MONETA Money Bank: Past the bottom, waiting for the recovery (stays BUY)
We remain BUYers of MONETA Money Bank and increase our 12M price target (PT) to CZK 95.1 (from CZK 69.7), offering 33% upside potential. Our PT hike is a function of our financial forecasts increases: we have hiked our 2021E and 2022E net profit forecasts by 67% and 15%, respectively. Our forecasts are aligned currently with the recently restored management guidance. Management is guiding for a 2023-25E ROTE of >17% (>16% ROE) and we see this as quite an ambitious profitability target. Our explicit 2023E ROTE forecast is a little more cautious than the target (16% vs. 17%+), but it still places MONETA among the top banks in the region. Our analysis suggests that this could be achievable, with a combination of healthy organic growth rates in business volumes at a solid single digit average annually and with the optimisation of capital usage, which suggests that dividends should continue to flow to investors, as soon as the regulator lifts the restrictions, in our view.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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