PRAGUE, May 30 (Reuters) - Czech investment group PPF and MONETA Money Bank have walked away from a deal to combine their assets, the two said on Monday, terminating a proposal that would have created a major competitor to foreign-owned market leaders.

MONETA said the deal, comprising a 25.9 billion crown ($1.1 billion) takeover of PPF's banking assets in Air Bank and the Czech and Slovak operations of consumer lender Home Credit, was ended following a decision by PPF.

"The termination comes as a consequence of senior management change in PPF Group and a subsequent transaction review conducted by them. Unfortunately, the review resulted in the PPF Group’s decision not to pursue the transaction," MONETA said in a regulatory release.

"Management of MONETA continues to believe in the strategic merit of the transaction, however, under the current circumstances, felt it necessary to find an amicable solution with the PPF Group."

PPF said in its own statement the deal collapse resulted from "macroeconomic changes which radically altered the parameters of the originally planned merger", including rising capital requirements and interest rates as well as economic risks from the war in Ukraine.

"PPF Group was ready to meet the transaction’s obligations, but it welcomes the termination agreement, deeming it the best solution for both PPF and other (MONETA) shareholders," it said.

With a 29.94% stake, PPF Group remains MONETA's largest shareholder. MONETA said the agreement prevented PPF from selling or raising the stake, but it may sell it to a strategic investor.

($1 = 22.9330 Czech crowns) (Reporting by Jan Lopatka; Editing by David Holmes)