MONETA Money Bank AS · PSECZ:MONET
MONETA Money Bank AS — Merger or Acquisition (May 2021)
84 slides from MONETA Money Bank AS's merger presentation, May 25, 2021
Slide 1: Acquisition of Air Bank Group
Acquisition of Air Bank Group Supporting material for shareholder meeting to be held on June 22nd, 2021 Published on May 20th, 2021 Updated on May 25th, 2021 (updated for response to shareholder feedback) MANDATORY DISCLOSURE / PUBLIC DISCLOSURE OF INSIDE INFORMATION
Slide 2: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 3: Acquisition Rationale: Mid to Long Term Value Creation
ACQUISITION RATIONALE: MID TO LONG TERM VALUE CREATION The acquisition of Air Bank Group is transformational and unique opportunity to accelerate growth and strengthen returns in medium to long term INVESTMENT THESIS TARGETED SHAREHOLDER BENEFITS • Establishing a leading Czech retail bank • Increasi
Slide 4: Structural Realities of Czech Banking Sector Size and Concentration
STRUCTURAL REALITIES OF CZECH BANKING SECTOR Large banks consistently generate 64% of banking SIZE AND industry’s revenues, deploy 64% of Tier 1 capital and produce 70% of net earnings (2017 – 2020). CONCETRATION ADVANTAGE Their size advantage is not challengeable through organic growth therefore co
Slide 5: Operating Income Structure
OPERATING INCOME STRUCTURE Medium-sized banks face challenges concerning ability to generate operating income and achieve capital efficiency LARGE BANKS (CZK bn)2 TOTAL OPERATING INCOME (CZK bn)1 115.9 123.5 131.6 114.4 Cumulative operating income at 64% 204.2 181.0 192.3 181.4 2017 2018 2019 2020 2
Slide 6: Distribution of Banking Profit Pool
DISTRIBUTION OF BANKING PROFIT POOL Large banks capture 70% of profit pool through scale advantage LARGE BANKS (CZK bn)2 NET PROFIT (CZK bn)1 63.5 54.1 56.4 Cumulative profit at 70% 32.4 91.1 81.4 75.3 2017 2018 2019 2020 MEDIUM-SIZED BANKS (CZK bn)2 47.5 13.9 15.4 Cumulative 12.3 profit at 17% 7.4
Slide 7: Leading Retail Bank
LEADING RETAIL BANK The proposed combination will create market leader in consumer lending and significantly improve position in retail deposits CONSUMER LOANS¹ (31 Dec-20, CZK bn) RETAIL DEPOSITS3 (31 Dec-20, CZK bn) Combined 69 804 67 479 41 322 39 Combined 285 34 192 2 28 163 20 123 Source: The l
Slide 8: Acquisition Rationale: Boosting Consumer Finance Offering
NEW ACQUISITION RATIONALE: BOOSTING CONSUMER FINANCE OFFERING Consumer finance is an attractive and highly profitable part of the banking sector, generally valued at significant premium to universal banks CONSUMER LOANS AS SHARE OF GDP ‘20 TRADING MULTIPLE COMPARISON ACROSS VERTICALS ’21E P/TBV2 mul
Slide 9: Overview of Acquired Entities
OVERVIEW OF ACQUIRED ENTITIES Air Bank Group has developed „critical mass“ retail banking and consumer lending in the Czech Republic and Slovakia ESTABLISHED 2011 1997 CZ ESTABLISHED ESTABLISHED 2014 1999 SK Retail Consumer Retail MARKET FOCUS MARKET FOCUS MARKET FOCUS banking finance lending CLIENT
Slide 10: Increasing Client Base
INCREASING CLIENT BASE Customer base of combined bank will exceed 2.4 million and broaden market reach by addition of 1 million customers Near to prime Mass market, primarily rural Mass affluent, metropolitan Net loans: CZK 226bn Branches: 154 ATMs : 558 Number of customers: 1,397k Net loans: CZK 16
