US President Donald Trump has decided to impose essentially flat tariffs on American imports. These will negatively affect the EU and indirectly the Czech Republic, which otherwise exports only a small part of its goods directly to the US. Given the possible changes in the final form of the tariffs and the uncertainty associated with estimating the sensitivity of the Czech economy to their introduction, this analysis presents several scenarios. Our calculations suggest that a flat 10% tariff on imports to the US would lead to a contraction of the Czech economy in the range of 1-2%, while a flat 20% tariff would lead to a contraction of 2-4%. In our view, the current form of the US measures implies an effective tariff rate of 10-15% on imports from the EU. We estimate that this would imply a contraction of Czech GDP by 1-3%. Sectors with a high share of Czech exports, such as cars, machinery and electronics, would likely be hit the hardest.

US President Donald Trump has decided to impose essentially flat tariffs on American imports. These will negatively affect the EU and indirectly the Czech Republic, which otherwise exports only a small part of its goods directly to the US. Given the possible changes in the final form of the tariffs and the uncertainty associated with estimating the sensitivity of the Czech economy to their introduction, this analysis presents several scenarios. Our calculations suggest that a flat 10% tariff on imports to the US would lead to a contraction of the Czech economy in the range of 1-2%, while a flat 20% tariff would lead to a contraction of 2-4%. In our view, the current form of the US measures implies an effective tariff rate of 10-15% on imports from the EU. We estimate that this would imply a contraction of Czech GDP by 1-3%. Sectors with a high share of Czech exports, such as cars, machinery and electronics, would likely be hit the hardest.

See attached report for details.

According to our estimates, 2025 will start with net profit growth of +13.9% yoy to CZK1.46bn in 1Q25. As market interest rates fall, interest income will decrease but so will financing costs. We continue to expect successful sales of third-party products. Regulatory fees will increase costs in the first quarter. We estimate operating profit of CZK1.90bn (+16.4% yoy) on total revenues of CZK3.40bn (+9.0% yoy). We expect Moneta's management to reiterate its full-year guidance.

Announcement date: Friday, 25 April 2025 at 7:00 a.m.

According to our estimates, 2025 will start with net profit growth of +13.9% yoy to CZK1.46bn in 1Q25. As market interest rates fall, interest income will decrease but so will financing costs. We continue to expect successful sales of third-party products. Regulatory fees will increase costs in the first quarter. We estimate operating profit of CZK1.90bn (+16.4% yoy) on total revenues of CZK3.40bn (+9.0% yoy). We expect Moneta's management to reiterate its full-year guidance.

The CNB is in a cycle of rate cuts. This will of course be reflected in market rates. Interest income will decrease compared to the previous year, but financing costs will also decrease. Overall, we expect a positive impact on net interest income, which should reach CZK2.40bn (+15.4% yoy). We also expect continued successful sales of investment products. This should be reflected in an increase in NF&C to CZK821m (+10.9% yoy). Overall, we estimate Moneta's 1Q25 operating income at CZK3.40bn (+9.0% yoy). The main operating expense item is personnel. In addition, regulatory fees are payable in the first quarter and could reach CZK223m. We estimate total operating expenses at CZK1.50bn (+0.8% yoy). We expect operating income to reach CZK1.90bn (+16.4% yoy). We estimate risk costs to grow to CZK166m (+22.8% yoy). This corresponds to 24bps, which is within Moneta's forecast range (15-35bps). We assume an effective tax rate of 15.5%. This implies a net profit of CZK1.46bn (+13.9%).

2025 forecasts: According to our estimates, Moneta should report oprerating income of CZK13.7bn, operating expenses of CZK5.9bn, operating profit of CZK7.8bn and net profit of CZK6.0bn for the year. We estimate the cost of risk at 24bps.

Moneta is forecasting operating income of CZK13.6bn, operating expenses of CZK5.9bn, operating profit of CZK7.7bn and net profit of CZK6.0bn. The cost of risk is expected to be in the range of 15-35bps, the effective tax rate is expected to be 15.5% and the RoTE is expected to be 20%.