Moneta in talks on acquisition of Wustenrot Czech units

Prague, Nov 29 (CTK) - Moneta Money Bank, the fourth biggest bank on the Czech market in terms of client numbers, is in exclusive talks on acquisition of the Czech building savings and mortgage business from Germany's Wustenrot group and wants to sign the deal by the year's end, the bank said in a press release today.

The closing of the acquisition of building society Wustenrot stavebni sporitelna and mortgage bank Wustenrot hypotecni banka is being planned to take place on April 1, 2020 or soon after that.

Moneta is going to announce the acquisition price and other details after it signs the share purchase agreement.

The acquisition is subject to approvals of the Czech National Bank (CNB) and the antitrust office.

"Management believes that the acquisition fits with Moneta's long term retail banking growth strategy and will be accretive to both earnings per share and dividend per share in the short and medium term," Moneta CEO Tomas Spurny said.

The bank plans to finance the acquisition from its existing excess capital and liquidity resources, according to Spurny.

"The transaction will not require any increase of Moneta's capital and therefore will not cause dilution to Moneta shareholders," he said.

Moneta will propose to pay out 2019 dividend as previously communicated, Spurny added.

Moneta expects the planned acquisition to give it 400,000 new clients, leading to a retail deposit growth of about 45 percent, or Kc53bn. It should also raise its market share in the mortgage segment from 3 to 6 percent and increase the volume of consumer loans from Kc40bn to Kc53bn.

Moneta also expects the acquisition to strengthen its annual profitability by 15 percent and increase operating revenues by 10 percent annually at least. Cost savings are estimated to reach 6 percent of Moneta's current cost base.

The acquisition is also expected to improve Moneta's overall risk profile and lead to an extraordinary gain during the year of the acquisition.

According to analyst Radim Dohnal of the Capitalinked.com portal, the sale of Wustenrot to Moneta is in line with the trend of foreign owners of Czech banks withdrawing from Czechia.

"It also fits in the strategy of Moneta Bank, which is convinced that it needs a bigger size and bigger market share. After the failure of negotiations with Air Bank and Home Credit, they took another look around the market," Dohnal told CTK.

Moneta had operated as GE Money Bank until 2016. It changed the name in connection with its IPO on the Prague Stock Exchange (BCPP) in May 2016.

Moneta Money Bank ranks among the biggest titles traded on the Prague bourse.

The Wustenrot financial group, which offers building savings and mortgage loans on the Czech market, saw its net profit rise by 1 percent to Kc420m last year.

Wustenrot stavebni sporitelna is the smallest out of the five building societies operating on the Czech market. Similarly, Wustenrot hypotecni banka ranks among minor mortgage banks in Czechia.

The group's parent company is based in Germany.

tam/er