarding our financial performance as of the end of third quarter of 2026. If I can ask you to turn to page number two. Moneta generated net profit of 5.5 billion. This represents an improvement of 12.7% against the previous year. The result comes on the basis of growth in the The operating income of the bank that came in at 11.2 billion. We also enjoy steady cost base of the bank. We incurred 4.2 billion in operating expenditures. And lastly, we have under control cost of risk that came in at 492 million. With respect to balance sheet development, our funding base reached 476 billion. This represents growth of 3.8% and we've enjoyed strong lending activity reflected in the growth and many more. The balance sheet grew to a level of 524 billion since beginning of the year, representing growth of 5%. With respect to capital, We remain well capitalized at 19%. The CET1 ratio is at 13.1%. Tier 1 ratio is at around 15. And we comfortably fulfill the moral requirement at 27.4%. If you look at risk-weighted assets, the risk-weighted assets reached a level of 181 billion, growing at 9% in line with the portfolio, with the loan portfolio growth. The profitability translated into returns. With respect to return on tangible equity, we are near 24%, 23.9%. Strong liquidity position reflected in the coverage ratio LCR of 282%. Based on the results here today, particularly of the third quarter, which is the highest in the history of the bank, we feel comfortable to increase the minimum Net profit target for 2026 to a level of 7.1 billion crowns. This would be 500 million better than what we originally at the beginning of this year communicated to the market. The improved guidance of the minimum net profit is driven by better than expected I believe that we will reach 15 billion steady cost base or stable cost base and cost of risk range we tighten to 20 to 30 billion. Translates into 22 basis points. Should we reach this result, the minimum net profit, the earnings per share would then be 13.9 crowns per share. If we turn the page, there are a couple of important points that we would like to get across. With respect to the lending growth, we expect to end the year in the range of 8.5 to 10.5%. This is on the basis of significant improvement In the lending activity as compared to the year 2025. With respect to deposit growth, we expect a growth rate of 2.5 to 3.5% range. This relates to our, I would call it, very careful repricing policy as we would like to keep the cost of funds under control for the full year. The average cost of funds we expect in the range of 210 to 250 basis points and this is supported by the fact that so far for the three quarters we stood at 2.1% which again represents stability. With respect to net interest margin, we would like to land in the range of 210 to 250 basis points. So far, we have put on the books 77 billion of new lending. This is an increase compared to 2025 of The new volume year-to-date carries contractual yield of 5.6%. If we look at the three weeks of the fourth quarter, We are actually increasing this yield by nearly 100 basis points based on repricing that we've initiated at the end of third quarter. And lastly, the performance is reflected in the In the overall legacy portfolio yield, which has increased by 20 basis points. With respect to wealth management franchise and the third party distribution, I would like to stress that we are continuing successfully in expanding this franchise. We expect the administered portfolio to land somewhere between 92.5 to 95 billion at the end of at the end of the year and we would like to reach the full year target of 20-22 billion in sales. So far this year to date we have done 16.3 billion so the target is relatively ambitious but let's hope that we will get it. On the following page we have messages related to operating income, cost management, risk management and net profit performance. I would like to maybe comment on cost of risk where my expectation is that we should be in the middle of this range and let's hope that that materializes. The rest of it I pretty much covered in the opening remarks. Now, let's turn to macroeconomic environment, the operating environment. If you look at Czech Republic, we have, I would say, so far, resilient performance. Nonetheless, the GDP for this year is estimated at 2.2% growth, which is lower than what was initially expected at this time last year. And it's clear that the year-on-year change in the GDP and the declining trend for the last two quarters. With respect to state budget deficit, this is projected to come in at 3.4% of the GDP. Currently, the debate regarding the budget deficit for 2027 is at around 390 billion, so clearly the pressure on government finance is increasing and this is also visible from the slowly creeping up of the countries in that mess. The good news is on unemployment, it remains benign and even though it's slightly If we look at the last five quarters. If we look at inflation, the year-on-year change is at 