Slide 11: Third Largest Network
THIRD LARGEST NETWORK The combined bank will operate a strong retail branch network supported by excellent ATM coverage BRANCHES (as of 31 Mar-21) ATMs (as of 31 Mar-21) Air Bank’s branches Well-positioned are located in large network Czech cities +373 931 +33 187 154 558 Combined Combined Source: M
Slide 12: Increasing Weight of Retail Lending
INCREASING WEIGHT OF RETAIL LENDING Combined bank will achieve nearly 75% of lending activity in highly profitable Retail and Small business segments NET LOAN PORTFOLIO BREAKDOWN (as of 31 Dec-20) Commercial Commercial Commercial 14% 27% 30% 70% 73% Retail 86% Retail + Small business Retail + Small
Slide 13: Overview of Loan Portfolio of Combined Target Perimeter
OVERVIEW OF LOAN PORTFOLIO OF COMBINED TARGET PERIMETER Acquisition will increase net loan portfolio by 25%, namely in high margin retail unsecured lending by 78% NET LOAN PORTFOLIO (as of 31 Dec-20, CZK bn) 282.8 +25.0% 75.1 SME and Corporate 226.1 (27%) 7.8 Small business SME and Corporate 66.9 (3
Slide 14: Loan Portfolio Quality
NEW LOAN PORTFOLIO QUALITY Combined loan portfolio retains strong provisioning level, solid overall coverage and improved NIM compared to standalone Balances as of 31 Dec-20 Air Bank MONETA COMBINED Air Bank Group contributes: (CZK m) Group NIM (% Avg Int Earning Assets)1 4.7% 2.8% 3.4% + 21% Gross
Slide 15: Increasing Weight of Retail Deposit
INCREASING WEIGHT OF RETAIL DEPOSIT Funding will consist of more than 80% of retail deposits and will create solid liquidity basis to support future lending growth CORE CUSTOMER DEPOSITS (as of 31 Dec-20) Commercial Commercial 17% 25% 75% 83% Retail 100% Retail Retail Proforma combined entity • The
Slide 16: Overview of Customer Deposits of Combined Target Perimeter
OVERVIEW OF CUSTOMER DEPOSITS OF COMBINED TARGET PERIMETER Acquisition will strengthen funding position by nearly 50% through addition of retail current and savings deposits CORE CUSTOMER DEPOSITS (as of 31 Dec-20, CZK bn) 380.7 +48.1% 45.0 Current (12%) Commercial 20.0 Savings & (17%) 257.1 Term (5
Slide 17: Strategic Objectives
STRATEGIC OBJECTIVES Aspirational market share targets are set to create medium to long term value CURRENT CURRENT POST MEDIUM TERM SEGMENT POSITION OF POSITION COMBINATION STRATEGIC DEVELOPMENT MONETA1 OF AB GROUP POSITION ASPIRATION Retail & Small Business 70% 86% 73% 80% SME & Corporate 30% 14% 2
Slide 18: Shareholder Value Creation
SHAREHOLDER VALUE CREATION Target of CZK 1.8 billion annual cost synergies by 2025 set to support improvement of recurring profitability Represents PERSONNEL COSTS (CZK bn) ~20% of initial SIGNIFICANT COST SYNERGY POTENTIAL (CZK bn) personnel cost 0.69 0.74 base 0.59 Represents ~20% of initial total
Slide 19: Air Bank Group: 1Q 2021 Profitability Based on IFRS
AIR BANK GROUP: 1Q 2021 PROFITABILITY BASED ON IFRS 1Q results appear broadly in line with PPF Group’s business plan COMBINED IFRS PROFIT & LOSS STATEMENT 1 (CZK m) CONTRIBUTION TO MONETA’s 1Q’21 REPORTED RESULTS 1Q 2020 1Q 2021 OPERATING INCOME + 50% NET INTEREST INCOME 1,633 1,298 OPERATING EXPENS
