MONETA Money Bank : Press release 1H 2022 (PDF, 0.37 MB)

PRESS RELEASE

In Prague, 28 July 2022

MONETA delivers first half net profit of CZK 2.9 billion,

up 100.7 per cent year-on-year

• CZK 2.9 billion net profit, up 100.7 per cent year-on-year
• Return on Tangible Equity of 22.6 per cent against 11.2 per cent in same period last year
• CZK 6.1 billion total operating income, up 13.1 per cent year-on-year
• Operating costs at CZK 2.8 billion, down 1.9 per cent year-on-year
• Cost of Risk recorded a net release of CZK 250 million, or positive 0.19 per cent of average loan portfolio
• Capital adequacy ratio at 16.8 per cent, excess capital position of CZK 5.2 billion
• Further progress made in digitalisation of product offers and services: Deloitte survey places MONETA among global top 10 per cent of digital banks
• ATM network strengthened in network sharing agreement with Komercni banka

Prague, 28 July 2022 - MONETA Money Bank ("MONETA") today announced its unaudited financial results for the first half of 2022. Net profit increased by 100.7 per cent year-on-year to CZK 2.9 billion, representing a Return on Tangible Equity of 22.6 per cent. Strong profitability in the first half was largely supported by the interest rate environment, favourable Cost of Risk and stable operating expenses.

Net interest income grew significantly by 18.2 per cent year-on-year due to higher market rates. Net fee and commission income performed strongly and increased by 6.7 per cent due to higher third-party commission income and a higher volume of transactions. Overall, total operating income reached CZK 6.1 billion, up 13.1 per cent against the same period last year. Total operating costs were stable and in fact slightly decreased by 1.9 per cent year-on- year to CZK 2.8 billion. This reflects continued cost discipline across all of MONETA's businesses in the face of inflationary pressures. Operating expenses were further supported by the one-off reimbursement of terminated

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MONETA Money Bank, a.s. | Vyskočilova 1442/1b, 140 28 Praha 4 - Michle | Company ID 25672720 | Registered by the Municipal Court in Prague, Section B, Insert 5403 | tel.: [phone] | www.moneta.cz

PRESS RELEASE

acquisition costs in the amount of CZK 113 million. Operating expenses adjusted for the acquisition charges and reimbursement were up by 2 per cent year-on-year, mainly in the personnel and administrative cost categories.

MONETA's Cost of Risk significantly improved compared to the first half of last year, recording a net provision release of CZK 250 million, or positive 0.19 per cent of the average net loan portfolio. This was mainly driven by upgrades or repayments of non-performing loan exposures in the amount of CZK 1.6 billion. The result was also supported by successful NPL disposals generating a pre-tax gain of CZK 160 million, as well as consistently good repayment discipline.

MONETA reported a strong capital position with regulatory capital of CZK 29.3 billion. The capital adequacy ratio stood at 16.8 per cent, which was 1.7 per cent above the management target of 15.1 per cent. MONETA maintained excess capital of CZK 5.2 billion, including CZK 2.3 billion of accruals for future dividend payments. The strong capital position offers a solid basis for further growth of the business and future dividend distributions.

MONETA won a record 12 awards in the annual Financial Academy's Zlata koruna (Golden Crown) awards, including four gold and six silver awards. Smart Banka mobile application won one gold and two silver awards, the online mortgage offering took the gold award for Innovation of the Year and a further two golds were awarded for the Building savings proposition and the Konto FOR Business (Konto PRO podnikání) current account proposition.

MONETA and Komerční banka (KB) signed an agreement to share their ATM networks across the Czech Republic. This will increase the availability of cash services for clients of both banks and contribute to sustainability as ATM locations are optimised and resources saved regarding the operation and servicing of ATMs. In a joint statement, MONETA and KB invited other banks to join the initiative in order to make the national network of ATMs more efficient and more environmentally friendly. Several banks expressed interest in participating. The initiative will see a significant expansion of available machines by adding KB's 863 ATM to MONETA's own network.

MONETA currently has 558 ATMs, of which 186 machines provide deposit functions. For MONETA and KB, the sharing of selected banking infrastructure will have a positive impact, reducing energy consumption and other costs associated with the operation of separate ATM networks, and reducing the carbon footprint of both banking networks.

MONETA's environment, social and governance - ESG - practices were recognised with the receipt of a first ESG rating from FTSE Russell, with a rating of three points out of a maximum five points in the FTSE4Good Emerging Index. Companies need to meet a variety of ESG criteria for inclusion in the FTSE4Good indices, which are designed to measure the performance of investable companies that demonstrate strong and transparent ESG practices.

