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Moneta says committed to high dividends as profit outlook brightens
May 11, 2017 / 11:02 AM / 7 months ago

Moneta says committed to high dividends as profit outlook brightens

* Moneta CEO says extraordinary dividend not likely

* Says committed to high payout ratio for 2017, 2018

* Bank looking to unload excess capital

* Raises 2017 profit forecast

PRAGUE, May 11 (Reuters) - Czech lender Moneta Money Bank is committed to paying high dividends to work off excess capital but an extraordinary interim payout looks unlikely this year, its chief executive said on Thursday after the bank raised its 2017 profit outlook.

Moneta, the country’s sixth biggest bank, posted a 3 percent drop in first-quarter net profit to 1.04 billion crown, beating expectations.

Lower costs related to risky loans allowed the bank to nudge up its forecast for full-year profit to at least 3.5 billion crowns ($143 million) from an estimate of 3.4 billion after the previous quarter.

Moneta also expects its CET1 capital ratio to remain above 17 percent at the end of 2017, barring an extraordinary interim dividend. It stood at 19.9 percent at the end of March.

The bank, whose shares have risen 18 percent since debuting in Prague a year ago, aims to cut its capital ratio to 15.5 percent in the next two years, a percentage point above its current regulatory minimum.

Shareholders in Moneta last month approved a dividend comprising 2016 profit and about a fifth of excess capital. But the meeting rejected a shareholder request to cut capital at a quicker pace.

Chief Executive Tomas Spurny said on Thursday an extraordinary payout this year was “not feasible”. He also said the bank would learn later this year new capital requirements.

“We are committed to a high payout ratio,” Spurny said in a telephone interview after the earnings release.

Czech banks, most also well-capitalised, have boosted lending in recent years to offset weaker margins from record low interest rates. Spurny said he expected high single digit loan growth for the bank this year.

He said Moneta, formerly part of General Electric before the U.S. group sold out its shares in a public offering and later bookbuilding sale last year, was committed to growing its existing business but would be interested in “non-material” acquisitions, although none were being considered at the moment.

He dismissed as “speculation” Czech media reports that Moneta was interested in UniCredit’s assets in the Czech and Slovak markets. He told analysts in a conference call there had not been formal or informal discussions.

“It is not on the agenda of the day and I don’t think it will be,” he said.

At 1100 GMT, Moneta shares were 0.4 percent higher.

$1 = 24.4510 Czech crowns Reporting by Jason Hovet; Editing by Mark Potter

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