Slide 20: Air Bank Group: 1Q 2021 Balance Sheet Based on IFRS
AIR BANK GROUP: 1Q 2021 BALANCE SHEET BASED ON IFRS 1Q results indicate balance sheet development in line with PPF Group’s business plan COMBINED ASETS1 (CZK m) COMBINED EQUITY AND LIABILITIES1 (CZK m) 1Q 2020 2020 1Q 2021 1Q 2020 2020 1Q 2021 CASH 41,774 46,212 50,420 CUSTOMER DEPOSITS 111,355 123,
Slide 21: Key Takeaways
KEY TAKEAWAYS The acquisition has potential to transform MONETA and create shareholder value in medium to long term CREATION OF LEADING RETAIL FRANCHISE WITH Unique and transformational opportunity to build relevance STRONG FINANCIAL PROFILE and sustainability of MONETA into the future >2.4m #1 TARG
Slide 22: MONETA Share Price Development
NEW MONETA SHARE PRICE DEVELOPMENT Proposed combination increased value of MONETA, share price appreciated by 18% since the announcement SHARE PRICE EVOLUTION OF MONETA VS. KOMERCNI SINCE PPF OFFER ANNOUNCED1 (CZK) 85 MMB Komercni (rebased) 80 79.0 75 72.5 70 67.1 65 60 Jan-21 Feb-21 Mar-21 Apr-21 A
Slide 23: MONETA Share and Target Price Development
NEW MONETA SHARE AND TARGET PRICE DEVELOPMENT Post announcement of proposed acquisition, average target price shifted towards higher ranges AVERAGE TARGET PRICE EVOLUTION (CZK) Share price Average target price 97 90 86 86 86 80 77 75 73 69 67 52 53 54 Announcement of acquisition negotiation 04/02 30
Slide 24: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 25: Acquisition Perimeter
ACQUISITION PERIMETER MONETA will acquire Air Bank, Home Credit CZ, Home Credit SK and Benxy ACQUISITION PERIMETER1 • Air Bank Group is supervised by the Czech National Bank on consolidated basis as a part of PPF Group Emma Capital PPF Financial Holdings BV group where PPF Financial Holdings BV is a
Slide 26: Acquisition Structure and Purchase Considerations
ACQUISITION STRUCTURE AND PURCHASE CONSIDERATIONS Acquisition financed through excess capital and cash proceeds from issuance of new shares Consideration of CZK 25.9 billion will be paid subject to shareholder approval through the following structure: • Cash payment of CZK 2.59 billion. • Financed t
Slide 27: GM, Closing and Mandatory Tender Offer Considerations
GM, CLOSING AND MANDATORY TENDER OFFER CONSIDERATIONS Shareholder meeting will vote and decide on the acquisition and issuance of new shares • General Meeting will be held on 22nd June 2021, where shareholders will be asked to vote on the proposed acquisition and approve the acquisition at proposed
Slide 28: Transaction Steps
TRANSACTION STEPS The acquisition leads to change of control where MONETA will be majority-owned and controlled by PPF Step 1 complete Step 1 Step 2 Step 3 Voluntary tender offer (VTO) Acquisition Mandatory tender offer (MTO) PPF PPF PPF Existing New Existing Cash Air Bank MONETA Cash shares shares
Slide 29: Indicative Acquisition Timeline
INDICATIVE ACQUISITION TIMELINE Closing date is targeted for October 1st,2021, subject to shareholder and regulatory approvals CNB/NBS and EC EGM approves: approve: acquisition (1/2 acquisition of Air of present Bank Group by votes) MMB new shares acquisition of MTO launched issuance to PPF
