Banks: Czech Banks: Banking on solid GDP outlook
In this report we initiate coverage of Czech banks with a positive outlook. We rate Moneta Money Bank Buy (FV CZK 97, 21% upside) and Komercni Banka Neutral (FV CZK 1,010, 7% upside). The CNB’s recent forecast for solid 3% GDP growth over the next two years, supported by domestic consumption as well as investments (both government and private), is above BBG consensus of 2.7% and 2.6% growth in 2019E-20E. We see a more sluggish EU growth outlook owing to a combination of global uncertainties (i.e. threats of an escalation of protectionist measures and the possibility of a disorderly Brexit), as well as adverse domestic factors in some Euro area countries, as the largest threat to the Czech open economy.Komercni banka is a universal banking group based in the Czech Republic. Co. is engaged in the provision of a range of financial services in retail, corporate and investment banking. Co.'s operating segments include: Retail Banking, the provision of products and services to individuals, such as among others building savings, pension insurance, overdrafts, credit card and personal loans and mortgages; Corporate Banking, the provision of products and services to corporate entities such as foreign currency and derivative products, syndicated and export financing, and guarantee transactions; and Investment Banking, which involves trading in financial instruments.
Moneta Money Bank as is a Czech Republic-based retail and expanding small and medium enterprises (SME) bank. The Company holds an universal banking licence and provides a range of retail and SME-focused financial products and services. The Company operates through a national distribution network of 229 branches and through alternative distribution channels, such as the internet, its call centre, auto dealers, brokers and approximately 4,700 leasing partners. The Company together with its controlled subsidiaries offers current accounts, savings accounts, term deposits and transactional banking products including payment services and debit cards, consumer loans, credit cards, overdrafts, mortgages and auto loans, auto leases and other complementary products such as bancassurance and sales of investment funds.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
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