Moneta shareholders reject capital rise for merger with PPF

Prague, June 22 (CTK) - The extraordinary general meeting of Moneta Money Bank today supported the planned merger with the PPF group's banking division but did not approve the proposed capital hike which is necessary for the completion of the transaction, spokeswoman Zuzana Filipova told CTK.

PPF's banking division includes Air Bank, consumer loan provider Home Credit Czechia and Slovakia, and Benxy, a firm running the online platform for peer-to-peer loans Zonky.

As many as 61.9 percent of the shareholders present voted in favour of the merger in the first vote, while at least 50 percent were necessary. In the subsequent second vote on a capital hike, only 61.69 percent supported such a step, while 75 percent of votes were required. The meeting ended around 14:00.

"Most shareholders expressed their agreement with the vision to create a strong Czech champion for sole traders and small clients," Moneta board chairman Tomas Spurny said.

"We believe that we will find a way of obtaining the necessary support and complete the transaction," he added.

PPF has acknowledged the shareholders' decision. "Consent of Moneta shareholders to the acquisition of assets in the Air Bank Group confirmed the agreed valuation of these assets and also confirmed that most existing Moneta shareholders support the plan to merge Moneta with Air Bank and the Czech and Slovak Home Credit," PPF said.

Company Tanemo of PPF remains Moneta’s largest shareholder with a stake that allows it to exercise major influence over the General Meeting’s decisions, PPF added.

In parallel with its stake in Moneta, PPF will continue develop its strategic investments in Home Credit and Air Bank, the group added.

"The approval of the merger intention without an approval of issuance of new shares is pointless," analyst Radim Dohnal of the Capitalinked.com portal told CTK in his comment. It is now up to PPF to improve its offer, he added.

Cyrrus analyst Tomas Pfeiler said he expected PPF to try to push through a similar transaction again in the future. But it has to make the parameters of the deal more attractive, he added.

"We want to build a new important player on the domestic banking market with a capital that has roots in Czechia and is able to conquer further markets," PPF CFO Katerina Jiraskova said on Monday.

Moneta was to acquire 100 percent of shares of Air Bank Group from PPF Group for a total consideration of Kc25.9bn consisting of two components – cash payment Kc2.59bn and cash proceeds contributed by PPF Group through the subscription for 291,375,000 newly issued Moneta shares. The new shares should be issued at Kc80 per share, increasing capital of the bank.

PPF Group would then hold an estimated 55.38 percent of Moneta.

The merger would give rise to the third largest bank on the Czech market after Ceska sporitelna and CSOB.

Moneta Money Bank has been operating under this name since 2016 when it changed from GE Money Bank because the bank entered the Prague Stock Exchange (BCPP). Moneta is one of the largest listings on the bourse.

According to information on its website, Monta is the fourth largest bank in Czechia with about 1.4 million clients.

In April 2020, Moneta completed the acquisition of Wustenrot's building society and mortgage bank, acquiring 400,000 new clients.

Moneta employs over 3,000 people and runs 160 branches and more than 550 ATMs.

Moneta's net profit fell to Kc2.6bn in 2020 from Kc4bn in 2019. Its operating revenues rose by 15 percent to Kc12.1bn. The results were influenced by higher risk costs and lower revenues because of the coronavirus pandemic. The bank's general meeting has approved a proposal not to distribute dividend from last year's profit.

The PPF group invests in many sectors, including financial services, telecommunications, real estate, engineering and biotechnologies. At the end of H1, PPF owned assets worth EUR44bn (about Kc1,150bn) and employed 98,000 people worldwide.

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