Slide 30: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 31: Combined Bank Business Plan
COMBINED BANK BUSINESS PLAN Based on the business plan of the combined bank, the acquisition has significant potential to be accretive in medium to long term 2022 2023 2024 2025 2026 '22-'26 EPS ACCRETION TARGET (12)% 0% 15% 23% 25% 11% DPS ACCRETION TARGET (12)% 0% 15% 23% 25% 11% 5 year comparison
Slide 32: MONETA Standalone Business Plan
MONETA STANDALONE BUSINESS PLAN MONETA standalone plan aspires to earnings capacity of CZK 23.1 billion, which corresponds to MONETA guidance MONETA STANDALONE 2022 2023 2024 2025 2026 Total '22-'26 CAGR TOTAL OPERATING INCOME (CZK bn) 11.6 12.6 13.1 13.5 13.9 64.7 4.6% COST BASE (CZK bn) (5.5) (5.6
Slide 33: Combined Bank Business Plan
COMBINED BANK BUSINESS PLAN The combined bank has potential to earn CZK 40.4 billion, representing CZK 17.3 billion increase or equalling to 75% improvement over MONETA standalone plan 1 COMBINED TARGETS 2022 2023 2024 2025 2026 Total '22-'26 CAGR TOTAL OPERATING INCOME (CZK bn) 17.9 19.6 21.0 22.1
Slide 34: Targeted Cost Synergies
TARGETED COST SYNERGIES Targeting CZK 1.8 billion cost synergies from combined cost base and assuming restructuring costs of CZK 2.2 billion COMBINED RESTRUCTURING COSTS (CZK bn) 2025 COST BASE IMPACT FROM COST SYNERGIES1 (CZK bn) 2.2 ( 1.8) 8.0 3.9 5.8 2.0 0.2 Cost Combined Total estimated 2021-23
Slide 35: Calculation of Estimated Synergies
NEW CALCULATION OF ESTIMATED SYNERGIES Synergies calculations are based on current cost base and assumed two percent annual cost inflation 2025 PROFORMA COMBINED COST BASE BEFORE COST SYNERGIES (CZK bn) 5 4.3 Current cost base 4 Cost inflation 3 2.3 2 1.4 1.2 1 0.6 0 Personnel expenses IT Marketing
Slide 36: Estimated Contribution to Net Profit
NEW ESTIMATED CONTRIBUTION TO NET PROFIT Synergies play significant role in reinforcement of recurrent profitability of the combined bank CZK bn 2022 2023 2024 2025 2026 CUMULATIVE 1 MONETA 3.8 4.6 4.8 4.9 5.0 23.1 2 NET COST SYNERGIES (0.4) 0.4 1.1 1.4 1.5 4.1 3 AIR BANK GROUP 1.8 2.2 2.8 3.2 3.3 1
Slide 37: Capital Adequacy Assumptions
CAPITAL ADEQUACY ASSUMPTIONS The combination has potential to generate stronger Return on Tangible Equity (ROTE) on reinforced capital base STANDALONE PLAN 2022 2023 2024 2025 2026 NET PROFIT (CZK bn) 3.8 4.6 4.8 4.9 5.0 TANGIBLE EQUITY (CZK bn) 24.6 26.2 27.5 28.8 29.9 CAPITAL ADEQUACY 15.8% 15.3%
Slide 38: Key Assumptions Underpinning the Business Plan
KEY ASSUMPTIONS UNDERPINNING THE BUSINESS PLAN Assumptions were derived from past performance, CNB and MinFin prognoses and through-the-cycle risk metrics Indicator 2021E 2022E 2023E 2024E 2025E GDP 3.5% 4.0% 3.1% 2.7% 2.5% Macro Unemployment 4.7% 4.3% 3.5% 2.6% 2.5% Outlook1 Inflation 2.4% 2.2% 2.0
Slide 39: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 40: Anticipated Development of MONETA's Capital
ANTICIPATED DEVELOPMENT OF MONETA’s CAPITAL IFRS equity of MONETA is estimated to increase to over CZK 52 billion through issuance of new shares CURRENT CAPITAL STRUCTURE OF MONETA (CZK bn) ESTIMATED CAPITAL STRUCTURE OF MONETA1 (CZK bn) ~ 52.4 Book value per share CZK 63.49 1.5 0.1 Reserves CZK 54.
