MONETA Money Bank: Twisting and turning, heading in the right direction (stays BUY)
We issue an update on MONETA Money Bank in light of the announcement that the potential merger with Air Bank and Home Credit is off the table. On our revised forecasts and valuation, we continue to be BUYers of MONETA and we increase our 12M price target (PT) to CZK 104.1 (up from CZK 92.4). MONETA Money Bank remains one of our top picks in the region as: i) it offers a top dividend yield for the next three years (7%+), unmatched elsewhere among the CE3 financials; and ii) we expect continuous business growth, with a 2018-21E lending CAGR of 9%+, faster than the market, driven by retail mortgage lending as MONETA can pick up market share in this area, which has been neglected in past years. Generous capital distribution (dividend yields of 7%+) and business growth should lead to a superior 2019-21E ROE and ROTE of c.15% and c.16%, on average, respectively, the top in the region among the financials, on our estimates.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.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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