2%. The latest published number was at 2.5%. And if you look at the contribution to inflation, it's pretty much across all of the categories except For clothing and food where we see some contraction, but the inflation remains worried, namely due to the imported inflation, which comes out of the conflict in the Middle East. With respect to the yield curve, the yield curve is deepening. It's remarkable. How the situation has changed during the past 12 months and as I said we try to reflect into our pricing on the asset side and we also try to control the marginal increase of cost of funds through a very careful strategy how we keep the funding base both from Now, let me turn to the development in our business model, namely the operating platform. We continue to have nascent growth in the customer base. This is slowed down by the pricing reality on deposits where we have Thank you very much. In parallel with that we are reviewing 10 additional locations and we seek to build a very bespoke plan how to cover the country for next three years. This is due to the fact that, as you will see on the next page, the footfall in the branches continues to decrease and we will have to react to that. The Alliance ATM network remains stable. We will see some internal changes in the structure of the network. I will come to that in two minutes. Total employment of the bank stable, slightly decreasing. We see a relatively rapid decrease of the front office positions. This impacts namely the branch network and the contact center and we see an increase in other parts of the bank. I would say in back offices where we face increased volumes and a higher number of transactions. also within the IT and digital parameters as the bank is more and more relying on digital channels this reflects itself and in some other parts of the bank we also need more staff and this is pretty much related to regulatory requirements and also to cyber security requirements which are dynamically Let's say becoming more and more challenging. On digital platform, we have 3% growth in active digital platform use, which is in line with our expectations. What is quite important here is that we have lent 31.8 billion of loan volumes to the digital platform. This is nearly 56% increase against last year. and the main factor here was played by our mortgage campaign running in the second quarter and translating into volumes throughout the third quarter. This is a very good result from our perspective. Also reflected in the nearly 400,000 We also are pleased by increased intermediation. 64 million transactions, nearly 64 million transactions and 9% growth in that category. And what is quite important is significant growth in the service transactions, which grew 13.7% and this takes pressure Looking at the branch network, we experienced steady decrease in the in the footfall and this will lead to a change of strategy how we conceive the physical coverage of the country. Nonetheless, the branches continue to play a very significant role accounting for 55 or 56 percent of loan volumes and the loan volumes in the network also increased by nearly 30 percent reaching a level of 45 billion. The last important factor I'll mention here is the client satisfaction. The branch network is This testifies to a high quality of the staff where we also have, you will see later on in the penetration, various professional certifications which help us to succeed in life insurance, in all insurance products and in the wealth management, in the world of wealth management franchise. Turning page to the contact center. Here we are also performing, I would say 360 degree review to make certain improvements. Inbound traffic remains stable. We have decreased the staff by more than 5%. And we have experienced or we successfully The client satisfaction has improved quite significantly. Five points we consider this We have done it successfully on processing of emails and now we are seeking ways how to make the contact center more efficient specifically are looking for root causes of the inbound calls and would like to eliminate them through I think we might see the first results of that either in the middle of 2027 or at the end of the third quarter of 2027. Lastly, the ATM network, as I already said, stable. What is changing is the structure of the Alliance network where more than 40% is now enabled for deposits. There is significant demand for cash deposits. You can see it from the growth numbers. They are also experiencing decline in withdrawals, henceforth we will, as we have relatively old Thank you very much. If you look at the service transactions, this is also a relatively important factor in our ability to service customers. So I will end my opening remarks here. I think the main message is this year we moved the net profit target at minimum to 7.1 billion and perhaps the second of Moneta Money Bank since we are a publicly traded company and I thank you for your attention and patience with me and I'll turn over to Jan Fricek.