Slide 41: Anticipated Development of MONETA's CET Capital
ANTICIPATED DEVELOPMENT OF MONETA’s CET 1 CAPITAL CET 1 capital of MONETA is estimated to increase from CZK 24.2 to 31.2 billion through issuance of new shares ESTIMATION OF CET 1 CAPITAL POSITION (CZK bn) Reported CET 1 capital as of 1Q’21 24.2 1 1 Expected net profit (2Q – 4Q, 2021) 2.4 2 2 Expect
Slide 42: Excess Capital Available for Potential Distribution
EXCESS CAPITAL AVAILABLE FOR POTENTIAL DISTRIBUTION The capital increase maintains excess capital reserve of which estimated CZK 1.5 billion could be distributed earlier ESTIMATION OF EXCESS CAPITAL (CZK bn) ESTIMATED AMOUNT FOR EXTRAORDINARY DISTRIBUTION 1 Reported excess capital as of 1Q’21 1 8.4
Slide 43: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 44: Implications for Non-PPF Shareholders
IMPLICATIONS FOR NON-PPF SHAREHOLDERS Strong corporate governance will be matched by effort to maximize free float and maintain public listing of combined bank STAGE 1 (VTO) STAGE 2 (POST ACQUISITION) STAGE 3 (AFTER) CURRENT PROFILE: CURRENT PROFILE: CURRENT PROFILE: • ISSUED SHARES 511 m • ISSUED S
Slide 45: Corporate Governance Post Acquisition
CORPORATE GOVERNANCE POST ACQUISITION MONETA will retain two tier corporate governance structure with majority independent Supervisory Board representing all shareholders THE SUPERVISORY BOARD (SB) THE MANAGEMENT BOARD (MB)1 6 shareholder elected members of 3 employee 5 existing board 2 will be whic
Slide 46: Independent Governance Structures
INDEPENDENT GOVERNANCE STRUCTURES Best practice SB and Committee membership – independent, diversified and broad set of skills – will be maintained after the combination SUPERVISORY BOARD AUDIT COMMITTEE NOMINATION COMMITTEE • Gabriel Eichler • Michal Petrman (Chairman) • C. Ronald Clarke (Chairman)
Slide 47: Curriculum Vitae: Ing. Kateřina Jirásková
CURRICULUM VITAE Ing. Kateřina Jirásková Overview of professional and educational credentials PPF Group Chief Financial Officer 1/2013 – present Generali PPF Asset management Chief Executive Officer 04/2004 – 12/2012 PPF Asset Management Senior portfolio manager 09/2000 – 04/2004 Conseq Finance Seni
Slide 48: Legal Structure of MONETA Group
LEGAL STRUCTURE OF MONETA GROUP Legal structure will be simplified post closing through legal merger of Air Bank into MONETA Money Bank, a.s. PHASE 1 (PRESENT) PHASE 2 (DEC 2021) PHASE 3 (JUN 2022) MONETA Money Bank, a.s. MONETA Money Bank, a.s. NEW BANK 100% MONETA Stavební 100% MONETA Stavební 100
Slide 49: Brand and Market Presence Management
BRAND AND MARKET PRESENCE MANAGEMENT Two banks will continue under distinct separate brands to leverage market presence and maintain client loyalty Closing Legal merger October 2021 June 2022 2021 2022 2023 Brand(s): • AIR BANK • AIR BANK • NEW BANK IDENTITY • HOME CREDIT • HOME CREDIT • HOME CREDIT
Slide 50: Corporate Governance
UPDATED CORPORATE GOVERNANCE Strong governance has been established around the acquisition process supported by expert opinions of reputable advisors • MONETA conducted comprehensive due diligence of Air Bank Group in Finance, Tax, Risk Management, IT, Operations, Commercial, Legal and HR areas; sep
Slide 51: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 52: Overview of Key Concerns
OVERVIEW OF KEY CONCERNS Despite change of control, interest of PPF focuses on value creation, shareholder distributions through dividends and mitigation of external risks SHAREHOLDER & GOVERNANCE BUSINESS PLAN AND GROWTH OPERATING ENVIRONMENT RELATED CONCERNS RELATED CONCERNS SPECIFIC RISKS SUPERVI
Slide 53: Key Risks of the Combination I
