PRAGUE, Nov 9 (Reuters) - Czech lender Moneta Money Bank raised its full-year guidance for the third time this year and said it planned to pay out a dividend that would be much higher than its minimum threshold.
The bank raised the full-year guidance for net profit to 3.9 billion crowns ($176.89 million) from the previous 3.65 billion and the original target of 3.4 billion.
The bank’s third-quarter net profit grew by 1.7 percent from a year ago to 924 million crowns, despite some analysts predicting a drop.
The growth came as costs dropped and loans grew, although margins fell in the competitive, high-liquidity market. Operating income dropped 6.9 percent to 7.8 billion.
The bank said rising interest rates — the central bank delivered two 25-basis-point hikes August and November — have slowed interest income erosion, and this trend would continue.
It said it had excess capital of 2.9 billion crowns and management would propose shareholders to pay out dividend “significantly above” its minimum of 70 percent of net profit for 2017.
Moneta has been dissolving its excess capital with the target of reaching 15.5 percent capital ratio, which is 1 percentage point above regulatory requirements effective from July 2018.
Last year, the bank paid dividend of 124 percent of net profit as it distributed part of the capital stock.
Moneta said its lending book expanded by 10.1 percent in the fast-growing economy, with the mortgage balance swelling by 22.7 percent.
The bank said its cost of risk reached 46 basis points, helped by the strong economic background and sales of non-performing loans, far below its initial target of 100-110 basis points.
Earnings per share were 1.81 crowns in the third quarter versus 1.78 a year ago. ($1 = 22.0480 Czech crowns) (Reporting by Jan Lopatka; Editing by Sunil Nair)