MONETA made progress towards its goal of reducing its 2016 carbon footprint by 90 per cent by 2026. The latest report on MONETA's carbon footprint reported that in 2021 it had decreased by 76.3 per cent since 2016.

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MONETA Money Bank, a.s. | Vyskočilova 1442/1b, 140 28 Praha 4 - Michle | Company ID 25672720 | Registered by the Municipal Court in Prague, Section B, Insert 5403 | tel.: [phone] | www.moneta.cz

PRESS RELEASE

Development of lending activity

MONETA's gross performing loan portfolio increased by 11.7 per cent year-on-year and reached CZK 267.1 billion. The retail loan portfolio grew by 12.7 per cent year-on-year to CZK 184.2 billion, and the commercial loan portfolio grew by 9.4 per cent to CZK 83.0 billion.

In the retail segment new consumer lending and auto loan volumes were stable at CZK 9.2 billion or CZK 0.7 billion, respectively. On the other hand, new mortgage volumes fell by 44 per cent year-on-year as a result of the significant rise in market interest rates. In total retail new lending volumes were CZK 24.1 billion, down 31.7 per cent year-on-year.

In the commercial segment, MONETA had a good first half with new volumes in investment loans growing by 26.5 per cent, and small business loan volumes up by 25.7 per cent. Overall, MONETA originated new commercial lending volumes of CZK 11.3 billion, an increase of 21.4 per cent year-on-year.

Digital distribution

According to Deloitte, MONETA Money Bank now ranks among the world's top 10 per cent of digital banks, with 98 per cent of the portfolio covered digitally. MONETA has moved significantly towards full digitalisation with the introduction of several innovations, including online mortgage facilities and the possibility of digitally opening, closing and otherwise managing current accounts, building savings accounts, and the family account that is unique in the Czech environment.

The award-winning Smart Banka mobile application currently handles 85 per cent of all interactions with clients. All savings and foreign currency accounts can be arranged online, and the volume of contracts arranged in this way accounts for almost 60 per cent. Smart Banka and Internet Banka currently process 68 per cent of all loans taken out with MONETA. And the annual volume of money exchanged in Smart Banka's online exchange office was CZK 6.5 billion at the end of May this year.

Our digital channels accounted for the origination of 43.1 per cent of new consumer lending volumes1 and 24.4 per cent of new small business loan volumes in the first half of this year. Clients used digital channels for making deposits as well, with 26.6 per cent share of retail current accounts opened online, and 8.1 per cent of building savings accounts opened online in the same period.

Distribution of collective investment products

MONETA's total balance of distributed investment fund products, such as mutual funds, reached CZK 25.3 billion at the end of the first half, up by 12.2 per cent year-on-year. MONETA recorded related fee income in the amount of CZK 140.2 million in the first half of the year, which constitutes a year-on-year increase of 58.2 per cent.

1 Excluding MSS production.

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MONETA Money Bank, a.s. | Vyskočilova 1442/1b, 140 28 Praha 4 - Michle | Company ID 25672720 | Registered by the Municipal Court in Prague, Section B, Insert 5403 | tel.: [phone] | www.moneta.cz

PRESS RELEASE

Deposit taking activity

MONETA increased its core deposit balance from CZK 266.2 billion at the end of the first half of 2021 to CZK 296.5 billion at the end of the same period this year, up 11.4 per cent. Retail core deposits registered an increase of 12.5 per cent to CZK 223.9 billion. Commercial core customer deposits increased 8.2 per cent year-on-year to CZK 72.6 billion.

Loan portfolio quality

The quality of MONETA's loan portfolio improved during the period under review. The NPL portfolio stood at CZK 3.8 billion after decreasing by CZK 2.5 billion during the last twelve months. The ratio of non-performing loans (NPL) decreased year-on-year from 2.5 per cent to 1.4 per cent. The improved NPL ratio resulted from successful disposals of NPLs nominal value of CZK 0.5 billion, a good portfolio performance and continued good payment discipline of previously downgraded exposures. Overall coverage through loan loss provisions of the loan book decreased from 2.5 per cent at the end of the first half 2021 to 1.9 per cent at the end of the first half 2022.