KEY RISKS OF THE COMBINATION I MONETA’s identified, analysed and planned mitigation of key risks embedded in the combination ISSUE MATERIALITY MITIGANTS STRUCTURAL • Due diligence does not indicate issues CREDIT RISK AND POTENTIAL POSITION – losses in line with MONETA´s LOSSES FROM RETAIL UNSECURED
Slide 54: Key Risks of the Combination II
KEY RISKS OF THE COMBINATION II MONETA’s identified, analysed and planned mitigation of key risks embedded in the combination ISSUE MATERIALITY MITIGANTS DECREASE OF • Combined cash liquidity > CZK 100 billion to LONGER PERIOD OF LOW INTEREST OPERATING INCOME be deployed through bond investments RAT
Slide 55: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 56: Share Price Metrics of PPF's Offer
SHARE PRICE METRICS OF PPF´S OFFER PPF offered CZK 80 per share, the price will serve as minimum basis for Mandatory tender offer if the acquisition is approved by shareholders and regulators MONETA METRICS @ CZK 80 per share – VOLUNTARY OFFER 1 Premium against 180days average 34.5% Price to Equity
Slide 57: MONETA Share Price Development
UPDATED MONETA SHARE PRICE DEVELOPMENT PPF announcement of CZK 80 against historical trading prices represents significant premium SHARE PRICE EVOLUTION OF MONETA VS. KOMERCNI BANKA SINCE PPF OFFER ANNOUNCED1 (CZK) 85 MMB Komercni banka (rebased) 80 75 76.7 70 67.8 65 65.9 60 Jan-21 Feb-21 Mar-21 Ma
Slide 58: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 59: Management's Response: Does the deal make sense structurally?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Does the deal make sense structurally for MONETA? 1. Industrial logic is in line with MONETA’s strategy to expand and develop retail and small business franchise (communicated continuously since 2016 IPO). 2. Industrial logic and benefits of market c
Slide 60: Management's Response: Is the valuation of MONETA adequate?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Is the valuation of MONETA adequate? 1. Analysts increased MONETA’s median target value from CZK 81 to CZK 96 during the post announcement period (Jan to May 2021), presumably due to the consolidation opportunity with Air Bank Group. 2. Stand-alone g
Slide 61: Management's Response: Is the Air Bank Group valuation fair?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Is the Air Bank Group valuation fair? 1. Air Bank Group is assumed to have CZK 12.0 - 12.5 billion of equity at closing date, hence the “multiple to book“ will be in range of 2.05 - 2.15. 2. Valuation includes significant cost synergies whose present
Slide 62: Management's Response: Are the deal economics attractive?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Are the deal economics attractive for MONETA’s shareholders? 1. On execution risk - MONETA previously successfully executed integration and realization of synergies from two Wüstenrot banks (2020) when acquired cost base was reduced by 50 percent. 2.
Slide 63: Management's Response: Are the cost synergies realistic?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Are the cost synergies assumptions realistic? 1. MONETA’s management has strong historical and fact based record in cost savings as the bank operated cost base at CZK 5.5 billion average (2013 - 2015), the cost base had been reduced to CZK 4.9 billio
Slide 64: Management's Response: Is information about future governance transparent?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Does MONETA management provide transparent information about future governance and its motivation? 1. Combined management will have targets to deliver values as per the combined business plan 2022 - 2026 presented to shareholders, compensation polici
Slide 65: Management's Response: Is the deal structure appropriate?