Thank you, Tomáš. Good morning, ladies and gentlemen. I'm now on page 17 and it's my pleasure to walk you through the profit and off-statement section. Let me repeat the key financials. In the first nine months, Moneta delivered net profit of 5.5 billion, Up by 12.7% year-on-year with earnings per share of 10.8 crowns and return tangible equity within 23.9%. Improved profitability was delivered on the back of operating income growth at 8.2% reaching 11.2%. Billion and this is a combination of higher net interest income year on year up by 9.7 percent reaching nearly 8 billion and this was driven by the continuing lending growth together with the ongoing repricing of the mortgage book. And also, the net fee and commission income line shows an increase year-on-year by 6.1%, stemming from the ongoing solid performance in the distribution of wealth management products. On the cost line, we report a stable development year-on-year, which together with the operating income growth resulted in the cost-to-income ratio reduction to 37.4%. And on the credit costs line, we report 492 million or 22 basis points of the average loan portfolio, which is at the lower end of our guided range for the credit costs for the full year. Moving forward, on page 18, we provide a detailed view on the net interest income development. As Tomas mentioned, we had a very strong third quarter delivering year-on-year growth of 12.1% and 5.5% increase against the second quarter, which indicates strong acceleration during the last two quarters. And in line with that net interest margin went up by 20 basis points, reaching 200%. Drivers of the development are reported on the right side. Most importantly, interest income from lending is up by 16.5%, which is a function of the accelerated lending growth as well as repricing within the mortgage book. Treasury income is up year-on-year by 3.6%, supported by higher two-week repo rate. And on the other hand, interest expense on customer deposits went up by 14.5%, which is a function of the deposit base expansion together with the gradual increase of the cost of funds in relative terms. Moving forward on page 19, we provide a similar view on the net fee and commission income. In the third quarter, we delivered a year-on-year growth of 5.8% and stable development against the second quarter. And here I would like to mention that in the third quarter and fourth quarter last year, we obtained extraordinary bonuses of 50 million in each quarter. If adjusted for that, we would report a recurring income growth of 12.8% year on year. Drivers of the development are reported on the right. Firstly, third-party commission income went up by nearly 100 million, which is a combination of the commission income from the wealth management products up by 29.4% and commission income from insurance products up by 10.2%. In the second category, fee income, we report only marginal growth of 13 million, which is attributable to higher transactional activity of our customers. And lastly, the growth of the fee expense category is attributable to the one-off bonuses obtained last year and the gradually increasing transactional activity of our customers. Moving forward on page 20, we report more detail about the performance in the wealth management products distribution franchise. This year we report year-on-year growth of the commission income by nearly 32% on the back of the outstanding amount of distributed wealth management products of 24.9%. And the commission income growth is a function of the opening fee income expansion by 11.9% and the trailer fee growth of 43.7%. Here I would like also to emphasize that the current tier profitability improvement is also attributable to a higher volume of distributed investment certificates and structured investment products generating upfront one-off commission income. Moving forward on page 21, We report on the insurance products distribution franchise. After the slowdown reported in the first quarter, I'm glad to comment that we improved the performance and for the first three quarters, our commission income is up by 5%. and also we distributed a higher number of insurance products sold this year. On the right hand side you can see that the improved performance is a function or was mostly supported by payment protection insurance as well as pension insurance while in life insurance product distribution we are slightly behind. Moving forward on page 22, we can continue with the cost base. As managed before, we managed the cost base stable year on year. And in two out of four categories, we report inflation offset in other two categories. Namely, the main personal pressure persists in the personnel. up by 5.7% and this I will comment in more detail on the following page while we achieved savings in the administrative also depreciation and amortization after the extension of useful life of the main fixed assets in the first quarter this year. Moving forward on page 23, let me comment on the personal costs in more detail. In the third quarter, we report the costs of 643 million, which is stable comparing to the third quarter last year. And if we look into the composition, we achieved a marginal saving on the recurrent costs, which is a combination of average salary increase more than offset by a reduction in number of FTEs. And in the one-off category, we report in the third quarter evaluation of different managerial bonuses reflecting share price development in amount of 19 million. And now we completed this section on page 24 with the administrative costs development in the third quarter we achieved 1.8% reduction year on year and this is attributable to three out of four reported categories the most importantly we achieved savings in IT category as a result of completion of the cloud migration last year and also in facilities We had less repairs and low intensity of maintenance. On the other hand, marketing costs are up in the third quarter due to mortgage and current account campaigns running in parallel. So that's all from myself for this moment and I will now hand over to my colleague Andrew Gerber who will continue with the balance sheet development. Thank you very much.