WOOD Flash – Moneta Money Bank: solid guidance on earnings and dividends

Moneta Money Bank has posted CZK 3.92bn of net profit for 2017, in line with the latest guidance, from December 2017 (CZK 3.9bn) and above the earlier guidance issued throughout 2017. More importantly, the management board announced its 2017 DPS recommendation of CZK 8, which implies a yield of almost 10% in the near term. On top of this, the management board committed to at least a CZK 11.5bn total dividend payout over 2018-21E (from the 2017-20E net profit), which implies a total yield of c.27%. Admittedly, CZK 4.1bn will be paid in a couple of months, so the following three years’ minimum dividend level is guided at CZK 7.4bn, implying a yield of almost 18%. We see such a commitment as largely in line with our expectations (our 2017-19E cumulated dividend is at CZK 10.2bn currently and our 2017E DPS level is CZK 7.6), ranking the bank as the top dividend payer in the regional financials space. Last but not least, the management board shared its rather detailed 2018-20E profitability and earnings guidance (the 2018E net profit guided to reach at least CZK 3.4bn and the 2020E net profit to be at least at CZK 3.8bn), which signals to us that management is working hard to restart the EPS growth in the foreseeable future.
We see all of the above as positive, on balance, due to the solid guidance and the commitments to the shareholders. We remain BUYers of Moneta Money Bank and we see these announcements as very supportive for our view. We note that our current 2018E and 2019E net profit forecasts are at CZK 3.29bn and CZK 3.4bn, respectively. Both represent at least small upside risks in light of the guidance issued by the bank today. Moneta is trading at a 2018E P/E ratio of 12.8x, but on our too-conservative forecasts, and this implies discounts to both Komercni Banka (a 2018E P/E of 13.6x) and the Polish banks (a 2018E median P/E of 14.9x). At the same time, it offers an unparalleled dividend yield.