NEW MANAGEMENT’S RESPONSE TO SHAREHOLDER FEEDBACK Is the deal structure appropriate and protects rights of non-PPF shareholders? 1. PPF invested estimated CZK 12.2 billion to acquire 29.9 percent of MONETA on basis to support the acquisition and medium to long term value creation, as publicly stated
Slide 66: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 67: MONETA Consolidated Profit and Loss Statement (IFRS)
2017 – 2020 MONETA MONEY BANK Consolidated Profit and Loss Statement (IFRS) CAGR CZK m 2017 2018 2019 2020 2017-2020 NET INTEREST INCOME 7,364 7,409 7,925 8,282 4.0% NET FEE AND COMMISSION INCOME 1,933 1,892 195 1,891 (0.7)% INCOME FROM FINANCIAL OPERATIONS 709 396 529 672 (1.8)% OTHER INCOME 329 46
Slide 68: MONETA Consolidated Balance Sheet Statement (IFRS)
2017 – 2020 MONETA MONEY BANK Consolidated Balance Sheet Statement (IFRS) CAGR CZK m 2017 2018 2019 2020 2017 – 2020 CASH AND BALANCES WITH THE CENTRAL BANK 7,127 8,139 6,697 7,782 3.0% FINANCIAL INSTRUMENTS 11,826 20,891 26,411 37,167 46.5% LOANS AND RECEIVABLES TO BANKS 53,380 33,436 23,485 22,872
Slide 69: Historical Financial Results of Air Bank Group
HISTORICAL FINANCIAL RESULTS OF AIR BANK GROUP 69
Slide 70: Air Bank Group Combined Profit and Loss Statement (IFRS)
2017 - 2020 AIR BANK GROUP Combined Profit and Loss Statement (IFRS) CAGR CZK m 20171,2 20181,2 20193 20203 2017-2020 NET INTEREST INCOME 4,661 5,162 5,991 5,823 7.7% NET FEE AND COMMISSION INCOME (113) (95) (82) (105) (2.4%) OTHER INCOME 378 24 40 63 (45.0%) TOTAL OPERATING INCOME 4,926 5,091 5,949
Slide 71: Air Bank Group Combined Balance Sheet Statement (IFRS)
2017 - 2020 AIR BANK GROUP Combined Balance Sheet Statement (IFRS) CAGR CZK m 20171,2 20181,2 20193 20203 2017-2020 CASH AND BALANCES WITH THE CENTRAL BANK 34,457 42,694 40,798 46,212 10.3% FINANCIAL INSTRUMENTS 20,267 20,019 18,784 26,964 10.0% LOANS AND RECEIVABLES TO BANKS 2,899 3,131 2,055 2,456
Slide 72: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 73: Combined Business Plan: Profit and Loss Statement
COMBINED BUSINESS PLAN 2022 - 2026 Profit and Loss statement CAGR CZK bn 2022 2023 2024 2025 2026 2022-2026 TOTAL OPERATING INCOME 17.9 19.6 21.0 22.1 22.7 6.1% COST BASE (9.5) (8.7) (8.1) (8.0) (8.1) (3.9)% PRE-IMPAIRMENT PROFIT 8.5 11.0 12.9 14.2 14.6 14.5% COST OF RISK (2.0) (2.0) (2.1) (2.3) (2.
Slide 74: Combined Business Plan: Balance Sheet Statement
COMBINED BUSINESS PLAN 2022 - 2026 Balance sheet statement CAGR CZK bn 2021 2022 2023 2024 2025 2026 2021-2026 CASH & LOANS TO BANKS 54.5 50.1 53.4 51.2 55.0 58.6 1.5% INVESTMENT SECURITIES 84.9 90.4 99.8 105.9 111.6 114.2 6.1% LOANS TO CUSTOMERS 312.9 341.1 371.2 396.4 417.2 433.2 6.7% INTANGIBLE A
Slide 75: Loans and Receivables to Customers
COMBINED BUSINESS PLAN 2022 - 2026 Loans and receivables to customers CAGR 2021-2026 CZK bn 2021 2022 2023 2024 2025 2026 CONSUMER LOANS 82.4 89.6 96.2 102.4 107.7 110.4 6.0% CREDIT CARD & OVERDRAFT 9.8 10.0 10.2 10.3 10.5 10.6 1.6% MORTGAGE 128.0 148.0 166.7 183.3 196.2 207.3 10.1% AUTO RETAIL 6.1
Slide 76: Customer Deposits