PROFITABILITY AND RETURN ON CAPITAL

• Total operating income of CZK 6.1 billion, up 13.1 per cent year-on-year. This was supported by net interest income growth of 18.2 per cent year-on-year and net fee and commission income of 6.7 per cent year-on-year.
• Reported total operating expenses of CZK 2.8 billion, lower by 1.9 per cent year-on-year, supported by one-time reimbursement of CZK 113 million costs related to terminated acquisition of Air Bank Group. Total operating expenses would increase by 2 per cent year-on-year if adjusted for incurred costs of the terminated acquisition and the reimbursement; mainly on personnel and administrative costs.
• Pre-impairmentprofit reached CZK 3.3 billion, up 29.9 per cent.
• Total Cost of Risk lowered significantly to positive 0.19 per cent, amounting to a net release of CZK 250 million, which was driven mainly by released provisioning related to NPL disposals and upgrades of NPLs, which were regularly repaid.
• Income tax stable at CZK 673 million with effective tax rate at 19 per cent.
• Net profit of CZK 2.9 billion, up 100.7 per cent year-on-year, resulting from the above-mentioned drivers.
• Return on Tangible Equity doubled year-on-year to 22.6 per cent.

BALANCE SHEET AND CLIENT BASE

Overall balance sheet of CZK 367.1 billion, up 16 per cent year-on-year due to expanding deposit base and earnings retention. Compared to 1H 2021 the size of the balance sheet was positively impacted by a campaign on savings accounts which was launched in the fourth quarter of 2021. The balance sheet was also supported by the issuance of MREL eligible bonds in the nominal amount of EUR 100 million (CZK 2.4 billion) in February 2022.

Investment securities2portfolio of CZK 52.6 billion, up 2.7 per cent year-on-year, consisting mainly of Czech government bonds.

2 Excluding VISA, SWIFT and Bankovní identita shares.

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MONETA Money Bank, a.s. | Vyskočilova 1442/1b, 140 28 Praha 4 - Michle | Company ID 25672720 | Registered by the Municipal Court in Prague, Section B, Insert 5403 | tel.: [phone] | www.moneta.cz

PRESS RELEASE

Total loan portfolio3grew by 11.7 per cent year-on-year to CZK 267.1 billion, mainly driven by:

• Retail lending3 was up 12.7 per cent year-on-year and reached CZK 184.2 billion. The retail loan portfolio constitutes 69 per cent of MONETA's total loan portfolio.
• • Mortgage lending up 17.2 per cent year-on-year and reached CZK 130.7 billion.
  • Consumer lending up 2.9 per cent year-on-year and reached CZK 48.7 billion.
  • Auto loans up 9.6 per cent year-on-year and reached CZK 2.4 billion.
  • Credit cards and overdrafts down by 1.3 per cent year-on-year to CZK 2.4 billion in line with market trends.
• Commercial lending3 was up by 9.4 per cent year-on-year and reached CZK 83 billion, which represents 31 per cent of MONETA's total loan portfolio, of which small business lending constitutes 4 per cent.
• • Investment loan portfolio grew by 4.6 per cent year-on-year to CZK 46.7 billion.
  • Working capital portfolio grew by 26.3 per cent year-on-year to CZK 14.2 billion.
  • Small business lending grew by 32.7 per cent year-on-year to CZK 11.5 billion.
  • Auto loans grew by 3.8 per cent to CZK 6.5 billion.
  • Leasing portfolio down by 18.8 per cent to CZK 4.1 billion in line with MONETA strategy.

Funding baseincreased by 12.6 per cent year-on-year to CZK 311.1 billion:

• Retail core customer depositsrose 12.5 per cent year-on-year to CZK 223.9 billion, which represents 72 per cent of the total funding base.
• Commercial core customer depositsincreased by 8.2 per cent to CZK 72.6 billion, which represents 23 per cent of the total funding base.
• Wholesalerecorded growth of 45.3 per cent year-on-year to CZK 14.6 billion, which represents 5 per cent of the total funding base.

Online distribution:

• Digital platform - 1H performance:
• • Share of digital consumer lending in total new production1 reached 43.1 per cent.
  • Signed mortgages through the Refinanso.cz platform and through the online mortgage proposition accounted for 14.7 per cent of total new mortgage production.
  • Digital Small Business instalment lending accounted for a 24.4 per cent share of total new Small Business instalment lending.
  • 26.6 per cent of new retail current accounts opened online.
  • 10.1 per cent of new asset management volume generated online.
  • 8.1 per cent share of new building savings contracts signed online.

3 Gross performing loans.

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MONETA Money Bank, a.s. | Vyskočilova 1442/1b, 140 28 Praha 4 - Michle | Company ID 25672720 | Registered by the Municipal Court in Prague, Section B, Insert 5403 | tel.: [phone] | www.moneta.cz