COMBINED BUSINESS PLAN 2022 - 2026 Customer deposits CAGR CZK bn 2021 2022 2023 2024 2025 2026 2021-2026 CURRENT ACCOUNTS 107.4 116.5 123.3 128.8 134.4 139.8 5.4% SAVING ACCOUNTS 197.8 207.9 224.5 238.3 252.7 262.8 5.9% TERM DEPOSITS & OTHER 0.7 0.7 0.6 0.6 0.6 0.6 (2.4)% BUILDING SAVINGS 30.5 31.7
Slide 77: Dividend Distribution Overview
COMBINED BUSINESS PLAN 2022 - 2026 Dividend distribution overview MONETA STANDALONE 2022 2023 2024 2025 2026 2022-2026 NET PROFIT (CZK bn) 3.8 4.6 4.8 4.9 5.0 23.1 DIVIDEND ACCRUED (CZK bn)1 3.0 3.7 3.8 3.9 4.0 18.5 NUMBER OF SHARES (m) 511 511 511 511 511 511 DIVIDEND PER SHARE 5.9 7.2 7.5 7.7 7.8
Slide 78: Key Performance Ratios
COMBINED BUSINESS PLAN 2022 - 2026 Key performance ratios PROFITABILITY 2022 2023 2024 2025 2026 ROE 9.5% 12.5% 14.4% 15.0% 15.0% ROTE 14.9% 19.0% 21.3% 21.9% 21.5% ROAA 1.0% 1.4% 1.5% 1.6% 1.6% COST TO INCOME RATIO 53.1% 44.4% 38.6% 36.2% 35.7% COST OF RISK 0.61% 0.56% 0.54% 0.56% 0.56% LIQUIDITY &
Slide 79: Key Performance Ratios
COMBINED BUSINESS PLAN 2022 - 2026 Key performance ratios BALANCE SHEET EFFICIENCY 2022 2023 2024 2025 2026 NIM 3.2% 3.2% 3.2% 3.2% 3.1% YIELD 4.8% 4.6% 4.6% 4.5% 4.5% RETAIL 4.9% 4.7% 4.5% 4.5% 4.4% COMMERCIAL 4.4% 4.4% 4.6% 4.7% 4.7% CORE COST OF FUNDS 0.31% 0.34% 0.41% 0.47% 0.52% RETAIL 0.33% 0.
Slide 80: Table of Content
TABLE OF CONTENT 1 STRATEGIC RATIONALE UPDATED 2 ACQUISITION OVERVIEW 3 BUSINESS CASE UPDATED 4 ANTICIPATED CAPITAL POSITION AT CLOSING 5 CORPORATE GOVERNANCE AND OPERATING MODEL UPDATED 6 KEY RISKS 7 PPF OFFER AND MONETA SHARE PRICE DEVELOPMENT UPDATED 8 RESPONSE TO SHAREHOLDER FEEDBACK NEW 9 HISTO
Slide 81: Key Takeaways: Critical Size and Relevance
KEY TAKEAWAYS MONETA competes against five large incumbent banks CRITICAL SIZE AND which generate 70% of net profit pool in the Czech Republic and enjoy number of competitive advantages. In order to RELEVANCE successfully compete MONETA needs to increase critical CONSIDERATION size while maintain fo
Slide 82: Key Takeaways: PPF's Offer to MONETA Shareholders
KEY TAKEAWAYS CZK 80 per share or CZK 40.88 billion represents premium of PPF’s OFFER TO 34 percent1 against 180 days average price and multiple of MONETA 1.5times price-to-equity and 15.7times price-to-earnings. This price is relevant as minimum to eventual Mandatory tender SHAREHOLDERS offer. On 5
Slide 83: Important Notices
IMPORTANT NOTICES • This document has been prepared by MONETA Money Bank, a.s. (“MONETA“) for information purposes, is addressed to investors and analysts and is not and shall not be treated under any circumstances as an invitation or offer to sell, invest in or deal in, or a solicitation of an offe
Slide 84: Important Notices Relating to Forward-Looking Statements
IMPORTAN NOTICES RELATING TO FORWARD-LOOKING STATEMENTS • This document contains projections, estimates, forecasts, targets, opinions, prospects, results, returns and forward-looking statements of MONETA with respect to, inter alia, profitability, costs, assets, capital position, financial condition